Since the Q1 2020 results, the outlook for 2020 and beyond has become brighter in our view. Sparekassen Sjælland-Fyn has expanded negative deposits rates to include more deposits by lowering the threshold to DKK 250,000 for NemKonto customers from 1 July. We estimate this will add just below DKK 30m to total income annually, all else equal. This will also lift the bank's loan loss absorption capacity, which could become important in an economic downturn. Danish mortgage spreads have also narrowed materially, which usually have a positive impact on value adjustments. In this report, we lift our 2020E-22E adjusted EPS estimates by 5-10%. Our new Gordon growth model-based fair value range is DKK 88-121 (79-111). Marketing material commissioned by Sparekassen Sjælland-Fyn.

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