Skjern Bank is a small Danish regional/local bank with a relationship-driven retail/SME lending model, conservative credit and a ~12% return on equity. Local Danish banks pair stable net interest income with high dividend payouts and strong capital.
On the ROE/P-B frame the equity is fairly valued — 1.50× book against a Gordon-justified ~1.45× (ROE 12%, COE ~9.5%, g 3%), at ~12× earnings. A benign Danish credit backdrop supports the ROE; the modest premium reflects the solid returns.
Gordon fair P/B = (12%−3%)/(9.5%−3%) ≈ 1.45×, essentially the current 1.50× — fairly valued. The Danish credit/rate cycle is the swing factor.
Base DKK 305 (−1%); bull DKK 360 (rate/credit tailwind lifts ROE); bear DKK 240 (a Danish/regional credit downturn or rate-driven NII decline).
The operating reverse-DCF (NOPAT / invested capital / WACC) does not apply to a balance-sheet business — leverage is the raw material and "net debt" is not meaningful. The equity is valued on residual income: book equity plus the present value of returns above the cost of equity, discounted at Ke; the single-stage lens is the Gordon fair price-to-book, (ROE−g)/(Ke−g). The market prices in a sustainable ROE of 13.0% vs 13.0% currently earned; at a sustained 13.0% ROE the warranted P/B is 1.54× (DKK 323/sh, +0%).
| Scenario | 24m target | Impl. ROE | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | DKK 360 | 14% | +11% | 30% | Rate/credit tailwind lifts ROE |
| Base | DKK 305 | 12% | -6% | 45% | Fair: trades near Gordon P/B + dividend |
| Bear | DKK 240 | 10% | -26% | 25% | Danish/regional credit downturn |
| Prob-weighted | DKK 305 | — | -5% | 100% | Scenario-weighted expected value |
| Ke \ ROE | 10% | 14% | 18% | 22% | 26% | 30% | 34% |
|---|---|---|---|---|---|---|---|
| 8.00% | 293 | 461 | 628 | 796 | 963 | 1131 | 1298 |
| 8.75% | 255 | 401 | 546 | 692 | 838 | 983 | 1129 |
| 9.50% (base) | 226 | 354 | 483 | 612 | 741 | 870 | 999 |
| 10.25% | 202 | 318 | 433 | 549 | 664 | 780 | 895 |
| 11.00% | 183 | 288 | 393 | 497 | 602 | 707 | 811 |
Green = fair value above the current price of DKK 323.00. For a financial the surface is dominated by cost of equity and sustainable ROE — not unit growth.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
A solid return on equity for a small local bank.
A relationship-driven, low-loss loan book.
Strong capital generation funds a high, well-covered dividend.
Higher Danish rates support net interest income.
An established local position with sticky relationships.
Skjern Bank is a solid small Danish local bank fairly valued on the ROE/P-B frame with a high dividend. HOLD, medium conviction; base target DKK 305 (−1%).
A rate/credit tailwind lifting ROE is the upside; a Danish/regional credit downturn is the principal risk.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.
NOPAT adjustments: Not available from structured data
Company add-backs we reject: Not available without footnote extraction
Pages read — FY: — · Q: —
How the mttssn view has evolved — each prior dated note is preserved.