BankNordik P/F
BankNordik lifts operating profit by 37% in Q1-Q3 2014

BankNordik P/F 

06.11.2014 07:58

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Operating profit of DKK 53m in Q3 2014, up from DKK 44m in Q2 2014 and DKK 30m
in Q3 2013. Operating profit for Q1-Q3 period of DKK 128m, up by 37% from DKK
93m last year. 

BankNordik's Q3 2014 interim report shows an improved performance, notably in
the Danish banking operations and in the insurance operations. Banking
operations in the Faroes continued to face an extremely competitive market for
lending. 

Loans and advances improved in the third quarter, driven especially by 5%
lending growth in the Danish banking operations. Growing demand for new lending
and credit facilities and an inflow of new customers have more than offset the
reduction in the existing loan base. The growing business activity also
supported fee and trading income. 

Total operating income for the first nine months of 2014 was down by DKK 44m to
DKK 596m from DKK 640m in the same period of 2013 primarily caused by
decreasing lending rates on the Faroe Islands. The implemented rationalisations
have reduced costs by DKK 27m. With loan impairment charges at less than half
of last year's figure and the cost reductions, BankNordik reported profit
before tax of DKK 134m for Q1-Q3 2014 against DKK 124m last year, even with
value adjustments contributing DKK 15m less than last year. Half of the profit
came from banking operations outside the Faroes. 

'We're very pleased to see our operations improving, driven especially by our
Danish activities, and that our earnings performance has been a little better
than we anticipated at the start of the year,' said BankNordik CEO Janus
Petersen. 

Narrowing the guidance for 2014

Management now expects profit before impairment charges, non-recurring items,
value adjustments and tax of DKK 220-240m for the full year 2014. This narrows
the guidance to the upper half of the previous guidance range of DKK 200-240m
announced at the start of the year. For the Q1-Q3 2014 period, this item was
DKK 185m. 

Management expects full-year loan impairment charges, which amounted to DKK 56m
(net) in the Q1-Q3 period, to be substantially lower than the 2013-figure of
DKK 147m. 

Expectations for future financial developments are inherently subject to risk
and uncertainty, and actual results may differ substantially from expectations. 

Solvency and liquidity remaining strong

BankNordik's solvency ratio of 14.1% at 30 September 2014 leaves a margin of
5.3 percentage points to the relatively low capital requirement of 8.8%, which
reflects the Bank's controlled risk profile. After recognition of the profit
for the period, the solvency ratio would be 15%. 

In step with the gradual implementation of the rules governing systemically
important financial institutions (SIFIs) and the new capital adequacy rules
(CRD IV) in the second half of 2015 or in 2016, the Bank's capital requirements
are expected to increase to close to 14% by the end of 2019. Accordingly,
BankNordik already complies with the upcoming stricter capital requirements. 

In terms of liquidity requirements, BankNordik also had a solid buffer at 30
September 2014, at 2.7 times the statutory requirement. 





For additional information, please contact:

Janus Petersen, CEO, tel. (+298) 330 340

Árni Ellefsen, CFO, tel. (+298) 230 348

Johnny í Grótinum, Investor Relations, tel. (+298) 230 380, ir@banknordik.fo



BankNordik has banking activities in Denmark, Greenland and the Faroe Islands
and insurance activities in the Faroe Islands and Iceland. Founded in the Faroe
Islands more than a century ago, the Group has 170,000 customers, total assets
of DKK 17bn and 513 employees. The Bank is subject to the supervision of the
Danish Financial Supervisory Authority and is listed on NASDAQ OMX.
www.banknordik.dk. 



Financial highlights

DKKm                          Q3     Q2     Q1     Q4     Q3  Q1-Q3  Q1-Q3  2013
                            2014   2014   2014   2013   2013   2014   2013      
--------------------------------------------------------------------------------
                                                                                
Net interest income          125    126    133    133    143    383    441   574
Net fee income                48     54     46     53     43    148    135   188
Income from insurance         26     20      8     14     15     54     55    69
 operations                                                                     
Other operating income         3      4      3      5      2     10      9    14
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating income*            201    205    190    206    203    596    640   845
Operating costs*            -125   -136   -132   -139   -136   -393   -418  -558
Sector costs, etc.            -6     -6     -6     -4     -4    -18    -20   -26
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit before       70     62     52     62     62    184    201   261
 impairment charges*                                                            
Loan impairment charges,     -17    -19    -21    -42    -32    -56   -107  -147
 net                                                                            
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit*             53     44     31     20     30    128     93   114
Non-recurring items            0      1     -2    -19      1     -1      8   -11
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit before       53     45     29      1     31    127    102   103
 value adjustments and                                                          
 tax                                                                            
Value adjustments             -4      9      2    -10     16      7     22    11
--------------------------------------------------------------------------------
Profit/Loss before tax        49     54     31     -9     47    134    124   114
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                                                                
Deposits, etc. DKKbn        12.3   12.3   12.0   12.2   12.0                    
Loans and advances, etc.    10.3   10.2   10.4   10.5   10.6                    
 DKKbn                                                                          
Equity, DKKbn                2.2    2.2    2.1    2.2    2.2                    
Solvency ratio             14.1%  14.6%  14.7%  14.7%  14.5%                    
Liquidity relative to      2.7 x  2.6 x  2.6 x  2.8 x  2.6 x                    
 statutory requirement                                                          
Income/cost ratio            62%    66%    70%    68%    67%                    
Number of employees (FTE)    513    510    512    523    530                    
 at end of period                                                               
--------------------------------------------------------------------------------

  * Excluding non-recurring items and value adjustments.

Further details are available in the interim report.
News Source: NASDAQ OMX



06.11.2014 The DGAP Distribution Services include Regulatory Announcements,
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Language:     English
Company:      BankNordik P/F
              
               
              Faeroe Islands
Phone:        
Fax:          
E-mail:       
Internet:     
ISIN:         FO0000000088
WKN:          
 
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