The Board of BankNordik has approved the financial statements for the first half of 2011. It shows a profit of DKK 49 million before value adjustments and tax against DKK 51 million in the same period last year (excl. extraordinary profit from sale of stock in Bakkafrost)
The demand for new loans remains relatively weak and previous loans are redeemed. Thus, the Bank’s lending and earnings from these activities have receded a little.
In August 2011, BankNordik has raised interest rates generally by 0.5 percentage point and has launched various initiatives regarding the internal organization and reduction of costs. Thus, branches both in the Faroe Islands and in Denmark have been merged. The interest costs and risk of revaluation are reduced by further redemption of external funding in the second half of 2011.
Strategic expansion
With the acquisition of the healthy parts of Amagerbanken from July this year and a number of former Sparbank branches last year BankNordik increased its activities in Denmark significantly. The activities are located in all the major growth areas, including Copenhagen, Aarhus, Odense and Mid-Jutland. At the same time, BankNordik achieved a better geographical and industrial risk diversification and increased its deposit surplus significantly – an important factor in times when other banks are experiencing difficulty obtaining financing.
“We are very pleased to welcome 90,000 new customers, who have gone through a period of uncertainty. BankNordik is a strong bank with good solvency and liquidity and low risk profile with the greatest emphasis on retail customers, so we have both the ability and willingness to partner with new, good customers," says Janus Petersen and continues:
"Revenue from our insurance business has increased significantly. It stipulates the importance of the increased focus on this front during recent years. It is important for our competitiveness, that we can supply our customers with a full range of financial services," says Janus Petersen.
Impairments on the loan portfolio were DKK 30 million in the first half of the year and are henceforth expected to return to a normal level.
The Bank’s costs in the first six months also include payments to the Collective Depositary Fund of DKK 17 million.
High solidity and good liquidity
BankNordik’s solvency was above 20% at the turn of half-year. The acquisition of large parts of Amagerbanken reduced the high solvency but following an increase in the capital base of DKK 600 million in connection with the acquisition the solvency is approximately 14.5%. This is significantly higher than the individual solvency requirement of 8.8%. BankNordiks policy remains to keep a high solvency – significantly exceeding the set requirement.
The bank´s total deposits are DKK 1.3 billion higher than the loans and advances which gives the bank a good liquidity.
Expectations of growth
“We are in the middle of the important integration process with new business opportunities and focus on control of the resources. But these are positive and forward looking tasks and challenges and our employees provide a great effort,” says Janus Petersen.
The Bank’s management is maintaining its previous expectations for 2011 as a whole of a profit before tax and value adjustments of DKK 100-140 million in relation to the previous activities. The integration of Amagerbanken is expected to influence the accounts negatively with around DKK 30 million so that the overall result is expected to be in the range of DKK 70-110 million.
From 2012, the increased activities in Denmark are expected to contribute significantly to the Bank’s performance.
BankNordik was founded over 100 years ago in the Faroe Islands. The Group has banking activities in Denmark and Greenland and the Faroe Islands and insurance activities on the Faroe Islands and Iceland. The Bank has a balance of DKK 20 billion and 630 employees. The Bank is subject to the Danish Financial Services Authority and participating in the Danish deposit guarantee fund. BankNordik is listed on NASDAQ OMX Copenhagen.
BankNordik Group
Key figures
| Million DKK | H1 2011 | H1 2010 | 2010 |
| Interest and fee income and income from insurance activities, net | 315 | 308 | 644 |
| Staff cost and administrative expenses | 209 | 195 | 408 |
| Impairment charges on loans | 30 | 35 | 167 |
| Profit before value adjustments, special items and tax | 49 | 51 | 16 |
| Profit before tax | 27 | 458 | 416 |
| Total assets | 13,299 | 14,984 | 14,259 |
| Loans and advances | 8,446 | 8,793 | 8,675 |
| Deposits and other debts | 8,741 | 8,713 | 8,790 |
| Due to credit institutions and central banks | 146 | 624 | 245 |
| Total shareholders’ equity | 2,016 | 2,049 | 2,003 |
| Solvency ratio | 20.3% | 17.7% | 17.0% |
| Excess cover relative to statutory liquidity requirements, % | 211% | 288% | 293% |
Further information may be found in the half- year report.
Additional information:
Janus Petersen, CEO, phone +298 330 340
Árni Ellefsen, CFO, phone +298 330 348
Investor Relations: ir@banknordik.fo
A web cast from the CEO is available on the BankNordik website www.banknordik.fo.
