Good performance in Q3 2022
Guidance for 2022 net profit lowered due to uncertainty in financial markets
3 November 2022
Árni Ellefsen, CEO
Page 1
Disclaimer
- This presentation contains statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements.
- No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of BankNordik, or any of its principal shareholders or subsidiary undertakings or any of such person's officers or employees or advisers accept any liability whatsoever arising directly or indirectly from the use of this document.
Page 2
Overview
- Highlights of Q3 2022
- Financials
- Operating income
- Insurance
- Expenditures
- Impairment charges
- Capital ratios
- The Faroese and Greenlandic economy
- Appendices
Retail banking
Corporate banking Insurance
Page 3
Highlights of Q3 2022
─ Operating profit higher than last year
Operational and financial highlights
- Net interest income up by 3% QoQ due to higher interest rates.
- Net fee and commission income flat QoQ and up by 15% YoY.
- Net insurance income down by 29% QoQ driven by increased claims, but up by 35% YoY.
- Operating costs YoY higher, primarily because of extraordinary costs associated with change in management and board members.
- Operating profit down by 14% QoQ and up by 16% YoY.
- CET1 capital ratio of 22.9% and MREL capital ratio of 31.4%
- Outlook: Net profit expectations lowered to DKK 140-170m (from DKK 160-190m). The outlook is subject to uncertainty, including impairments on loans and advances, market value adjustments, and macroeconomic developments in the markets in which the Group operates.
Profit & Loss
DKKm | Q3 2022 Q2 2022 | Index | 9M 2022 9M 2021 | Index | ||
Net interest income | 67 | 65 | 103 | 197 | 194 | 102 |
Net fee and commission income | 22 | 22 | 102 | 65 | 57 | 115 |
Net insurance income | 11 | 15 | 71 | 38 | 28 | 135 |
Other operating income | 11 | 9 | 123 | 29 | 26 | 112 |
Operating income | 110 | 111 | 100 | 330 | 305 | 108 |
Operating and sector costs | -62 | -63 | 100 | -186 | -180 | 104 |
Profit before impairment charges | 48 | 48 | 100 | 144 | 125 | 115 |
Net impairment charges on loans | 12 | 22 | 54 | 43 | 36 | 119 |
Operating profit | 60 | 70 | 86 | 187 | 161 | 116 |
Non-recurring items | 0 | 0 | 0 | 82 | ||
Investment portfolio earnings | -36 | -16 | 223 | -50 | -9 | 592 |
Profit before tax, continuing operations | 24 | 54 | 45 | 136 | 235 | 58 |
Profit before tax, discontinued operations | 0 | 0 | 0 | 9 | 0 | |
Profit before tax | 24 | 54 | 45 | 136 | 245 | 56 |
Key Metrics
DKKbn | Q3 2022 Q2 2022 | Index | 9M 2022 9M 2021 | Index | |||
Loans and advances | 8.0 | 7.7 | 103 | 8.0 | 7.6 | 105 | |
Deposits and other debt | 8.2 | 8.9 | 92 | 8.2 | 7.4 | 111 | |
Mortgage credit | 2.7 | 2.7 | 97 | 2.7 | 2.6 | 102 | |
Target | |||||||
Operating cost / income, % | < 55.0 | 56.5 | 56.6 | 56.4 | 58.9 | ||
CET1 capital ratio, % | 20.0 | 22.9 | 23.3 | 22.9 | 26.1 | ||
MREL capital ratio, % | 33.0 | 31.4 | 32.0 | 31.4 | 31.7 | ||
RoE, % (annualised) | > 10.0 | 4.6 | 10.1 | 7.8 | 10.0 | ||
RoE, excl. one-offs, % (annualised) | > 10.0 | 4.6 | 10.1 | 7.8 | 6.9 | ||
Combined ratio | 85.0 | 81.1 | 76.4 | 81.0 | 100.9 | ||
Divested activities eliminated from the figures above | Page 4 |
Operating income - Net interest income
- Lending rates higher and deposit rates lower
Comments
- Net interest income up by DKK 1.9m QoQ and DKK 3.6m YoY
- Increase in net interest income, due to higher interest rates
- Lending volumes up by DKK 253m QoQ and DKK 383m YoY
- Deposits down by DKK 672m QoQ, primarily due to lower deposits from corporate customers in Greenland
Loans and deposits | Loans | Deposits | ||||||||||||||
DKKbn | 8.9 | |||||||||||||||
9 | ||||||||||||||||
7.9 | 8.0 | 7.7 | 8.0 | 8.2 | ||||||||||||
8 | 7.6 | 7.7 | 7.6 | 7.4 | 7.6 | 7.7 | ||||||||||
7 | ||||||||||||||||
6 | ||||||||||||||||
5 | ||||||||||||||||
4 | ||||||||||||||||
3 | ||||||||||||||||
Q2 2021 | Q3 2021 | Q4 2021 | Q1 2022 | Q2 2022 | Q3 2022 | |||||||||||
QoQ changes in net interest income
DKKm
71 | |||||||
70 | 2.6 | 1.6 | |||||
69 | |||||||
68 | 1.6 | 0.5 | 66.7 | ||||
67 | |||||||
3.2 | 1.1 | ||||||
66 | 64.8 | ||||||
65 | |||||||
64 | |||||||
63 | |||||||
62 | |||||||
61 | |||||||
Q2 2022 Lending | Lending | Deposit | Deposit | External Other | Q3 2022 | ||
volume | interest | volume | interest | funding |
YoY changes in net interest income
DKKm
202 | ||||
200 | 3.2 | 3.6 | ||
0.5 | 197.2 | |||
198 | ||||
4.6 | 3.2 | 3.1 | ||
196 |
- 193.6
188
Q3 2021 Lending | Lending | Deposit | Deposit | External Other | Q3 2022 |
volume | interest | volume | interest | funding |
Divested activities eliminated from the figures above | Page 5 |
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Disclaimer
BankNordik P/F published this content on 02 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 November 2022 09:44:04 UTC.