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

  1. 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.