BankNordik P/F - Financial Statement Release

Q1 2013: BankNordik expecting sustained profit improvement in 2013

BankNordik recorded operating profit before impairment charges of DKK 65m in
the first quarter of 2013 

BankNordik's financial statements for the first quarter of 2013 reflect the
efficiency improvements implemented over the past year, which led the Bank to
reduce its employee headcount in January. Related costs of DKK 10m are
recognised in the financial statements. 

Total Q1 income amounted to DKK 209m, slightly less than in the most recent
quarters. The fall was mainly due to seasonal fluctuations in fee and insurance
income as well as a drop in lending. 

Costs amounted to DKK 141m, a level in line with expectations. As the headcount
was only reduced during the first quarter, costs are set to fall further. 

Operating profit unchanged

Operating profit before impairment charges was DKK 65m, a reduction of DKK 1m
relative to last year. As per usual, the insurance operations produced slightly
lower results in the winter season than in the other quarters of the year,
whereas the banking operations contributed a slightly better performance than
in previous quarters. 

“Our Q1 performance was largely as we had expected, considering the more
competitive market, reduced lending and the seasonal fluctuations of some of
our sources of income,” said BankNordik CEO Janus Petersen. 

Following a recent review of certain loan categories, especially to personal
customers, BankNordik took impairment charges of DKK 55m in the first quarter.
Based on an overall assessment of loan composition and collateral, the Bank
expects impairment charges in 2013 to be at the same level as in 2012. This
expectation presumes that the macroeconomic environment does not deteriorate. 

Attractive product and service offering

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. 

In April, the Bank introduced Nordik360, a new customer loyalty programme
offering attractive terms and conditions to customers pooling their business
with BankNordik. 

“Even though the Nordik360 programme has only been available for a few weeks,
it appears to have been very well received by our customers and it is also
helping us attract new customers,” said Janus Petersen. 

The Bank has a well-diversified lending portfolio with personal customers
accounting for 60%, a good industry spread and only a few large exposures. This
risk profile is reflected in the solvency need of 8.6%, or very close to the
statutory minimum solvency requirement of 8%. The Bank's solvency of 14.9%
leaves a margin of 6.3 percentage points relative to the minimum requirement. 

The Bank's liquidity was 2.9 times the required level at 31 March 2013.

Financial highlights

DKKm                                  Q1      Q4      Q3      Q2      Q1    2012
                                    2013    2012    2012    2012    2012        
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Operating income*                    209     236     224     219     217     895
Operating costs*                    -141    -143    -145    -153    -151    -592
--------------------------------------------------------------------------------
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Profit before impairments             65      93      79      66      66     303
Impairments of loans                 -55     -35     -14     -46     -19    -115
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Operating profit*                     10      58      65      20      46     188
Non-recurring costs                  -10     -16      -1     -11     -48     -77
Sector costs, etc.                    -8      -5       0       1      -5      -9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit/(loss) before        -8      46      64       9      -7     102
 value adjustments and tax                                                      
Value adjustments                     22       6       4      -7      17      19
--------------------------------------------------------------------------------
Profit before tax                     13      42      68       2      10     121
--------------------------------------------------------------------------------
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Deposits etc.                     12.800  12.746  13.087  13.262  13.088  12.746
Loans etc.                        10.820  11.303  11.271  11.430  11.376  11.303
Total assets                      17.817  17.609  17.827  17.876  17.878  17.609
Equity                             2.063   2.053   2.013   1.957   1.969   2.053
Solvency ratio                     14.9%   14,8%   13,8%   15,1%   14,9%   14,8%
Liquidity relative to statutory    2.9 x   2.5 x   2.7 x   2.8 x   2.7 x   2.5 x
 requirement                                                                    
Costs / Operating profit             68%     61%     65%     70%     70%     66%
Number of employees (FTE) at         533     550     577     583     582     550
 year-end                                                                       
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* Adjusted for non-recurring costs for integration and restructuring purposes
and other special items (value adjustments, sector costs, etc.). 

Retaining full-year 2013 profit forecast

The BankNordik Group continues to develop in line with the announced strategy.
Economic growth and, by extension, loan demand is low, leading to a drop in the
Bank's loans and advances by about 4%. The level of loan impairment charges for
2013 is expected to be in line with the 2012 level. The Bank's financial
results for 2013 and each of the next few years will include a DKK 25m
contribution to building up the banking industry's deposit guarantee scheme. 

BankNordik maintains its full-year guidance of profit before value adjustments
and tax in the DKK 130-160m range, a strong improvement from DKK 102m in 2012. 



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) 330 380, 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 18bn and 530 employees. The Bank is subject to the supervision of the
Danish Financial Supervisory Authority and is listed on NASDAQ OMX.
www.banknordik.dk.

Attachments:

BN Q1 13 Medd - DK.pdf

Interim Report Q1 2013.pdf

BN Q1 13 - UK.pdf