BankNordik: Cash is king - Nordea

On Friday, 28 January, BankNordik lifted its 2021 net profit guidance to DKK 270m (previously DKK 230-250m), led by a positive asset quality development. Similar to its Danish peers, BankNordik also provided its initial outlook for 2022, stating that it expects net profit of DKK 130-160m for the year. We lift our estimate to DKK 150m. With the announcement of its 2024 capital targets in conjunction with its Q3 report, BankNordik has set the stage for excessive capital distributions in the years ahead. We expect its capital optimisation efforts to yield a negative effect on NII, albeit partly offset by positive effects from repricing initiatives within the insurance portfolio. We hence lower 2023E NII by ~2% and increase 2022E-23E net insurance income by ~4%. Our new Gordon growth-based fair value is DKK 180-200 (163-186). Marketing material commissioned by BankNordik.

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