Announcement no. 3/2025
“2024 was generally a year of positive business trends for the Føroya Banki Group. It was also a year marked by continued geopolitical tensions, by inflation being brought under control and interest rates coming down following several years of rising interest rates and high inflation.
The financial statements showed sound core operations, and we find the performance for the year with a net profit of DKK 310 million and a return on equity of close to 16% satisfactory. The positive performance was backed by growth in both deposits and lending, increased investment activity and a solid return on the investment portfolio. This strong starting point will support us in successfully pursuing our strategic plans for sustainable growth in the strategy period towards 2026.
Costs were kept in line with the original guidance for the year, resulting in a cost/income ratio of 53%. That we were able to reverse impairment charges for the eighth year running reflects the sound credit quality of our customers and is a good jumping-off point for 2025,” says Føroya Banki CEO Turið F. Arge.
We delivered a profit after tax of DKK 310 million, and at the general meeting on 27 March we expect to recommend a dividend distribution of DKK 350 million (DKK 36.46 per share), of which DKK 133 million is originating from a capital optimisation and DKK 217 million represents 70% of the net profit for 2024.
Highlights of Føroya Banki's annual report for 2024:
Q4 2024 relative to Q3 2024
Q1-Q4 2024 vs Q1-Q4 2023
Capital ratios
At 31 December 2024, the Group had a CET 1 capital ratio of 23.8%, against 25.8% at 31 December 2023. The total capital ratio including MREL was 36.3% at 31 December 2024 against 41.1% at 31 December 2023.
Guidance for 2025
Føroya Banki's management is guiding for FY 2025 net profit in the DKK 210-240m range (FY 2024: DKK 310m). The guidance is subject to uncertainty and will, amongst other things, depend on economic conditions, developments in the Group’s markets, loan impairments and market value adjustments.
Appendix: Q1-Q4 2024 financial highlights and comparative figures
Highlights and ratios
| DKKm | 2024 | 2023 | Index | Q4 2024 | Q3 2024 | Index | Q2 2024 | Q1 2024 | Q4 2023 |
| Net interest income | 347 | 360 | 96 | 78 | 87 | 90 | 90 | 92 | 100 |
| Net fee and commission income | 74 | 77 | 96 | 19 | 18 | 106 | 17 | 19 | 17 |
| Net insurance income | 57 | 60 | 95 | 10 | 20 | 52 | 15 | 12 | 12 |
| Other operating income (less reclassification) | 41 | 32 | 129 | 9 | 10 | 91 | 10 | 11 | 4 |
| Operating income | 519 | 528 | 98 | 117 | 135 | 87 | 132 | 135 | 133 |
| Operating costs | -273 | -259 | 106 | -72 | -69 | 104 | -68 | -65 | -65 |
| Sector costs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
| Profit before impairment charges | 245 | 269 | 91 | 46 | 66 | 69 | 63 | 70 | 68 |
| Impairment charges, net | 1 | 10 | 11 | 11 | 6 | 203 | 7 | -23 | -5 |
| Operating profit | 246 | 279 | 88 | 57 | 72 | 79 | 70 | 47 | 62 |
| Non-recurring items | 0 | -9 | 0 | 0 | 0 | 0 | 0 | ||
| Profit before investment portfolio earnings and tax | 246 | 270 | 91 | 57 | 72 | 79 | 70 | 47 | 62 |
| Investment portfolio earnings | 136 | 109 | 125 | 31 | 48 | 64 | 35 | 23 | 46 |
| Profit before tax | 382 | 379 | 101 | 88 | 119 | 73 | 105 | 70 | 109 |
| Tax | 72 | 72 | 100 | 15 | 23 | 65 | 18 | 15 | 20 |
| Net profit | 310 | 308 | 101 | 72 | 96 | 75 | 87 | 55 | 89 |
| Loans and advances | 9.086 | 8.883 | 102 | 9.086 | 9.072 | 100 | 9.023 | 8.915 | 8.883 |
| Deposits and other debt | 10.007 | 8.710 | 115 | 10.007 | 9.359 | 107 | 9.180 | 8.930 | 8.710 |
| Mortgage credit | 2.741 | 2.599 | 105 | 2.741 | 2.579 | 106 | 2.585 | 2.621 | 2.599 |
| Equity | 2.076 | 1.851 | 112 | 2.076 | 2.004 | 104 | 1.909 | 1.824 | 1.851 |
| Total capital ratio, incl. MREL capital, % | 36,3 | 41,1 | 36,3 | 37,9 | 40,8 | 39,9 | 41,1 | ||
| CET 1 capital, % | 23,8 | 25,8 | 23,8 | 25,1 | 25,6 | 25,0 | 25,8 | ||
| ROE, % | 15,8 | 16,9 | 14,2 | 19,6 | 18,6 | 12,0 | 19,6 | ||
| ROE, excl. one-offs, % | 15,8 | 17,3 | 14,2 | 19,6 | 18,6 | 12,0 | 19,6 | ||
| Liquidity Coverage Ratio (LCR), % | 337,4 | 228,2 | 337,4 | 302,2 | 285,6 | 283,6 | 228,2 | ||
| Operating cost/income, % | 53 | 49 | 61 | 51 | 52 | 48 | 49 | ||
| Number of FTE, end of period | 207 | 207 | 100 | 207 | 206 | 101 | 209 | 209 | 207 |
Further details are available in the annual report.
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 14.5bn and 207 employees. The Bank is subject to the supervision of the Danish Financial Supervisory Authority and is listed on Nasdaq Copenhagen.
