BankNordik: Net profit miss but core operations are solid - ABG

Losses on bond portfolio behind net profit…
… as indicated in net profit downgrade in October
Core operations remain solid despite low NII effect in Q3


Another net profit miss based on investment portfolio

BankNordik reported Q3 net profit -35% vs. ABGSCe and -44% q-o-q primarily driven by losses from the investment portfolio totaling DKK 36m vs. our estimates of a flat development from Q2 where the losses were DKK 16m. Profit before loan losses came in 6% below ABGSCe based on higher-than-expected costs which came in flat q-o-q. Total income was in line with our expectations. Net interest income grew 3% q-o-q but came in 3% lower than our expectations, which was offset by higher-than-expected other operating income. Q3 was another quarter of loan loss reversals of DKK 12m which was significantly higher than our expectation of DKK 4m. This is another confirmation of BankNordik’s strong asset quality. Insurance income performed a solid quarter and was pretty much in line with our expectations. The CET1 ratio stood at 22.9% slightly below ABGSC estimate of 23.1% due to risk-weighted assets. The deviations in the report leads us to believe that the stock will trade neutral to slightly negative today.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/banknordik/Equity-research/2022/11/banknordik---net-profit-miss-but-core-operations-are-solid/