2014 – Increasing turnover and adjustment to future market conditions

Activity in the financial markets continued to increase in 2014, leading to an 18 per cent increase in trading activity for VP SECURITIES A/S (VP) and net turnover at the highest level since 2009. As a consequence of changes in European legislation and the development of a joint European settlement platform, VP's core business is changing. In 2014, a number of activities took place to prepare VP for the future challenges.

VP's result for 2014 is affected positively by an increase in net turnover of 9 per cent to DKK 399 million in 2014. The increase can be attributed primarily to VP's core activity, CSD Services, but there were also small increases in net turnover in VP's other business areas. Costs have also risen in view of the costs defrayed regarding the ongoing strategic work, including the development of the IT platform in preparation for the transition to TARGET2-Securities (T2S), as well as the streamlining of the organisation. The operating profit for 2014 was DKK 80.9 million, which is a decrease by DKK 9.2 million from 2013. Profit for the year was DKK 63.1 million, which is DKK 5.4 million lower than in 2013.

VP's two principle business areas are CSD & Securities Services (securities-related activities) and VP INVESTOR SERVICES (services to support the needs of companies and mutual funds for effective investor care services). Both areas developed positively in 2014.

Increased trading activity

In 2014, 15.1 million securities transactions were settled via VP, which was an increase of 18 per cent compared to 2013. The breakdown of the transactions was 8.0 million share transactions (an increase of 26 per cent compared to 2013), 0.8 million bond transactions (a decrease of 5 per cent) and 6.3 million unit trust transactions (an increase of 14 per cent). This development is a consequence of the positive share market trends and very low bond yields.

The value of the turnover issued via VP increased by 3 per cent to DKK 44,205 billion and the total market value of securities registered with VP at the end of 2014 was DKK 7,304 billion, which is DKK 394 billion higher than at the end of 2013 and equivalent to an increase of 6 per cent.

"In 2014, VP benefited from continued increasing activity in the financial markets, leading to higher turnover in our core business and related areas. Work has also taken place in all business areas in 2014 to develop new services and strengthen relations with our customers. On the transition to new terms of competition, it is important to be close to our customers in the coming years, and aware of their future direction, so that we can continue to assure them the best and most effective future solutions," says CEO Niels Olsen.

Influx of new investor services customers

2014 saw a continued influx of new customers to VP INVESTOR SERVICES, while some customers were subject to mergers or winding-ups. VP INVESTOR SERVICES now manages the share registers of 235 companies, banks and mutual funds, and during 2014 provided meeting services for 221 AGMs and shareholder meetings, etc.

Adjustment to future market conditions

The framework for VP's core activities is currently changing significantly as a consequence of several ongoing initiatives at European level. The most significant initiatives concern a number of changes in legislation relating to the implementation of common rules for the CSDs (CSD-R) and the development of the joint European settlement platform, T2S.

"Harmonisation of legislation combined with the joint European settlement platform will provide the basis for the future liberalisation of the market for services related to the book entry, issuance and clearing of securities trades, which today constitute VP's core business. 2014 has therefore been a year with many activities that are all intended to make VP even better prepared for the future challenges," says Peter Lybecker, Chairman of VP's Board of Directors.

"VP is the only CSD in Scandinavia that participates in T2S, and many resources have been invested in 2014 to prepare VP's existing IT platform for participation in this joint European solution. In 2014, we also worked intensively on identifying VP's opportunities in the new market conditions, including identification of the right future service platform and array of products for our customers. To a great extent this work has been based on dialogue with our customers and other market participants, and we expect to achieve clarification during the first half of 2015," Peter Lybecker adds.

For further information, please contact:

Chairman of the Board of Directors, Peter Lybecker, tel.: (+45) 4358 8888
CEO Niels Olsen, tel.: (+45) 2114 2141

VP's Annual Report can be downloaded here.

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