BankNordik P/F
BankNordik expects 2013 profits almost in line with 2012

BankNordik P/F 

10.01.2014 08:00

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BankNordik releases updated FY 2013 guidance impacted by higher impairments and
claims expenses in the insurance business than previously expected. 

BankNordik's operating profit before impairment charges and special items will
be largely in line with the guidance already provided for 2013. Demand for
loans remains soft, and the market for new lending is extremely competitive,
putting interest margins under considerable pressure. As a result, operating
income fell in 2013, but the decline was largely offset by the drop in
operating costs achieved through extensive rationalisation measures. 

Insurance operations have performed largely as expected in 2013. However, an
unusual number of major windstorm claims were reported in the Faroe Islands in
December causing above-average losses, which means that the insurance arm will
contribute approximately DKK 10 million less to the consolidated results than
previously expected. 

As previously announced, BankNordik has decided to move all head office
functions to a new, efficient property in Tórshavn. The previous head office
facility has been sold and will be vacated when the new property is ready for
occupation in 2015. The sale of the head office produced an accounting gain of
DKK 18 million in the first half of 2013, which is being offset, however, by a
similar impairment charge on the new construction project, which under current
rules must be valued not according to costs incurred, but rather according to
an estimated rental value. 

The impairment charges for the year are expected to be DKK 145-150 million
(2012: DKK 115 million). Most of the impairment charges relate to personal
customers and small corporate customers. 

Profit forecast for 2013

In an overall preliminary estimate that includes the actual value adjustments
at 31 December 2013, BankNordik currently expects a profit for 2013 of
approximately DKK 100-120 million before (2012: DKK 121 million). 

The 2013 profit before value adjustments and tax is expected to be DKK 85-100
million (2012: DKK 102 million). The previous guidance for this figure was DKK
130-160 million. 

A preliminary calculation shows BankNordik's solvency ratio at 31 December 2013
to be about 14.8%, which is 5.9 percentage points higher than the individual
solvency need of about 8.9%. Also, at 31 December 2013, BankNordik had solid
excess liquidity cover of about 178%. 

BankNordik's annual report for 2013 is expected to be published on 27 February
2014. 



Additional information

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

Árni Ellefsen, CFO, tel. (+298) 330 348

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 180,000 customers, total assets
of DKK 17bn and 510 employees. The Bank is subject to the supervision of the
Danish Financial Supervisory Authority and is listed on NASDAQ OMX.
www.banknordik.dk.
News Source: NASDAQ OMX



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Language:     English
Company:      BankNordik P/F
              
               
              Faeroe Islands
Phone:        
Fax:          
E-mail:       
Internet:     
ISIN:         FO0000000088
WKN:          
 
End of Announcement                             DGAP News-Service
 
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