Announcement no. 8/2024
“We delivered a generally positive performance for the first three months of 2024. Our profit before tax of DKK 70m was largely in line with the figure for the first quarter of last year. In addition to the favourable interest rate environment and the return on our own portfolio, the satisfactory performance was based on a sound balance between income and costs. Our income improved slightly, driven by an increase in business activity (both deposits and lending improving), while costs were in line with the previous quarterly periods.
Despite the positive trends, the first quarter was also marked by an increase in impairment charges compared to recent years. As previously announced, impairment charges are expected to return to a more normalised level in 2024 than what we have witnessed in recent years. However, the impairment charges taken previously do not imply that our customers generally are facing challenges, and they continue to display credit robustness. Nor have the impairment charges affected our previous full-year guidance for net profit of DKK 225-255m,” says CEO Turið F. Arge.
Highlights of Føroya Banki's interim report for the three months to 31 March 2024:
Q1 2024 vs Q1 2023
Q1 2024 vs Q4 2023
Capital ratios
At 31 March 2024, the Group had a CET 1 capital ratio of 25.0%, against 25.8% at 31 December 2023. The total capital ratio including MREL was 39.9% at 31 March 2024 against 41.1% at 31 December 2023. The net profit of DKK 55.0m is not included in the capital ratios.
Guidance for 2024
The Group reconfirms the 2024 net profit guidance of DKK 225–255m originally stated in the Annual Report 2023.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
Føroya Banki 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 13.4bn and 209 employees. The Bank is subject to the supervision of the Danish Financial Supervisory Authority and is listed on Nasdaq Copenhagen.
Appendix: Q1 2024 financial highlights and comparative figures
| Highlights and ratios | |||||||||
| DKKm | Q1 2024 | Q4 2023 | Index | Q3 2023 | Q2 2023 | Q1 2023 | Q1 2024 | Q1 2023 | Index |
| Net interest income | 92 | 100 | 93 | 96 | 86 | 78 | 92 | 78 | 119 |
| Net fee and commission income | 19 | 17 | 111 | 19 | 19 | 21 | 19 | 21 | 91 |
| Net insurance income | 12 | 12 | 98 | 24 | 19 | 5 | 12 | 5 | 246 |
| Other operating income (less reclassification) | 11 | 4 | 289 | 9 | 11 | 8 | 11 | 8 | 133 |
| Operating income | 135 | 133 | 101 | 148 | 135 | 112 | 135 | 112 | 120 |
| Operating costs | -64 | -65 | 99 | -65 | -64 | -63 | -64 | -63 | 101 |
| Sector costs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
| Profit before impairment charges | 70 | 68 | 104 | 83 | 71 | 49 | 70 | 49 | 144 |
| Impairment charges, net | -23 | -5 | 447 | 0 | 7 | 8 | -23 | 8 | -271 |
| Operating profit | 47 | 62 | 76 | 82 | 78 | 57 | 47 | 57 | 83 |
| Non-recurring items | 0 | 0 | 0 | -6 | -3 | 0 | -3 | ||
| Profit before investment portfolio earnings and tax | 47 | 62 | 76 | 82 | 72 | 54 | 47 | 54 | 88 |
| Investment portfolio earnings | 23 | 46 | 49 | 26 | 15 | 22 | 23 | 22 | 104 |
| Profit before tax | 70 | 109 | 64 | 108 | 87 | 75 | 70 | 75 | 93 |
| Tax | 15 | 20 | 74 | 20 | 17 | 14 | 15 | 14 | 107 |
| Net profit | 55 | 89 | 62 | 88 | 70 | 61 | 55 | 61 | 90 |
| Loans and advances | 8.915 | 8.883 | 100 | 8.790 | 8.655 | 8.354 | 8.915 | 8.354 | 107 |
| Deposits and other debt | 8.930 | 8.710 | 103 | 8.602 | 8.426 | 8.524 | 8.930 | 8.524 | 105 |
| Mortgage credit | 2.621 | 2.599 | 101 | 2.615 | 2.567 | 2.634 | 2.621 | 2.634 | 100 |
| Equity | 1.824 | 1.851 | 99 | 1.762 | 1.676 | 1.608 | 1.824 | 1.608 | 113 |
| Total capital ratio, incl. MREL capital, % | 39,9 | 41,1 | 29,9 | 30,2 | 28,9 | 39,9 | 28,9 | ||
| CET 1 capital, % | 25,0 | 25,8 | 21,5 | 21,8 | 20,8 | 25,0 | 20,8 | ||
| ROE, % | 12,0 | 19,6 | 25,2 | 21,2 | 17,7 | 12,0 | 14,4 | ||
| ROE, excl. one-offs, % | 12,0 | 19,6 | 25,2 | 22,6 | 18,5 | 12,0 | 15,0 | ||
| Liquidity Coverage Ratio (LCR), % | 283,6 | 228,2 | 196,6 | 183,7 | 220,0 | 283,6 | 220,0 | ||
| Operating cost/income, % | 48 | 49 | 44 | 47 | 56 | 48 | 56 | ||
| Number of FTE, end of period | 209 | 207 | 101 | 207 | 203 | 203 | 209 | 203 | 103 |
