2012-11-13 07:56:44 CET
2012-11-13 07:57:47 CET
REGULATED INFORMATION
BankNordik P/F - Ársreikningur
BankNordik reporting Q3 profit improvement
Operating profit of DKK 65m in the third quarter driven by improved income,
lower costs as well as impairment charges on loans and advances of only DKK
14m.
Integration of the healthy parts of Amagerbanken now completed, there are no
more non-recurring costs and Danish operations are now returning a decent
profit.
Profit for the first nine months of the year amounted to DKK 80m before tax,
and the bank maintains its full-year guidance of profit.
BankNordik generated operating income of DKK 226m in the third quarter. The
performance was as expected and in line with the performance of recent
quarterly periods, but it was achieved in spite of lower interest income from
bonds in the securities portfolio and from loans and advances carrying rates of
interest linked to the money market.
Operating costs were DKK 147m, this amount being lower than each of the last
four quarters, i.e. the period since BankNordik acquired the healthy parts of
Amagerbanken effective 1 July 2011.
This brought the profit for the quarter before impairment charges to DKK 79m,
as compared with DKK 66m in each of the first two quarters of the year. For the
9M period, the profit before impairment charges and special items amounted to
DKK 210m.
“We're pleased that we've managed to maintain and in fact improve earnings from
our day-to-day operations, not least considering the current difficult
interest rate environment. That is a good indication of the strength of
BankNordik,” said BankNordik CEO Janus Petersen.
Profit for the first nine months of the year amounted to DKK 80m before tax and
DKK 71m before value adjustments and sector costs. BankNordik maintains its
full-year guidance of profit before tax, value adjustments and sector costs of
DKK 80-140m.
Low impairment charges
Net impairment charges on loans and advances amounted to just DKK 14m in the
third quarter, or substantially less than in previous quarters, bringing
impairment for the 9M period to DKK 79m.
The operating profit before special items was DKK 65m. Special items amounted
to a net income of DKK 3m in the third quarter and consisted almost entirely of
value adjustments.
“The integration with Amagerbanken was almost fully completed before the
summer. This was a very demanding process for everyone involved, and we
incurred significant costs in the first half of the year. The present quarterly
report is the first one without any such non-recurring costs, and our Danish
operations are now reporting a decent profit of DKK 28m,” said Janus Petersen.
Equity of DKK 2.0bn and supplementary capital of almost DKK 0.7bn gave
BankNordik a solvency ratio of 13.8% at 30 September 2012, after the Bank had
repaid DKK 150m worth of subordinated loan capital. By comparison, the solvency
need was 8.9%. BankNordik's policy is to retain the high solvency ratio at
significantly above the required level.
The same applies to the Bank's liquidity, which at 30 September 2012 was 2.6
times the required level.
BankNordik's financial highlights
DKKm Q3 Q2 Q1 Q4 Q3 Q1-Q3 Q1-Q3 2011
2012 2012 2012 2011 2011 2012 2011
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Operating income* 226 221 219 192 232 665 562 754
Operating costs* -147 -155 -153 -157 -152 -455 -362 -519
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Profit before 79 66 66 35 80 210 200 235
impairment charges*
Impairment charges -14 -46 -19 -37 -17 -79 -49 -86
on loans
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Operating profit* 65 20 46 -2 63 131 152 149
Non-recurring costs -1 -11 -48 -55 -35 -60 -44 -99
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Operating profit 64 9 -2 -57 28 71 108 50
before value
adjustments and
sector costs
Value adjustments, 4 -6 11 24 2 9 -44 -20
sectors cost, etc.
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Profit before tax 68 2 10 -33 30 80 64 31
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Loans and advances, 13,101 13,262 13,088 13,032 13,955
etc.
Loans etc. 11,271 11,430 11,376 11,769 11,949
Total assets 17,841 17,876 17,878 17,086 18,902
Equity 2,013 1,957 1,969 1,958 2,017
Solvency ratio 13.8% 15.1% 14.9% 15.6% 15.0%
Surplus liquidity 2.6x 2.8x 2.7x 2.2x 2.5x
relative to
statutory
requirement
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* 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 Q3 interim report.
A more efficient organisation
BankNordik acquired considerable operations from Sparbank in 2010 as well as
the healthy parts of Amagerbanken in 2011. This meant that, in terms of
deposits, the Bank's operations more than doubled in the two years. As a
result, it was necessary to implement changes to in-house procedures, involving
both customer service and the ongoing efforts to enhance efficiency. These are
two important goals for BankNordik. In addition, branches have been merged in
Denmark and in Greenland, and the overall headcount has been reduced.
As announced on 29 October 2012, management recently took additional steps to
simplify the organisation and reduce the staff. These steps will ensure a
management structure with a short chain of command between day-to-day
customer-directed operations and the executive management, and the changes are
to make the Bank more efficient and enhance its profitability and competitive
strength.
Guidance for FY profit maintained
Interest income remains under pressure and the Bank has responded by announcing
changes to its interest rates. The downward trend in loans and advances seen
since the start of the year has continued but seems to have stabilised, and
loans and advances are expected to remain at the current level by year end.
Running an efficient and profitable business is an inherent part of
BankNordik's general strategy. Consistently with this strategy, the Bank has
taken steps to reduce its current costs further by making organisational
adjustments.
As a result, the guidance for the full-year results is unchanged. BankNordik
continues to expect profit before tax, value adjustments and sector costs of
DKK 80-140m for 2012.
Conference call and webcast today at 12.30 (CET)
BankNordik will review the financial results today at 12.30 (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 numbers for the conference call are as follows:
Denmark: +45 32 72 80 18
UK: +44 1452555131
USA: +1 8666 828 490
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: ir@banknordik.fo
BankNordik was founded more than 100 years ago in the Faroe Islands. The Group
has banking activities in Denmark, Greenland and the Faroe Islands and
insurance activities in the Faroe Islands and Iceland. The Group has total
assets of DKK 18bn and 560 employees. The Bank is subject to the supervision of
the Danish Financial Supervisory Authority and is listed on NASDAQ OMX.
www.banknordik.dk.
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