Announcement no. 7/2023
“We’re pleased to report solid financial results for the first quarter, as we improved our net profit by 30% year on year. The strong performance was driven especially by the persistently sound credit quality and resilience to inflationary pressures of our customer portfolio, which enabled reversals of impairment losses during the period. Although income from our insurance operations came in below our expectations, we upgraded our full-year net profit guidance in April due to the improved outlook for our core operations. While we see good prospects for the rest of the year, we have decided to raise the management estimated provision from DKK 56m to DKK 65m in light of the generally uncertain economic environment,” said BankNordik CEO Árni Ellefsen.
Highlights of BankNordik's interim report for the three months to 31 March 2023:
Q1 2023 vs Q1 2022
Q1 2023 vs Q4 2022
Capital ratios
At 31 March 2023, the Group had a CET 1 capital ratio of 21.0%, against 21.6% at 31 December 2022. The total capital ratio including MREL was 29.1% at 31 March 2023 against 29.9% at 31 December 2022.
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.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:
Árni Ellefsen, CEO, tel. (+298) 230 348
Turið F. Arge, Executive Vice President, 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 201 employees. The Bank is subject to the supervision of the Danish Financial Supervisory Authority and is listed on Nasdaq Copenhagen.
Appendix: Q1 2023 financial highlights and comparative figures:
DKKm | Q1 2023 | Q4 2022 | Index | Q3 2022 | Q2 2022 | Q1 2022 | Q1 2023 | Q1 2022 | Index |
Net interest income | 78 | 72 | 107 | 67 | 65 | 66 | 78 | 66 | 118 |
Net fee and commission income | 21 | 23 | 93 | 22 | 22 | 22 | 21 | 22 | 99 |
Net insurance income | 5 | 14 | 34 | 11 | 15 | 12 | 5 | 12 | 42 |
Other operating income (less reclassification) | 8 | 8 | 110 | 11 | 9 | 10 | 8 | 10 | 84 |
Operating income | 112 | 117 | 96 | 110 | 111 | 109 | 112 | 109 | 103 |
Operating costs | -63 | -58 | 109 | -62 | -62 | -61 | -63 | -61 | 104 |
Sector costs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
Profit before impairment charges | 49 | 59 | 82 | 48 | 48 | 48 | 49 | 48 | 102 |
Impairment charges, net | 8 | 3 | 249 | 12 | 22 | 10 | 8 | 10 | 87 |
Operating profit | 57 | 62 | 92 | 60 | 70 | 57 | 57 | 57 | 99 |
Non-recurring items | -3 | 0 | 0 | 0 | 0 | -3 | 0 | ||
Profit before investment portfolio earnings and tax | 54 | 62 | 86 | 60 | 70 | 57 | 54 | 57 | 93 |
Investment portfolio earnings | 22 | 8 | 275 | -36 | -16 | 2 | 22 | 2 | 1354 |
Profit before tax | 75 | 70 | 108 | 24 | 54 | 59 | 75 | 59 | 128 |
Tax | 14 | 16 | 87 | 4 | 10 | 12 | 14 | 12 | 119 |
Net profit | 61 | 54 | 114 | 20 | 43 | 47 | 61 | 47 | 130 |
Loans and advances | 8.354 | 8.083 | 103 | 7.977 | 7.724 | 7.684 | 8.354 | 7.684 | 109 |
Deposits and other debt | 8.506 | 8.351 | 102 | 8.225 | 8.897 | 8.047 | 8.506 | 8.047 | 106 |
Mortgage credit | 2.634 | 2.648 | 99 | 2.652 | 2.730 | 2.727 | 2.634 | 2.727 | 97 |
Equity | 1.626 | 1.817 | 89 | 1.756 | 1.737 | 1.697 | 1.626 | 1.697 | 96 |
Total capital ratio, incl. MREL capital, % | 29,1 | 29,9 | 31,4 | 32,0 | 32,9 | 29,1 | 32,9 | ||
CET 1 capital, % | 21,0 | 21,6 | 22,9 | 23,3 | 23,8 | 21,0 | 23,8 | ||
ROE, % | 14,7 | 12,1 | 4,6 | 10,1 | 10,1 | 14,7 | 10,1 | ||
ROE, excl. one-offs, % | 14,9 | 12,1 | 4,6 | 10,1 | 10,1 | 14,9 | 10,1 | ||
Liquidity Coverage Ratio (LCR), % | 220,0 | 225,2 | 225,8 | 223,4 | 198,4 | 220,0 | 198,4 | ||
Operating cost/income, % | 56 | 49 | 56 | 56 | 56 | 56 | 56 | ||
Number of FTE, end of period | 201 | 200 | 101 | 201 | 203 | 199 | 201 | 199 | 101 |