BankNordik is headquartered in the Faroe Islands. It holds between 40% and 50% of the market. The bank also has a small (but fast growing) operation in Greenland. It operates its own non-life insurance company in the Faroe Islands. BankNordik’s dividend policy is to pay out 50% of net profits while it targets a CET1 ratio of 20%.
BankNordik is focusing on optimising its operations through investments in digitalisation and automation to lower costs. While there are smaller growth opportunities in the Faroese banking sector, BankNordik is aiming to grow in Greenland by taking market share from Grønlandsbanken. Lending in Greenland has grown at a 16.3% CAGR since 2018, leaving BankNordik with ~20% of the market and indicating further growth opportunities.
Regulatory risks as well as credit risk are the biggest risks in the BankNordik investment case. New regulations such as Basel IV, MREL and IFRS 9 will be implemented over the coming years. Margin pressure is a risk to profitability as well.