2.11.2023 08:20:24 CET | BankNordik | Interim report (Q1 and Q3)

Correction to announcement no. 20/2023: Wrong attatchments in announcements no. 20/2023

Announcement no 21/2023

“We’re pleased to report solid financial results for the first nine months of the year with a profit before tax of DKK 271m, up from DKK 136m in the year-earlier period.

 The favourable performance was mainly driven by an increase in central bank and market rates, increases in both deposits and lending, the return on the investment portfolio and a good performance by the insurance business during the quarter. Furthermore, the customer portfolio maintained its sound credit quality despite a generally volatile economic environment of rising interest rates and high inflation. 

Prospects are generally good for the rest of the year, and as reported in a previous announcement, we have raised our net profit guidance from DKK 235-265m to the DKK 260-290m range,” said BankNordik CEO Turið F. Arge. 

Highlights of BankNordik’s interim report for the first nine months of 2023:

9M 2023 vs. 9M 2022

  • Operating profit before impairment charges increased from DKK 144m in the 9M 2022 period to DKK 202m in 9M 2023.
    • Net interest income rose from DKK 197m in 9M 2022 to DKK 260m in 9M 2023.
    • Fee and commission income amounted to DKK 60m in 9M 2023, which was DKK 6m lower than in 9M 2022. Net insurance income amounted to DKK 48m in 9M 2023, a DKK 10m increase relative to the year-earlier period.
    • Other operating income amounted to DKK 28m in 9M 2023, which was DKK 1m lower than in the same period of 2022.
    • Operating costs amounted to DKK 192m in 9M 2023, which was a DKK 7m increase relative to 9M 2022.
  • Impairment was a net reversal of DKK 15m in the 9M 2023 period, compared with a DKK 43m net reversal in 9M 2022.
  • Non-recurring items amounted to DKK 9m in the 9M 2023 period against DKK 0m in 9M 2022.
  • The overall profit before tax for the 9M 2023 period was DKK 271m against DKK 136m for 9M 2022.
    • The investment portfolio yielded a return of DKK 63m in the 9M 2023 period against a loss of DKK 50m in 9M 2022.

Q3 2023 vs. Q2 2023

  • BankNordik reported operating profit before impairment charges of DKK 83m in Q3 2023, an increase of DKK 12m from Q2 2023.
    • Net interest income amounted to DKK 96m in Q3 2023, which was a DKK 10m improvement on Q2 2023.
    • Fee and commission income increased by DKK 1m to DKK 19m in Q3 2023 from DKK 19m in Q2 2023.
    • Net insurance income amounted to DKK 24m in Q3 2023, a DKK 4m increase on Q2 2023.
    • Other operating income amounted to DKK 9m in Q3 2023, which was a DKK 2m decline relative to Q2 2023.
    • Operating costs for Q3 2023 amounted to DKK 65m, which was a DKK 1m increase on Q2 2023.
  • Impairment charges were DKK 0m in Q3 2023 against a DKK 7m reversal in Q2 2023.
  • Non-recurring items amounted to DKK 0m in Q3 2023 against a cost of DKK 6m in Q2 2023.
  • The overall profit before tax was DKK 108m in Q3 2023 against DKK 87m in Q2 2023.
    • The investment portfolio yielded a return of DKK 26m in Q3 2023, against DKK 15m in the preceding quarter.
  • Bank lending volumes were up by 2% from DKK 8,655m at 30 June 2023 to DKK 8,790m at 30 September 2023.
  • Brokered mortgage-credit increased by 2% from DKK 2,567m at 30 June 2023 to DKK 2,615m at 30 September 2023.
  • Deposits increased by 2% from DKK 8,426m at 30 June 2023 to DKK 8,602m at 30 September 2023.

Capital ratios

At 30 September 2023, the Group had a CET 1 capital ratio of 21.8%, against 21.6% at 31 December 2022. The total capital ratio including MREL was 30.1% at 30 September 2023 against 29.9% at 31 December 2022. The net profit for the period is not included in the capital ratios.

Guidance for 2023
On 18 April 2023, the Bank raised its FY 2023 net profit guidance from DKK 190–220m as originally guided to DKK 210–240m. Subsequently, on 16 June 2023, the Bank raised its net profit guidance to a range of DKK 235-265m and, on 19 September 2023, further again to a range of DKK 260-290m.The guidance is generally subject to uncertainty and will, amongst other things, depend on economic developments, loan impairment charges and market value adjustments.

For further information, please call:
Turið F. Arge, CEO, tel. (+298) 230 678

BankNordik has banking activities in Greenland and the Faroe Islands and insurance activities in the Faroe Islands. Founded in the Faroe Islands more than a century ago, the Group has total assets of DKK 12.5bn and 207 employees. The Bank is subject to the supervision of the Danish Financial Supervisory Authority and is listed on Nasdaq Copenhagen.

Appendix: Q1-Q3 2023 financial highlights and comparative figures

Further details are available in the interim report.

Highlights and ratios                  
DKKm Q3 2023 Q2 2023 Index Q1 2023 Q4 2022 Q3 2022 Q1-Q3 2023 Q1-Q3 2022 Index
Net interest income 96 86         111 78 72 67 260 197         132
Net fee and commission income 19 19         103 21 23 22 60 65           91
Net insurance income 24 19         123 5 14 11 48 38         126
Other operating income (less reclassification) 9 11           84 8 8 11 28 29           96
Operating income 148 135         110 112 117 110 395 330         120
Operating costs -65 -64         101 -63 -58 -62 -192 -185         104
Sector costs 0 0   0 0 0 -1 -1  
Profit before impairment charges 83 71         117 49 59 48 202 144         140
Impairment charges, net 0 7 -6 8 3 12 15 43 35
Operating profit 82 78         106 57 62 60 217 187         116
Non-recurring items 0 -6   -3 0 0 -9 0  
Profit before investment portfolio earnings and tax 82 72         114 54 62 60 208 187         111
Investment portfolio earnings 26 15 175 22 8 -36 63 -50 -124
Profit before tax 108 87         124 75 70 24 271 136         198
Tax 20 17         118 14 16 4 52 26         199
Net profit 88 70         126 61 54 20 219 111         198
Loans and advances 8.790 8.655         102 8.354 8.083 7.977 8.790 7.977         110
Deposits and other debt 8.602 8.426         102 8.524 8.351 8.225 8.602 8.225         105
Mortgage credit 2.615 2.567         102 2.634 2.648 2.652 2.615 2.652           99
Equity 1.780 1.694         105 1.626 1.817 1.756 1.780 1.756         101
Total capital ratio, incl. MREL capital, % 30,1 30,4   29,1 29,9 31,4 30,1 31,4  
CET 1 capital, % 21,8 22,1   21,0 21,6 22,9 21,8 22,9  
ROE, % 20,2 16,8   17,5 12,1 4,6 16,2 7,8  
ROE, excl. one-offs, % 20,2 17,9   18,3 12,1 4,6 16,8 7,8  
Liquidity Coverage Ratio (LCR), % 196,6 183,7   220,0 225,2 225,8 196,6 225,8  
Operating cost/income, % 44 47   56 49 56 49 56  
Number of FTE, end of period 207 203         102 203 200 201 207 201         103

Attachments

  • Interim Report_Q3 2023.pdf
  • Q3 2023_IR Presentation.pdf

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