Danish CSD VP Securities Services (VP) has recorded its best-ever year. VP achieved a profit before tax of DKK 112.8 million in 2005 compared to DKK 84.5 million the year before.
The improvement reflects an increase in net turnover of DKK 50.8 million, itself reflecting record turnover in securities in 2005 as well as the impact of several new product initiatives. During the year, VP placed a number of its information products, including vp.FACT, in a separate business unit under the name of VP Financial Information. These grew strongly, as VP Financial took over the customer portfolios of the Finnish company Finansium. The deal meant 30 Finnish, Swedish and Baltic customers are now using VP Financial as their data supplier. Agreements were also concluded with a number of new Danish and Nordic customers for the supply of financial information from VP Financial.
VP has offered to set up a system in Mexico for the handling of mortgage credit bonds, in conjunction with the Soros Economic Development Fund (Soros) and the Danish Central Bank. VP and Totalkredit will supply systems for handling mortgage bonds, while Soros will contribute marketing and management resources. For this purpose, VP and Soros established an American joint venture under the name of Absalon, with a fifty-fifty split of ownership. In the autumn of 2005, Absalon agreed with the Mexican authorities on the introduction of a mortgage credit system based on the Danish model.
VP remains financially strong. The net capital and the tied-up fund reserve of VP, which showed a combined return of 39 per cent in 2005 compared to 28 percent in 2004, amounted to DKK 148.2 million and DKK 54.8 million, respectively, at the end of 2005.
VP Chairman Sven E. Lystbk says VP has decided to offer shareholder register services, and to that end has already taken over the shareholder registration activities of Danske Bank and Nordea. “The acquisition of Danske Bank’s and Nordea’s shareholder register activities enables VP to further develop the infrastructure with new services such as electronic proxy voting, which will be beneficial for companies, unit trust funds and investors,” says Lystbk.
During 2005, VP closely followed the work of a Danish government committee set up by the Ministry of Justice to assess the scope for making the title registration process paperless. Lystbk describes as “pleasing” its conclusion that VP’s experience of the dematerialisation of securities and electronic recording of rights made it eminently achievable.” A paperless process will involve considerable rationalisation gains for authorities and citizens alike and VP hopes to have the opportunity to contribute towards the establishment of a paperless title registration system,” says Lystbk.
Importantly, Lystbaek says VP “takes a positive stance” towards the consolidation of exchanges, CSDs and banks in the Nordic markets. E describes VP as “an active contributor to the development of a Nordic market place.” During 2005, VP embarked on a collaborative venture – together with the Norwegian, Icelandic, Swedish and Finnish CSDs – known as NordiConnect. It is exploring the possibility of establishing a network with advanced links that will enable the participating CSDs to offer market participants a single interconnected system.
VP is paying a dividend of DKK 2,000 per share to shareholders, equivalent to a total of DKK 80 million.
The VP AGM also re-elected the following members to the Board:
Bent Andersen, Managing Director Christian Clausen, Member of the Executive Board Jrgen A. Engell, Executive Vice President Ivan Hansen, Managing Director Bjarne Graven Larsen, Chief Investment Officer Sven E. Lystbk, Member of the Executive Committee Torben Nielsen, Member of the Board of Governors Sven A. Blomberg, CEO
Niels Torslev, Member of the Executive Board, was elected instead of Peter Engberg Jensen, Group Managing Director, and Frank Kristensen, Group Manager, was elected instead of Preben Lykkegaard Andersen, Group Manager. Both did not wish to offer themselves for re-election.
In addition to this, the Board includes the following employee representatives: Merete Fussing, Key Account Manager Anne-Lise Hansen, Head of Systems Maintenance Gitte Ina Nielsen, Systems Analyst Torben Kok Nielsen, Systems Analyst Jorgen Nymann Weje, Building Technician
Immediately after the ordinary general meeting, the Board elected its Chairman and Vice Chairman. Sven E. Lystbk was re-elected as Chairman and Torben Nielsen was re-elected as Vice Chairman.
Based on the high level of activity on the market during the first quarter of 2006, VP anticipates a net turnover for 2006 at the same level or slightly higher than 2005. VP’s costs are correspondingly expected to increase in 2006 compared to 2005. Profits from ordinary activities in 2006 are thus expected to be at the same level or slightly higher than in 2005.