Company announcement
Announcement no. 38/2018
Increased expectations for the 2018 result
Due to the strong reversal of impairment charges for the first nine months of 2018, BankNordik raises its net profit guidance for the year of 2018 from previously guided DKK 190-240m to DKK 240-280m.
In addition, we now expect operating profit before impairment charges to come in at the upper end of the previously announced range of DKK 160-200m in 2018, although the risk of potential insurance claims in the last quarter could have an adverse effect on the final outcome.
“We are pleased to announce progress on income, costs and reversal of impairment charges in the third quarter of 2018. Net interest income increased despite persistently tighter interest margins and we managed to keep a tight control of costs. However, the main reason for the upwards revision in net profit expectations for 2018 is due to another consecutive quarter of reversed impairment charges, which for the first nine months amounted to DKK 93m.” said BankNordik CEO, Árni Ellefsen.
This guidance is generally subject to uncertainty and will, amongst other things, depend on economic conditions, loan impairments and market value adjustment.
Further details will be published in the Interim Report for Q3 2018 on 1 November 2018.
Preliminary adjusted Income Statement
| DKK million | 9M 2018 | 9M 2017 | Q3 2018 | Q2 2018 | Q1 2018 | Q4 2017 | Q3 2017 |
| Net interest income | 282 | 292 | 94 | 93 | 94 | 95 | 97 |
| Net fee and commission income | 130 | 139 | 43 | 43 | 44 | 47 | 35 |
| Income from insurance operations | 31 | 31 | 13 | 6 | 12 | 12 | 13 |
| Other operating income | 36 | 24 | 10 | 15 | 12 | 8 | 11 |
| Operating income* | 479 | 486 | 160 | 157 | 162 | 162 | 156 |
| Operating costs* | -342 | -351 | -111 | -116 | -115 | -111 | -114 |
| Operating profit before impairment charges | 137 | 135 | 49 | 42 | 47 | 52 | 42 |
| Impairment charges, net | 93 | 9 | 39 | 23 | 31 | 51 | 4 |
| Operating profit | 230 | 144 | 88 | 65 | 77 | 103 | 46 |
| Non-recurring items | 82 | -17 | -6 | 12 | 76 | -1 | -17 |
| Profit before value adjustments and tax | 311 | 127 | 81 | 76 | 154 | 101 | 29 |
| Value adjustments | -26 | 16 | -3 | -17 | -6 | -10 | 1 |
| Profit before tax | 286 | 143 | 79 | 59 | 148 | 92 | 30 |
| Net profit | 229 | 112 |
* Excluding non-recurring items and value adjustments
Further information:
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 16.7bn and 390 employees. The Bank is subject to the supervision of the Danish Financial Supervisory Authority and is listed on Nasdaq Copenhagen.