BankNordik: ABGSC’s DK small/mid-cap seminar feedback - ABG

Incoming CEO presented at today’s Copenhagen seminar

Gas independence strengthens asset quality

Positive outlook for continued growth in Greenland

Gas independence offers positive outlook for asset quality
Today we had the pleasure of hosting the incoming BankNordik CEO (current EVP), Turið Finnbogadóttir Arge, at our Danish small/mid-cap seminar. During the presentation she emphasised BankNordik’s regional advantage as the Faeroese customers are not dependent on gas but rely on oil, which is comforting in the current conditions. Further, the Faroe Islands have not seen energy prices increase nearly as much as Danish corporate and private customers. Therefore, the only real comparable threat they face is inflation. The fishing industry has overcome its exposure to Russia, which was the largest export partner with 23% at the end of 2021, now down to ~4%. The development was smoothed significantly as it was able to export the fish to other parties at attractive prices. Lastly, she had a positive view on the quality of the important tourism-related industries in the Faroe Islands in times of crisis (13% of total lending).

Greenland continues to be a stable growth case
The positive outlook for continued stable growth in Greenland was confirmed, with the two new airports set to open in 2024 a crucial factor in the expected growth of the tourism industry. However, this is still a long-term development as of today. BankNordik still sees itself as well-positioned in relation to the competition, with GrønlandsBANKEN the only competitor, by offering the customers lower prices without seeing any deterioration in the advantageous market conditions in Greenland.

Well under way to reach 2024 goals
The market conditions and increasing interest rates provide comfort in the FY’22 guidance of a net profit of DKK 160-190m. BankNordik is reluctant to offer an estimated interest rate sensitivity, but we expect a positive effect similar to Danish peers in the range of 4-6% on 2023e PTP and ...
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