The BANK of Greenland’s Annual Report 2021
Very satisfactory results in 2021
In 2021, the BANK of Greenland achieved a profit before tax of DKK 158.9 million, compared to DKK 130.9 million in 2020. The profit is thereby at most recently published level of approx. 158 million before tax. The return on opening equity after dividend and before tax was 13.9% p.a., compared to 12.1% in 2020.
The Bank recommends to the Annual General Meeting that the dividend payment for 2021 is DKK 40 per share.
Profit before value adjustments and write-downs amounts to TDKK 149,222, compared to TDKK 143,590 in 2020.
Net interest and fee income increased by TDKK 12,420 compared to 2020, amounting to TDKK 338,933.
For the overall year, value adjustment of securities and currencies resulted in a gain of TDKK 11,219, compared to a gain of TDKK 136 in 2020.
Impairment of loans, etc. amounted to TDKK 1,537, which is TDKK 11,291 lower than for 2020. The total write-downs include Covid-19 reservation of DKK 21 million. The total impairment in the year thus amounts to a modest 0.03% of the Bank’s loans and guarantees.
Lending decreased from TDKK 4,006,248 in 2020 to TDKK 3,783,681 in 2021. It is a decline of TDKK 222,567 or 5.6%. Guarantees increased during the year, by TDKK 159,634 to TDKK 1,781,465.
The BANK of Greenland’s capital ratio amounted to 24.4 at end of 2021, and the Bank has calculated the individual solvency requirement at 10.7%.
Outlook for 2022
It is expected that lending is to develop positively towards the end of the year. Deposits are expected to be at the level of the end of 2021. The Bank will be affected negatively if the Covid-19 pandemic is exacerbated or amplified to any significant degree.
Total core income is expected to increase in 2022, the primary factors being the expected 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 2021. Staff expenses are expected to show more subdued development as well as expenses in the IT area.
The Bank assesses that the quality of the loan portfolio is satisfactory. Write-downs on loans are therefore still expected to be at a low, but normalised, level.
Based on interest rate levels, capital losses on the Bank’s listed securities must be expected, while capital gains are expected from the currency area and sector shares.
In company announcement no. 01/2022 of 19 January 2022 the Bank has announced its profit before tax expectations to be in the level of DKK 120-140 million. Based on the above mentioned factors, the expectations for 2021 are maintained. An escalation of the ongoing crisis in Ukraine can impact the capital markets and the Bank’s profits.
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