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.