BankNordik: Another stable quarter apart from investments - ABG

Investment portfolio earnings the only disturbance…
…in another solid quarter from BankNordik
Mid-range net profit expected despite investment losses


Q3’22 net profit miss from losses on investment portfolio

BankNordik reported net profit 35% below ABGSCe, primarily driven by losses on the investment portfolio totalling DKK 36m vs. ABGSCe at DKK 17m. Apart from this, Q3 was yet another stable quarter from BankNordik where total income was in line with ABGSCe, even though the initial effect of interest rate hikes was DKK 2m lower than we expected. This was offset by other operating income coming in DKK 4m above our expectations. Costs came in flat q-o-q (DKK 0.2m lower) where we had expected a decline of DKK 3m. The quarter contained significantly lower IT costs but was offset by extraordinary costs related to the change in management and board members (see page 4). The cost/income ratio came in at 56.5%, 10bp lower q-o-q which leaves BankNordik close to its 2024 target of 55%. Despite DKK 3m in higher claims (+11% q-o-q), the insurance business had another solid quarter, with the continued positive effect from price adjustments. The insurance business thus continues its stable track record, only disturbed by the investment result but benefitting from a lower number of large claims. The combined ratio came in at 81% vs. 76% in Q2 and remains under BankNordik’s target of 85%.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/banknordik/Equity-research/2022/11/banknordik---another-stable-quarter-apart-from-investments/