The BANK of Greenland
CVR no. 80050410
Notification to Nasdaq OMX Copenhagen
2/2024
Annual Report
2023
Annual Report
2023
1
Management’s Review 2
Annual Report in Headlines 2
Greenland’s Society and Economy 5
About the BANK of Greenland in Brief 21
Summary of Financial Highlights 22
Management´s Review for 2023 23
Management Statement 35
Audit Statement 36
Statement of Income 41
Statement of Comprehensive Income 42
Balance Sheet 43
Statement of Changes in Equity 44
Cash Flow Statement 45
Overview of Notes 47
Notes to the Annual Report, including Accounting policies
applied 48
Board and Management 82
Information about the BANK of Greenland 86
Financial Calendar and Stock Exchange Notifications 87
Contents
Annual Report
2023
Management’s Review
2
Annual Report in Headlines
Growth in business volume and record result
2023 was a year characterised by rising interest rates and rising
inflation, yet Greenland's economy proved to be robust, with
sound growth expected in 2023. The financial markets' perfor-
mance and Greenland’s robustness are both reflected in the
Bank’s Annual Report for 2023. Growth in several of the Bank’s
significant business areas, a higher interest rate level, low write-
downs and positive value adjustments resulted in record earn-
ings for the Bank in 2023.
In 2023, the BANK of Greenland achieved a profit before tax
of DKK 244.6 million, compared to DKK 109.1 million in 2022.
The result is at the level of the revised guidance in January 2024
for a result at the level of DKK 244 million, but significantly
above the expectations at the start of the year of a result of
DKK 130–170 million.
Core operations at an improved level
The Bank’s core operations improved significantly from DKK
153.0 million in 2022 to DKK 218.7 million in 2023.
After record-high lending in 2022, lending grew further in 2023.
Lending increased by DKK 459 million to DKK 4,813 million at
the end of 2023, representing the highest level in the history of
the Bank. The increase in lending is a consequence of the Bank’s
favourable market position and Greenland's continued favoura-
ble economic performance and the business community's great
propensity to invest in 2023. In two years, lending has thus in-
creased by over DKK 1 billion. This testifies to the fact that
there has been good activity in the Greenlandic business com-
munity in particular, but also to the fact that the BANK of
Greenland supports the development of society to a considera-
ble extent and, not least, that we are competitively strong.
Net interest income increased by DKK 86.5 million or 36% to
DKK 329.7 million in 2023. The increase is significant and
among other things reflects that throughout 2023 lending has
been at a high level. At the same time, interest rate increases
have pushed up interest income from both bonds and lending.
Bonds and Money market interest rates also improved the re-
turn on the Bank’s surplus liquidity.
High conversion activity at the end of 2022 and slightly lower
activity in the private housing market in 2023 contributed to a
Management’s Review
DKK million
0,0%
5,0%
10,0%
15,0%
20,0%
0
50
100
150
200
250
300
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Profit before tax Return on opening equity after dividend and before tax
Annual Report
2023
Managem
ent’s Review
3
decrease in guarantees in 2023. At the end of 2023, guarantees
totalled DKK 1,774 million, compared to DKK 1,934 million in
2022.
Deposit interest rates also increased significantly in 2023, when
the Bank, like most other banks, offered new deposit products
with better returns for the Bank’s customers.
Fee and commission income decreased in 2023, compared to
the previous year. Key drivers of this decrease included the de-
clining guarantee volume and the insurance area.
Costs also rose in 2023. Staff expenses increased and the total
number of full-time employees increased by six, just as the pay
increase under collective agreements also caused this item to
increase. Administration expenses also increased in 2023. These
include an increase in BEC costs, and in the card area, as well as
further training for the Bank’s employees.
Limited losses and write-downs
Write-downs and provisions amounted to a modest DKK 14.2
million in 2023, compared to DKK 4.5 million in 2022. Despite
the increase, the total level of write-downs is still low and re-
flects a significant management reserve now amounting to ap-
proximately DKK 45.6 million, including amounts for the de-
rived economic effect of rising inflation and interest rates. The
economy and our customers have thereby once again demon-
strated considerable economic robustness.
Significant capital gain
The Bank’s liquidity is placed in the money market, in bonds
and, to a certain extent, in sector shares. The interest rate
trend has resulted in higher price gains on the Bank’s bond
holdings. However, the Bank’s sector shares and the currency
area also made a positive contribution. Value adjustments show
a gain of DKK 40.1 million in 2023, compared to a loss of DKK
39.4 million in 2022.
Growth in the Bank
The Bank again experienced significant growth in 2023. Lending
increased by 10.6%, reaching the highest level in the Bank’s his-
tory, while the pension area is also expanding. Based on ongo-
ing private and public investments, the Bank still expects contin-
ued growth in 2024, but at a lower level than in 2023.
Balance sheet, capital and dividend
The BANK of Greenland’s capital-intensive activities, and lend-
ing and guarantees in particular, grew in 2023, requiring contin-
ued focus on the Bank’s capital.
As an SIFI-designated banking institution since 2017, this means
that the Bank’s management continuously assesses the capital
structure. In this respect, consideration of the authorities’ ex-
pectations of the current and future optimum capitalisation of a
banking institution is a significant aspect. There is also a need to
have sufficient capital to take part in credit granting in Green-
land.
In view of the continued phasing in of the MREL requirement
the Bank has therefore continued to issue both Tier 2 and Tier
3 capital.
The capital base is still assessed to be robust. On this basis, divi-
dend of DKK 55 per share compared to DKK 20 per share in
2022 is proposed. The dividend is equivalent to 51% of the
profit for the year, after which the Bank has a solvency ratio of
26.0 compared to 23.6 in 2022. The solvency requirement is
unchanged at 11.1%.
Outlook for 2024
Greenland is affected by rising inflation, although not at the
same level as in other countries, and even though some in-
crease in inflation in 2024 is expected, we still expect favoura-
ble development in the banking business.
Uncertainty in the capital markets will affect the Bank’s value
adjustments. We nonetheless expect losses and write-downs to
remain at a low level, and derived risks related to inflation, rising
interest rates and cyclical uncertainty in 2024 are assessed to
be covered by the current level of impairment write-downs.
The Bank’s expected profit before tax for the year 2024 is
DKK 180-230 million. This expectation corresponds to the ad-
vice in the stock exchange announcement of 14 December
2023.
Nuuk, 27 February 2024
Martin Birkmose Kviesgaard, Managing Director