Djurslands Bank is a small Danish regional/local bank with a conservative, relationship-driven lending model, low loan losses and a ~13% return on equity. Local Danish banks combine stable net interest income with high dividend payouts and strong capital.
On the ROE/P-B frame the equity is cheap — 1.35× book against a Gordon-justified ~1.53× (ROE 13%, COE ~9.5%, g 3%), ~13% upside plus a high dividend. The benign Danish credit backdrop supports the ROE.
Gordon fair P/B = (13%−3%)/(9.5%−3%) ≈ 1.53×, versus the current 1.35× — ~13% upside to the formula, plus a high dividend, at a low P/E (≈10.5×).
Base DKK 1050 (+9%) toward fair value plus dividend; bull DKK 1200 (rate/credit tailwind lifts ROE); bear DKK 850 (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 11.8% vs 13.0% currently earned; at a sustained 13.0% ROE the warranted P/B is 1.53× (DKK 1,085/sh, +13%).
| Scenario | 24m target | Impl. ROE | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | DKK 1,200 | 14% | +25% | 35% | Rate/credit tailwind lifts ROE |
| Base | DKK 1,050 | 13% | +9% | 45% | Re-rate toward Gordon P/B + dividend |
| Bear | DKK 850 | 11% | -11% | 20% | Danish/regional credit downturn |
| Prob-weighted | DKK 1,062 | — | +11% | 100% | Scenario-weighted expected value |
| Ke \ ROE | 10% | 14% | 18% | 22% | 26% | 30% | 34% |
|---|---|---|---|---|---|---|---|
| 8.00% | 992 | 1560 | 2127 | 2694 | 3261 | 3828 | 4395 |
| 8.75% | 863 | 1356 | 1849 | 2342 | 2836 | 3329 | 3822 |
| 9.50% (base) | 763 | 1200 | 1636 | 2072 | 2508 | 2945 | 3381 |
| 10.25% | 684 | 1076 | 1467 | 1858 | 2249 | 2640 | 3031 |
| 11.00% | 620 | 975 | 1329 | 1684 | 2038 | 2392 | 2747 |
Green = fair value above the current price of DKK 960.00. 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.
1.35× book vs a Gordon-justified ~1.53× — cheap on the frame.
A relationship-driven, low-loss loan book.
Strong capital generation funds a high, well-covered dividend.
A solid return on equity for a small local bank.
Higher Danish rates support net interest income.
Djurslands Bank is a conservative small Danish bank trading below its Gordon-justified P/B with a high dividend — cheap on the frame. BUY, modest conviction; base target DKK 1050 (+9%).
A benign credit backdrop supports the ROE; small size, illiquidity and regional concentration are the principal risks.