Announcement no. 17/2024
“The positive trends from the first half continued in the third quarter, resulting in a satisfactory profit of DKK 119m before tax, which was a 13% improvement on the preceding quarter. The solid core operations were supported by a favourable interest rate environment and a thriving business with growth in both lending and deposit volumes and higher insurance income. Costs were maintained at the same level as in the previous quarter and were in line with the original guidance for the year. In the period, we also saw an outstanding investment portfolio return and reversal of impairment charges that reflected our customers’ sound credit quality,” says Føroya Banki CEO Turið F. Arge.
Highlights of Føroya Banki’s interim report for the first nine months of 2024:
Q1-Q3 2024 vs. Q1-Q3 2023
Q3 2024 vs. Q2 2024
Capital ratios
On 30 September 2024, the Group had a CET 1 capital ratio of 25.1% against 25.8% at 31 December 2023. The total capital ratio including MREL was 37.9% at 30 September 2024 against 41.1% at 31 December 2023. The reduction of the overall total capital ratio was due to the Bank’s repayment of hybrid capital in the amount of DKK 150m. The net profit of DKK 238.1m for Q1-Q3 2024 is not included in the calculation of capital ratios.
Guidance for 2024
On 18 October 2024, the Bank’s Management announced an upwards revision to its financial guidance for 2024. The original guidance for the year was for a net profit in the DKK 225-255m range. This range was raised to DKK 250-280m on 19 August and again in October to DKK 275-300m. The revision in October was driven by an improved outlook for core operations with growth in both lending and deposit volumes as well as solid investment portfolio returns. Furthermore, the credit quality of the Bank’s customers continues to be sound, as reflected in the relatively low impairment level.
The guidance is subject to uncertainty and will, amongst other things, depend on economic developments, loan impairment charges and market value adjustments.
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 14.1bn and 206 employees. The Bank is subject to the supervision of the Danish Financial Supervisory Authority and is listed on Nasdaq Copenhagen.
Appendix: Føroya Banki’s Q1-Q3 2024 financial highlights and comparative figures
| Highlights and ratios | |||||||||
| DKKm | Q3 2024 | Q2 2024 | Index | Q1 2024 | Q4 2023 | Q3 2023 | Q1-Q3 2024 | Q1-Q3 2023 | Index |
| Net interest income | 87 | 90 | 97 | 92 | 100 | 96 | 269 | 260 | 103 |
| Net fee and commission income | 18 | 17 | 106 | 19 | 17 | 19 | 54 | 60 | 92 |
| Net insurance income | 20 | 15 | 133 | 12 | 12 | 24 | 46 | 48 | 97 |
| Other operating income (less reclassification) | 10 | 10 | 101 | 11 | 4 | 9 | 32 | 28 | 113 |
| Operating income | 135 | 132 | 102 | 135 | 133 | 148 | 401 | 395 | 102 |
| Operating costs | -68 | -68 | 101 | -64 | -65 | -65 | -200 | -192 | 104 |
| Sector costs | 0 | 0 | 0 | 0 | 0 | -1 | -1 | ||
| Profit before impairment charges | 66 | 63 | 104 | 70 | 68 | 83 | 200 | 202 | 99 |
| Impairment charges, net | 6 | 7 | 83 | -23 | -5 | 0 | -10 | 15 | -68 |
| Operating profit | 72 | 70 | 102 | 47 | 62 | 82 | 189 | 217 | 87 |
| Non-recurring items | 0 | 0 | 0 | 0 | 0 | 0 | -9 | ||
| Profit before investment portfolio earnings and tax | 72 | 70 | 102 | 47 | 62 | 82 | 189 | 208 | 91 |
| Investment portfolio earnings | 48 | 35 | 135 | 23 | 46 | 26 | 106 | 63 | 169 |
| Profit before tax | 119 | 105 | 113 | 70 | 109 | 108 | 295 | 271 | 109 |
| Tax | 23 | 18 | 128 | 15 | 20 | 20 | 57 | 52 | 110 |
| Net profit | 96 | 87 | 110 | 55 | 89 | 88 | 238 | 219 | 109 |
| Loans and advances | 9.072 | 9.023 | 101 | 8.915 | 8.883 | 8.790 | 9.072 | 8.790 | 103 |
| Deposits and other debt | 9.359 | 9.180 | 102 | 8.930 | 8.710 | 8.602 | 9.359 | 8.602 | 109 |
| Mortgage credit | 2.579 | 2.585 | 100 | 2.621 | 2.599 | 2.615 | 2.579 | 2.615 | 99 |
| Equity | 2.004 | 1.909 | 105 | 1.824 | 1.851 | 1.762 | 2.004 | 1.676 | 120 |
| Total capital ratio, incl. MREL capital, % | 37,9 | 40,8 | 39,9 | 41,1 | 29,9 | 37,9 | 29,9 | ||
| CET 1 capital, % | 25,1 | 25,6 | 25,0 | 25,8 | 21,5 | 25,1 | 21,5 | ||
| ROE, % | 19,6 | 18,6 | 12,0 | 19,6 | 20,9 | 16,5 | 16,8 | ||
| ROE, excl. one-offs, % | 19,6 | 18,6 | 12,0 | 19,6 | 20,9 | 16,5 | 17,4 | ||
| Liquidity Coverage Ratio (LCR), % | 302,2 | 285,6 | 283,6 | 228,2 | 196,6 | 302,2 | 196,6 | ||
| Operating cost/income, % | 51 | 52 | 48 | 49 | 44 | 50 | 49 | ||
| Number of FTE, end of period | 206 | 209 | 99 | 209 | 207 | 207 | 206 | 207 | 99 |
