2013-03-05 07:56:45 CET

2013-03-05 07:57:52 CET


REGULATED INFORMATION

BankNordik P/F - Ársreikningur

Annual Report 2012: BankNordik quadrupling profit 


Profit before tax of DKK 121m for 2012 against DKK 31m in 2011.

The main events of 2012 were the integration of the healthy parts of
Amagerbanken and the subsequent organisational restructuring. The non-recurring
costs of this exercise amounted to DKK 77m and yet the Bank still managed a
satisfactory profit before tax of DKK 121m for 2012. The operating profit
before non-recurring items was DKK 188m compared to DKK 149m last year. 

“The results are in line with the expectations we had at the beginning of the
year, and which at that time might have seemed a bit on the high side. We've
followed our plans diligently, and the results show that we're on the right
track,” said BankNordik CEO Janus Petersen. 

In light of the profit improvement, the Board of Directors recommends that the
company pay dividends of DKK 10 million to the shareholders. 

Enhanced profitability

Through acquisitive growth in Denmark, Greenland and Iceland, BankNordik has
doubled in size since 2009, gaining new know-how and expertise and opening up
for better opportunities for organic growth. This spells out the Bank's
strategic vision, which it has gradually achieved by capitalising on the right
opportunities as they arose. 

During the past 12 months, BankNordik has improved the customer service
efficiency of its branch network. The initiatives taken have strengthened
profitability, but they have also improved the competitive strength and
provided more resources for advising the growing number of customers making use
of the Bank's financial and advisory services. 

Following the successful integration of the new activities, the Bank is now
focused on profitability, customer service, credit quality and capital
strength. 

“The year 2012 was a milestone in the strategic development of BankNordik,
yielding the positive results of the many far-reaching decisions we have made
in recent years,” said Janus Petersen. 

Insurance operations delivering good results

BankNordik operates two insurance companies; one has a 25% market share in the
Faroe Islands, the other has 15% in Iceland. Both insurance companies reported
mild winter seasons with a low level of claims, together reporting DKK 47
million in profit before tax for 2012. 

“We've seen a constant improvement in our insurance operations, and I'm very
pleased with the performance of our insurance businesses,” said Janus Petersen. 

Healthy lending leads to low solvency need

The Bank has a well-diversified lending portfolio with personal customers
accounting for 60% of it, a good industry spread and only a few large
exposures. Its low risk profile is reflected in the low solvency need of 8.6%,
which is close to the minimum requirement of 8%. In other words, the solvency
rate of 14.8% gives the Bank a comfortable excess of 6.2 percentage points over
the solvency need. 

Outlook for 2013

In 2013, BankNordik will continue to develop the Bank in line with the
announced strategy. Economic growth and, by extension, loan demand is expected
be low, which makes the Bank expect about a 2% drop in lending. In the coming
years, the Bank will be facing a new expense of around DKK 23 million annually
for consolidating the depositors' guarantee fund. Write-downs, on the other
hand, are expected to fall relative to 2012. 

Profit before tax and value adjustments for 2013 is expected to be in the DKK
130-160m range (2012: DKK 102m). 



Financial highlights



DKKm                        2012    2011      Q4      Q3      Q2      Q1      Q4             2012    2012    2012    2012    2011
--------------------------------------------------------------------------------
Operating income*            895     754     236     224     219     217     192
Operating costs*            -592    -519    -143    -145    -153    -151    -157
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit before                303     235      93      79      66      66      35
 impairments                                                                    
Impairments, net            -115     -86     -35     -14     -46     -19     -37
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit*            188     149      58      65      20      46      -2
Non-recurring costs          -77     -99     -16      -1     -11     -48     -55
Sector costs, etc.            -9     -29      -5       0       1      -5      -2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit before      102      21      36      64       9      -7     -60
 value adjustments and                                                          
 tax                                                                            
Value adjustments             19      10       6       4      -7      17      27
--------------------------------------------------------------------------------
Profit before tax            121      31      42      68       2      10     -33
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Loans and advances, etc.  12,746  13,032  12,751  13,087  13,262  13,088  13,123
Loans etc.                11,303  11,769  11,303  11,271  11,430  11,376  11,769
Total assets              17,609  17,086  17,609  17,827  17,876  17,878  17,086
Equity                     2,053   1,958   2,053   2,013   1,957   1,969   1,958
Solvency ratio             14.8%   15.6%   14.8%   13.8%   15.1%   14.9%   15.6%
Excess liquidity           2.5 x   2.2 x   2.5 x   2.7 x   2.8 x   2.7 x   2.2 x
 relative to statutory                                                          
 requirement                                                                    
Costs / Operating profit     66%     69%     61%     65%     70%     70%     82%
Number of employees          550     612     550     577     583     582     612
 (FTE)                                                                          
--------------------------------------------------------------------------------

* Adjusted for non-recurring costs for integration and restructuring purposes
and other special items (value adjustments, sector costs, etc.). 

BankNordik acquired activities from Amagerbanken effective 1 July 2011.



Further details are available in the 2012 Annual Report.

Conference call today

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.com. 

The dial-in number for the conference call is +44 (0) 1452 555131. Participants
are kindly asked to call in a few minutes before the conference begins. 



For further information, please contact:

Janus Petersen, CEO, tel. (+298) 330 340

Árni Ellefsen, CFO, tel. (+298) 330 348

Investor Relations: info@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 100 years ago, the Group has 180,000 customers, total assets
of DKK 18bn and 531 employees. The Bank is subject to the supervision of the
Danish Financial Supervisory Authority and is listed on NASDAQ OMX.
www.banknordik.dk.