Værdiansættelse af Amagerbanken A/S

Hasse Lyngsie Wulff & Kim Richard Achilles Holm

Student thesis: Master thesis

Abstract

This thesis sets out to determine the fair value of Amagerbanken A/S share as of January 31st, 2011. Amagerbanken has received enormous media attention since the onset of the global financial crisis in 2008. This is due to poor financial performances, the result of which has required multiple capital injections from government and investors. Only six days after the cut-off date (January 31st, 2011), Amagerbanken filed for bankruptcy. This was the result of a DKK 3.1 billion loan loss provision in less than three months. For the purposes of the thesis, only information concerning the period prior to the cut-off date is employed. The valuation is conducted through a combined strategic and financial analysis. This facilitates a forecasting of future performance, which in turn enables a calculation of the value of Amagerbanken. In the strategic analysis it is concluded that Amagerbanken’s sole competitive advantage is a stable and loyal private and corporate customer base on the island of Amager. A major weakness affecting the functioning of the bank is that customers are incapable of repaying outstanding loans. In the context of high exposure to the Copenhagen real estate market, the bank has failed to effectively assess risk and credit factors. Consequently, it is argued that poor image and a lack of economic strength will cause a declining customer base. A major ongoing threat to the bank is stagnation of real estate prices and prolonged economic recovery. Further loan loss provisions can be anticipated, and there is a low possibility of their reversal. In addition, capital requirements and the new Basel III regulations represent an imminent threat of bankruptcy.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages188