The BANK of Greenland
CVR no. 80050410
Notification to Nasdaq OMX Copenhagen
15/2023
Quarterly
Report
Q1
- Q3 2023
Quarterly Report
Q1 - Q3 2023
1
Management’s Review 2
Quarterly Report in headlines 2
Financial highlights Q1 - Q3 2023 4
Management's Review, Q1 - Q3 2023 5
Statement by the Management 10
Income Statement and Statement of Comprehensive Income 12
Balance Sheet 13
Statement of Changes in Equity 14
Overview of Notes 16
Notes to the Quarterly Report 17
Contents
Quarterly Report
Q1 - Q3 2023
Management’s Review
2
Quarterly Report in headlines
Good profit improvement and growth for the Bank
The BANK of Greenland’s profit before tax is DKK 170.8
million for the first nine months of 2023, compared to DKK
65.2 million for the same period of 2022. The profit before
value adjustments and write-downs amounts to DKK 159.2
million, compared to DKK 113.9 million for the previous year.
Lending has increased by DKK 319 million since the end of
2022, and amounts to DKK 4,672 million at the end of
September 2023. The economic development in Greenland
continues to be favourable, with positive development in the
Bank's lending. At the same time, guarantees decreased by DKK
65 million, from DKK 1,934 million at the end of 2022, to DKK
1,869 million at the end of Q3 2023.
Net interest and fee income increased by DKK 59.9 million to
DKK 315 million in the first three quarters of 2023, compared
to the same period of 2022. The increase is primarily due to
the record-high lending volume and the development in the
level of interest rates in 2022 and 2023. Compared to
30 September 2022, loans and guarantees increased by DKK
396 million up to the end of September 2023.
At the end of September 2023, total costs including write-offs
amounted to DKK 160.2 million, compared to DKK 145.8
million for the same period of 2022. The increase concerns
staff expenses as a consequence of increases due to collective
agreement-based adjustments and staff increases, as well as
other administration expenses, where the increase can be
attributed primarily to IT costs, staff training and a few large
cost items of a non-recurring nature.
At the end of the first nine months of 2023, value adjustments
show a capital gain of DKK 19.8 million, compared to a capital
loss of DKK 45.7 million for the same period of 2022. The new
interest rate trends resulted in positive development in the
Bank’s bond holdings. Similarly, the Bank’s sector shareholdings
also performed positively.
Impairment of loans and guarantees amounted to DKK 8.3
million at the end of September 2023, compared to DKK 3.0
million at the end of September 2022. The Bank sees continued
satisfactory creditworthiness in the loan portfolio. In addition to
the Bank’s individual impairment models, a management
supplement of DKK 46.5 million is allocated. In particular, the
supplement accommodates the risks associated with increasing
inflation and interest rates, and greater cyclical uncertainty.
In the stock exchange announcement of 18 October 2023, the
forecast profit for the year before tax was adjusted upwards
from a range of DKK 170-210 million to a range of DKK 200-
230 million, which is maintained.
Management’s Review
The profit before tax gives a return of 17.6% p.a. on opening equity after disbursement of dividend.
Lending and guarantees increased by a total of DKK 253 million to DKK 6.541 billion.
Deposits increased to DKK 6.3 billion.
Core earnings per DKK in costs of 1.99 in the first 3 quarters of 2023, compared to 1.78 in 2022.
Write-downs and provisions of 0.1% for the period.
Solvency ratio of 24.6 and a capital requirement of 11.5%.
Qu
arterly Report Q1 - Q3 2023
Management’s Review
3
Quarterly Report
Q1 - Q3 2023
Management’s Review
4
Financial highlights Q1 - Q3 2023
Q1 - Q3
Q1 - Q3
Full year
Q1 - Q3
Q1 - Q3
Q1 - Q3
2023
2022
2022
2021
2020
2019
Net interest and fee income
315,032
255,178
351,485
249,061
239,671 240,099
Value adjustments
19,809
-45,672
-39,356
7,716
-4,691
9,823
Other operating income
4,456
4,563
6,588
3,942
3,343
4,280
Staff and administration expenses
152,100
138,304
195,056
137,545
126,964 124,789
Depreciation and impairment of tangible assets
6,070
5,488
7,320
5,214
5,213
5,023
Other operating expenses
2,050
2,036
2,706
1,992
1,746
1,852
Write
-downs on loans and receivables, etc. 8,253
3,040
4,523
1,570
10,394 6,615
Profit before tax
170,824
65,201
109,112
114,398
94,006
115,923
Tax
33,706
-747
10,361
18,377
24,898 19,666
Profit for the period
137,118
65,948
98,751
96,021
69,108
96,257
Selected balance sheet items:
Lending
4,672,382
4,101,071
4,353,585
3,814,849
3,734,998 3,693,537
Deposits
6,289,006
5,786,992
5,942,479
5,634,605
5,909,284 5,629,837
Equity
1,422,847
1,264,404
1,318,592
1,230,319
1,149,052 1,043,379
Total assets
8,523,579
7,752,312
7,949,566
7,352,102
7,447,672 6,986,261
Contingent liabilities
1,868,631
2,044,097
1,934,125
1,937,514
1,585,426 1,403,000
Key figures:
Capital ratio
24.6
22.7
23.6
22.7
23.0 22.3
Core capital ratio
23.4
22.2
23.2
22.7
23.0 22.3
Return on equity before tax for the period
12.5
5.1
8.4
9.5
8.4 11.4
Return on equity after tax for the period
10.0
5.2
7.6
8.0
6.2 9.5
Income per cost krone
2.0
1.4
1.5
1.8
1.7 1.8
Rate of return
1.6
0.9
1.2
1.3
0.9 1.4
Interest risk rate
1.2
1.3
1.2
1.4
1.1 2.4
Foreign exchange position
0.5
0.6
0.5
0.9
0.6 0.4
Liquidity coverage ratio
227.0
230.9
220.5
273.4
243.1 153.8
Net stable funding ratio (NSFR)
133.6
136.0
133.8
-
- -
Lending plus write
-downs as a ratio of deposits 72.2
69.0
71.5
64.4
63.9 67.2
Lending as a ratio of equity
3.3
3.2
3.3
3.1
3.3 3.5
Growth in lending for the period
7.3
8.4
15.1
-4.8
-0.7 6.4
Sum of large exposures
163.9
167.5
167.3
161.3
168.4 173.3
Write
-down ratio for the period 0.1
0.1
0.1
0.0
0.2 0.1
Accumulated
write-down ratio 3.0
3.0
3.0
3.2
3.3 3.4
Profit per share after tax for the period
76.2
36.6
54.9
53.3
38.4 53.5
Net book value per share
790.5
702.4
732.6
684.0
638.0 580.0
Stock exchange quotation/net book value per share
0.8
0.8
0.8
0.9
0.9 0.9
Quarterly Report
Q1 - Q3 2023
Management’s Review
5
Management's Review, Q1 - Q3 2023
Statement of income
At TDKK 237,689, compared to TDKK 175,800 in the first 3
quarters of 2022, net interest income increased by 35%. The
growth in the Bank’s lending of just over 14% during the
period, and the rising interest rate level throughout the second
half of 2022 and into 2023, are the reasons for the increase.
Since July 2022, Danmarks Nationalbank has increased the
interest rate by 4.2 percentage points in total, which gives the
Bank higher income on the direct deposits at Danmarks
Nationalbank.
Fee and commission income decreased by TDKK 2,342
compared to the same period of 2022. Lower investment
activity and insurance brokerage commission have a negative
impact, while increased lending fees have a positive impact on
the item.
Dividends on shares show an increase of TDKK 333. Net
interest and fee income therefore also increased by TDKK
59,854 to TDKK 315,032 at the end of September 2023.
Other operating income is by and large unchanged and
amounts to TDKK 4,456.
Staff and administration expenses amount to TDKK 152,100,
after increasing by TDKK 13,796 from the end of September
2022.
Staff expenses increased by TDKK 5,382 as a result of higher
staff numbers and salary increases under collective agreements.
Administration expenses increased by TDKK 8,414. The
increase concerns IT costs, supplementary staff training and
costs of a non-recurring nature.
Other operating expenses, which consist of the operation and
maintenance of the Bank’s buildings and contributions to the
Settlement and Guarantee Assets, are at a generally unchanged
level compared with the same period in 2022, and amount to
TDKK 2,050.
Depreciation of tangible assets amounted to TDKK 6,070,
compared to TDKK 5,488 for the same period of 2022. The
difference is primarily related to the increasing depreciation of
buildings.
The profit before value adjustments and write-downs
amounted to a satisfactory TDKK 159,268, compared to TDKK
113,913 after three quarters of 2022.
Value adjustments represent a total capital gain of TDKK
19,809, compared to a capital loss of TDKK 45,672 for the
same period of 2022. The Bank’s holdings of sector equities
and the currency area performed favourably in 2023. At the
same time, based on the level of interest rates, the Bank’s bond
holdings also gave capital gains in the first three quarters of
2023.
Financial Highlights and Key Figures
DKK 1,000
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
2023 2023 2023 2022 2022 2022 2022 2021
Net interest and fee income
111,043
99,933
104,056
96,307
87,370
82,061
85,747
89,871
Costs,
depreciation and
amortisation
51,492
51,814
56,914
59,254
48,059
48,572
49,197
51,145
Other operating income
1,451
1,613
1,392
2,025
1,514
1,414
1,635
2,244
Profit before value adjustments
and write-downs
61,002
49,732
48,534
39,078
40,825
34,903
38,185
40,970
Value adjustments
8,817
3,085 7,907
6,316
-20,477
-14,528
-10,667 3,503
Write-downs on loans, etc.
1,974
-713
6,992
1,483
928
1,394
718
-33
Profit before tax
67,845
53,530
49,449
43,911
19,420
18,981
26,800
44,506
Impairment of loans, etc. amounted to TDKK 8,253, compared
to TDKK 3,040 for the same period of 2022. The Bank does
not consider the increase to reflect a general increase in the
credit risk, and the creditworthiness of the loan portfolio is still
considered to be satisfactory. The impairment level is still
modest and the impairment ratio for the period is 0.1%.
Despite uncertain macroeconomic prospects as a consequence
of inflation, a higher interest rate level and geopolitical
instability, Greenland and the BANK of Greenland’s customers
have so far not been significantly affected. However, the future
economic development is subject to uncertainty.
Quarterly Report
Q1 - Q3 2023
Management’s Review
6
In addition to the individual write-downs, on this basis the Bank
has maintained a significant management reserve of DKK 46.5
million to counter risks.
The profit before tax is thereafter TDKK 170,824, having
increased by TDKK 105,623 from the same period of 2022.
Development in the quarter
Net interest and fee income amounted to TDKK 104,056 in
Q1 and to TDKK 99,933 in Q2. In Q3, the item amounted to
TDKK 111,043. The difference between Q1 and Q2 is
primarily due to periodically higher fee and commission income
in Q1. In Q3, the increase was primarily due to an increase in
interest income.
Total costs amounted to TDKK 56,914 in Q1, and to TDKK
51,814 in Q2. In Q3, the item amounted to TDKK 51,492. Staff
expenses decreased in Q2, since in Q1 holiday allowance, etc.
is paid, but is not paid in the subsequent quarters. Other
administration costs also fell in Q2 compared to Q1.
The profit before value adjustments and write-downs thereby
increased in Q3, to TDKK 61,002, which is TDKK 11,270
higher than in Q2 2023 and TDKK 12,438 higher than in Q1
2023. Profit before tax increased to DKK 53.5 million in Q2
2023, from DKK 49.4 million in Q1 2023. In Q3, profit before
tax amounted to DKK 67.8 million.
Lending increased by TDKK 45,355 in Q1, by TDKK 240,058 in
Q2, and by TDKK 33,384 in Q3, which overall corresponds to
an increase of 7.3% from the end of 2022. At the start of the
year, it was expected that the favourable economic
development in Greenland would increase the Bank's lending.
Deposits increased by TDKK 69,612 in Q1, by TDKK 50,000 in
Q2, and by TDKK 226,915 in Q3 2023. In overall terms, the
increase in deposits from the end of 2022 is thus TDKK
346,527.
Balance sheet and equity
In the first three quarters, the Bank’s lending grew satisfactorily
by TDKK 318,797, to TDKK 4,672,382, while the Bank’s
guarantees to customers fell by TDKK 65,494 from the end of
2022, and amounted to TDKK 1,868,631 at the end of
September 2023.
The Bank increased its bond holdings in 2023, and bonds
totalled TDKK 1,279,636 at the end of Q3.
Other assets decreased by TDKK 17,143 from the end of 2022
to September 2023. The primary reason is a reduction in the
Bank’s capital contribution to BEC.
The Bank's deposits, which predominantly comprise on-
demand deposits, amounted to TDKK 6,289,006 at the end of
September 2023, which is an increase of TDKK 346,527 from
the end of 2022. The Bank continues to have a stable
deposit/lending ratio of approximately 135%.
After payment of the dividend of TDKK 36,000 for 2022
adopted by the Annual General Meeting, the Bank's equity
increased from TDKK 1,318,592 to TDKK 1,422,847.
Total assets thereafter increased by TDKK 574,013 to TDKK
8,523,579.
Uncertainty of recognition and measurement
The principal uncertainties concerning recognition and
measurement are related to write-downs on lending, provisions
on guarantees and non-utilised credit facilities, together with
the valuation of properties, unlisted securities and financial
instruments. The management assesses that the presentation of
the accounts is subject to an appropriate level of uncertainty.
Ordinary inspection by the Danish Financial
Supervisory Authority
In May 2023, the Danish Financial Supervisory Authority
conducted an ordinary inspection of the Bank.
At the end of September 2023, the Bank received a report on
the inspection. The report stipulates six mandatory orders to
the Bank and a supplement of 0.1% to the solvency
requirement. The supplement to the solvency requirement was
recognised as at 30 September 2023.
Financial risks
The BANK of Greenland is exposed to various financial risks,
which are managed at different levels of the organisation. The
Bank’s financial risks consist of:
Credit risk: Risk of loss as a consequence of debtors’ or
counterparties’ default on actual payment obligations.
Market risk: Risk of loss as a consequence of fluctuation in the
fair value of financial instruments and derivative financial
instruments due to changes in market prices. The BANK of
Greenland classifies three types of risk within the market risk
area: interest rate risk, foreign exchange risk and share risk.
Quarterly Report
Q1 - Q3 2023
Management’s Review
7
Liquidity risk: Risk of loss as a consequence of the financing
costs increasing disproportionately, the risk that the Bank is
prevented from maintaining the adopted business model due to
a lack of financing/funding, or ultimately, the risk that the Bank
cannot fulfil agreed payment commitments when they fall due,
as a consequence of the lack of financing/funding.
Operational risk: The risk that the Bank in full or in part incurs
financial losses as a consequence of inadequate or
inappropriate internal procedures, human errors, IT systems,
etc.
Capital requirement
The BANK of Greenland must by law have a capital base that
supports the risk profile. The BANK of Greenland compiles the
credit and market risk according to the standard method and
the operational risk according to the basic indicator method.
MREL requirement
The requirement concerning own funds and eligible liabilities
must be viewed as an element of the recovery and resolution
of banks. This entails that banks which are subject to this
requirement must maintain a ratio of capital instruments and
debt obligations that, in a resolution situation, can be written
down or converted before simple claims.
On 6 December 2022, a revised MREL requirement was
determined for the BANK of Greenland, at 29.4% of the Bank’s
risk-weighted assets at the end of 2021. The MREL require-
ment is being phased in during the period from 2022 to 2027.
The linear phasing-in means that by 2023, the Bank must fulfil
an MREL requirement of 4.9%. This means that in the course
of the coming years, the Bank must fulfil the phased-in
requirement by issuing capital instruments and consolidation of
equity capital.
In continuation of the established MREL requirement, the Bank
made issues in 2021, 2022 and 2023. A total of DKK 75 million
Senior Non-Preferred and DKK 65 million in subordinated
capital contributions.
Capital requirement
Q3 2023
Full year
2022
Pillar I
8.00% 8.00%
Pillar II
3.50%
3.10%
Solvency requirement
11.50%
11.1%
SIFI buffer requirement
1.50% 1.50%
Capital reserve buffer requirement
2.50%
2.50%
Capital requirement
15.50%
15.1%
MREL requirement (phased in linearly as
from 1 January 2022)
4.90% 2.53%
Total capital requirement
20.40%
17.6%
Capital base, cf. Note 19
1,334,859 1,300,270
SNP issue
74,668 74,563
MREL capital base
1,409,527
1,374,833
MREL capital ratio
25.40% 25.00%
Surplus capital cover
5.00%
7.37%
Solid capital base
In accordance with the Danish Financial Business Act, the Board
of Directors and the Executive Management must ensure that
the BANK of Greenland has an adequate capital base. The
capital requirement is the capital which, according to the
management’s assessment, as a minimum is needed to cover all
risks.
The BANK of Greenland was designated as a SIFI institution in
April 2017.
Based on the requirements concerning own funds and eligible
liabilities, the Board of Directors expects that the total capital
reserves must be increased during the coming years. The aim of
the Board of Directors is that there must be sufficient capital
for growth in the Bank’s business activities, just as there must
be sufficient capital to cover ongoing fluctuations in the risks
assumed by the Bank.
In 2021, the Bank’s Board of Directors therefore adopted a
capital objective with a set target for CET1 of 24%. The BANK
of Greenland’s core capital ratio was 23.4 at the end of Q3
2023, and the capital ratio was 24.6.
For 2023, the Bank expects more subdued growth in risk-
weighted assets and higher earnings than in 2022, whereby the
capital ratio will be closer to the target at the end of the year.
The result for Q1-Q3 2023 has not been verified by the Bank’s
auditor and is therefore not included in the capital ratio.
Including the result for Q1-Q3 2023, the core capital ratio is
calculated at 25.9% and the capital ratio at 27.1%.
Quarterly Report
Q1 - Q3 2023
Management’s Review
8
As at the end of September 2023, the Bank’s individual
solvency requirement was calculated at 11.5%. The BANK of
Greenland thus has surplus capital cover before the buffer
requirement of 13.1%, or TDKK 711,452. After deductions for
the capital reserve buffer requirement of 2.5% and the SIFI
buffer requirement of 1.5%, the surplus cover is 9.1%.
CRR II has been introduced into Greenlandic legislation with
effect from 1 July 2023.
The BANK of Greenland’s reported individual solvency requirement according to the 8+ model
Q3 2023
Full year 2022
Capital
requirement
Solvency
requirement
Capital
requirement
Solvency
requirement
Pillar I requirement
433,661
8.0
440,087
8.0
Credit risk
133,782
2.5
119,785
2.2
Market risk
22,202
0.4
21,077
0.4
Operational risk
16,142
0.3
16,302
0.3
Other risk
17,620
0.3
15,323
0.2
Capital and solvency requirement
623,407
11.5
612,574
11.1
The BANK of Greenland has published further details of the
calculated solvency requirement in a report on its website
http://www.banken.gl/report/
Liquidity and funding
The liquidity coverage ratio (LCR) is a minimum requirement of
the ratio between current assets and liabilities, to ensure a
satisfactory liquidity ratio.
At the end of the first half-year, the Bank had an LCR of 227%
and thereby fulfils the LCR requirement of at least 100%.
The Net Stable Funding Ratio (NSFR) was introduced with
CRR II on 1 July 2023 and replaces the Bank’s previous key
figures for stable funding in the Supervisory Diamond. NSFR
amounts to 133.6 at 30 September 2023 and is thus
comfortably above the statutory requirement of 100%.
The Bank’s required funding is based solely on deposits.
The Supervisory Diamond
The BANK of Greenland has considered the benchmarks set
out in the Danish FSA’s Supervisory Diamond for banks. The
Supervisory Diamond states four benchmarks for banking
activities which the Bank aims to fulfil. It must be noted that
publicly-owned enterprises account for 36% points of the sum
of large exposures.
The exposure to property amounts to 21.4%. This exposure is
subject to considerable subordinate public financing. In addition,
some of the exposure is based on lease contracts with the
state, the Government of Greenland or municipalities. The
Bank assesses that both of these factors contribute to stabilising
the overall sector exposure.
Sum of large exposures
(maximum 175% of actual core capital)
The BANK of Greenland 163.9%
Growth in lending
(less than 20% per year)
The BANK of Greenland 13.9%
Liquidity benchmark
(less than 100%)
The Bank of Greenland 228.5%
Property exposure
(less than 25% of total loans and guarantees)
The Bank of Greenland 21.4%
Quarterly Report
Q1 - Q3 2023
Management’s Review
9
Investor relations
The BANK of Greenland’s overall financial objective is to
achieve a competitive return for the shareholders. At a price of
630 at the end of September 2023, the price of the BANK of
Greenland’s share has increased since the end of 2022, when
the price was 590.
At the Bank’s Annual General Meeting on 28 March 2023, a
dividend payment of DKK 20 per share, or a total of DKK 36
million to the Bank’s shareholders, was adopted, and was paid
out on 31 March 2023.
In accordance with Section 28a of the Danish Companies Act,
six shareholders have notified shareholdings in excess of 5%.
The Bank has no holdings of own shares.
The BANK of Greenland's mission, values and
corporate governance
The BANK of Greenland conducts banking activities in
Greenland in open competition with domestic and foreign
banks and provides advice and services in the financial area to
all citizens and businesses in Greenland.
The Bank’s mission should be viewed in a broader perspective
whereby the BANK of Greenland can be seen as the BANK for
all of Greenland. This entails an enhanced responsibility to
participate positively and actively in society’s development and
to help to create opportunities for the benefit of Greenland,
while also ensuring sound financial activities. The BANK of
Greenland is highly aware of this vital role.
The BANK of Greenland’s values are firmly anchored in the
Bank and its employees. The values are Commitment, Decency,
Customer-oriented and Development-oriented. These values
serve as a guide for how we act and wish to be seen within
and outside the Bank.
The BANK of Greenland considers all of the Corporate
Governance recommendations and the Danish Executive
Order on Management and Control of Banks, etc. and it is the
Bank’s objective to observe these recommendations at all times
and to the greatest possible extent. The Bank’s Corporate
Governance Statement can be found on the Bank’s website
www.banken.gl
.
Outlook for the remainder of 2023
Despite inflation and interest rate increases, the BANK of
Greenland expects moderate economic growth in Greenland in
2023.
On this basis, lending is expected to develop positively towards
the end of the year, but with lower full-year growth than in
2022. Deposits are expected to be at the level of Q3 2023.
The Bank will be affected negatively if inflation and cyclical
trends are exacerbated or amplified to any significant degree.
Total core income is expected to increase in 2023, for which
the primary reasons are the increased lending volume and the
development in interest rates.
Total expenses including depreciation and amortisation are
expected to be higher than in 2022. Increases are expected in
the personnel area. Administration expenses are also expected
to increase, primarily in the IT area and for supplementary staff
training and consultants.
The Bank assesses that the quality of the loan portfolio is
satisfactory. Write-downs for impairment of lending are
therefore expected to continue to be at a low level.
On the basis of the level of interest rates, gains must be
expected on the Bank’s listed securities. However, the value
adjustment of the fund portfolio is subject to uncertainty.
Capital gains are expected from the currency area and sector
equities.
In the stock exchange announcement of 18 October 2023, the
forecast profit for the year before tax was adjusted upwards
from a range of DKK 170-210 million to a range of DKK 200-
230 million, which is maintained.
Quarterly Report
Q1 - Q3 2023
Statement by the Management
10
The Board of Directors and Executive Management have today
considered and approved the quarterly report for the period
from 1 January to 30 September 2023, for the public limited
liability company, GrønlandsBANKEN, aktieselskab.
The quarterly report was prepared in accordance with the
Danish Financial Business Act, and the Management Review was
drawn up in accordance with the Danish Financial Business Act.
The quarterly report is furthermore prepared in accordance
with additional Danish disclosure requirements for listed
financial companies.
It is our opinion that the quarterly report gives a true and fair
view of the Bank's assets, liabilities and financial position at 30
September 2023, and of the result of the Bank's activities for
the first three quarters of 2023.
It is our opinion that the Management’s Review gives a true and
fair review of the development in the Bank’s activities and
financial affairs, as well as a description of the significant risks
and uncertainties to which the BANK of Greenland is subject.
Statement by the Management
Nuuk, 1 November 2023
Executive Management
Martin Birkmose Kviesgaard
Board of Directors
Gunnar à Liða
Kristian Frederik Lennert
Maliina Bitsch Abelsen
Chair
Vice Chair
Lars
Holst
Pilunnguaq Frederikke Johansen Kristiansen
Tulliaq Angutimmarik Olsen
Niels Peter Fleischer Rex
Peter Angutinguaq Wistoft
Ellen Dalsgaard Zdravkovic
Quarterly Report
Q1 - Q3 2023
Statement by the Management
11
Quarterly Report Q1 - Q3 2023
Income Statement and Statement of Comprehensive Income
12
Income Statement and Statement of Comprehensive
Income
DKK 1,000
Notes
Q1 - Q3 2023
Full year 2022
Q1 - Q3 2022
3
Interest income
298,832
227,093
160,638
4
Negative interest income
0
-1,824
-5,465
5
Interest expenses
61,143
3,040
1,010
6
Positive interest expenses
0
-20,995
-21,637
Net interest income
237,689
243,224
175,800
Share dividend, etc.
2,155
1,822
1,822
7
Fees and commission income
75,510
106,796
77,852
Fees paid and commission expenses
322
357
296
Net interest and fee income
315,032
351,485
255,178
8
Value adjustments
19,809
-39,356
-45,672
Other operating income
4,456
6,588
4,563
9
Staff and administration expenses
152,100
195,056
138,304
Depreciation and impairment of tangible assets
6,070
7,320
5,488
Other operating expenses
2,050
2,706
2,036
18
Write
-downs on loans and receivables, etc. 8,253
4,523
3,040
Profit before tax
170,824
109,112
65,201
10
Tax
33,706
10,361
-747
Profit for the period
137,118
98,751
65,948
COMPREHENSIVE INCOME
Profit for the period
137,118
98,751
65,948
Other comprehensive income:
Value adjustment of properties
4,183
32,030
3,393
Value adjustment of defined-benefit severance/pension scheme
0
-93
0
Tax on value adjustment of properties
-1,046
-8,007
-848
Other comprehensive income
3,137
23,930
2,545
Comprehensive income for the period
140,255
122,681
68,493
Quarterly Report Q1 - Q3 2023
Balance Sheet
13
Balance Sheet
DKK 1,000
Notes
Assets
30 September
2023
31 December
2022
30 September
2022
Cash balance and demand deposits with central banks
1,484,522
1,396,401
1,232,568
11
Receivables from credit institutions and central banks
108,386
118,619
352,114
18
Loans and other receivables at amortised cost
4,672,382
4,353,585
4,101,071
12
Bonds at fair value
1,279,636
1,156,821
1,150,641
Shares, etc.
132,517
120,063
118,444
13
Assets connected to pool schemes
439,494
394,576
417,404
Land and buildings in total
297,153
284,370
250,530
-
Domicile properties 297,153
284,370
250,530
Other tangible assets
6,363
6,007
5,925
Other assets
98,002
115,145
118,361
Accruals and deferred income
5,124
3,979
5,254
Total assets
8,523,579
7,949,566
7,752,312
Liabilities
Liabilities to credit institutions and central banks
17,952
22,598
16,699
14
Deposits and other liabilities
6,289,006
5,942,479
5,786,992
Deposits in pool schemes
439,494
394,576
417,404
15
Issued bonds at amortised cost
74,668
74,563
74,528
Current tax liabilities
61,069
18,861
39,439
Other liabilities
69,852
58,527
54,380
Prepayments and deferred expenses
2,681
7,535
4,183
Total debt
6,954,722
6,519,139
6,393,625
Provisions for pensions and similar obligations
2,322
2,097
1,903
Provisions for deferred tax
59,172
67,126
51,174
Provisions for losses on guarantees
10,801
8,036
7,842
Other provisions
4,861
5,047
5,006
Provisions for losses on non
-utilised credit facilities 4,566
4,821
3,666
Total provisions
81,722
87,127
69,591
16
Subordinated debt
64,288
24,708
24,692
Total subordinated debt
64,288
24,708
24,692
Equity
17
Share capital
180,000
180,000
180,000
Revaluation reserves
64,788
61,651
40,173
Retained earnings
1,178,059
1,040,941
1,044,231
Proposed dividend
0
36,000
0
Total equity
1,422,847
1,318,592
1,264,404
Total liabilities
8,523,579
7,949,566
7,752,312
1
Accounting policies applied
2
Accounting estimates
19
Contingent liabilities
20
Capital conditions and solvency
Quarterly Report Q1 - Q3 2023
Statement of Changes in Equity
14
Statement of Changes in Equity
DKK 1,000
Share capital
Revaluation
reserves
Retained
earnings
Proposed
dividend
Total equity
capital
Equity, 01 January 2022
180,000
37,628 978,283
72,000
1,267,911
Dividend paid
0
0
0
-72,000
-72,000
Other comprehensive income
0
2,545
0
0
2,545
Profit for the period
0
0 65,948
0
65,948
Equity, 30 September 2022
180,000
40,173
1,044,231
0
1,264,404
Other comprehensive income
0
21,478 -93
0
21,385
Profit for the period
0
0 -3,197
36,000
32,803
Equity, 31 December 2022
180,000
61,651 1,040,941
36,000
1,318,592
Equity, 01 January 2023
180,000
61,651 1,040,941
36,000
1,318,592
Dividend paid
0
0 0
-36,000
-36,000
Other comprehensive income
0
3,137 0
0
3,137
Profit for the period
0
0 137,118
0
137,118
Equity, 30 September 2023
180,000
64,788 1,178,059
0
1,422,847
Quarterly Report Q1 - Q3 2023
Statement of Changes in Equity
15
Quarterly Report Q1 - Q3 2023
16
1. Accounting policies applied, etc. 17
2. Significant accounting estimates 17
3. Interest income 18
4. Negative interest income 18
5. Interest expenses 18
6. Positive interest expenses 18
7. Fee and commission income 18
8. Value adjustments 18
9. Staff and administration expenses 19
10. Tax 19
11. Amounts receivable from credit institutions and central banks 19
12. Bonds 19
13. Assets connected to pool schemes 20
14. Deposits 20
15. Issued bonds at amortised cost 20
16. Subordinated debt 20
17. Share capital 21
18. Loans 21
19. Contingent liabilities 24
20. Capital conditions and solvency 25
Overview of Notes
Quarterly Report Q1 - Q3 2023
Notes to the Quarterly Report
17
The Quarterly Report has been prepared in accordance with
the Danish Financial Business Act, the statutory order on
financial reports for credit institutions and investment service
companies, etc. and the Danish disclosure requirements for the
quarterly reports of listed financial companies.
The accounting policies applied are unchanged from the Annual
Report for 2022.
Tax, which consists of current tax and changes in deferred tax,
is recognised in the income statement when it relates to the
profit for the period, and directly in equity when it can be
attributed to items carried directly to equity.
On calculating the taxable income, Greenland allows tax
deduction of dividends for the dividend-paying company. The
taxation value of this is therefore added to equity at the time of
the Annual General Meeting’s approval of the dividend.
Deferred tax assets are recognised in the balance sheet at the
value at which the asset is expected to be realised. The
quarterly report has not been audited or reviewed.
The calculation of the accounting value of certain assets and
liabilities is subject to a degree of uncertainty and an estimate of
how future events will affect the value of these assets and
liabilities. The most significant estimates relate to:
• measurement of loans, guarantees and non-utilised credit
facilities;
• financial instruments;
• fair value of domicile properties; and
• provisions.
Non-listed financial instruments that primarily concern sector
equities and that are measured at estimated fair values.
The measurement of the fair value of the Bank’s head office
properties is subject to significant accounting estimates and
assessments, including expectations of the properties’ future
returns and the fixed yield ratios.
For provisions, there are significant estimates related to the
determination of the future employee turnover rate, as well as
determining the interest obligation for tax-free savings accounts.
Notes to the Quarterly Report
1.
Accounting policies applied etc.
2.
Significant accounting estimates
Quarterly Report Q1 - Q3 2023
Notes to the Quarterly Report
18
DKK 1,000
Q1 –
Q3
2023
Full year
2022
Q1 –
Q3
2022
3. Interest income
Receivables from credit institutions and central banks
33,760
1,150
0
Lending and other receivables
242,965
218,531
156,007
Bonds
21,221
7,412
4,631
Foreign exchange, interest rate, equity, commodity and other contracts, as
well as derivative financial instruments
886
0
0
Total interest income
298,832
227,093
160,638
4. Negative interest income
Receivables from credit
institutions and central banks 0
-1,074
-4,675
Foreign exchange, interest rate, equity, commodity and other contracts, as
well as derivative financial instruments
0
-750
-790
Total negative interest
0
-1,824
-5,465
5. Interest expenses
Credit
institutions and central banks 118
0
0
Deposits and other liabilities
61,025
3,040
1,010
Total interest expenses
61,143
3,040
1,010
6. Positive interest expenses
Deposits and other liabilities
0
-11
-11
Deposits and other liabilities
0
-20,984
-21,626
Total positive interest expenses
0
-20,995
-21,637
7. Fee and commission income
Securities and securities accounts
2,267
8,629
3,062
Payment settlement
27,968
38,042
28,372
Loan transaction fees
3,903
5,589
3,829
Guarantee commission
23,790
32,228
24,070
Other fees and commission
17,582
22,308
18,519
Total fee and commission income
75,510
106,796
77,852
8. Value adjustments
Lending at fair value
347
-7,577
-7,651
Bonds
8,233
-49,488
-52,849
Shares
6,896
4,486
2,762
Currency
4,764
5,473
4,286
Foreign exchange, interest rate, equity, commodities and other contracts, as
well as derivative financial instruments
-431
7,750
7,780
Total value adjustments
19,809
-39,356
-45,672
Quarterly Report Q1 - Q3 2023
Notes to the Quarterly Report
19
DKK 1,000
Q1 –
Q3
2023
Full year
2022
Q1 –
Q3
2022
9. Staff and administration expenses
Staff expenses
Salaries 66,601
91,485
61,965
Other staff expenses 2,082
2,271
1,886
Pensions 8,519
10,979
8,117
Social security expenses 412
484
264
In total 77,614
105,219
72,232
Other administration expenses
74,486
89,837
66,072
Average number of FTEs
141.4
137.4
136.3
Of which salaries and remuneration to the Board of Directors and the
Executive Management
4,792
5,788
4,346
Five other employees whose activities have a significant influence on the
Bank’s risk profile::
Salaries and
pensions, including free car and other benefits 4,722
6,124
4,422
10. Tax
25
-% of the profit before tax 42,706
27,278
16,300
Discount for dividend tax paid
-498
-430
-430
6
-%-supplement 0
1,637
953
Total tax on ordinary profit
42,208
28,485
16,823
Paid dividend tax
498
430
430
Change in deferred tax as a consequence of a change in the corporate tax
supplement
-528
0
Adjustment to deferred tax prior year
0
1,080
1,080
Other changes
-26
0
Taxation value of dividend paid
-9,000
-19,080
-19,080
Tax in total
33,706
10,361
-747
Deferred tax
1,046
-8,779
1,928
Taxation value of dividend paid
-9,000
0
-19,080
Tax to be paid
41,660
19,140
16,404
No
company tax was paid in the period.
11. Amounts receivable from credit institutions and central banks
Receivables from credit institutions 108,386
118,619
352,114
Total amounts receivable
108,386
118,619
352,114
12. Bonds
Of the bond portfolio, a nominal amount of TDKK 50,000 is pledged as
collateral for accounts with Danmarks Nationalbank.
Quarterly Report Q1 - Q3 2023
Notes to the Quarterly Report
20
DKK 1,000
Q1 –
Q3
2023
Full year
2022
Q1 –
Q3
2022
13. Assets connected to pool schemes
Investment
associations 439,468
394,308
417,318
Non
-invested funds 26
268
86
Total
439,494
394,576
417,404
14. Deposits
On demand
5,595,539
5,241,972
5,209,531
On terms of notice
374,021
384,216
284,110
Deposits with time conditions
33,000
58,000
40,000
Special deposit conditions
286,446
258,291
253,351
Total deposits
6,289,006
5,942,479
5,786,992
15. Issued bonds at amortised cost
Bond issue
74,668
74,563
74,528
Total
74,668
74,563
74,528
Loan raised as Senior
Non-Preferred, nominally 50,000
50,000
50,000
The loan was raised as Senior Non
-Preferred on 27 October 2021 and falls
due for full redemption on 27 October 2026. The Bank has the option of
early redemption as from 27 October 2025.
Loan raised as Senior Non
-Preferred, nominally 25,000
25,000
25,000
The loan was raised as Senior Non
-Preferred on 2 September 2022 and falls
due for full redemption on 2 September 2027. The Bank has the option of
early redemption as from 2 September 2026.
16. Subordinated debt
Capital
certificate as below 64,288
24,708
24,692
In total
64,288
24,708
24,692
Subordinated debt included in the capital base according to CRR
64,288
24,708
24,692
Loan raised as subordinated debt, nominally
25,000
25,000
25,000
Interest rate, fixed rate
6.197%
6.197%
6.197%
The loan was raised on 2 September 2022 and falls due for full redemption
on 2 September 2032. The Bank has the option of early redemption as from
2 September 2027.
Loan raised as subordinated debt, nominally
40,000
0
Interest rate, floating rate
Cibor 6 + 4%
The loan was raised on 1 June 2023 and falls due for full redemption on 1
June 2032. The Bank has the option of early redemption as from 1 June
2028.
Quarterly Report Q1 - Q3 2023
Notes to the Quarterly Report
21
DKK 1,000
Q1 –
Q3
2023
Full year
2022
Q1 –
Q3
2022
17. Share capital
Share capital consists of 1,800,000 shares of DKK 100
Own holdings of capital instruments
Number of own shares
0
0
0
18. Loans
Write
-downs on loans, guarantees and non-utilised credit facilities:
New write
-downs concerning new facilities during the period 11,637
20,471
10,252
Reversal of write
-downs concerning redeemed facilities -12,154
-17,415
-14,714
Net write
-downs during the period as a consequence of changes in the
credit risk
9,501
3,146
8,951
Losses without preceding
write-downs 88
593
547
Received for claims previously written off
-819
-2,272
-1,996
Recognised in the statement of income
8,253
4,523
3,040
DKK 1,000
Stage 1 Stage 2
Stage 3
Total
Write-downs on loans
30.09.2023
Start of the period
28,826 64,706
86,477
180,009
New write
-downs concerning new facilities during the
year
2,952 6,559
1,227
10,738
Reversal of write
-downs concerning redeemed facilities -2,638 -2,161
-6,010
-10,809
Change in write
-downs at the beginning of the year –
transfer to stage 1
7,467 -4,873
-2,594
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-1,115 6,870
-5,755
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-115 -556
671
0
Net
write-downs as a consequence of changes in the
credit risk
-7,296 5,087
8,753
6,544
Previously written down, now finally lost
-1,002
-1,002
Interest on written
-down facilities
3,355
3,355
Write-downs in total
28,081
75,632
85,122
188,835
Quarterly Report Q1 - Q3 2023
Notes to the Quarterly Report
22
DKK 1,000
Stage 1 Stage 2
Stage 3
Total
Write-downs on guarantees
30.09.2023
Start of the period
1,239 1,025
5,772
8,036
New write
-downs concerning new facilities during the
year
252 191
75
518
Reversal of write
-downs concerning redeemed facilities -2 -6
-68
-76
Change in write
-downs at the beginning of the year –
transfer to stage 1
545 -37
-508
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-70 132
-62
0
Change in
write-downs at the beginning of the year –
transfer to stage 3
-9 -48
57
0
Net write
-downs as a consequence of changes in the
credit risk
-816 27
3,112
2,323
Write
-downs in total 1,139 1,284
8,378
10,801
Write-downs on non-utilised drawing rights
30.09.2023
Start of the period
498 547
3,776
4,821
New write
-downs concerning new facilities during the
year
23 357
0
380
Reversal of write
-downs concerning redeemed facilities -95 -34
-1,140
-1,269
Change in write
-downs at the beginning of the year –
transfer to stage 1
176 -77
-99
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-8 170
-162
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-1
1
0
Net
write-downs as a consequence of changes in the
credit risk
-245 328
551
634
Write-downs in total
349
1,290
2,927
4,566
Write-downs on loans
31.12.2022
Start of the period
21,314 67,951
85,104
174,369
New write
-downs concerning new facilities during the
year
4,545 9,913
4,518
18,976
Reversal of write
-downs concerning redeemed facilities -1,757 -3,774
-11,039
-16,570
Change in write
-downs at the beginning of the year –
transfer to stage 1
17,776 -14,283
-3,493
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-1,072 6,416
-5,344
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-54 -4,530
4,584
0
Net write
-downs as a consequence of changes in the
credit risk
-11,926 3,013
12,326
3,413
Previously written down, now finally lost
0 0
-3,445
-3,445
Interest on written
-down facilities 0 0
3,266
3,266
Write
-downs in total 28,826 64,706
86,477
180,009
Quarterly Report Q1 - Q3 2023
Notes to the Quarterly Report
23
DKK 1,000
Stage 1 Stage 2
Stage 3
Total
Write-downs on guarantees
31.12.2022
Start of the period
744 2,071
4,858
7,673
New write
-downs concerning new facilities during the
year
507 547
252
1,306
Reversal of write
-downs concerning redeemed facilities -2 -36
-179
-217
Change in write
-downs at the beginning of the year –
transfer to stage 1
1,505 -1,370
-135
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-68 1,036
-968
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-3 -86
89
0
Net write
-downs as a consequence of changes in the
credit risk
-1,444 -1,137
1,855
-726
Write
-downs in total 1,239 1,025
5,772
8,036
Write-downs on non-utilised drawing rights
31.12.2022
Start of the period
1,203 1,037
2,561
4,801
New write
-downs concerning new facilities during the
year
25 80
84
189
Reversal of write
-downs concerning redeemed facilities -231 -166
-231
-628
Change in write
-downs at the beginning of the year –
transfer to stage 1
557 -555
-2
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-41 724
-683
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-1 0
1
0
Net write
-downs as a consequence of changes in the
credit
risk
-1,014 -573
2,046
459
Write-downs in total
498
547
3,776
4,821
Write-downs on loans
30.09.2022
Start of the period
21,314 67,951
85,104
174,369
New write
-downs concerning new facilities during the
year
3,605 4,091
1,591
9,287
Reversal of write
-downs concerning redeemed facilities -1,636 -2,561
-9,881
-14,078
Change in write
-downs at the beginning of the year –
transfer to stage 1
16,157 -12,469
-3,688
0
Change in write
-downs at the beginning of the year –
transfer to
stage 2 -1,407 6,948
-5,541
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-28 -3,253
3,281
0
Net write
-downs as a consequence of changes in the
credit risk
-23,062 18,477
14,831
10,246
Previously written down, now
finally lost
-3,191
-3,191
Interest on written
-down facilities
3,159
3,159
Write
-downs in total 14,943 79,184
85,665
179,792
Quarterly Report Q1 - Q3 2023
Notes to the Quarterly Report
24
DKK 1,000
Stage 1 Stage 2
Stage 3
Total
Write-downs on guarantees
30.09.2022
Start of the period
744 2,071
4,858
7,673
New write
-downs concerning new facilities during the
year
546 279
0
825
Reversal of write
-downs concerning redeemed facilities -1 -24
-49
-74
Change in write
-downs at the beginning of the year –
transfer to stage 1
1,449 -1,367
-82
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-55 1,116
-1,061
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-3 -42
45
0
Net write
-downs as a consequence of changes in the
credit risk
-1,312 -1,450
2,180
-582
Write
-downs in total 1,368 583
5,891
7,842
Write-downs on non-utilised drawing rights
30.09.2022
Start of the period
1,203 1,037
2,561
4,801
New write
-downs concerning new facilities during the
year
33 72
35
140
Reversal of write
-downs concerning redeemed facilities -167 -164
-231
-562
Change in write
-downs at the beginning of the year –
transfer to stage 1
451 -451
0
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-24 684
-660
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-1 0
1
0
Net write
-downs as a consequence of changes in the
credit risk
-740 -906
933
-713
Write-downs in total
755
272
2,639
3,666
DKK 1,000
Q1 –
Q3
2023
Full year
2022
Q1 –
Q3
2022
19. Contingent liabilities
Mortgage finance guarantees
1,029,567
989,198
999,100
Registration and remortgaging guarantees
238,295
300,180
340,221
Other guarantees
600,769
644,747
704,776
Guarantees, etc. in total
1,868,631
1,934,125
2,044,097
Provision balance for guarantees
10,801
8,036
7,842
Provision balance for non
-utilised credit facilities 4,566
4,821
3,666
The Bank is a member of BEC (BEC Financial Technologies a.m.b.a.). On any
withdrawal the Bank will be obliged to pay a withdrawal fee to BEC
equivalent to the preceding three years’ IT costs.
Like the rest of the Danish banking sector, the Bank has an obli
gation to
make payments to the Guarantee Fund and the Resolution Fund.
Quarterly Report Q1 - Q3 2023
Notes to the Quarterly Report
25
DKK 1,000
Q1 –
Q3
2023
Full year
2022
Q1 –
Q3
2022
20. Capital conditions and solvency
Credit risk
4,525,897
4,619,420
4,487,750
CVA risk
13,714
13,892
21,254
Market risk
252,361
238,978
251,326
Operational risk
628,793
628,793
639,644
Total risk exposure
5,420,765
5,501,083
5,399,974
Equity at the beginning of the period
1,318,592
1,267,911
1,267,911
Comprehensive income for the
period 0
122,681
0
Adjustment to deferred tax prior year
0
0
-1,080
Proposed dividend, accounting effect
9,000
-27,000
19,080
Paid dividend
-36,000
-72,000
-72,000
Framework for ratio of own shares
-11,250
-10,620
-10,710
Deduction
- insignificant holdings CET1 instruments -2,666
0
0
Deductions for prudent valuation
-1,418
-1,568
-1,526
Deductions for Non
-Performing Exposures -5,687
-3,842
-2,726
Actual core capital
1,270,571
1,275,562
1,198,949
Supplementary capital
64,288
24,708
24,692
Capital base
1,334,859
1,300,270
1,223,641
Actual core capital ratio
24.6
23.6
22.7
Capital ratio
23.4
23.2
22.2
Statutory capital ratio requirements
8.0
8.0
8.0
Quarterly Report Q1 - Q3 2023
Notes to the Quarterly Report
26