Satisfactory performance in an extraordinary year
In 2020, the BANK of Greenland achieved a profit before tax of DKK 130.9 million, compared to DKK 150.5 million in 2019. The profit is thereby at the high end of the most recently published interval of DKK 128-131 million before tax. The return on opening equity after dividend and before tax was 12.1% p.a., compared to 15.6% in 2019.
The Bank recommends to the Annual General Meeting that the dividend payment for 2020 is DKK 25 per share.
Profit before value adjustments and write-downs amounts to TDKK 143,590, compared to TDKK 148,874 in 2019.
Net interest and fee income increased by TDKK 3,006 compared to 2019, amounting to TDKK 326,513.
For the overall year, value adjustment of securities and currencies resulted in a gain of TDKK 136, compared to a gain of TDKK 9,585 in 2019.
Impairment of loans, etc. amounted to TDKK 12,828, which is TDKK 4,869 higher than for 2019. The year’s write-downs include Covid-19 write-downs of DKK 20 million in addition to individually impaired exposures. The total impairment thus amounts to a modest 0.2% of the Bank’s loans and guarantees.
Lending increased significantly to TDKK 4,006,248 Compared to 2019, this is an increase of TDKK 247,512, or 6.6%. Guarantees increased during the year, by TDKK 142,294 to TDKK 1,621,831.
Total loans and guarantees thereby increased very satisfactorily, by TDKK 389,806 in total to TDKK 5,628,079, and are thereby at the highest level in the Bank’s history.
The BANK of Greenland’s capital ratio amounted to 23.5 at end-2020, and the Bank has calculated the individual solvency requirement at 11.2%.
Outlook for 2021The course of the economy in 2021 is still uncertain, as a consequence of Covid-19. The Bank’s activities will be affected negatively if the Covid-19 pandemic worsens or is significantly prolonged, and will be affected positively if the negative effects diminish in the course of the year. On this basis, lending is only expected to increase moderately up to the end of the year.
Total core earnings are expected to increase in 2021, for which the primary reasons are the increased lending volume, the full impact of negative deposit interest rates, and the development in the Bank’s pension products.
Total expenses including depreciation and amortisation are expected to be moderately higher than in 2020.
The Bank assesses that the quality of the loan portfolio is satisfactory. Write-downs for impairment of lending are therefore expected to continue to be at a low level.
In view of the continued low level of interest rates, moderate capital losses on the Bank’s bond portfolio must be expected, while capital gains are expected from the currency area and sector equities.
On this basis, a profit before tax at the level of DKK 115-135 million is expected, compared to DKK 130.9 million in 2020.
- Headline: The BANK of Greenland’s Annual Report 2020 Copenhagen Stock Exchange:GRLA
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