The BANK of Greenland
CVR no. 80050410
Notification to Nasdaq OMX Copenhagen
2/2025
Annual Report
2024
Annual Report
2024
1
Management’s Review 2
Annual Report in Headlines 2
Greenland’s Society and Economy 5
About the BANK of Greenland in Brief 20
Summary of Financial Highlights 21
Management’s Review for 2024 22
Management Statement 34
Audit Statement 35
Statement of Income 40
Statement of Comprehensive income 41
Balance Sheet 42
Statement of Changes in Equity 43
Cash Flow Statement 44
Overview of Notes 46
Notes to the Annual Report, including Accounting Policies
Applied 47
Board and Management 82
Information about the BANK of Greenland 85
Financial Calendar and Stock Exchange Notifications 86
Contents
Annual Report
2024
Management’s Review
2
Annual Report in Headlines
Lending growth and fine results
2024 began with a relatively high level of interest rates, and a
drop in interest rates came later than expected in 2024. The
higher level of interest rates has reduced the appetite for
investment, but Greenland’s economy is nevertheless still
robust. The financial markets’ performance and Greenland’s
robustness are both reflected in the Bank’s Annual Report for
2024.
The BANK of Greenland achieved a profit before tax of DKK
245.7 million in 2024, compared with DKK 244.6 million in
2023. The result is at the level of the revised guidance from
October 2024 of a profit at the level of DKK 225-250 million,
but exceeds the expectations at the start of the year of a profit
of DKK 180-230 million.
Core operations at an improved level
The Bank’s core operations improved from DKK 218.7 million
in 2023 to DKK 236.0 million in 2024.
Lending increased by DKK 218 million to DKK 5,031 million at
the close of 2024, which is the highest level in the Bank’s
history. The increase in lending is a consequence of the Bank’s
favourable market position and competitiveness, and
Greenland’s continued sound economic performance.
In 2024, net interest income increased by DKK 35.2 million or
8% to DKK 470.3 million. The increase among other things
reflects the Bank’s high lending throughout 2024. At the same
time, the level of interest rates increased interest income from
both bonds and lending. The bond and money market interest
rates also improved the return on the Bank’s surplus liquidity,
which has expanded due to the strong increase in deposits.
The guarantee volume declined in 2024. At the end of 2024,
guarantees amounted to DKK 1,423 million, compared with
DKK 1,774 million in 2023. The decrease is primarily due to a
change in the guarantee scheme with DLR Kredit in 2024.
The higher level of interest rates pushed up deposit rates in
2024. At the same time, deposits increased by more than DKK
700 million in 2024, to DKK 7.1 billion.
Fee and commission income decreased in 2024, compared to
the previous year. Guarantee commission and payment
settlement are the key reasons for this decline, while the
securities area increased.
As expected, costs also increased in 2024. Staff expenses rose
and the total number of full-time employees increased by ten,
just as the pay increase under collective agreements also
pushed up staff expenses. Administration expenses also
increased in 2024. One reason is an increase in BEC costs,
other IT expenses and marketing costs.
Management’s Review
DKK million
0,0%
5,0%
10,0%
15,0%
20,0%
0
50
100
150
200
250
300
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Profit before tax Return on opening equity after dividend and before tax
Annual Report
2024
Management’s Review
3
Limited losses and write-downs
Write-downs and provisions were a modest DKK 18.9 million
in 2024, compared to DKK 14.2 million in 2023. Despite the
increase, the total level of write-downs is still low and reflects a
significant management reserve amounting to DKK 42.3 million,
including amounts for the derived cyclical effect. In view of the
low level of impairment write-downs, the economy and our
customers have once again demonstrated considerable
economic resilience.
Significant capital gains
The Bank’s liquidity is placed in the money market, in bonds
and, to a certain extent, in sector shares. The prevailing interest
rates resulted in slightly lower capital gains on the Bank’s bond
holdings. However, the Bank’s sector shares and the currency
area also made a positive contribution. In 2024, value adjust-
ments resulted in total income of DKK 28.6 million, compared
to income of DKK 40.1 million in 2023.
Growth in the Bank
The Bank once again achieved sound growth in 2024. Lending
increased by 4.5%, reaching the highest level in the Bank’s
history, while deposits and the pension area are also expanding.
Total assets therefore also reached a new milestone of DKK
10,023 million.
Balance sheet, capital and dividend
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’
expectations 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
Greenland.
In view of the ongoing phasing-in of the Bank’s MREL capital
requirement, in 2024 the Bank therefore continued to issue
both Tier 2 and Tier 3 capital.
The capital base is still assessed to be robust. On this basis,
dividend of DKK 100 per share, compared to DKK 55 for the
previous year, is proposed. The dividend is equivalent to 86%
of the profit for the year, after which the Bank has a solvency
ratio of 26.9, compared to 26.0 in 2023. The solvency
requirement is unchanged at 11.1%.
The Bank’s core capital accounts for 25.1% and despite the
significant dividend rate this exceeds the Bank’s long-term target
of 24%. The Bank assesses that the forthcoming implemen-
tation of CRR3 will bring an increase in the Bank's risk-weighted
assets and thereby reduce the capital ratio, which is the
background to the higher capital ratio.
Outlook for 2025
Short-term yields are expected to fall in 2025 as inflation
comes under control in Europe. It is expected that this in turn
will reduce costs and increase the Bank’s customers’ investment
appetite. The lower interest rates will have a significant negative
effect on core earnings, however.
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 and
cyclical uncertainty in 2025 are assessed to be addressed by the
current level of impairment write-downs.
In both the short and longer term, the considerable focus on
Greenland, which escalated at the beginning of 2025, can affect
the economic development and the framework conditions in
Greenland. However, the BANK of Greenland has no basis to
assess that this will be of any material significance in the short
term in 2025, so that it is the circumstances described in this
report – the macroeconomic and local conditions – that are
generally expected to influence the Bank’s operations.
The Bank expects a profit before tax of DKK 150-185 million
for 2025. There is thus no change in the expected profit for
the year, which is in line with the notification in the stock
exchange announcement of 11 December 2024.
Nuuk, 3 March 2025
Martin Birkmose Kviesgaard, Managing Director
Annual Report
2024
Management’s Review
4
Annual Report
2024
Management’s Review
5
Greenland’s Society and Economy
Greenland’s economy has remained relatively strong in the face
of several years marked by global uncertainty, international
tensions and economic crises. Compared with recent years’
international economic downturn – including high inflation,
rising interest rates and declining purchasing power –
Greenland's economy has been remarkably robust, despite
some negative impacts. Structural challenges give rise to some
uncertainty of development in the coming years, when both
international and local conditions will play a decisive role.
One key reason for Greenland's economic growth is the major
capital investments, which are expected to have peaked in
2024. These building and construction activities are very
important for overall economic activity, since they primarily rely
on production in Greenland and only require imports on a
smaller scale. It is important to note, however, that the
manpower required for these projects is predominantly
brought in from abroad for these particular assignments. The
enormous investments in modernisation of Greenland's
infrastructure, including new airports, incineration plants and
energy supply facilities, therefore have a great impact on
economic growth. It is nonetheless vital that this economic
activity is accompanied by a strong focus on ensuring a good
balance with other economic conditions. Fiscal policy that can
be described as expansionary, among other things due to these
major investments, can impose increasing pressure on the
labour market, higher pay levels and thereby diminished
competitiveness. When economic growth is financed by greater
indebtedness, this exacerbates vulnerability to unexpected
economic setbacks.
Even though the macroeconomic indicators have been generally
positive and Greenland’s activity level is generally high, significant
challenges lie ahead. These challenges pose a threat to long-
term economic stability. The population is ageing and there are
ever-increasing expectations of public benefits. There is close to
full employment – particularly among groups with professional
skills – which emphasises the lack of trained manpower in
several areas where demand is high. Ensuring structural
economic sustainability requires ongoing reforms and targeted
initiatives, including strengthening the level of educational
attainment, matched more closely to society’s needs.
With Sustainability and Growth Plan II as a structural economic
guiding principle, Greenland's Finance Act is aimed to set the
course for long-term economic sustainability, reduce business
vulnerability and pave the way for sustainable and socially
equitable growth. One means to achieve this is by raising levels
of education and professional skills, as well as economic
diversification and reform of the tax, duty and pension systems.
The annual report reviews these topics under four overall
themes. The first theme concerns the general course of the
economy, while the second theme focuses on the dynamics
and growth potentials of the business community. The third
theme is an in-depth review of the structural challenges
currently faced by Greenland. The fourth and final theme
focuses on how it is important for Greenland to be open
towards external investments and capital, as they will be vital
for the country’s continued development.
The escalated international focus on Greenland, culminating at
the start of 2025, affects the media, population, politicians and
everyday life in Greenland. In view of the rhetoric from the
parties involved, the potential political and economic impacts
are very extensive and uncertain. For the time being, however,
no circumstances have any real impact on Greenland's
economy, households and businesses on a scale that makes it
possible to assess any real economic effect, or impact on
particular segments of society. This analysis of the economic
conditions therefore does not take account of these potential
outcomes, since at the time of writing this would be based on
excessive speculation and theoretical considerations.
Overall economic development
Economic growth
Despite global challenges and crises, Greenland's economy has
shown its strength in the past years. As Figure 1 shows,
according to provisional data, GDP grew by 1.8% in 2023.
More subdued economic growth is expected in 2024, however,
with a forecast 0.9% increase, and 1.1% in 2025.
Economic activity in Greenland is primarily driven by major
capital investments, in particular the three new airports in
Nuuk, Ilulissat and Qaqortoq. Nuuk’s international airport
opened in November 2024, and has accounted for a substantial
share of capital investments in recent years. The airports in
Ilulissat and Qaqortoq will be completed in the following years
– after which there are plans to commence the expansion of
the Buksefjord hydroelectric power plant. Even though the
building and construction activities have peaked so far, the
general perception in the locally based element of the
construction industry is that order books are thinning out. If the
sector undergoes a critical decline in activity, one possible
strategy might be to intensify the renovation of the existing
building stock. Reducing the maintenance backlog for rental
homes, ports and energy installations would not only support
local activity in the sector, but also reduce the implicit debt.
However, this should be planned with due consideration of the
risk of overheating the economy, and its significance to the
overall indebtedness.
Annual Report
2024
Management’s Review
6
It is also crucial that public capital investment projects are
assessed on the basis that each of them should strengthen the
economy. Even though there may be other political grounds for
completing a construction project than those related to the
economy, Greenland's economic resilience is weakened
whenever an economically weak project is adopted, or a good
project is curtailed. This is most clearly apparent when
decisions are taken without economic calculations, or when an
economically sound project is linked with a poorer project in
order to gain political endorsement.
Unemployment is still extremely low and almost non-existent
for those with vocational or higher academic qualifications,
while overall employment has reached a record-high level. Due
to this development, which to a high degree is driven by foreign
manpower, the workforce is fully utilised, and further economic
growth cannot be driven solely by reducing unemployment. To
generate new growth, it will therefore be necessary to increase
productivity through investment in innovation and rationalisa-
tion measures, while also upgrading the competence level of
the existing workforce. Strategic efforts are also needed to
renew and expand the business structure, so that more sectors
can contribute to the economy.
Figure 1
Economic development
Real GDP growth
Note: 2018-2019 are final figures, while 2020-2021 are provisional figures. 2022-2025*
are preliminary forecasts. The figure shows real GDP growth, compiled in 2010 prices.
Sources: Statistics Greenland and Greenland's Economic Council.
As a small, open economy, Greenland's future economic
development will also depend on the international cyclical
development. In global terms, the IMF and OECD assess that
growth in Europe will increase from 2024 to 2025. Short-term
yields are expected to fall as inflation approaches the ECB’s
target level.
1
Finance Bill for 2025
2
See OECD-FAO Agricultural Outlook 2024-2033, July 2024.
These international trends may to some extent contribute
positively to Greenland's economic performance. Lower
interest rates and a more subdued increase in import prices
can reduce costs for both households and businesses. It should
be noted that inflation in Greenland has been lower than in
many other countries, which can strengthen Greenland’s
competitiveness and present advantages in the export markets.
1
Another key driver of economic growth is fisheries exports, as
fish and fish products account for 98% of Greenland's total
goods exports. According to the annual report on food
production and prices from the FAO and OECD, prices for fish
products are expected to decrease in both nominal and real
terms towards 2025-2027, before they are expected to slowly
rise again.
2
This price drop is due among other things to
increased competition from alternative protein sources, in
particular poultry. The FAO and OECD predict that real fish
prices will fall by 15% up to 2033. Calculations from
Greenland’s Economic Council show that a 25% decline for fish
and shellfish will reduce public finances by more than DKK 369
million, due to lower income from resource taxes, A-tax and
corporate taxes. There is no doubt, however, that the strong
reliance on fisheries exports makes Greenland's economy
particularly vulnerable to fluctuations in prices for fish products.
This emphasises the need to reduce the risk exposure through
greater economic diversification, with full utilisation of potential
within, for example, tourism, mining and sustainable new
business areas. A broader economic footing would create a
stable foundation for future growth.
In September 2024, Greenland’s Economic Council assessed
that GDP growth in 2025 would be 1.1%. Since then, the
BANK of Greenland has assessed that expectations of fisheries’
economic contribution in 2025 can be adjusted downwards
due to new executive orders subject to consultation, as well as
lower quotas. Since a number of construction activities are
approaching completion, GDP growth closer to zero is
possible.
In the longer term, Greenland's economy still faces several
unresolved structural challenges. In previous reports,
Greenland's Economic Council has pointed out that fiscal policy
is not sustainable, as expenditure is expected to significantly
outpace revenue.
3
This imbalance is aggravated by Greenland's
ageing population, a workforce close to being fully utilised, and
persistent challenges in the area of children and young people.
This makes extensive reforms necessary, to ensure structural
sustainability.
3
See Greenland's Economic Council’s autumn 2023 report.
0,6%
2,8%
0,2%
1,3%
2,1%
1,8%
0,9%
1,1%
2018 2019 2020 2021 2022* 2023* 2024* 2025*
Annual Report
2024
Management’s Review
7
Debt accumulation
At the end of 2023, the Greenland Government, the
municipalities and the publicly-owned enterprises had net debt
of just over DKK 1 billion, while the total gross debt of the
Greenland Government, municipalities and publicly-owned
enterprises was almost DKK 8 billion, equivalent to around 35%
of GDP. The debt is primarily concentrated in the government-
owned companies, with the gross debt totalling close to DKK 7
billion. For the last many years, Naalakkersuisut (the Govern-
ment of Greenland) has pursued a prudent debt policy. As a
consequence, Greenland’s government debt has for some time
accounted for a relatively low share of GDP. Figure 2 compares
Greenland’s debt level with international levels, where the EU’s
gross average debt in 2023 was 80.8%. Naalakkersuisut expects
the overall debt level to increase in coming years as a conse-
quence of planned borrowing for the expansion and
establishment of hydroelectric power stations.
4
Under the
2025 Finance Bill, the total debt will increase to DKK 9.2 billion
in 2026 and DKK 9.9 billion in 2027, equivalent to gross debt of
37% and 39% of GDP in the respective years. This naturally
diminishes the fiscal policy scope and makes the economy more
vulnerable to unexpected economic downturns. There is also a
considerable maintenance backlog for ports, energy facilities
and rental homes, which should be viewed as implicit debt. It is
important to take this implicit debt into consideration, as its
handling would either require increased indebtedness or entail
higher prices for consumers. Price increases can lead to
inflation and conceal the actual cost of indebtedness, leaving the
impression of an artificially low overall economic impact.
Debt levels are currently still relatively low from a European
perspective, which is positive as it contributes to a flexible
economy. Investments can also help to tackle structural
challenges, among other things by diversifying the economy. It is
important, however, that the favourable debt situation is not
4
Finance Bill for 2025.
undermined by less profitable investments, merely because
current indebtedness appears reasonable. The debt is
approaching the highest level in 30 years and the balance
between investments and indebtedness will be particularly
important in the next few years, when the focus must be on
identifying projects that contribute to resolving the structural
challenges, at the lowest possible economic cost to Greenland.
Figure 2
Development in gross public interest-bearing debt in
Greenland, Denmark and the EU in 2022
Per cent of GDP
Not e:
Greenland I measures the interest-bearing debt as a ratio of GDP. Greenland II
measures the net interest-bearing debt as a ratio of GDP. Both Greenland I and
Greenland II include the Greenland Government, municipalities and government-
owned limited liability companies. EU and Denmark
cover the gross debt. *Indicates
projected values for Greenland I and II.
Sources: Finance Bill 2019, 2020, 2022, 2023, 2024 and 2025, Statistics Greenland and
Eurostat.
The total proceeds from direct and indirect taxes in 2023
significantly exceeded the expectations in the 2024 Finance Bill.
Public expenditure was slightly lower than expected, resulting in
a budget improvement exceeding DKK 400 million in the
Greenland Government’s OI balance (see Table 1). According
0%
20%
40%
60%
80%
100%
2015
2016
2017
2018
2019
2020
2021
2022*
2023*
2024*
2025*
2026*
2027*
Greenland I Greenland II EU Denmark
le 1
2020
2021
2022
2023 2024
2025
2026
2027 2028
2020-
2023
2025-
2028
Budgeted
OI balance, Finance Bill,
2025
+103.3
+18.,7
+126.7
+187.1 +598.8
Budgeted
OI balance, Finance Act
+49.6 -76.2
+7.6
+6.1 +284.4 -130.1
+57.2
+31.3
+143.6
+102.0
Actual
OI result
-134.8 -150.0
+113.2
+424.0
+253.0
Difference
-184.4 -73.8
+105.4
+417.9
All prices are stated in DKK million. A minus indicates a deficit. 2019-2023 are realised figures, while 2024-2025 have been adopted for the year. 2026-2028 are budget estimates.
the Finance Bill for 2025.
Annual Report
2024
Management’s Review
8
to the 2025 Finance Bill, increases in taxes and duties are
expected to exceed the general economic growth rate, and the
Treasury's OI balance is expected to be positive as from 2025
and up to 2028. The balance expectations were subject to
significant downward adjustment from the Finance Act for
2024, however, with the surplus only reaching 30-50% of the
previous forecasts. This downward adjustment is due to such
factors as higher expectations of operational expenses,
particularly in the healthcare area, which have increased
significantly, as well as rising administration expenses. Even
though the proceeds from taxes, duties and transfers also
increased, this income only partly matches the increase in total
expenses, which overall results in a lower expected balance.
This was reduced considerably in the 2025 Finance Act, and a
deficit in 2025 is now budgeted for, followed by three years
with surpluses, which overall will give a four-year surplus of
DKK 102 million. This is mainly due to the adoption of the Tax
Reform, Let’s all make Greenland a better place, which increases
the employment deduction and raises the municipal block grant.
The reform is only partly financed and thereby weakens
government finances and reduces economic sustainability. In
overall terms, and in the immediate short term, Greenland's
government finances are currently in a sound position. It is
important to point out, however, that the planned increase in
indebtedness does not include the implicit debt in the form of
the significant maintenance deficit for government-owned
buildings and infrastructure.
If indebtedness increases up to 2027, the scope for manoeuvre
will be reduced, and economic vulnerability will increase. The
Budget Act therefore also requires that any debt expansion is
kept under control. The Act ensures that borrowing is
exclusively used for economically viable investments, while
maintaining balanced government finances. The Budget Act
determines that the Greenland Government's OI balance must
as a minimum be in balance, and that the overall appropriations
for operations, grants and investments may not exceed real
growth of 1% over one year, and 2% over four years. In
practice, the Act serves as a ceiling to regulate growth in the
public sector. The Finance Act for 2025 showed compliance
with the balance requirements.
5
The budget only just fulfilled
the Budget Act’s requirements, however, as the difference
between the maximum and the planned expenditure for the
2025-2028 period only amounted to DKK 6.5 million, after
inclusion of the recommended reserve for coming Finance
Acts. Any such full utilisation of the Budget Act's four-year
framework would significantly reduce opportunities to manage
any future fluctuations, which could make Greenland's
economy more vulnerable to cyclical fluctuations.
5
Finance Act 2025, p. 137.
Greenland's current cyclical position, characterised by low
unemployment, a high level of activity and a labour market
under pressure, does not favour a policy with full utilisation of
the framework. In these circumstances, excessive easing of fiscal
policy could exacerbate the pressure on the economy and
increase the imbalance. Instead, the fiscal policy instruments
should be used to stabilise the economy by dampening cyclical
fluctuations.
Greenland's economy also faces an unresolved structural
sustainability problem that requires long-term solutions to
ensure the economy's sustainability. The development plan
should be to widen the margin to the expenditure limit, so that
the economic scope can be more closely targeted at new
economically profitable investments that can help resolve the
structural challenges and/or reduce the negative consequences
of economic downturns, to make Greenland's economy more
sustainable going forward.
Price trends
After a period in which higher interest rates were used as an
instrument to manage the significant inflation rate, the level of
interest rates has begun to fall. Danmarks Nationalbank
followed the ECB’s lowering of interest rates and cut its rate by
a total of 1% point from June to December. Inflation is
expected to decrease further, which gives reasonable grounds
to expect a further significant drop in interest rates in 2025.
As Figure 3 shows, so far Greenland has been relatively
protected from the significant price increases experienced by
many other countries during the global inflation crisis. This is
particularly due to KNI’s hedging of fixed prices for oil and
diesel products, as well as the fact that Greenland could use its
hydroelectric power supplies. The agreement on a fixed oil
price expired at the end of 2023, however, which brought the
price development in 2024 into question.
Annual Report
2024
Management’s Review
9
Figure 3
Development in inflation
Index (2017=100)
Not e: Development in the consumer price index from 2015 to 2023, with 2015 as index
100. The figure is calculated at six-monthly intervals. Q3 is the third quarter.
Sources: Statistics Greenland, Statistics Denmark and Statistics Faroe Island
KNI raised oil and diesel prices at the beginning of 2024, but
the increase was lower than expected compared to world
market performance, and in an international perspective fuel
prices are still low. In July 2024, prices were 2.9% higher than
the same month in 2023, with rising fuel prices and increasing
housing expenses as the most significant inflationary factors.
Inflation in the past year was therefore below expectations, but
there is still some uncertainty due to the international energy
markets and Greenland's dependence on imported goods.
Fossil fuel prices in Greenland have thereby not adjusted to a
new natural level, and price rises must also be expected in
2025.
In addition, Nukissiorfiit (the Greenland Energy Company)
announced electricity and water tariff increases at 3.5% in both
2024 and 2025, and Naalakkersuisut's renovation of public
housing may also lead to price increases.
6
Furthermore, last
year Naalakkersuisut approved Royal Arctic Line’s freight rate
hike at 12% over a three-year period, while as from 2025 an
ongoing rate increase of 2.5% per year is introduced.
Moreover, the current manpower shortage in Greenland and
the countries from which manpower is recruited can be
expected to generate wage pressure, together with inflation. In
combination, these factors will help to push up inflation in the
coming years. This makes it important to continuously monitor
the development in prices, so as not to conduct fiscal policy
that generates more inflation.
Housing market
After several years with very few days on market and rising
sales prices and prices per square metre, figures for 2023 and
the first nine months of 2024 show a downturn in Nuuk's
6
Greenland's Economic Council's autumn 2024 report.
housing market. In 2022, the average number of days on
market was 75 days. This more than doubled in 2023, when
days on market increased to 181 days, and this trend prevailed
in 2024, when the average days on market in Q3 increased to
240 days, see Figure 4. For homes that are not newly-built
properties, days on market are considerably shorter (140 days),
but in this case too, the pattern is for significantly more days on
market than in previous years.
Figure 4
Development in average days on market
Average days on market in Nuuk and Denmark, days
Not e: Days on market denotes the average number of days a detached or terraced house,
or owner-occupied flat, has been offered for sale before it is removed from the
market. For Greenland, only sold homes are included, while the Danish figures also
include homes that are not sold. Days on market are calculated on the basis of the
da t e of sale/delisting.
Sources: The BANK of Greenland and Finance Denmark
At the same time, the average price per square metre fell by
6% from DKK 31,688 in 2023 to DKK 29,878 in 2024, see
Figure 5. Nonetheless, housing prices in nominal terms in 2024
are still at the 2021 level. This development does not reflect
trends in Denmark, which saw price increases in 2024 (current
prices). The rising level of interest rates is therefore not
necessarily the only explanation for this slowdown in the
housing market.
It should also be taken into account that in 2023 and 2024, a
large number of newly-built properties were completed for
sale, which increased the supply of new residential units. Since
there is no significant difference in the number of homes newly
occupied by a buyer, this shows that the increasing number of
days on market is primarily influenced by higher supply (newly-
built properties) and to a lesser extent by demand.
Moreover, many vendors have redeemed public loans at a
discounted rate or converted mortgage loans in recent years,
which could explain how part of the price drop does not affect
vendors. The financing structure of fixed interest rates and
repayment of mortgage debt also demonstrates its strength,
90
100
110
120
130
2017,
Q3
2018,
Q3
2019,
Q3
2020,
Q3
2021,
Q3
2022,
Q3
2023,
Q3
2024,
Q3
Greenland Denmark Faroe Islands
0
50
100
150
200
250
300
2019 2020 2021 2022 2023 2024
Nuuk Nuuk, ex. project sale Denmark
Annual Report
2024
Management’s Review
10
supporting homeowners’ resilience, and is also evident from a
very low impairment write-down requirement for the Bank's
exposure to homeowners.
The BANK of Greenland can note slightly lower house sale
activity in a period of 2023 and 2024, but in view of the higher
supply and high interest rates this must be seen as a normal
market reaction. On the other hand, the BANK of Greenland
assesses that the addition of newly-built properties to the
market will more or less come to a standstill during 2025,
which should stabilise the ratio between supply and demand.
The existing lower interest rate will also support activity in the
housing market.
Figure 5
Development in housing prices
Housing prices in Nuuk, Denmark, Copenhagen and Thorshavn,
index (2016=100)
Not e: 2017=100. Price trends in Nuuk (Greenland), Denmark and Copenhagen are
compiled in DKK per square metre for detached and terrace houses, as well as
owneroccupied flats, while for Thorshavn (the Faroe Islands) and Nuuk (Greenland)
the prices are compiled on the basis of sales prices. The prices are not adjusted by
the consumer price index and therefore reflect the nominal development in housing
prices. Data for the Faroe Islands is only until 2023, due to missing data. Data for
Nuuk in 2024 only includes the first three quarters.
Sources: Finance Denmark, BANK of Greenland and Statistics Faroe Islands.
Business conditions
Greenland's business activities are strongly affected by a narrow
sector structure, with fisheries playing a dominant role, as a vital
source of both employment and export income. Since 98% of
Greenland’s total goods exports comprise fish and fish
products, the country’s economy relies strongly on stable catch
and price conditions. This dependence on fisheries exposes the
economy to adverse fluctuations, which emphasises the need
for a broader business structure. Initiatives focused on tourism,
mining and other sustainable new business areas may be key
activities to reduce vulnerability and create a more robust
economic foundation.
Fisheries
Fisheries continue to be a central element of Greenland’s
economy, but as a sector that faces biological, market-related
and structural challenges. The adoption of Greenland’s new
Fisheries Act in May 2024 is a step towards more sustainable
management of the fisheries resources. The Act entered into
force at the beginning of 2025, as the result of a long and
complex process which showed that various stakeholders –
from small fishing boats to major shipping companies – had
diverging needs and faced different challenges. The purpose of
the Act is to improve the framework for increasing the value of
catches, modernising equipment, and retaining workplaces,
particularly in the small communities that rely on fisheries for
their livelihoods. The Act is also intended to make some
elements of fisheries more effective and to maintain fish stocks
at a level where they can give a maximum, long-term and
sustainable yield.
The Fisheries Act thus addresses some of the sector’s
challenges and seeks to create better framework conditions,
among other things by granting individual transferable quotas
(ITQ) to small fishing boat owners, to give these fishermen
greater flexibility. Some small-scale fishermen will use the
opportunity to sell their quotas for a one-off sum. This will
make it possible to boost investments in these fisheries and
make them profitable, while the uncertainty among other things
relates to whether this could undermine the settlements’
economic viability, leading to centralisation and causing
settlements to disappear.
However, the Act has given rise to concern in some areas of
the sector. The criticism includes the risk of the quotas being
spread across too many small operators, which can exert
further pressure on profitability and make fisheries less
economically sustainable.
The BANK of Greenland assesses that the adoption of this Act
represents several important positive steps forward in terms of
safeguarding long-term economically sustainable coastal
Greenland halibut fishing. On the other hand, limitations of
ownership under the Fisheries Act address other political
priorities and not the long-term maximisation of fisheries’
yields. Moreover, some elements of the legislative amendments
represent intervention in some aspects of fisheries, which can
lead to uncertainty concerning future investments in this
industry, since the framework can change significantly and
beyond the fisheries commission’s proposals. There is no
doubt, however, that there are considerable positive aspects to
the introduction of ITQ in coastal Greenland halibut fishing. It
can assure older fishermen approaching retirement of
economic security, and secure development opportunities for
others, while ensuring more effective fishing. However, the
80
100
120
140
160
2017 2018 2019 2020 2021 2022 2023 Q3
2024
Nuuk, square metre price
Denmark, square metre price
Copenhagen, square metre price
Tórshavn, sales price
Annual Report
2024
Management’s Review
11
decisive aspect will be how the Act is implemented in executive
orders.
The biological framework sets a natural limit to growth in the
sector. The quotas for the most important species are already
on the way down, particularly for prawn, while Greenland
halibut is also under pressure. Despite these warnings, the
biological recommendations are sometimes not always
followed. In the longer term this strategy is not sustainable,
however, as excessive fishing depletes stocks and reduces
future catch opportunities. It is therefore still vital to adhere to
the biological recommendations and the Fisheries Act is a step
towards ensuring this.
The fishing industry has experienced considerable volatility in
the international markets in recent years. Competition from
countries such as Norway has also intensified, which exerts
pressure on prices.
Figure 6
Annual value of exports of fish and shellfish
DKK million
Prawn
Greenland
halibut
Cod
Mackerel
Capelin
Other
fish
species
Not e: 2024* are estimates, where mackerel, capelin and other fish species are projected
on the basis of the first three quarters' of 2024, due to data availability. The
projections are calculated on the basis of seasonal trends from the previous years’
catches at fish type level. 2024** are projections, where prices are on average
assumed to be identical to 2023, while volumes are assumed to change equivalently
to quota changes. The prices are not adjusted in relation to the consumer price
index and are therefore nominal/current prices
Sources: Statistics Greenland, Naalakkersuisut (the Government of Greenland) and own
estimates.
Looking back on the last few years, the export value of fish and
shellfish has been rising, and in 2023 the export value was DKK
28 million higher than in 2022, equivalent to an increase of
0.5% from an already high level, see Figure 6. After several
strong years, fisheries now show signs of a slowdown,
however, and in 2024 the export value is predicted to drop by
7
See OECD-FAO Agricultural Outlook 2024-2033, July 2024.
around 13% to DKK 5.1 billion. The decline can be attributed
to such factors as falling kilo prices for fish and shellfish in Q1
2024, which were 3-4% lower than in the same period of the
previous year. There was no equivalent decrease in Q2. Fish
product prices are generally expected to decline, however, in
both nominal and real terms, up to 2025-2027, before they are
expected to slowly increase again.
7
There is also the challenge of limited port capacity, which at
worst can lead to the loss of valuable working days, with
economic consequences for the sector.
Even though quota flexibility gives opportunities to transfer
unused quotas to 2025, and thereby temporary relief from
some of the economic consequences, this is only a short-term
solution. This can lead to lower catch volumes, affecting
fishermen's income, business income and the Treasury’s tax
revenue. For many areas for which fisheries is the economic
foundation, declining activity can have significant consequences
and increase relocation and centralisation. The situation also
emphasises the need for tighter management and a more
sustainable balance, to ensure fisheries’ long-term development.
Tourism and aviation
Tourism is one of the fastest-growing global industries. The
sector is expected to expand in importance in the coming
years, and forecasts show that in ten years’ time tourism and
travel will account for 11.4% of total global GDP.
8
For
Greenland, this development represents an obvious
opportunity to create economic growth and local development.
At the end of 2024, Greenland’s tourism sector stood on the
threshold of an exciting new period, where the opening of the
new international airport in Nuuk and a number of
forthcoming direct summer routes brings the promise of
considerable growth potential for the sector.
In recent years there has been a clear increase in Greenland's
tourism. In September 2024, the accumulated number of
foreign overnight stays was around 5% higher than in the same
period of 2023 (see Figure 7), while provisional figures indicate
growth exceeding 20% in the number of foreign airline
passengers from 2023 to 2024 (see Figure 8). This
development emphasises that foreign tourism already plays a
greater role in Greenland's economy. On the other hand, the
statistics show that both hotel overnight stays and international
aviation involving residents of Greenland declined in 2024. This
indicates that a growing share of the tourism economy
originates from foreign tourists.
8
Statista, https://www.statista.com/statistics/1099933/travel-and-tourism-share-of-gdp/,
4.783
5.840
5.868
5.101
4.679
2021 2022 2023 2024* 2025**
Annual Report
2024
Management’s Review
12
Figure 7
Increase in foreign-visitor overnight hotel stays
Number of foreign-visitor overnight hotel stays, acc. annually
Not e: The figure shows the number of foreign-vis itor overni ght hot el s ta ys for 2 02 0 to
2024. Foreign refers to all countries that are not Greenland, i.e. including Denmark.
The number of overnight hotel stays is accumulated for each year. This means that
the last month represents the total annual number. For 2024, the first nine months
are included due to data availability..
Source: Statistics Greenland
Naalakkersuisut's ambition is for tourism to account for 40% of
the value of Greenland’s exports in 2035, with a doubling of
the number of tourists. To achieve this goal, it is vital to
develop the tourism sector in step with the increasing demand.
Figure 8
Development in the number of airline passengers
Number of airline passengers, accumulated annually
Not e: The figure shows the number of foreign depa rting airl ine passengers for 2020 to
2024. Foreign refers to all countries that are not Greenland. The number of
departing airline passengers is accumulated for each year. This means that the last
month represents the total annual number. For 2024, the first ten months are
included due to data availability.
Source:
Statistics Greenland
With the opening of the new international airport in Nuuk in
November 2024, the inflow of tourists is not expected to
materialise until the new routes start up in high season in the
summer of 2025, and subsequent years. Capacity analyses from
Visit Greenland
9
show, however, that it is already challenging to
meet the need for overnight stays, restaurants and attractions.
With average annual growth of 5%, the analysis shows that
Nuuk will face a severe lack of hotel capacity in 2027, unless
9
https://traveltrade.visitgreenland.com/da/seneste-nyt/visit-greenland-udgiver-
kapacitetsanalyse-for-nuuk/
there is investment in new hotels and expansion of existing
facilities. Restaurants in Nuuk are already under a lot of
pressure, and the sector is struggling to obtain sufficient
manpower and suitable premises. The challenge is even more
acute in Ilulissat, and the capacity analysis shows that, with the
expected increase in demand, there will already be a severe
shortage of hotel rooms as from 2026, particularly during high
season in July and August.
To ensure sustainable, long-term growth, it is not sufficient to
focus solely on quantitative growth. It is vital that tourism is
developed with due consideration of sustainability in the
environmental, social and cultural areas. The growth in tourism
must be balanced, so as to strengthen the economy, and
contribute to local value creation and employment, without this
being at the expense of Greenland's unique nature and culture.
This does not mean, however, that external investment must
be ruled out – quite the contrary, in fact. The much-needed
growth requires injection of capital, experience and know-how
from foreign parties that can cooperate closely with local
businesses to ensure responsible, profitable development.
Greenland thus has opportunities to balance strong growth in
tourism with sustainability, utilising tourism’s full potential for
the benefit of the local community, local and foreign investors,
and Greenland’s overall economy.
To support this development and ensure responsible growth, in
November Naalakkersuisut adopted a new Tourism Act that
entered into force as from 1 January 2025. The purpose of the
Act is to establish a more sustainable and regulated tourism
sector, with focus on safety, quality and a local anchoring. The
key initiatives include a requirement for a licence to operate
tourism activities, where at least two thirds Greenlandic
ownership is required for a licence to be issued. The Act has
received a mixed reception from the sector. On the one hand,
it is assessed to be positive that local parties are ensured better
conditions and visibility, but there are also concerns that strict
requirements can deter foreign investors from engaging in a
sector for which external capital and know-how are vital to
realising tourism’s full potential.
Besides the new Tourism Act, discussions continue concerning
possible new taxes, including overnight stay taxes, that will also
impact the sector. While these taxes could potentially boost
the municipalities’ finances and opportunities to maintain the
tourism infrastructure, it is vital that they are introduced on a
predictable basis, and with sufficient notice, Unforeseen
changes, such as a passenger tax on cruise liner calls, have
0
50.000
100.000
150.000
200.000
2020 2021 2022 2023 2024
0
20.000
40.000
60.000
80.000
100.000
2020 2021 2022 2023 2024
Annual Report
2024
Management’s Review
13
previously presented challenges for operators who did not
have sufficient time to adjust their pricing accordingly.
Greenland’s new Tourism Act and the proposed taxes can be
an important step towards a more structured and sustainable
tourism sector, but a fine balance needs to be maintained, so
that they do not inadvertently impede growth and investment
in the sector. The BANK of Greenland has expressed
scepticism about the adopted restriction of dominion and
advocated for the necessity of foreign investments and
partnerships between local and foreign operators. It will
therefore also be particularly important to monitor whether
restrictions to foreign ownership impede investments and
development to such an extent that this cannot be set off by
the upswing in local investment. This would present the risk
that the basis for tourism investments in infrastructure, hotel
capacity, etc. is not financially viable.
Mineral resources and the mining industry
The strategic global importance of Greenland’s geology has
been recognised for many years, and in recent years both the
EU and the USA have stepped up their interest in Greenland,
particularly with regard to critical mineral resources. At the
beginning of 2024, Naalakkersuisut and the EU entered into a
strategic partnership on the development of mineral resources
in Greenland. This partnership reflects the EU’s need for access
to rare-earth elements and other critical raw materials, and the
wish to reduce dependence on China, which today supplies
most of the EU’s consumption of rare-earth elements. This
gives Greenland a unique opportunity to play a key role in the
global supply chain. For Greenland, this situation provides
opportunities for economic growth and development, but
realising this potential will require a targeted effort to
strengthen and develop Greenland’s mineral resources sector.
Despite the increasing international interest in Greenland’s
mineral resources, activity in the sector is still limited. At the
end of 2024, there was only one active mineral project, Lumina
Sustainable Materials’ anorthosite mine, while there are
expectations that the gold mine north of Nanortalik will reopen
during 2025.
Greenland thus still faces the challenge of turning the mineral
resources sector into a reliable economic factor. This will
inevitably require significant foreign investment. Insufficient data
is emphasised as one of the greatest barriers to this
development. This particularly concerns geological data from
mineral resources exploration, so as to document the
occurrence of critical minerals and give a better overview of
their quality and prevalence.
Another key barrier is the absence of a proof of concept to
demonstrate that mining projects in Greenland can be
profitable. A successful major project would attract further
investment and boost confidence in the sector.
There is also political focus on ensuring that Greenland derives
the greatest possible benefit from its mineral resources.
Initiatives such as Greenland’s Small Scale Exploration and
Utilisation Act and the requirement for local management are
political tools to ensure value creation for the local population
and to support the mineral resources sector’s development
based on a proper understanding of the local context.
However, the uncertainty concerning political changes, such as
the introduction of Greenland’s Uranium Act to ban uranium
mining in Greenland, has previously provoked investor concern
and may continue to affect Greenland’s status as a sound
investment object.
The mineral resources and mining sector is characterised by
long-term investment and a high capital commitment. For
Greenland this entails creating an attractive and stable
investment environment in which political receptiveness and a
clear framework walk hand in hand with a society that
acknowledges the legitimacy of economic returns. If the sector
is to achieve its potential as a central driver of Greenland’s
economy, contributing to the global green transition, it is vital
to build trust between all parties concerned. Greenland must
be able to offer a combination of stable framework conditions,
effective administration and a clear political strategy that signals
predictability, competitiveness and ambition. Predictability in
administrative practice is vital, but difficult to legislate on. The
BANK of Greenland cannot assess whether a strategic
partnership with the EU can address this issue, and strengthen
the administrative structure, but it must be made easier to
attract new investment and there is an obvious need for several
new initiatives, based on a broad political mandate.
Other business opportunities and potential
Besides the established sectors such as fisheries and tourism,
Greenland has considerable potential for developing sustainable
new business areas. The coming hydroelectric power stations
are expected to generate energy volumes far exceeding
Greenland’s demand, which opens up opportunities for
innovation in energy-intensive industries such as Power-to-X
technologies or data centres.
Other exciting perspectives include Greenlandic mud (glacial
rock flour) for use as a fertiliser and to bind CO₂, and storage
of liquid CO₂ (Carbon Capture and Storage) in Greenland's
basalt underground, which is assessed to be suitable for this at
several locations.
Over time, these new sectors may perhaps contribute to local
business development and creation of new workplaces in
Greenland, while strengthening Greenland’s role in the global
Annual Report
2024
Management’s Review
14
green transition. These are all very long-term areas, however,
presenting significant technical and commercial risks, so that
mainly foreign capital holders with commercial insight will have
to take on the risk together with opportunities to generate
returns.
Greenland’s role in a geopolitical context may also lead to real
investment with business development potential. The EU
partnership, and several bilateral and geopolitical interests in
Greenland, may pave the way for investments not only in green
energy and mineral resources, but also with potential for
infrastructure, education, etc. for the benefit of Greenland’s
long-term economic development.
Structural challenges
Greenland faces several structural challenges that may become
more prominent in the coming years, unless they are given
priority now. A lack of manpower, a low competence level, an
ageing population and significant inequality exert pressure on
both the economy and social cohesion.
Labour market
Greenland’s labour market reflects the economic upswing in
recent years. In March 2024, measured on the basis of the last
12 months’ average, the number of jobseekers was the lowest
in over ten years, with only around 1,000 registered jobseekers
in September 2024, see Figure 9.
10
This means that the labour
force is close to full utilisation.
Full employment is positive for public finances, as higher income
tax revenue combined with lower expenditure on public
benefits can boost budgets. A demand for manpower that
exceeds supply when unemployment is low and economic
growth is an objective can present a challenge, however. The
structural labour market challenge has persisted for several
years, although this has been partly offset by a steady increase
in the number of foreign nationals working in Greenland.
During the past three years, more than 1,000 people of
employable age have moved to Greenland, which has increased
the labour force by around 3.5%.
11
In recent years the nature
of immigration to Greenland has changed. More and more new
immigrants are Asians and unskilled workers.
10
It should be noted, however, that in the months from April to September 2024, there
were around 15% more jobseekers than for the same months in 2023. This increase
should be viewed in the light of such factors as the new jobseekers’ allowance from
2024, which has increased the financial incentive to register as looking for work.
Figure 9
Development in the number of job seekers
Number of registered job seekers
Not e: Monthly figures for the number of registered job seekers. The number is calculated
on the basis of the entire population.
Source: Statistics Greenland
Greenland’s workforce is just under 80% of the population, see
Figure 11. Even though this ratio is marginally higher than in
Denmark, it could potentially be higher in Greenland, in view of
the shorter life expectancy and lower number of pensioners.
For comparison, the ratio for the Faroe Islands exceeds 90%. If
Greenland could increase its workforce to the Faroese level,
this would add just over 4,400 people to the labour force.
While Greenland’s unemployment rate stood at around 2.7%
in 2023 and is expected to be close to unchanged in 2024,
unemployment rates vary quite considerably across Greenland.
The variation is particularly apparent from a comparison of
smaller settlements with larger towns. In Tasiilaq, the
unemployment rate is 12.6%, in contrast to Ilulissat, where the
rate is 1.1%. In view of the high demand for labour, it is
important to investigate opportunities for regional initiatives to
optimise utilisation of the workforce. Even with full utilisation,
productivity growth and more foreign manpower will probably
be necessary. This necessity is emphasised by population
projections, which, despite their uncertainty, indicate a
population decline.
As a measure to increase the supply of labour and also increase
the degree of self-reliance, a political agreement to reform the
personal income and tax system has been established. The
reform entails raising both the basic deduction and the
employment deduction, in order to increase the incentive to
work and to improve the circumstances of low-income groups.
11
Statistics Greenland.
0
1.000
2.000
3.000
4.000
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
Jan
May
Sep
2018 2019 2020 2021 2022 2023 2024
Annual Report
2024
Management’s Review
15
However, increasing the supply of labour is not enough in itself.
To achieve a well-functioning labour market it is also necessary
to ensure a workforce with skills and qualifications that match
businesses’ needs and requirements. There is a particular lack of
trained and qualified manpower, while unemployment rates are
significantly higher for those with a lower level of educational
achievement. This means that the labour market policy must be
viewed in close relation to the education policy, as this will not
only increase the labour supply, but also benefit productivity.
Figure 11
Workforce as a ratio of the population
Workforce as a ratio of the population of working age
Not e: The figure shows the workforce (unemployed and employed in total) as a
percentage of the population in Greenland, Denmark and the Faroe Islands,
respectively. Due to data limitations, the ratios are compiled for marginally different
popula ti on g roups for the three countries (populations: 16-64 year-olds in Denmark,
15-64 year-olds in the Faroe Islands and 18-retirement age in Greenland).
Reservation is therefore made for comparability..
Sources: Statistics Denmark, Statistics Greenland and Statistics Faroe Islands
12
Greenland’s Economic Council, January 2024.
Education
Even though Greenland’s unemployment is low, there is a clear
connection between unemployment and level of education.
This tendency is not unique to Greenland, but can also be seen
in the other OECD countries. This emphasises the need to
raise the education level to increase future employment levels.
For as long as a large proportion of the population has only
achieved lower secondary education, the average unemploy-
ment rate will remain high. This is also apparent from
Fejl!
Henvisningskilde ikke fundet., which shows that unemployment
is significantly higher among those with lower secondary
education as their highest educational qualification. Figure 12
shows that in 2023, 57% of Greenland’s population had lower
secondary education as their highest educational qualification –
an improvement from 71% in 2003 and 65% in 2013, but still a
challenge for the labour market and the economy. Analyses
from Greenland’s Economic Council show a productivity gain
from further education of between 40 and 90%.
12
In June 2024, Naalakkersuisut therefore approved the new
education strategy for 2024-2030, as an initiative for more
people to complete upper secondary education. It is important,
however, that sufficient funding is provided to this area, since
Greenland’s geography and population size will require
substantial efforts.
Young people wishing to achieve higher educational
qualifications are still obliged to study abroad to a great extent.
The challenge this presents is that a large proportion of new
graduates do not return to Greenland. A key condition for
success is that the young people also gain the language skills
40%
50%
60%
70%
80%
90%
100%
2016 2017 2018 2019 2020 2021 2022 2023
Greenland Denmark Faroe Islands
Figure
10
Unemployment by level of education
Unemployment rate calculated for each of the four education levels
Lower secondary school
Upper secondary school
Vocational education
Higher education
Not e:
The columns show the level of unemployment for each of the four education levels in Greenland from 2018 to 2023.
Source:
Statistics Greenland
8,1%
7,1%
7,5%
6,2%
5,5%
5,0%
1,9%
1,4% 1,4%
0,9% 0,9%
1,1%
2,4%
2,1%
2,3%
1,8%
1,5%
1,4%
0,4% 0,4% 0,4%
0,3%
0,4%
0,4%
5,0%
4,3%
4,5%
3,7%
3,2%
2,9%
2018 2019 2020 2021 2022 2023
Average unemployment rate
Annual Report
2024
Management’s Review
16
that are crucial for them to flourish in an increasingly more
globalised labour market.
The positive aspect is that Sustainability and Growth Plan II
focuses on the education area. Especially such initiatives as
improved guidance and bridge-building can help to achieve a
better match between skills and labour market requirements.
This includes the fisheries sector, where there is high demand
for qualified manpower.
It is doubtful, however, whether these measures alone can
improve the level of education to the extent and at the speed
that is likely to be an socioeconomic necessity. There is a need
for broader, more targeted efforts to ensure that more young
people gain the right skills and qualifications. There is an urgent
need to think in new ways, which requires cooperation with
other countries, institutions and everyone who can make it
realistically possible to raise education levels, starting with
elementary school and also including vocational colleges and
upper secondary programmes. The BANK of Greenland cannot
assess whether partnerships with the EU, such as in the mineral
resources area, is a path to take, but there is an urgent need
for new measures that can bring about concrete development.
Figure 12
Development in level of education
Distribution of education
Lower
secondary
school
Upper secondary
school
Higher education
Not e: The columns show the distribution of education on the populations between the
ages of 25 and 64 in Greenland, the EU and Denmark for 2003, 2013 and 2023.
Sources: Statistics Greenland, Eurostat and Statistics Denmark.
Demographic challenges
In recent decades the ageing of Greenland’s population has
increased steadily, and this trend is set to continue. In 2024,
people aged over 60 accounted for almost 16% of the
population, while the over-70s and over-80s made up almost
5% and 1%, respectively (see Figure 13). Compared to 2000,
the proportion of all three elderly age groups has
approximately doubled. This reflects the positive trend of
longer life expectancy, but also presents considerable
challenges. The rising ratio of elderly people will increase public
expenditure on elderly care, healthcare and pensions. Greater
prosperity also leads to the expectation of a higher quality of
welfare benefits, which further increases the pressure on
government finances. The government health agreement of
November 2023 resulted in an appropriation of DKK 35
million to the health service. Furthermore, at Naalakkersuisut’s
request, in connection with the Danish Finance Act the Danish
government has proposed the allocation of a healthcare pool
of DKK 140 million for 2025 to 2028, to cover patients from
Greenland who are assigned for treatment in Denmark.
This pressure is further amplified by a declining birth rate.
Fertility in Greenland has dropped by almost 26% from 1990
to 2022, which means that in future fewer people of working
age will have to provide for a growing proportion of elderly
people. This presents a twofold challenge. Government
revenue from taxes is expected to decline, while expenditure is
expected to rise as a consequence of the demographic
development. This structural challenge is not unique to
Greenland, and is also apparent in many western countries, but
is nonetheless a significant structural problem.
Figure 13
Development in proportion of the population over 60, 70
and 80 years of age
Proportion of the population over 60, 70 and 80 years of age
Not e: Proport ion of t he popul a ti on a g ed over 60 f rom 2 0 00 t o 202 4 .
Sources: Statistics Greenland
Increasing public expenditure in the future, in the face of falling
revenue, will result in an unsustainable fiscal policy, and
according to Greenland’s Economic Council, there will be an
71%
65%
57%
14%
19%
18%
23%
18%
15%
21%
25%
30%
51%
40%
33%
52%
47%
42%
9%
11%
14%
35%
41%
49%
25%
35%
43%
2003 2013 2023 2003 2013 2023 2003 2013 2023
Greenland Denmark EU
7,7%
15,9%
2,5%
4,9%
0,5%
1,0%
0%
5%
10%
15%
20%
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
Proportion over 60 years of age Proportion over 70 years of age
Proportion over 80 years of age
Annual Report
2024
Management’s Review
17
annual financing deficit of over DKK 1 billion.
13
This is
equivalent to around 6% of GDP, which further emphasises the
need for reforms. Based on this challenge, the need for reforms
has been considered by Greenland's Economic Council and in
this section of the BANK of Greenland’s annual reports for
many years, while the measures actually taken during this
period have been limited.
In 2023, Inatsisartut (the Greenland Parliament) adopted a
decision to abolish the mutual dependency obligation applied to
the calculation of pensions for old-age and disability pension
recipients. This change removes the financial incentives which
led elderly people to leave the labour market earlier than
necessary. It is therefore a positive step that can contribute to
retaining elderly people in the labour market, for the benefit of
the economy, while increasing the supply of manpower to a
labour market that is under pressure. It is important to note,
however, that this initiative alone is not sufficient to resolve
Greenland’s structural sustainability problem.
Besides increasing the incentive to stay in the labour market,
Inatsisartut has also already raised the retirement age in several
instances. First from 65 to 66 years of age, and then later to
the current 67 years of age. In addition, specific proposals are
expected for automatic adjustment of the retirement age based
on remaining life expectancy, to meet the rising costs of people
living longer. This is particularly important because the current
pension system is only based on private pension plans to a
minimum degree.
The measures will also have the effect of reducing social
inequality across the entire population. The proportion of
Greenland's population living in relative poverty was
14
12% in
2022. This is more than three times the proportion in
Denmark and the Faroe Islands, at around 3-4%, see Figure 14.
The proportion living in relative poverty is generally increasing.
The proportion was particularly high in the Covid-19 pandemic
years, but disregarding these years, there is an upward
development trend.
13
Greenland Economic Council’s report from autumn 2023.
Figure 14
Inequality in Greenland compared to Denmark and the
Faroe Islands
Proportion of the population living in relative poverty
Not e: The proport ion of t h e popu l a t ion a ged over 1 4 yea rs whos e income i s below 5 0% of
the median of the equivalised disposable income. Equivalised disposable income is
an income measure that corrects income on the basis of the number of family
members, i.e. the sca le economies that may arise from more adults and the
expenses associated with having children.
Sources: Statistics Greenland and Statistics Denmark
To handle the structural challenges at a pace that prevents
them from developing out of hand, it is vital to regard them as
related elements of the whole picture. Improving one area can
often have derived positive effects in other areas. For example,
raising education levels can contribute to increasing the
workforce, higher productivity and less inequality. These
improvements can also improve social mobility, which can
further strengthen education levels. Focusing on how the
different areas are mutually related can create a positive spiral
effect, giving the economy in general a boost.
External investments as one of several driving
forces for Greenland's future development
Reforms that primarily affect local conditions and economic
sustainability can and should be supplemented with good
framework conditions to attract foreign investment. To ensure
Greenland’s economic growth and sustainable development it is
vital not to exclude opportunities for investment from abroad.
Greenland’s own capital reserves and manpower are already
fully utilised and future growth will require new capital,
experience and know-how to be contributed by external
parties. These investments can play a key role in supporting
innovation, rationalisation measures and strategic expansion of
the business structure.
While other countries seek actively to attract foreign
investment, in Greenland it is often feared that major
international companies could drain the country of profits and
assets. Even though it is vital that investors can legitimately
profit from their investment, this concern should be addressed
14
Relative poverty also indicates the proportion of the population who live on less than
50% of the country’s median income, taking due account of family size and structure.
12%
4%
3%
0%
5%
10%
15%
2015 2016 2017 2018 2019 2020 2021 2022 2023
Greenland Denmark Faroe Islands
Annual Report
2024
Management’s Review
18
and also promote responsible investment. Foreign investment
can create unique new opportunities. They can ensure that
Greenland attracts and builds up know-how within green
energy solutions, tourism and mining, which are sectors with
considerable growth potential. For this to succeed, it is
necessary to establish a stable, attractive investment
environment where a clear framework and political
responsiveness can ensure value-generating collaboration
between local and international parties.
In this respect, impact investments and blended finance can be
relevant instruments. Impact investments focus on generating
economic returns, as well as positive social or environmental
effects, such as promoting green energy solutions or
strengthening local communities. Blended finance is a model
whereby public and private capital are combined to reduce the
risk for private investors and also ensure investment in projects
of great economic importance. These methods can support
Greenland in attracting investments that not only benefit
investors, but also ensure sustainable development, for the
benefit of all of society.
In the context of Greenland it is vital that this cooperation is
not impeded by the necessary regulation and framework
conditions, but that it instead promotes responsible and
sustainable investments.
It is vital that Greenland does not isolate itself, but instead finds
the right balance between international investments and local
interests. Through close cooperation and acknowledgement of
the legitimacy of economic returns on investments, Greenland
can leverage its unique position to ensure a future with
appropriate attractive community development.
Annual Report
2024
Management’s Review
19
Annual Report
2024
Management’s Review
20
About the BANK of Greenland in Brief
The BANK of Greenland was established in 1967 by a group of
Danish banks. The founding general meeting was held on 26
May 1967 at Danske Bankers Fællesrepræsentation’s premises
in Copenhagen. This marked the birth of the first bank in
Greenland. The Bank opened on 1 July 1967.
Nine months before, Bikuben (restructured in 1985 as Nuna
Bank) established a branch in Nuuk. In 1997, the BANK of
Greenland and Nuna Bank merged.
The BANK of Greenland's mission
“The BANK of Greenland creates income and value through
advisory services and other services in the financial area for all
citizens of Greenland. We support society by promoting
financial understanding, cooperating with educational
institutions and the business community, and supporting
sustainable local initiatives and development.”
The Bank's mission should thus be viewed in a broader
perspective whereby the BANK of Greenland can be seen as
the Bank for all of Greenland. This imposes an enhanced
responsibility to participate positively and actively in society’s
development and to help to create opportunities in Greenland,
while also ensuring sound financial activities. The BANK of
Greenland is highly aware of this vital role.
The BANK of Greenland’s values
The BANK of Greenland’s values are firmly anchored in the
Bank and its employees. The values are
Commitment, Decency,
Customer-oriented and Development-oriented. These values
serve as a guide for how we act and wish to be seen within
and outside the Bank.
The BANK of Greenland’s strategy, vision and
objectives
In December 2024, the BANK of Greenland’s Board of
Directors approved the Bank’s strategy for the coming years.
“Strategy 2028” will support the vision and objective to be “for
the benefit of Greenland”. The strategy determines the Bank’s
key development areas for the coming years, as well as setting
out an overall action plan. The Bank seeks to involve all staff in
achieving the Bank’s vision to be “for the benefit of Greenland”.
The BANK of Greenland hereby wishes to ensure the Bank’s
continued favourable development through a balanced focus on
the three main areas:
Business development, employee development and
customer experience
On an annual basis, the main areas are included in objectives,
which are continuously adjusted to the long-term strategy and
vision for 2028. The BANK of Greenland will thereby ensure
that we continue to give value to society and are the preferred
bank for customers, shareholders and employees, fulfilling the
vision to be “for the benefit of Greenland”.
Figure 15
The Bank’s vision for 2028 – for the benefit of Greenland
Annual Report
2024
Management’s Review
21
Summary of Financial Highlights
2024
2023
2022
2021
2020
SELECTED OPERATING ITEMS:
Net interest and fee income
470,264 435,012
351,485
338,933
326,513
Value adjustments
28,578 40,058
-39,356
11,219
136
Other operating income
5,400 5,803
6,588
6,185
5,369
Staff and administration expenses
226,362 211,166
195,056
186,385
178,734
Depreciation and impairment of tangible assets
9,017 8,158
7,320
7,014
6,948
Other
operating expenses 4,255 2,815
2,706
2,497
2,610
Write
-downs on loans and receivables, etc. 18,909 14,160
4,523
1,537
12,828
Profit before tax
245,699
244,574
109,112
158,904
130,898
Tax
36,689 52,179
10,361
26,072
34,671
Profit for the year
209,010
192,395
98,751
132,832
96,227
SELECTED BALANCE SHEET ITEMS:
Lending
5,030,995 4,812,975
4,353,585
3,783,681
4,006,248
Deposits
7,152,807 6,413,469
5,942,479
5,363,871
5,847,772
Equity
1,593,622 1,479,123
1,318,592
1,267,911
1,176,917
Total assets
10,021,543 8,840,981
7,949,566
7,226,988
7,438,325
Contingent liabilities
1,422,643 1,774,426
1,934,125
1,781,465
1,621,831
KEY FIGURES FOR THE BANK (IN PER CENT)
Return on
opening equity before tax and dividend 17.5 18.9
9.0
13.9
12.1
Return on opening equity after tax and dividend
14.9 14.9
8.1
11.6
8.9
Capital ratio
26.9 26.0
23.6
24.4
23.5
Individual solvency requirement
11.1 11.1
11.1
10.7
11.2
KEY
RATIOS PER SHARE IN DKK
Profit for the year per share, before tax
136.5 135.9
60.6
88.2
72.7
Profit for the year per share, after tax
116.1 106.9
54.9
73.8
53.5
Net book value per share
885 822
733
704
654
Dividend per share
100 55
20
40
25
Closing share price
700 625
590
598
590
Definition
of key figures for the Bank
The period’s return on equity before tax and after dividend
Profit before tax as a ratio of equity less the taxable value of
dividend.
The period’s return on equity after tax and after dividend
Profit after tax as a ratio of equity less the taxable value of dividend.
Annual Report
2024
Management’s Review
22
Management’s Review for 2024
Principal activity
The BANK of Greenland’s principal activity is to offer financial
services to private customers, business customers and public
institutions in Greenland. The Bank wishes to offer a wide
range of products that is adapted to Greenland’s society and
customers’ requirements, combined with professional advisory
services.
Statement of income
Net interest income increased by TDKK 30,259 from 2023. A
higher level of interest rates than expected, and lending growth
in 2024, had a positive effect on lending rates. Market interest
rates in 2024 also had a positive impact on the return on the
Bank’s surplus liquidity, both as direct investments placed in
Danmarks Nationalbank and as interest on bonds.
Dividend on the Bank’s shareholdings amounts to TDKK 8,859,
compared to TDKK 2,155 in 2023. The development is due to
DKR Kredit’s payment of dividend for the first time.
Fee and commission income decreased by TDKK 1,803 from
2023 to 2024. The decreasing guarantee volume and payment
settlement fees during the year drove the decline. In total, net
interest and fee income increased by TDKK 35,252 to TDKK
470,264.
Other operating income, primarily external rental income on
the Bank’s residential properties, amounted to TDKK 5,400,
compared to TDKK 5,803 in 2023.
Staff and administration expenses increased by TDKK 15,196 to
TDKK 226,362. Staff expenses increased as a consequence of
pay increases under collective agreements and several staff
increases. The average number of full-time employees increased
by around ten people in 2024. Administration expenses were
at a higher level of TDKK 106,438, compared to TDKK
102,054 in 2023. The higher level reflects an increase in BEC
and other IT expenses and in marketing costs.
Depreciation of property and fixtures and fittings increased to
TDKK 9,017, compared to DKK 8,158 in 2023. Additional staff
properties increased depreciation in 2024.
Other operating expenses increased by TDKK 1,440 to TDKK
4,255. Other operating expenses primarily concern operation
and maintenance of bank buildings, as well as contributions to
guarantee and settlement assets. The increase in costs is
primarily due to maintenance of bank buildings.
The profit before value adjustments and write-downs is
thereby above the 2023 level, amounting to TDKK 236,030,
compared to TDKK 218,676 in 2023.
Selected Highlights and Key Figures (not audited)
DKK 1,000
Q4
Q3
Q2
Q1
Q4 Q3 Q2
Q1
2024
2024
2024
2024
2023 2023 2023
2023
Net interest and fee income
114,392
113,509
122,734
119,629 119,981 111,043 99,933
104,056
Costs, depreciation and amortisation
65,959
56,190
58,299
59,186 61,918 51,492 51,814
56,914
Other operating income
1,428
1,355
1,316
1,301 1,346 1,451 1,613
1,392
Profit before value adjustments and write
-downs 49,861
58,674
65,751
61,744 59,409 61,002 49,732
48,534
Value adjustments
6,004
18,657
-1,450
5,367 20,248 8,817 3,085
7,907
Write
-downs on loans, etc. 3,745
3,892
5,946
5,326 5,907 1,974 -713
6,992
Profit before tax
52,120
73,439
58,355
61,785 73,750 67,845 53,530
49,449
Annual Report
2024
Management’s Review
23
Considering Q4 2024 in isolation, net interest and fee income
amounted to TDKK 114,392, compared to TDKK 119,981 for
the same period of 2023. The development in Q4 2024 is
primarily due to higher fee income in Q4 compared to Q3
2024. Comparison of the quarters of 2024 with Q4 2023
shows declining income from interest, despite a higher level of
lending and deposits, and thereby a negative effect of the falling
level of interest rates in the last part of 2024.
Total costs are at a higher level than for the same period of the
previous year, amounting to TDKK 65,959, compared to TDKK
61,918 in Q4 2023. The increase particularly reflects the
aforementioned increase in staff numbers. Moreover, additional
staff expenses of a one-off nature were incurred in Q4 2024,
which was not the case in 2023. Value adjustments at DKK
6 million are thereby significantly below Q3 and the same
quarter of 2023. Write-downs and provisions are TDKK 3,745
lower than for the same period of the previous year. The profit
before tax in Q4 is thus TKK 52,120, compared to TDKK
73,750 in Q4 2023.
For the overall year, value adjustment of securities and
currencies resulted in a gain of TDKK 28,578, compared to a
gain of TDKK 40,058 in 2023. The Bank’s holdings of sector
equities gave lower gains than the previous year, although this
should be viewed against higher share dividends. The market’s
performance entailed greater fluctuation in the value
adjustment of the Bank’s bond holdings, but nonetheless a gain
for the year of DKK 16.0 million in 2024, compared to a gain of
DKK 23.7 million in 2023.
Impairment write-downs on loans, etc. were TDKK 18,909 in
2024, which is TDKK 4,749 higher than in 2023. This is still a
modest overall level. The total impairment write-downs
amount to 0.3% of the Bank’s loans and guarantees. The Bank
continues to see generally strong credit quality in the lending
portfolio.
In addition to the Bank’s individual impairment models, a
management estimate is allocated, which at the end of 2024
totalled DKK 42.3 million. The estimate addresses industry and
credit risk, but in particular also risks associated with rising
inflation and cyclical uncertainties.
The profit before tax is TDKK 245,699, compared to TDKK
244,574 in 2023. The profit for the year is thereby within the
interval of DKK 225-250 million stated in October 2024. The
profit before tax gives a return on equity of 16.0%.
Tax is calculated at 25% of the profit before tax, adjusted for
non-tax-liable income and non-deductible expenses. The profit
after tax is TDKK 209,010 in 2024 and gives a return on equity
of 13.6%.
Balance sheet and equity
The BANK of Greenland’s balance sheet at year-end 2024
totalled a record TDKK 10,021,543, after an increase of TDKK
1,180,562 from 2023. Deposits were on a rising trend
throughout 2024, amounting to TDKK 7,152,807 at the end of
2024. Compared to 2023, this is an increase of TDKK 739,338.
Deposits primarily increased in the public-sector customer
segment and from business customers in 2024. The Bank’s
deposits are mainly held on demand.
Lending in 2024 increased by 4.5% or TDKK 218,020 to TDKK
5,030,995. At the start of 2024, the Bank expected that the
economic development in Greenland would bring an increase
in lending in 2024, but generally with a lower growth rate than
in previous years. At the same time, the Bank’s guarantees
decreased by TDKK 351,783 to TDKK 1,422,643. The primary
reason for the decline is that the Bank has entered into a new
guarantee agreement with DLR Kredit, which entails lower
guarantee commission than before.
Total loans and guarantees thereby decreased by a total of
TDKK 133,763 to TDKK 6,453,638.
Development in business scope
TDKK
The Bank’s bond holdings increased by TDKK 195,420 to
TDKK 1,498,540.
Land and buildings increased by TDKK 12,718 to TDKK
310,860 in 2024. Due to increasing staff numbers, the Bank
acquired five new staff accommodation units in 2024.
1.000.000
1.500.000
2.000.000
2.500.000
3.000.000
3.500.000
4.000.000
4.500.000
5.000.000
5.500.000
6.000.000
6.500.000
7.000.000
7.500.000
2020 2021 2022 2023 2024
Deposits Lending Guarantees
Annual Report
2024
Management’s Review
24
Including returns, the pension area, expressed as assets in pool
schemes, increased by 31.5% in 2024, to TDKK 675,765.
In accordance with the capital plan, in 2024 the Bank made an
additional Senior-Non-Preferred bond issue of TDKK 100,000.
The Bank also issued supplementary capital of TDKK 40,000 in
2024.
Equity amounts to TDKK 1,593.622, compared to TDKK
1,479,123 at the end of 2023. Share capital amounts to TDKK
180,000. The Bank does not have hybrid loan capital. The
capital ratio is 26.9, compared to 26.0 in 2023.
Uncertainty of recognition and measurement
The main uncertainties concerning recognition and
measurement are related to write-downs on loans, provisions
on guarantees, the valuation of financial instruments, and
properties. The management assesses that the uncertainty
concerning the presentation of the accounts for 2024 is at a
responsible level and is unchanged from the previous year.
Compliance and anti-money laundering
The Danish FSA conducted an anti-money laundering
inspection visit in June 2024, with a concluding report on
20 August 2024. The mandatory orders received after the
inspection are described on the Bank’s website under the
following link:
https://www.banken.gl/media/opop542c/bem%C3%A6rkninger-
til-hvidvaskinspektion_uk.pdf
In general, the Bank considers the inspection process to be
constructive and satisfactory, and mandatory orders were
issued for areas of which the Bank is aware and is now in the
process of correcting.
The Bank has established a separate department to handle anti-
money laundering and measures to prevent the financing of
terrorism. The department is among other things responsible
for control of new customer registrations, alarm processing and
reporting to the Anti-Money Laundering Secretariat. In addition,
the department undertakes the annual reporting to the Board
of Directors concerning the Bank’s money laundering risks. In
order for the Bank to comply with the statutory obligation to
act in the event of suspected money laundering, in 2023 the
Bank implemented a new transaction monitoring system, which
facilitates more detailed monitoring by the Bank.
There is also a separate compliance function. The compliance
function is responsible for independent reporting to the
Executive Management and the Board of Directors. The
compliance function is responsible for assessment and control
of compliance with applicable legislation, market standards and
internal regulations. In addition, it advises on how compliance
risks can be reduced.
Financial risks
The BANK of Greenland is exposed to various financial risks,
which are managed at different levels of the organisation. The
Bank’s financial risks consist of:
Credit risk: Risk of loss as a consequence of debtors’ or
counterparties’ default on actual payment obligations.
Market risk: Risk of loss as a consequence of fluctuation in the
fair value of financial instruments and derivative financial
instruments, due to changes in market prices. The BANK of
Greenland classifies three types of risk within the market risk
area: interest rate risk, foreign exchange risk and share risk.
Liquidity risk: Risk of loss as a consequence of the financing
costs increasing disproportionately, the risk that the Bank is
prevented from maintaining the adopted business model as a
consequence of a lack of financing/funding, or ultimately, the
risk that the Bank cannot fulfil agreed payment commitments
when they fall due, as a consequence of the lack of
financing/funding.
Operational risk: The risk that the Bank in full or in part incurs
financial losses as a consequence of inadequate or deficient
internal procedures, or human errors, IT systems, etc.
Capital requirement
The BANK of Greenland must by law have a capital base that
supports the risk profile. The BANK of Greenland compiles the
credit and market risk according to the standard method and
the operational risk according to the basic indicator method.
The Bank assesses that there is no need for more advanced
methods to be used. Concerning risk management, reference is
made to Note 2.
MREL requirement
The requirement concerning own funds and eligible liabilities
must be viewed as an element of the recovery and resolution
of banks. This entails that banks which are subject to this
requirement must maintain a ratio of capital instruments and
debt obligations that, in a resolution situation, can be written
down or converted before simple claims.
On 30 November 2023, a revised MREL requirement was
determined for the BANK of Greenland, at 30.2% of the Bank’s
risk-weighted assets at the end of 2022. The MREL require-
ment is being phased in up to 2027. This means that in the
course of the coming years, the Bank must fulfil the
Annual Report
2024
Management’s Review
25
requirement by issuing capital instruments and through
consolidation of equity capital.
On the basis of the established MREL requirement, the Bank
made two further issues in 2024, with a view to targeted
coverage of the MREL requirement. Issues of DKK 100 million
Senior Non-Preferred and DKK 40 million subordinated debt
were made.
Capital requirement
2024
2023
Pillar I
8.00%
8.00%
Pillar II
3.10%
3.10%
Solvency requirement
11.1%
11.1%
SIFI buffer requirement
1.50%
1.50%
Capital reserve buffer
requirement
2.50%
2.50%
Capital requirement
15.1%
15.1%
MREL requirement (phased in
linearly as from 1 January 2022)
7.55%
4.90%
Total capital requirement
22.7%
20.0%
Capital base, cf. Note 23
1,535,841
1,450,158
SNP issue cf Note 19
273,569
173,969
MREL capital base
1,809,410
1,624,127
MREL capital ratio
31.70%
29.10%
Surplus capital cover
9.05%
9.10%
The MREL requirement is being phased in as from 1 January
2022 on a linear basis over six years. This entails that the Bank
must fulfil an MREL requirement of 7.55% in 2024. As from
1 January 2025, the Bank must fulfil an MREL requirement of
10.07% on the basis of a revised MREL requirement of 30.2%
notified on 10 December 2024.
Sound capital
In accordance with the Danish Financial Activities Act, the
Board of Directors and the Executive Management must
ensure that the BANK of Greenland has an adequate capital
base. The capital adequacy requirement is the capital which,
according to the management’s assessment, as a minimum is
needed to cover all risks.
The BANK of Greenland was designated as an SIFI institution in
April 2017. Based on the requirements concerning eligible
liabilities, the Board of Directors expects that the total capital
reserves must be increased during the coming years. The aim of
the Board of Directors is that there must be sufficient capital
for growth in the Bank’s business activities.
There must also be sufficient capital to cover ongoing
fluctuations in the risks assumed by the Bank.
The Bank's risk-weighted assets amount to TDKK 5,710,361,
compared to TDKK 5,573,039 in 2023.
The Bank’s Board of Directors has adopted a capital objective
with a CET1 target of 24%. The BANK of Greenland’s core
capital ratio was 25.1 at the end of 2024, and the capital ratio is
26.9 after payment of the proposed dividend. The core capital
ratio is thereby achieved above the long-term target of 24,
which is due to the expected increase in risk-weighted assets
on the implementation of CRR3. CRR3 is expected to be
implemented in the law of Greenland in 2026, but the Bank
already expects to make adjustment in line with the directive in
2025. The Bank therefore assesses it to be appropriate to
maintain a higher core capital level at the end of 2024, in the
expectation that the implementation of CRR3 and the general
development in the Bank’s activities will bring the core capital
closer to the target.
Based on the aforementioned, the Bank’s Board of Directors
proposes to the Annual General Meeting that dividend of DKK
100 per share be paid for 2024, equivalent to 86% of the profit
after tax.
At 31 December 2024, the Bank’s individual solvency
requirement was compiled at 11.1%. The BANK of Greenland
thereby has surplus capital cover before the buffer require-
ments of 15.8%. After deductions for the capital reserve buffer
requirement of 2.5% and the SIFI buffer requirement of 1.5%,
the surplus cover is 11.8%.
In December 2024, the Minister of Industry, Business and
Financial Affairs approved the phasing-in of a contracyclical
capital buffer requirement of 0.5% as from 1 January 2026, and
an additional 0.5% as from 1 July 2026.
The individual solvency requirement is compiled on the basis of
the Order on the calculation of risk exposures, capital base and
solvency requirements, as well as the Danish FSA’s guideline in
this respect. On the basis of the calculated capital requirement,
the Bank has compiled surplus cover at TDKK 901,743, which
comprises the difference between the capital requirement
(solvency requirement) and the actual capital (capital ratio). The
management assesses that the capital is adequate to cover the
risk entailed by the Bank’s activities.
The BANK of Greenland's capital plan meets the requirements
in full, so that the annual financial statements are presented on
a going-concern basis.
Annual Report
2024
Management’s Review
26
The BANK of Greenland’s calculated capital and solvency requirement according to the 8+ model
2024 2023
DKK 1,000
Capital
requirement
Solvency
requirement
Capital
requirement
Solvency
requirement
Pillar I requirement
456,829 8.0%
445,843
8.0%
Credit risk
114,534 2.0%
120,061
2.2%
Market risk
27,320 0.5%
22,404
0.4%
Liquidity risk
6,270 0.1%
0
0.0%
Operational risk
23,621 0.4%
15,646
0.3%
Other risk
5,524 0.1%
12,256
0.2%
Capital and solvency requirement
634,098
11.1%
612,574
11.1%
Reference is made to the BANK of Greenland’s website for a
description and amplification of the method of calculation of
the capital and solvency requirement for 2024. Reference is
also made to the Bank’s risk management report for 2024 at
https://www.banken.gl/en/investor/public-disclosure/
The report has not been audited.
Liquidity
The BANK of Greenland has a comfortable deposit surplus and
the Bank’s funding is based on deposits and capital issues.
The official measure of liquidity is the Liquidity Coverage Ratio
(LCR), which is a minimum requirement of the ratio between
current assets and liabilities, to ensure a satisfactory liquidity
ratio. LCR must be at least 100%.
At the end of 2024, the Bank had an LCR of 266.2% and
thereby fulfilled the LCR requirement.
DKK 1,000
2024
2023
Liquidity buffer LCR
3,454,167
2,735,104
Outflow, net
1,297,598
1,055,997
LCR
266.2%
259.0%
The Supervisory Diamond
The BANK of Greenland has considered the benchmarks set
out in the Danish FSA’s Supervisory Diamond for banks. The
Supervisory Diamond states four benchmarks for banking
activities which the Bank aims to fulfil. At the end of 2024, the
BANK of Greenland lies within all of the threshold values in the
Supervisory Diamond.
In accordance with the table below, the sum of the Bank's 20
largest exposures can be stated at 36.0%, which is adequately
below the Danish FSA's threshold of 175%. It must be noted
that approximately 45 percentage points concern exposures to
publicly-owned enterprises.
The property exposure has been reduced and amounts to
19.8% according to the table below. This exposure is subject to
considerable subordinate public financing. In addition, some of
the exposure is based on lease contracts with the state, the
Government of Greenland or municipalities. The Bank assesses
that these factors contribute to stabilising the overall sector
exposure.
Investor Relations
The BANK of Greenland seeks to ensure transparency
concerning the Bank and there is good communication and
dialogue with the Bank’s shareholders and other stakeholders.
This takes place, for example, by providing information to
Nasdaq OMX Copenhagen, where the Bank is listed. The
purpose of publishing information is to:
• Comply with applicable disclosure obligations and current
stock-exchange ethical regulations.
• Ensure openness concerning the Bank.
• Ensure good and positive dialogue with the Bank’s
stakeholders.
• Increase awareness of the BANK of Greenland in investor
circles in Greenland and abroad.
• Give investors structured, continuous and planned
information which fulfils the investors’ information
requirements when investment decisions are taken.
• Increase the liquidity of the BANK of Greenland share.
Supervisory diamond
2024
2023
Limit
Sum of large exposures
136.0%
150.00%
< 175%
Property exposure
19.8%
22.10%
< 25%
Growth in lending
4.50%
10.60%
< 20%
Liquidity benchmark
268.4%
259.00%
> 100%
Annual Report 2024
Management’s Review
27
The objective will result in rapid, accurate information
concerning both price-relevant and other matters relating to
the Bank. In 2023, the BANK of Greenland entered into a
collaboration with HC Andersen Capital, which includes
quarterly online investor presentations.
The BANK of Greenland publishes information that may be of
relevance to its share price as company notifications via
Notified – Nasdaq OMX and on the Bank’s website under
“Investor” https://banken.gl/en/about-us/investor/
. The content
of the notifications includes quarterly, interim and annual
reports, including management reviews, general meetings and
other news. All company notifications are drawn up in Danish
and English on publication. Furthermore, information is made
available in Danish, Greenlandic and English on our website:
https://banken.gl/en/about-us/investor/.
When investor presentations are held, the material is
subsequently published on the BANK of Greenland’s website,
so that it is generally available.
The Executive Management is responsible for informing
investors and other stakeholders, by agreement with the Board
of Directors. In special cases, the Executive Management may
authorise senior staff members to notify investors and other
stakeholders.
At a price of 700 at the end of 2024, the price of the BANK of
Greenland’s share has increased since the end of 2023, when
the price was 625. The BANK of Greenland proposes to the
Annual General Meeting that the dividend payment for 2024 is
DKK 100 per share, or a total of DKK 180 million. It should be
noted that in Greenland dividend is tax deductible for the
dividend-paying company.
Shareholders
The BANK of Greenland’s overall financial objective is to
achieve a competitive return for the shareholders.
At 31 December 2024, the BANK of Greenland had 2,484
shareholders registered by name, which is slightly fewer than at
31 December 2023, when the number of shareholders
registered by name was 2,539. Shareholders registered by
name account for approximately 93% of the share capital. In
accordance with Section 28a of the Danish Companies Act, six
shareholders have notified shareholdings in excess of 5%, see
Note 22.
Dividend policy
The BANK of Greenland’s objective is to continue to distribute
dividend to its shareholders, according to the expected
development in the Bank’s operations and balance sheet, tax
optimisation and regulatory solvency requirements. The
dividend payment for 2024 recommended to the Annual
General Meeting is DKK 100 per share, which should be
viewed in conjunction with the description given under Capital.
The capital ratio is 26.9 and the core capital ratio is 25.1, and
thereby above the long-term target of 24, see the previous
description.
Historic pay-out ratio
Not e: Under Greenland’s tax legislation, distributed dividend is fully tax-deductible.
Events occurring after the close of the financial year
As from the balance sheet date and up to today’s date no
events have occurred to change the assessment of the Annual
Report.
Outlook for 2025
It is assessed that Greenland saw positive economic growth in
both 2023 and 2024. The BANK of Greenland expects close to
zero economic growth in 2025, as described under
“Greenland's Society and Economy” in this report.
In both the short and longer term, the considerable focus on
Greenland, which escalated at the beginning of 2025, can affect
the economic development and the framework conditions in
Greenland. However, the BANK of Greenland has no basis to
assess that this will be of any material significance in the short
term in 2025, so that it is the circumstances described in this
report – the macroeconomic and local conditions – that are
generally expected to influence the Bank’s operations.
Expected declining interest rates are expected to increase the
appetite for investment, however, and lending is expected to
develop positively towards year-end, but with lower growth
than in 2024. Deposits are expected to be at the level of the
end of 2024.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pay-out ratio (before tax)
Pay-out ratio (after tax)
Annual Report 2024
Management’s Review
28
The Bank will be affected if inflation and cyclical trends are
exacerbated or amplified to any significant degree.
Total core income is expected to decrease in 2025, for which
the primary reason is the development in interest rates.
Total expenses including depreciation and amortisation are
expected to be higher than in 2024. A few staff increases and
the full effect of staff increases are expected in 2024.
Administration expenses are also expected to increase,
primarily in the IT area.
The Bank assesses that the credit quality of the loan portfolio is
satisfactory. Impairment write-downs on loans are therefore
still expected to be at a low, but normalised, level.
Based on the expected level of interest rates, gains on the
Bank’s listed securities must be expected. Capital gains are also
expected from the currency area and sector shares.
Based on these conditions, a profit before tax at the level of
DKK 150-185 million is expected for 2025, compared to DKK
245.7 million in 2024. The result is in accordance with the stock
exchange announcement of 11 December 2024.
Customers
The BANK of Greenland has strong focus on customer
satisfaction, which is measured by an annual customer
satisfaction survey. On this basis, measures are being initiated in
areas where customers believe that the Bank can do better.
The BANK of Greenland seeks to provide Greenland's best
customer experience, which is a key aspect of the Bank's strategy.
Through ongoing feedback from our customers immediately
after each customer meeting, we work to continuously
improve the customer experience. Our customers’ constructive
feedback is welcomed with great appreciation and we know
that our customers appreciate being heard. The Bank uses NPS
(Net Promoter Score) for these surveys.
As the Bank for all of Greenland, it is positive that the Bank's
presence at coastal locations is considered to add value for
individual local areas. The cooperation with the Bank's
customers is based on close relations between business
advisers, specialists and business enterprises, which gives a deep
insight into each enterprise's business model and needs.
Combined with local knowledge and an understanding of
economic conditions, this insight facilitates value-adding business
advisory services.
The Bank’s Business Department cooperates with other
financial partners to ensure that the Bank’s customers have
access to the best solutions and opportunities in such areas as
insurance and mortgage credit. The Bank’s aim is to serve as a
power centre that creates growth throughout Greenland.
The Bank’s role as a powerhouse is clearly apparent from the
current major infrastructure investments. To maximise the
benefit for Greenland, during the past two years, the Bank,
together with the Greenland Business Association, the BANK
of Greenland Business Fund and a number of other good
partners, has facilitated a number of customer initiatives and
events. The topics have included "Women in Business", ”Future
Greenland 2024”, ”Global Greenland” – local business
development, after-work meetings on such topics as tourism
development, investment events, and various network initiatives.
Private customers are offered a simple and flexible product
range, and in 2024 advisers’ training included a focus on
sustainable customer dialogues. These products are used to
provide each customer with an individual solution, matched to
the customer’s needs. Ongoing contact with the customer is
crucial to ensuring a good customer relationship, and the Bank
seeks to be available both in person and on the digital platforms
required by the customer. In 2024, the Bank had the major task
of updating our customers’ scope and purpose of business with
the Bank. This is to protect customers, the Bank and Greenland
in general from economic crime.
The Bank and society
The day-to-day business with the Bank's customers in the
course of the year gave income totalling DKK 485 million,
compared to DKK 467 million in 2023. The income is the sum
of net interest and fee income, other operating income and
value adjustments, after deduction of write-downs on loans.
The Greenland Government and the municipalities receive
corporate tax, dividend tax and tax on staff remuneration.
Employees receive salary and pension contributions, etc., after
deduction of PAYE tax. The purchases made by the Bank from
Danish suppliers are mainly IT services from BEC and Nets.
The BANK of Greenland makes a significant contribution to
society as tax payments in the last three years amounting to
around DKK 116 million on average per year.