BankNordik is headquartered in the Faroe Islands. It holds between 40% and 50% of the market. The bank also has smaller operations in Denmark and Greenland. It operates its own non-life insurance company in the Faroe Islands. BankNordik’s dividend policy is to pay out 20-40% of net profits while it targets a CET1 ratio of 18.5%.
BankNordik is optimising its business and divesting non-core units. We expect it to continue the efficiency measures. We see potential for higher cash flow stability ahead and a high and stable dividend stream.
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.