Announcement no. 23/2019
Increased business volumes – continued margin pressure
“The first half of 2019 progressed well and we delivered satisfactory financial results. Pressure on interest margins continued to cause a drag on net interest income, but was countered by high customer activity and growing business volumes. In July, we raised our net profit guidance in response to a significant reversal of impairment charges, mirroring not only the current economic environment but also the sound credit quality of our loan portfolio,” said BankNordik CEO, Árni Ellefsen.
“In Q2 2019, BankNordik partnered with the European Investment Fund to provide financing to innovative enterprises in the Faroe Islands and Greenland under the InnovFin programme – an EU initiative of which BankNordik is the first and currently sole partner bank covering the Faroese and the Greenlandic markets. Apple Pay was also introduced to our customers, enabling contactless purchases through the use of Apple devices,” said Mr. Ellefsen.
Highlights of BankNordik's interim report for the first six months of 2019:
H1 2019 vs. H1 2018
Q2 2019 vs. Q1 2019
Capital ratios
The Group’s CET1 capital ratio was 17.5% and the total capital ratio was 19.6%, both on 30 June 2019.
Net income in 2019 will not be recognised in the capital and solvency statement until the annual report is released in audited form.
Outlook
Management reconfirms the FY2019 guidance of operating profit before impairment charges in the range of DKK 160–200m (H1 2019: DKK 81m).
On 22 July 2019, BankNordik raised its guidance for the FY2019 net profit from DKK 100–150m as previously guided to DKK 150–200m (H1 2019: DKK 118m), driven by the reversal of impairment charges.
This guidance is generally subject to uncertainty and will, amongst other things, depend on economic conditions, loan impairments and market value adjustments.
For additional information, please contact:
Árni Ellefsen, CEO, tel. (+298) 230 348
BankNordik has banking activities in Denmark, 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 17.7bn and 390 employees. The Bank is subject to the supervision of the Danish Financial Supervisory Authority and is listed on Nasdaq Copenhagen.
Appendix: Financial highlights and comparative figures are provided below.
Financial highlights
DKK million | H1 2019 | H1 2018 | Q2 2019 | Q1 2019 | Q4 2018 | Q3 2018 | Q2 2018 |
Net interest income | 181 | 188 | 90 | 91 | 92 | 94 | 93 |
Net fee and commission income | 93 | 87 | 45 | 48 | 42 | 43 | 43 |
Income from insurance operations | 24 | 18 | 15 | 9 | 13 | 13 | 6 |
Other operating income | 22 | 27 | 11 | 11 | 9 | 10 | 15 |
Operating income | 321 | 319 | 163 | 158 | 156 | 160 | 157 |
Operating costs | -240 | -231 | -119 | -120 | -115 | -111 | -116 |
Operating profit before impairment charges | 81 | 88 | 43 | 38 | 42 | 49 | 42 |
Impairment charges, net | 72 | 54 | 53 | 19 | 18 | 39 | 23 |
Operating profit | 153 | 142 | 96 | 57 | 60 | 88 | 65 |
Non-recurring items | 0 | 88 | 0 | 0 | -10 | -6 | 12 |
Profit before value adjustments and tax | 153 | 230 | 96 | 57 | 50 | 81 | 76 |
Value adjustments | -2 | -23 | -10 | 8 | -12 | -3 | -17 |
Profit before tax | 151 | 207 | 86 | 65 | 38 | 78 | 59 |
Loans and advances | 10.1 | 9.7 | 10.1 | 10.0 | 10.0 | 10.0 | 9.7 |
Deposits and other debt | 14.1 | 13.1 | 14.1 | 14.0 | 13.4 | 13.2 | 13.1 |
Mortgage lending | 12.6 | 11.9 | 12.6 | 12.5 | 12.2 | 12.1 | 11.9 |
Equity | 2.0 | 1.9 | 2.0 | 2.0 | 2.0 | 1.9 | 1.9 |
Solvency ratio | 19.6 | 18.5 | 19.6 | 19.2 | 19.8 | 17.6 | 18.5 |
Operating cost/income, % | 75 | 72 | 73 | 76 | 73 | 69 | 73 |
Number of FTE, end of period | 390 | 390 | 390 | 393 | 393 | 385 | 390 |
* Excluding non-recurring items and value adjustments.
Further details are available from the interim report.
Attachments