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BankNordik

BankNordik

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 23%.

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.

DKKm 2020 2021e 2022e
Total Income 387 410 437
Total operating costs -238 -238 -232
Operating profit 152 276 229
EPS Adj 16,81 16,5 19,6
EPS adj growth (%) -25,6 -1,8 18,7
BVPS 237,94 209,02 220,88
NAVPS 237,69 208,76 220,59
DPS 5 59,06 9,71
ROE (%) 7,6 10,7 9,4
RONAV (%) 7,4 7,5 9,2
C/I (%) 63 59,2 52,7
Loan losses (%) -0,07 -0,31 -0,19
CET1 ratio (%) 22,6 26,7 25,2
P/E Adj (x) 9 9,6 8,1
P/BV (x) 0,64 0,76 0,72
P/NAV (x) 0,64 0,76 0,72
Dividend yield (%) 3,3 37,1 6,1
DKKm 2020 2021e 2022e
Net interest income 258 269 282
Net commission income 60 72 75
Trading income 0 0 0
Insurance income 45 42 54
Other operating income 24 27 26
Total income 387 410 437
Personnel costs -238 -238 -232
Other operating costs -1 0 0
Total operating costs -238 -238 -232
Profit before loan losses 149 172 206
Loan losses 5,24 24 15
Investment portfolio -2 -2 8
Other items 0 82 0
Operating profit 152 276 229
Tax -40 -58 -43
Other items after tax 54 9 0
Net profit 166 227 185
Tax rate (%) -26,4 -20,9 -19
EPS 17,44 23,83 20,25
Net Profit Adj 161 159 181
EPS Adj 16,81 16,5 19,6
Key balance sheet data 2020 0 0
Net lending 7608 7781 8068
Goodwill and intangibles 2 2 2
Total assets 17290 12180 12467
Shareholders equity 2271 1995 1936
Net asset value 2269 1992 1933
Capital adequacy 2020 0 0
Tier 1 Capital, excl.hybrids 2206 1876 1838
Tier 1 Capital, reported 2357 2030 1992
Capital base 2581 2130 2091
Risk exposure amount (BIS II) 9774 7043 7318
Asset quality 2020 0 0
Problem loans, gross 671 527 537
Provisions for problem loans -469 -326 -319
Problem loans, net 202 201 218
Key figures N/A N/A N/A
Profitability 2020 2021 2022
Net interest margin (%) 1,5 1,8 2,3
ROE (%) 7,6 10,7 9,4
RONAV (%) 7,4 7,5 9,2
ROREA (%) 1,6 2,7 2,6
Cost efficiency 2020 0 0
Cost / income Core (%) 63 59,2 52,7
Costs / assets Core (%) 1,34 1,62 1,88
Financial position 2020 0 0
Net lending / deposits (%) 98,4 101,8 105,6
REA / assets (%) 56,5 57,8 58,7
Common equity tier 1 ratio (%) 22,6 26,7 25,2
Tier 1 ratio, reported (%) 24,1 28,8 27,2
Capital adequacy (%) 26,4 30,2 28,6
Equity ratio Core (%) 12,8 15,4 14,7
Asset quality 2019 0 0
Problem loans, gross / lending (%) 7,9 6,2 6,1
Problem loans, net / lending (%) 2,7 2,6 2,7
Provision ratio (%) 69,9 61,9 59,5
Loan losses, net / lending (%) -0,1 -0,3 -0,2

Equity research

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Media

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

Main shareholders - BankNordik

Main shareholders Share capital % Voting shares % Verified
Henrik Lind (Lind Invest) 15.0 % 15.0 % 25 Feb 2021
Protector Forsikring ASA 10.0 % 10.0 % 5 Jan 2021
Sp/F Framherji 5.0 % 5.0 % 25 Feb 2021
P/F Tjaldur 5.0 % 5.0 % 25 Feb 2021
Handelsbanken Fonder 2.7 % 2.7 % 31 Aug 2021
Eika Kapitalforvaltning 1.3 % 1.3 % 31 Aug 2021
BIL Danmark 0.4 % 0.4 % 31 Oct 2020
Dimensional Fund Advisors 0.4 % 0.4 % 31 Jul 2021
P/F BankNordik 0.3 % 0.3 % 31 Dec 2020
Danske Invest (DK) 0.2 % 0.2 % 31 Jul 2021
Source: Holdings by Modular Finance AB