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Sydbank (OMX: SYDB) Denmarks fifth largest bank is now in trouble.

Today several papers have announced that one Sydbank’s CEO’s has resigned after 3 months on the board of directors. The person was a long term employee of the bank and the position didn’t suit him?

The Chairman of the board describes the exit as “uneventful”?? Just because the Navy SEAL’s haven’t kicked the door in with guns blazing it is all in a day’s work???

You are more than gullible if you don’t think there is more to it than that!

For starters the quarterly report of Sydbank had an extra ¼ bio. DKK impairments.

Tracking back to the report from the Bank Inspection dated March 30th2012, that remarked:

1) The inspection was solely concerned with agricultural loans (7½% of the loans).

2) The November 2011 inspection had revealed a need for increased impairments of .2 bio DKK that subsequently appeared in the annual report. (Let’s just say the Bank Inspection doesn’t visit – they camp).

3) The March report furthermore indicated a further “reservation” need of ½ bio. DKK.

Apparently half of that “reservation” has found its way to the bookkeeper in time for the first quarterly report. CEO Karen Frøsig comments that in 2007 they had reversed a number of impairments; but the current environment advised a more cautious approach.

That simply doesn’t make sense! The farm prices topped Q2 2008 (actually the same time You took over the failed Trelleborg Bank) – and it has taken You 3½-4 years to find out that the hicks weren’t paying and they were literarily farming dirt. “Honeypie” only the fact that You was promoted to CEO in 2010 might excuse You for leaning so heavily on the criminal code.

Sydbank has generally been rather scandal ridden – at least dating back to the merger with the notorious Varde Bank – one of Danish banking history’s unmitigated disasters.

On the management level the former regional chairman, Kresten Phillipsen was chairman of the board until he resigned – had to – he died. But Peter Gemælke chairman of the farmers association – that left the management board of DLR (a mortgage bank with 2/3 agricultural loans) – had to – presumably insolvent.

On a semi-related note: It was announced yesterday that Søren Gade, former secretary of defence (resigned in semi-ignominy – due the scandal surrounding a translation into Arabic of a paratroopers book – messy), announced that he was the new CEO of the farmers association.

Oh, Sydbank is only the tip of the iceberg.

But back to the number crunching:

The 3 year CB loans of 18.9 bio. DKK are approaching a resolution:

15 bio. Is presumably to Danske Bank, that put up BRF real estate mortgage bonds as collateral – and thus is an indirect loan to BRF in distress.

3½ bio. is with reasonable certainty Sydbank as the Q1 2012 report mentions the decrease in loans of – yes, you guessed it – 3½ bio. DKK. These loans are presumably deposited in the CB as collateral. I don’t quite know what became of the CB CEO’s admonishment to let them stay on the books?

That leaves .4 bio. where I don’t know what they are.

As to Frøsig – well when a smart and self-conscious “carrier woman” starts to look like Angela Merkel after a 24/7 session with Greek governments – there is something really spoiling your day.