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2013-11-13 07:59:00 CET 2013-11-13 07:59:01 CET REGULATED INFORMATION BankNordik P/F - Company AnnouncementQ3 Interim Report: BankNordik lifts operating profitDespite a more competitive market, a lower interest margin and impairment losses, BankNordik achieved operating profit before value adjustments and tax of DKK 102m for the first nine months of 2013, compared to DKK 66m in the 9M 2012 period. Profit before tax amounted to DKK 124m. Operating costs were reduced considerably, boosting both profitability and competitive strength. More and more of BankNordik's commercial customers are experiencing increasing revenues and brighter prospects, and they are again ready to invest in new plant and business activities. This is a trend feeding through to the Bank by way of increased lending to corporate customers. On the other hand, personal customers continued to pay off debts more than they took out new loans, causing the Bank's loans and advances to fall slightly. Recent years' organisational trimmings and efficiency improvements have been converted to added competitive power. BankNordik is getting good and improving satisfaction ratings and is playing an active role in the more competitive market, offering attractive prices on loans as well as deposits. Combined with the lower net lending, however, this has put the Bank's earnings under pressure, as expected. “BankNordik is a part of the local community, just like a small, local bank, but we can also offer our customers the services of a large bank and at some of the best prices in the market,” said BankNordik CEO Janus Petersen. “Our loyalty concept has been very well received. It allows us to individualise our service, and our customers get significant financial benefits from pooling their business with us. We are investing in building long-term customer relations and in strengthening our market position,” said Janus Petersen. Operating profit before impairment charges of DKK 221m BankNordik generated operating income of DKK 640m in the first nine months of 2013 and of DKK 204m in the third quarter, in which the Group's insurance arm reported relatively high claims expenses. Operating costs were reduced by DKK 31m to DKK 418m for the 9M period. This brought operating profit before impairment charges to DKK 221m in 9M 2013, compared with DKK 210m in 9M 2012. The Q3 2013 operating profit was DKK 68m. Net loan impairment charges for Q3 amounted to DKK 32m. For the full year, impairment charges are now expected to be slightly higher than the 2012 figure of DKK 115m. Operating profit before value adjustments and tax and after impairment charges, special items and the contribution to the banking sector's deposit guarantee scheme was DKK 102m for the first nine months of 2013, as against DKK 66m in the same period of 2012. The profit before tax amounted to DKK 124m. Guidance for full-year results maintained The BankNordik Group continues to deliver on the announced strategy and its emphasis on providing quality customer service, profitability and risk management. Despite the promising indications for both the Danish and the international economy, demand for loans is expected to remain weak in the foreseeable future. In addition, the interest margin is under considerable competitive pressure. Furthermore, the Bank's financial results for 2013 and each of the next few years will be charged with a contribution of about DKK 25m for building up the banking sector's deposit guarantee scheme. Against that background, BankNordik maintains its full-year guidance of profit before value adjustments and tax in the DKK 130m-160m range, which is a strong improvement from DKK 102m in 2012. Solvency and liquidity at healthy levels The Bank has a well-diversified lending portfolio with personal customers and the public sector accounting for almost 60%, a good industry diversification and only few large exposures. This risk profile is reflected in the Bank's solvency need of 8.9%, which is among the very lowest in the Danish banking sector and very close to the statutory minimum solvency requirement of 8%. The Bank's solvency of 14.5% leaves a margin of 5.6 percentage points relative to the minimum requirement. Due to its large deposit surplus BankNordik has a healthy liquidity with a surplus coverage of 163% above the required level at 30 September 2013. For further information, please contact: Janus Petersen, CEO, tel. (+298) 330 340 Árni Ellefsen, CFO, tel. (+298) 330 348 Johnny í Grótinum, Investor Relations, tel. (+298) 230 380, ir@banknordik.fo BankNordik has banking activities in Denmark, Greenland and the Faroe Islands and insurance activities in the Faroe Islands and Iceland. Founded in the Faroe Islands more than a century ago, the Group has 180,000 customers, total assets of DKK 17bn and 517 employees. The Bank is subject to the supervision of the Danish Financial Supervisory Authority and is listed on NASDAQ OMX. www.banknordik.dk. Financial highlights DKKm Q3 Q2 Q1 Q4 Q3 9M 9M 2012 2013 2013 2013 2012 2012 2013 2012 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Operating income* 204 230 206 236 224 640 660 895 Operating costs* -136 -142 -141 -143 -145 -418 -449 -592 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Operating profit before 68 88 65 93 79 221 211 303 impairment charges Loan impairment charges, -32 -20 -55 -35 -14 -107 -79 -115 net -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Operating profit* 35 68 10 58 65 114 131 188 Non-recurring items 0 18 -10 -15 -1 8 -61 -77 Sector costs, etc. -4 -8 -8 -7 0 -20 -4 -9 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Operating profit/(loss) 31 79 -8 36 64 102 66 102 before value adjustments and tax Value adjustments 16 -16 22 6 4 22 14 19 -------------------------------------------------------------------------------- Profit before tax 47 63 14 42 68 124 80 121 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Deposits, etc. DKKbn 12.0 12.3 12.8 12.7 13.1 Loans and advances etc. 10.6 10.7 10.8 11.3 11.3 DKKbn Total assets, DKKbn 16.9 17.4 17.8 17.6 17.8 Equity, DKKbn 2.2 2.1 2.1 2.1 2.0 Solvency ratio 14.5% 15.4% 14.9% 14.8% 13.8% Liquidity relative to 2.6 x 2.8 x 3.0 x 2.5 x 2.7 x statutory requirement Cost/income ratio 66% 62% 68% 61% 65% Number of employees (FTE) 517 529 533 550 577 at year-end -------------------------------------------------------------------------------- * Adjusted for non-recurring items and other special items (value adjustments, sector costs, etc.). Further details are available in the interim report. |
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