BankNordik P/F
BankNordik: 2013 financial results in line with 2012

DGAP-News: BankNordik P/F /

27.02.2014 / 08:00

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Profit before value adjustments and tax of DKK 103m for 2013, compared with DKK
101m in 2012. Performance impacted by competitive markets and impairment
charges. The Nordik 360 loyalty programme has increased business with customers
wishing to make use of the Bank's professional services and broad range of
products. 

Operating income totalled DKK 846m, as against DKK 895m the year before. Demand
for loans remains soft, and the market for new lending is extremely
competitive, putting interest margins under considerable pressure. The
insurance operations made a healthy contribution to consolidated earnings. 

The drop in income from banking activities were to a large extent offset by
lower operating costs achieved through extensive rationalisation measures. On
the other hand, the financial results were impacted by BankNordik's DKK 26m
contribution to the banking industry's deposit guarantee scheme (2012: DKK
11m). This brought operating profit before impairment charges to DKK 261m,
compared with DKK 292m in 2012. 

The profit after loan and credit impairment charges for the year was DKK 147m
(2012: DKK 115m). Most of the impairment charges relate to personal customers
and small corporate customers. 

The profit after impairment charges and special items but before value
adjustments and tax was DKK 103m, compared with DKK 101m in 2012. This is
slightly higher that the profit guidance announced on 10 January 2014. 

Increasing and strengthening customer collaboration

Following BankNordik's strategic long-term expansion of its operations in 2010
and 2011 and the far-reaching restructuring that followed, the Bank was once
again able to dedicate its full attention to serving its customers in 2013. 

In order to focus its efforts, the Bank strengthened its services to those of
its customers who make the most use of its banking services. A new loyalty
programme, Nordik 360, has been launched to retain and expand the group of
high-value customers. At the same time, more efficient services were provided
to customers demanding fewer and less sophisticated services. 

Outlook for 2014

BankNordik intends to continue developing its operations in line with its
current strategy and policies. 

Interest rates are expected to remain at low levels, and moderate economic
growth is expected in the Bank's markets. As a result, demand for loans is
expected to remain low, but the Bank will work to increase the volume of new
lending in order to offset the repayments on existing loans. As a result, the
Bank expects loans and advances at the end of 2014 to be at the level of the
beginning of the year. The interest margin is expected to contract somewhat in
the very competitive markets. 

As a result, the Bank expects a drop in net interest income in 2014 relative to
2013. The same applies to the income from insurance operations. A slight
improvement is expected in fee income from increases in pension, investment and
mortgage-credit activities. 

The Bank will retain its focus on cost savings in 2014.

Based on the above, BankNordik expects profit before impairment charges,
special items, value adjustments and tax of DKK 200-240m for 2014 (2013: DKK
261m). 

Net impairments on loans are expected to be lower in 2014 than in 2013.

Solvency and liquidity at healthy levels

BankNordik's risk profile is reflected in its solvency need of 8.9%, which is
among the lowest in the Danish banking sector and very close to the statutory
minimum solvency requirement of 8%. The Bank's solvency of 14.7% leaves a
margin of 5.8 percentage points relative to the solvency need. 

The Faroese and the Danish regulatory authorities have agreed to designate
three of the four Faroese banks as systemically important financial
institutions (SIFIs), one being BankNordik. Preliminary calculations indicate
that BankNordik will be imposed a SIFI-buffer of 2.5%. 

In terms of liquidity, BankNordik also has solid excess cover at 178% above the
required level, equal to 2.8 times the requirement. 

Audiocast Presentation of the results

In connection with publication of the Annual Report the bank hosts an audiocast
presentation of the results. CEO Janus Petersen will be the host of the
audiocast. 

A link to the audiocast is available on www.banknordik.com.

Investors, analysts and other interested parties will be able to put forward
questions by dialling in on the following dial in numbers at 10:30 GMT. 

Leader UK Freephone Dial-In:             
United Kingdom                08005286702

Leader Std International Dial-In:  +44 (0) 1452 554946


Leader LocalCall Dial-In Numbers:          
Denmark, Copenhagen                32728019



Appendix: BankNordik's financial highlights for 2013



For further information, please contact:

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 170,000 customers, total assets
of DKK 17bn and 500 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                        2013    2012      Q4      Q3      Q2      Q1      Q4
                                            2013    2013    2013    2013    2012
--------------------------------------------------------------------------------
                                                                                
Net interest income          574     613     133     143     151     147     154
Net fee income               188     195      53      43      48      44      54
Income from insurance         69      81      14      15      29      12      18
 operations                                                                     
Other operating income        14       6       5       3       3       3       4
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Operating income*            845     895     206     204     230     206     230
Operating costs*            -558    -592    -140    -136    -142    -141    -137
Sector costs, etc.           -26     -11      -4      -4      -8      -8      -7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit before      261     292      62      64      81      57      86
 impairment charges*                                                            
Loan impairment charges,    -148    -115     -41     -32     -20     -55     -35
 net                                                                            
--------------------------------------------------------------------------------
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Operating profit*            114     178      21      31      69      10      58
Non-recurring items          -11     -77     -19       0      10      -2     -10
--------------------------------------------------------------------------------
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Operating profit/(loss)      103     101       1      31      79      -9      34
 before value                                                                   
 adjustments and tax                                                            
Value adjustments             11      21     -10      16     -16      22       8
--------------------------------------------------------------------------------
Profit before tax            114     121      -9      47      63      13      42
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Deposits, etc.            12,193  12,746  12,193  12,019  12,331  12,800  12,746
Loans etc.                10,460  11,303  10,460  10,587  10,750  10,820  11,303
Total assets              17,085  17,609  17,085  16,876  17,369  17,817  17,609
Equity                     2,156   2,053   2,156   2,155   2,125   2,063   2,053
Solvency ratio             14.7%   14.8%   14.7%   14.5%   15.4%   14.9%   14.8%
Liquidity relative to      2.8 x   2.5 x   2.8 x   2.6 x   2.8 x   3.0 x   2.5 x
 statutory requirement                                                          
Costs / Operating profit     66%     66%     68%     67%     61%     68%     61%
Number of employees          509     550     509     517     529     533     550
 (FTE) at year-end                                                              
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* Excluding non-recurring items and other special items (value adjustments
etc.). 



Further details are available in the 2013 Annual Report.
News Source: NASDAQ OMX


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Language:    English         
Company:     BankNordik P/F  
 
 
             Faeroe Islands  
ISIN:        FO0000000088    
 
 
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254648 27.02.2014