The BANK of Greenland's Annual Report 2019



Lending growth and capital gains give the best result in the history of the BANK of Greenland.

The BANK of Greenland achieved a profit of DKK 150.5 million before tax for 2019, compared to DKK 140.3 million in 2018. The return on opening equity after dividend and before tax was 15.6% p.a., which is considered satisfactory. The profit after tax is DKK 129.9 million, compared to DKK 112.9 million in 2018, giving a return on opening equity of 13.5% p.a. after tax and after dividend.

The profit sets a new record in the Bank's history and is at the high end of the latest estimate for the year of DKK 135-155 million given by the Bank on the presentation of the interim report for Q3 2019.

The profit before value adjustments and write-downs is slightly below the 2018 level. The profit is TDKK 148,874, compared to TDKK 152,799 in 2018.

The dividend payment for 2019 recommended to the Annual General Meeting is an unchanged DKK 30 per share.

Net interest and fee income increased by TDKK 6,899 from 2018, while staff and administration expenses rose by TDKK 10,477 to TDKK 167,884. It was expected that the Bank's increasing business volume would require an increase in staff numbers in 2019.

For the overall year, value adjustment of securities and currencies resulted in a gain of TDKK 9,585, compared with a loss of TDKK 1,546 in 2018.

Write-downs on loans, etc. amount to TDKK 7,959, which is somewhat lower than in 2018. The total write-downs in 2019 are a modest 0.1% of the Bank's loans and guarantees.



Lending increased again in Q4 and showed a very satisfactory increase in 2019, by TDKK 286,562 to TDKK 3,758,736, or 8.3%.

Guarantees increased during the year, by TDKK 201,933 to TDKK 1,479,537.

Total loans and guarantees thereby increased satisfactorily, by TDKK 488,495 in total, to TDKK 5,238,273, and are thereby at the highest-ever level.

The BANK of Greenland's capital ratio amounted to 22.5 at end-2019, and the Bank has calculated the individual solvency requirement at 11.9%.

Expected development in 2020

Greenland is expected to undergo positive economic development in 2020. The economic upturn gives the Bank grounds for some optimism, so that lending is expected to increase moderately in 2020.

Total costs including write-offs are expected to be moderately higher than in 2019, based on wage increases under collective agreements, a small increase in the number of employees, and increasing compliance and IT costs.

In view of the continued low level of interest rates, moderate capital losses on the Bank's bond portfolio must be expected. 2019 was affected particularly by a capital gain of DKK 8.6 million on the sale of 75% of SparInvest to Nykredit, and this income thus cannot be expected in 2020.

On this basis, a profit before tax at the level of DKK 120-140 million is expected, compared with DKK 150.5 million in 2019.

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