Solid start to the year- First quarter of solely continuing business activities
Company Announcement no. 6/2017
Highlights of BankNordik's interim report for the first quarter of 2017:
(The figures below have been adjusted for divested activities in 2016 related to insurance company Vörður, unless otherwise indicated)
Q1 2017 vs. Q1 2016
-
BankNordik reported operating profit of DKK 43m for first quarter of 2017, a decrease of DKK 7m (14%) compared to the first quarter of 2016.
-
Net interest income was down by DKK 15m year-on-year primarily due to the controlled run-off of corporate lending in Denmark, but also due to a tighter interest margin.
-
Fee and commission income was DKK 8m higher, owing partially to higher income from asset management activity.
-
Net insurance income was flat compared to Q1 2016.
-
Operating costs were down by DKK 1m to DKK 116m.
-
Net impairment charges were DKK 0m compared to reversed impairment charges of DKK 1m for the same period last year.
-
BankNordik generated profit before tax of DKK 57m in Q1 2017 compared to a profit of DKK 25m for the same period of last year.
-
There were no non-recurring items in Q1 2017 compared to an expense of DKK 12m in Q1 2016
-
Value adjustments amounted to a gain of DKK 14m against a loss of DKK 3m in Q1 2016.
-
There were no discontinued activities relating to Vörður in Q1 2017 compared to a loss before tax of DKK 10m on this item in Q1 2016.
-
Lending volumes were down by DKK 802m from DKK 9,961m in Q1 2016 to DKK 9,159m in Q1 2017, mostly due to the winding up of corporate loans in Denmark
“The first quarter of 2017 progressed well and our results were in line with expectations. Interest income was continually challenged, fee and commission income increased moderately, and net impairment charges remained at a very low level for yet another quarter,” said BankNordik CEO, Árni Ellefsen.
“After the strategic refocusing of the BankNordik Group in 2016, this was our first quarter that solely contained continuing business activities. During the quarter, we have taken measures to better engage with our customers and utilize the feedback to improve the overall costumer experience. This will be a focal point for us throughout 2017,” said Mr. Ellefsen.
Q1 2017 vs. Q4 2016
-
Q1 2017 operating profit was up by DKK 5m on Q4 2016.
-
Net interest income was down by DKK 2m in Q1 2017 compared to Q4 2016, primarily due to a drop in average lending volumes during the quarter.
-
Fee and commission income was up by DKK 1m compared to Q4 2016.
-
Net insurance income amounted to DKK 9m in Q1 2017, compared to a loss of DKK 7m in Q4 2016, which was caused by the extraordinarily high level of claims from harsh weather conditions in the Faroe Islands during December 2016.
-
Operating costs were DKK 2m higher in Q1 2017 compared to the previous quarter.
-
Net impairment charges were zero in Q1 2017, compared to a DKK 4m reversal in Q4 2016.
-
BankNordik recorded profit before tax of DKK 57m in Q1 2017 compared to profit of DKK 28m in Q4 2016.
-
Value adjustments were a gain of DKK 14m in Q1 2017 compared to a loss of DKK 10m in Q4 2016.
-
Lending volumes were up by DKK 18m from DKK 9,141m in Q4 2016 to DKK 9,159m in Q1 2017, despite taking into consideration the gradual winding up of the remaining corporate loans in Denmark.
Dividends and capital ratios
At the Annual General Meeting held on 31 March 2017, the shareholders adopted the proposal to pay total dividends of DKK 300m (DKK 30 per share), including DKK 60m in ordinary dividend and DKK 240m in extraordinary dividend. The amount was paid out on 5 April 2017.
The Group’s CET1 capital ratio increased by 0.1 percentage point quarter-on-quarter to 16.1% at 31 March 2017. The solvency ratio increased to 18.4% at 31 March 2017 from 18.3% at 31 December 2016.
BankNordik monitors the regulatory landscape on an ongoing basis to adapt to the impending MREL capital requirements, which are expected to be announced before the end of 2017.
Outlook
Management reconfirms the FY2017 guidance of profit before impairment charges, value adjustments and tax in the range of DKK 150-190m (Q1 2017: DKK 43m).
Impairment charges on loans for 2017 are expected to be less than DKK 20m (Q1 2017: DKK 0m).
This guidance is generally subject to uncertainty and will depend on economic conditions, including possible central bank monetary policy measures.
For additional information, please contact:
Árni Ellefsen, CEO, tel. (+298) 230 348
|