Published: 2017-10-26 08:01:14 CEST
BankNordik P/F
Interim report (Q1 and Q3)

YTD results in line with guidance

- Lending to personal customers picked up in Q3 2017 in all three markets

Announcement no. 8/2017


Highlights of BankNordik's interim report for the first nine months of 2017:

First nine months of 2017 vs. first nine months of 2016

  • BankNordik generated profit before tax of DKK 143m in the first nine months of 2017, down DKK 16m compared to the same period of last year, excluding the gain on the sale of Vørður
    • Net interest income was down by DKK 21m year-on-year due to the controlled run-off of corporate lending in Denmark and tighter interest margins.
    • Fee and commission income was up by DKK 8m due to higher income from asset management activity and mortgage broking services during the period.
    • Operating costs were up by DKK 4m to DKK 350m, due to severance payments and higher IT costs
    • BankNordik reversed DKK 9m in net impairment charges compared to reversed impairment charges of DKK 8m for the same period of last year.
    • An impairment loss of DKK 17m on the Group’s head office (written down from DKK 79m to DKK 62m) was recognised as a non-recurring expenditure due to a higher discount rate applied in the valuation.
    • Value adjustments amounted to a gain of DKK 24m compared to a gain of DKK 18m in 9M 2016.
  • Lending volumes were up by DKK 177m from DKK 9,372m at 30 September 2016 to DKK 9,549m at 30 September 2017, despite Danish corporate loans in the amount of DKK 156m being wound-up during the period.
  • Deposits increased by a total of DKK 178m from DKK 12,805m at 30 September 2016 to DKK 12,983m at 30 September 2017.


“I am pleased to announce that the BankNordik Group is on track to meet its guidance for 2017. During the quarter, lending volumes increased and net interest income stabilised, while fee and commission income fell, in particular due to the restructuring of asset management activity in compliance with MiFID II. We continued to reverse impairment charges in the quarter, confirming the Group’s dedication to sound credit policy guidelines in conjunction with a low-risk loan portfolio,” said BankNordik CEO, Árni Ellefsen.

“Although our net interest income remains under pressure due to tight interest margins, we are pleased to note that lending increased during the period, especially to personal customers with volumes up by 2.5% QoQ and 5.3% YTD. The refocusing of our business activities and the targeted effort to strengthen the quality of our customer relationships has facilitated this development and will remain a focal point in our commitment to reach our long-term financial objectives,” said BankNordik CEO, Árni Ellefsen.


Q3 2017 vs. Q2 2017

  • BankNordik recorded profit before tax of DKK 30m in Q3 2017 compared to profit of DKK 55m in Q2 2017.
    • Net interest income was flat compared to Q2 2017.
    • Fee and commission income were down by DKK 19m compared to Q2 2017, in part due to the restructuring of asset management activity with regards to MiFID II, of which approximately DKK 6m is expected to be offset by higher dividend income/value adjustments in the future.
    • Net insurance income were DKK 13m, up by DKK 4m compared to Q2 2017.
    • Operating costs were down by DKK 6m in Q3 2017 compared to the previous quarter, in particular due to lower IT costs.
    • Net impairment charges were a reversal of DKK 4m in Q3 2017 compared to a reversal of DKK 5m in Q2 2017.
    • An impairment loss of DKK 17m on the Group’s head office (written down from DKK 79m to DKK 62m) ) was recognised as a non-recurring expenditure due to a higher discount rate applied in the valuation.
    • Value adjustments were a gain of DKK 5m in Q3 2017 compared to a gain of DKK 4m in Q2 2017.
  • Lending volumes were up by DKK 122m from DKK 9,428m in Q2 2017 to DKK 9,549m in Q3 2017, primarily due to growth in lending to private customers.
  • Deposits decreased by DKK 490m from DKK 13,472m in Q2 2017 to DKK 12,983m in Q3 2017. The decrease was due to a transitional period, in which a part of the Group’s assets under management were being transferred to deposits under pooled schemes.


Capital ratios

The Group’s CET1 capital ratio increased by 0.2 percentage point quarter-on-quarter to stand at 15.9% at 30 September 2017. The solvency ratio increased to 18.2% at 30 September 2017 from 17.9% at 30 June 2017. With regards to changes in the accounting guidelines for interim financial reporting, BankNordik has decided not to recognise net profit within a given year in the capital and solvency statement until the annual report is released in audited form.

BankNordik monitors the regulatory environment on a regular basis to anticipate and adapt to the upcoming MREL requirements.



Management reconfirms the FY2017 guidance of profit before impairment charges, non-recurring items, value adjustments and tax in the range of DKK 150-190m (9M 2017: DKK 127m).

Previously, management expected net impairment charges on loans for 2017 to be less than DKK 20m. This figure has been revised and net impairment charges for 2017 are now expected not to be higher than zero (9M 2017: Reversal of DKK 9m).

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


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 16.1bn and 407 employees. The Bank is subject to the supervision of the Danish Financial Supervisory Authority and is listed on Nasdaq Copenhagen.


Appendix: Financial highlights and comparative figures are provided below.


Financial highlights


DKK million
9M 2017 9M 2016 Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016
Net interest income 292 313 97 97 98 100 103
Net fee and dividends income 149 141 39 58 52 51 46
Income from insurance operations 31 33 13 9 9 -7 12
Other operating income 7 7 3 2 1 2 2
Operating income* 479 494 152 166 160 146 163
Operating costs* -350 -345 -114 -120 -116 -114 -113
Sector costs, etc. -2 -3 -1 -1 -1 1 -1
Operating profit before impairment charges* 127 146 38 46 43 33 49
Loan impairment charges, net 9 8 4 5 0 4 4
Operating profit* 136 153 42 51 43 38 53
Non-recurring items -17 -12 -17 0 0 0 0
Profit before value adjustments and tax 119 141 25 51 43 38 53
Value adjustments 24 18 5 4 14 -10 12
Profit/loss before tax, excl. Vørður 143 159 30 55 57 28 64
Profit/loss before tax, incl. Vørður 143 249 30 55 57 28 164
Deposits, etc. DKKbn 13.0 12.8 13.0 13.5 12.7 12.7 12.8
Loans and advances, etc. DKKbn 9.5 9.4 9.5 9.4 9.2 9.1 9.4
Equity, DKKbn 1.7 1.9 1.7 1.7 1.7 1.9 1.9
Solvency ratio 18.2% 19.0% 18.2% 17.9% 18.4% 18.3% 19.0%
Excess liquidity relative to statutory requirement 219% 228% 219% 246% 239% 242% 228%
Operating cost/income 73% 70% 75% 72% 73% 78% 69%
Number of FTE, end of period 407 416 407 407 416 415 416

* Excluding non-recurring items and value adjustments.


Further details are available in the interim report.

9M_2017_IR Presentation.pdf
Interim Report_Q3 2017.pdf