2012-03-20 07:44:40 CET

2012-03-20 07:45:45 CET


REGULATED INFORMATION

BankNordik P/F - Ársreikningur

Annual Report 2011 


BankNordik improved its operating profit for 2011

Operating profit almost doubled to DKK 134 million from DKK 73 million last
year (adjusted for non-recurring items) 

Operating income 13% up to DKK 754 million (2010: DKK 666 million)

The mid-year acquisition of the healthy parts of Amagerbanken was truly a major
event for BankNordik in 2011. The transaction added 82,000 retail and 10,000
corporate customers to the customer base and gave the Bank 200 skilled new
employees, 12 well-located branches, a considerable deposit surplus and a
stronger geographic and industry diversification of business activities. 

The pre-tax profit for the year amounted to DKK 31 million, constrained by
substantial non-recurring items of DKK 103 million related to the acquisitionand integration of Amagerbanken. 

Net operating income improved from DKK 666 million to DKK 754 million, the
acquired activities only being consolidated from July 2011. An expected
increase in the Group's income from insurance activities failed to materialise
due to large claims following severe storms in the Faroe Islands in November
and December. 

Operating profit almost doubled to DKK 134 million in 2011 from DKK 73 million
in 2010 (adjusted for non-recurring items). A key factor in the improvement was
the considerable drop in loan impairment charges to DKK 101 million from DKK
200 million in 2010. 



Consolidation after period of strong growth

“We've had two years of exceptionally strong growth: first, we acquired a
substantial amount of business operations from Sparbank in 2010 followed by the
healthy parts of Amargerbanken in 2011. Measured in terms of deposits, we more
than doubled the size of our operations in that two-year period, and we now
have an active presence in four markets, covering Greenland, Iceland, the
Faroes and Denmark,” said BankNordik CEO Janus Petersen. 

In-house, the IT systems of the acquired activities in Denmark were
successfully migrated to SDC in February 2012 after months of careful planning.
The preparations and the actual migration was a demanding exercise for the
organisation, but the change will be of strategic importance for developing
BankNordik's customer services and the ongoing efficiency enhancements. Both
are important objectives for BankNordik. 

“This was a very demanding process, and we went to great lengths to keep the
effects of the changes at a minimum for our customers. Looking ahead, the large
and important steps we've taken enable us to improve our customer service and
to proceed with the healthy development of the Bank while staying true to our
strategy of maintaining proximity to our customers, ensuring tight risk
management and keeping all operations profitable,” said Janus Petersen. 

The acquired activities have higher operating costs than the Group's original
operations as well as its goal of a cost/income ratio not higher than 60. Steps
have been taken to reduce costs in order to lift profitability. 



High solvency ratio and strong cash resources

Backed by equity of DKK 2 billion and supplementary capital of DKK 0.8 billion,
BankNordik had a solvency ratio of 15.6% at 31 December 2011. By comparison,
BankNordik's individual solvency requirement was 9.5%. The Bank's policy is to
maintain a high solvency ratio that is substantially above the level required.
A similar policy applies to liquidity, this being twice the required level at
the end of the year. 

At the annual general meeting to be held on 30 March 2012, the Board of
Directors intends to recommend that no dividend be declared in respect of the
2011 financial year and that the entire profit for the year be retained for
consolidation purposes. 

BankNordik expects the operating income to improve further in 2012 to the range
of DKK 880-930 million (2011: DKK 754 million) and for the operating profit to
be DKK 150-200 million (DKK 134 million) when adjusted for non-recurring items. 

“Our main task in 2012 will be to streamline our operations and enhance our
efficiency. We must also maintain the close relations with our customers that
we've come to be known for and continue to develop our business from the new,
broader platform,” said Janus Petersen. 



BankNordik Group financial highlights:



DKKm                                                            2011    2010
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Operating income*                                                735     644
Profit before impairment charges*                                235     273
Impairment charges on loans                                      101     200
Operating profit*                                                134      73
Non-recurring items                                             -103     312
Profit before tax                                                 31     385
Deposits etc.                                                 13,032   8,844
Loans and advances etc.                                       11,769   8,675
Deposit surplus                                                1,263     169
Total assets                                                  17,086  14,206
Equity                                                         1,958   1,977
Solvency ratio                                                 15.6%   17.0%
Excess liquidity cover relative to the statutory requirement    115%    293%
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 * Adjusted for non-recurring items

 Further details are available from the Annual Report



Conference call and webcast today at 11.00 AM (CET)

BankNordik will review the financial results today at 11.00 (CET) at its
customary conference call for analysts and investors. The conference call will
be webcast on BankNordik's website, www.banknordik.fo 

The dial-in number for the conference call is (+45) 32 71 47 67. Participants
are kindly asked to call in a few minutes before the conference begins. 

The presentation and the Annual Report will also be available on the Bank's
website, www.banknordik.fo 


         For further information, please contact:
         Janus Petersen, CEO, tel. (+298) 330 340
         Árni Ellefsen, CFO, tel. (+298) 330 348
         Investor Relations: ir@banknordik.fo