In a series of recent financial disclosures, both the Bank of Greenland and an unnamed Danish bank reported significant increases in their Q3 profits.
The Bank of Greenland reported a pre-tax profit of DKK 170.8 million in Q3 2023, up significantly from DKK 65.2 million during the same period in 2022. This reflects a return of 17.6% p.a on opening equity after dividend payout. The bank's net interest and fee income increased by DKK 59.9 million, totaling DKK 315 million. Total costs, including write-offs, amounted to DKK 160.2 million, up from DKK 145.8 million last year. Value adjustments resulted in capital gains of DKK 19.8 million, contrasting with a capital loss of DKK 45.7 million for the same period in the previous year. Impairments on loans and guarantees rose to DKK 8.3 million, from DKK 3.0 million last year, with write-downs and provisions representing only 0.1% of total lending and guarantees. The bank maintained a solvency ratio of 24.6 and a capital requirement of 11.5%. On October 18, 2023, the bank revised its forecasted annual profit upwards to DKK 200-230 million.
Meanwhile, an unnamed Danish bank posted a profit of DKK 2,409 million for the same period, experiencing a return on equity of 23.2% p.a after tax. Influenced by the Danish central bank’s continuous interest rate hikes since July 2022, the bank's core income rose by 42% to DKK 5,227 million while trading income increased by 36% to DKK 240 million compared to the same period in the previous year. Costs slightly increased to DKK 2,335 million from DKK 2,288 million in the same period in the prior year while core earnings before impairment surged by a notable 98%.
Impairment charges for loans and advances resulted in an income of DKK 21 million due to strong credit quality in the lending portfolio. The bank's loans and advances decreased by DKK 1.8 billion, a decrease of 2%, while the CET1 ratio increased by 1.2pp to stand at 18.5%. In Q3, the bank initiated a share buyback of DKK 600 million and expects profit after tax for 2023 to be in the range of DKK 3,000-3,200 million, essentially doubling profit after tax. The bank's net interest income was significantly influenced by higher interest payments on the bank's significant deposit surplus.
Both banks project that their core income, costs (core earnings), and non-recurring costs for 2023 will be higher than those of 2022, with financial market developments and macroeconomic factors influencing these projections. For the Danish bank, non-recurring costs are expected to be around DKK 50 million.
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