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BankNordik

BankNordik

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Faroe-based Northatlantic bank

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 optimising its business and divesting non-core units. We expect it to continue the efficiency measures. The divestment of Danish branches in the start of 2021 could pave the way for massive buybacks and an improved dividend policy.

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.

Financials

DKKm 2021 2022e 2023e
Total Income 395 424 443
Total operating costs -238 -232 -232
Operating profit 295 216 229
EPS Adj 15,18 15,18 17,04
EPS adj growth (%) 6,2 0 12,2
BVPS 179,51 162,07 174,6
NAVPS 179,28 161,84 174,35
DPS 50,89 30,1 8,41
ROE (%) 11,3 9,2 10,5
RONAV (%) 8 9 10,2
C/I (%) 61,9 54,4 52,2
Loan losses (%) -0,77 -0,19 -0,12
CET1 ratio (%) 23,2 20,5 22,8
P/E Adj (x) 8,4 8,4 7,5
P/BV (x) 0,71 0,79 0,73
P/NAV (x) 0,71 0,79 0,73
Dividend yield (%) 39,8 23,5 6,6
DKKm 2021 2022e 2023e
Net interest income 263 269 280
Net commission income 75 78 82
Trading income 0 0 0
Insurance income 29 51 54
Other operating income 28 26 27
Total income 395 424 443
Personnel costs -238 -232 -232
Other operating costs 0 0 0
Total operating costs -238 -232 -232
Profit before loan losses 157 193 211
Loan losses 59 15 10
Investment portfolio -5 8 8
Other items 84 0 0
Operating profit 295 216 229
Tax -63 -41 -43
Other items after tax 9 0 0
Net profit 242 175 185
Tax rate (%) -21,3 -19 -19
EPS 21,56 15,72 17,61
Net Profit Adj 172 170 181
EPS Adj 15,18 15,18 17,04
Key balance sheet data 0 0 0
Net lending 7629 7856 8108
Goodwill and intangibles 3 3 3
Total assets 11454 11681 11933
Shareholders equity 2012 1785 1752
Net asset value 2009 1782 1749
Capital adequacy 0 0 0
Tier 1 Capital, excl.hybrids 1635 1441 1653
Tier 1 Capital, reported 1784 1590 1802
Capital base 1883 1690 1901
Risk exposure amount (BIS II) 7052 7025 7264
Asset quality 0 0 0
Problem loans, gross 527 537 548
Provisions for problem loans -300 -294 -288
Problem loans, net 227 244 260
Key figures N/A N/A N/A
Profitability 2021 2022 2023
Net interest margin (%) 1,8 2,3 2,4
ROE (%) 11,3 9,2 10,5
RONAV (%) 8 9 10,2
ROREA (%) 2,9 2,5 2,6
Cost efficiency 0 0 0
Cost / income Core (%) 61,9 54,4 52,2
Costs / assets Core (%) 1,66 2 1,97
Financial position 0 0 0
Net lending / deposits (%) 102,9 105,9 109,3
REA / assets (%) 61,6 60,1 60,9
Common equity tier 1 ratio (%) 23,2 20,5 22,8
Tier 1 ratio, reported (%) 25,3 22,6 24,8
Capital adequacy (%) 26,7 24,1 26,2
Equity ratio Core (%) 14,3 12,3 13,9
Asset quality 0 0 0
Problem loans, gross / lending (%) 6,3 6,2 6,1
Problem loans, net / lending (%) 3 3,1 3,2
Provision ratio (%) 56,9 54,7 52,5
Loan losses, net / lending (%) -0,8 -0,2 -0,1

Equity research

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Media

BankNordik - Company presentation with CFO Rune Nørregaard
BankNordik - Company presentation with CFO Rune Nørregaard

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Main shareholders - BankNordik

Main shareholders Share capital % Voting shares % Verified
The government of the Faroe Island 34.8 % 34.8 % 5 Jul 2021
Henrik Lind (Lind Invest) 15.0 % 15.0 % 25 Feb 2021
Protector Forsikring ASA 10.0 % 10.0 % 11 Apr 2022
Sp/F Framherji 5.0 % 5.0 % 25 Feb 2021
P/F Tjaldur 5.0 % 5.0 % 25 Feb 2021
Eika Kapitalforvaltning 2.0 % 2.0 % 31 May 2022
BIL Danmark 0.4 % 0.4 % 31 Oct 2020
P/F BankNordik 0.3 % 0.3 % 31 Dec 2020
Dimensional Fund Advisors 0.3 % 0.3 % 31 May 2022
Danske Invest (DK) 0.2 % 0.2 % 31 May 2022
Source: Holdings by Modular Finance AB