The BANK of Greenland
CVR no. 80050410
Notification to Nasdaq OMX Copenhagen
12/2023
Quarterly Report
First
Half of 2023
Quarterly Report
First Half of 2023
1
Management’s Review 2
Interim Report in headlines 2
Financial highlights for the first half of 2023 4
Management's Review, first half of 2023 5
Statement by the Management 10
Income Statement and Statement of Comprehensive Income 12
Balance Sheet 13
Statement of Changes in Equity 14
Overview of Notes 16
Notes to the Interim Report 17
Contents
Quarterly Report
First Half of 2023
Management’s Review
2
Interim Report in headlines
Excellent first half-year for the Bank
The BANK of Greenland's profit before tax amounts to DKK
103.0 million for the first half of 2023, compared to DKK 45.8
million for the first half of 2022. The profit before value
adjustments and write-downs is satisfactory at DKK 98.3
million, compared to DKK 73.1 million for the previous year.
Lending has increased by DKK 285 million since the end of
2022, amounting to DKK 4,639 million at the end of the first
half of 2022. The economic development in Greenland
continues to be favourable, with positive development in the
Bank's lending. Guarantees decreased by DKK 104 million from
DKK 1,934 million at the end of 2022 to DKK 1,830 million at
the end of the first half of 2023.
Net interest and fee income increased by DKK 36.2 million to
DKK 204 million in the first half of 2023 compared to the same
period in 2022. The increase is primarily due to the record-high
lending volume and the development in the level of interest
rates in 2022 and 2023. Compared to the first half of 2022,
total loans and guarantees increased by DKK 629 million up to
the end of the first half of 2023.
Total expenses including depreciation amounted to DKK 108.7
million at the end of the first half of 2023, compared to DKK
97.8 million for the same period of 2022.
The increase concerns personnel expenses as a consequence of
increases due to collective agreement-based adjustments and
an increase in the number of employees, as well as other
administrative expenses, where the increase can be attributed
primarily to IT costs and a few larger one-off cost items.
At the end of the first half of 2023, value adjustments show a
capital gain of DKK 11.0 million, compared to a capital loss of
DKK 25.2 million for the same period of 2022. Th new interest
rate trends resulted in positive development in the Bank’s bond
holdings. Similarly, the Bank’s sector shareholdings also
performed positively.
Impairments of loans and guarantees amounted to DKK 6.3
million in the first half of 2023, compared to DKK 2.1 million in
the first half of 2022. The Bank sees continued satisfactory
creditworthiness in the loan portfolio. In addition to the Bank’s
individual impairment models, a management supplement of
DKK 38.2 million is allocated. In particular, the supplement
accommodates the risks associated with increasing inflation and
interest rates, and greater cyclical uncertainty.
In the announcement to the stock exchange of 21 July 2023,
the forecast for the year's profit before tax was changed from
a range of DKK 145-185 million to a range of DKK 170-210
million, which is still maintained.
Management’s Review
The profit before tax gives a return of 15.9% p.a. on opening equity after disbursement of dividend.
Lending and guarantees increased by a total of DKK 181 million to DKK 6.469 billion.
Deposits increased to DKK 6.1 billion.
Basic earnings per cost in DKK of 1.90 in the first half of 2023, compared to 1.75 in the first half of 2022
Write-downs and provisions of 0.1% for the period.
Solvency ratio of 24.0 and a capital requirement of 11.3%.
Quarterl
y Report First Half of 2023
Management’s Review
3
Quarterly Report
First Half of 2023
Management’s Review
4
Financial highlights for the first half of 2023
First half-
year
First half-
year
Full year
First half-
year
First half-
year
First half-
year
2023
2022
2022
2021
2020
2019
203,990
167,808
351,485
168,148
161,110
160,316
10,992
-25,195
-39,356
5,115
-7,330 2,593
3,005
3,049
6,588
2,179
2,221
2,878
102,828
92,437
195,056
93,229
85,566
86,341
4,035
3,636
7,320
3,486
3,449 3,367
1,866
1,696
2,706
1,602
1,416
1,889
6,279
2,112
4,523
2,331
9,845
4,787
102,979
45,781
109,112
74,794
55,725
69,403
16,746
-5,893
10,361
7,882
14,754 4,877
86,233
51,674
98,751
66,912
40,971
64,526
4,638,998
4,009,541
4,353,585
3,824,443
3,736,894 3,797,656
6,062,091
5,673,324
5,942,479
5,879,878
6,016,314 5,593,007
1,370,904
1,249,277
1,318,592
1,200,414
1,120,137 1,010,990
8,222,783
7,544,633
7,949,566
7,537,865
7,507,427 6,874,825
1,830,345
1,972,396
1,934,125
1,914,893
1,521,275 1,300,697
24.0
22.8
23.6
22.7
23.3 21.1
22.9
22.8
23.2
22.7
23.3 21.1
before tax for the period 7.7
3.6
8.4
6.3
5.1 6.9
6.4
4.1
7.6
5.6
3.7 6.6
1.9
1.5
1.5
1.7
1.6 1.7
1.0
0.7
1.2
0.9
0.5 0.9
1.3
1.4
1.2
1.5
1.0 2.0
0.3
0.3
0.5
0.9
0.7 0.3
217.2
207.9
220.5
259.6
183.7 165.3
-downs as a ratio of deposits 74.4
68.9
71.5
65.1
63.2 69.8
3.4
3.2
3.3
3.2
3.3 3.8
6.6
6.0
15.1
-4.5
-0.6 9.4
166.5
164.0
167.3
163.1
167.6 172.2
-down ratio for the period 0.0
0.0
0.1
0.0
0.2 0.1
-down ratio 3.0
3.1
3.0
3.2
3.5 3.3
after tax for the period 47.9
28.7
54.9
37.2
22.8 35.8
761.6
694.0
732.6
666.9
622.3 561.7
0.8
0.9
0.8
0.9
0.8 1.0
Quarterly Report
First Half of 2023
Management’s Review
5
Management's Review, first half of 2023
Statement of income
At TDKK 150,522, compared to TDKK 113,127 for the first
half of 2022, net interest income increased by 33%. The Bank’s
growth in lending of just over 15% during the period and the
rising interest rate level throughout the second half of 2022
and into 2023 are the reasons for the increase.
Since July 2022, Danmarks Nationalbank has increased the
interest rate by 3.7 percentage points in total, which gives the
Bank higher income on the direct deposits at Danmarks
Nationalbank.
Fee and commission income decreased by TDKK 1,615
compared to the same period of 2022. Lower investment
activity and insurance brokerage commission have a negative
impact on the item, while increased lending fees have a positive
impact on the item.
Dividends on shares show an increase of TDKK 333. Net
interest and fee income therefore also increased by TDKK
36,182 to TDKK 203,990 for the first half of 2023.
Other operating income is largely unchanged and amounts to
TDKK 3,005.
Staff and administration expenses amount to TDKK 102,828,
which is an increase of TDKK 10,391 compared to the first half
of 2022.
Staff expenses increased by TDKK 4,104 as a consequence of
individual staff increases and salary increases under collective
agreements. Administration expenses increased by TDKK
6,287. The increase concerns IT costs, supplementary training
of staff and costs of a non-recurring nature.
Other operating expenses, which concern operation and
maintenance of the Bank’s office buildings and contributions to
Afviklings- og Garantiformuen (the Settlement and Guarantee
Capital scheme), increased by TDKK 170 to TDKK 1,866 in the
first half of 2023, compared to the same period of 2022.
Depreciation of property and fixtures and fittings amounts to
TDKK 4,035, compared to TDKK 3,636 for the same period of
2022. The difference is primarily related to the increasing
depreciation of buildings.
The profit before value adjustments and write-downs is a
satisfactory TDKK 98,266, compared to TDKK 73,088 in the
first half of 2022.
Value adjustments represent a total capital gain of TDKK
10,992, compared to a capital loss of TDKK 25,195 for the
same period of the previous year. The Bank’s holdings of sector
equities and the currency area performed favourably in the first
half of 2023. At the same time, based on the level of interest
rates, the Bank’s bond holdings also gave capital gains in the first
half of 2023.
Financial Highlights and Key Figures
DKK 1,000
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
2023 2023 2022 2022 2022 2022 2021 2021
Net interest and fee income
99,933
104,056
96,307
87,370
82,061
85,747
89,871
80,914
Costs, depreciation and
amortisation
51,814
56,914
59,254
48,059
48,572
49,197
51,145
46,436
Other operating income
1,613
1,392
2,025
1,514
1,414
1,635
2,244
1,762
Profit before value adjustments
and write-downs
49,732
48,534
39,078
40,825
34,903
38,185
40,970
36,242
Value adjustments
3,085
7,907 6,316
-20,477
-14,528
-10,667
3,503 2,601
Write-downs on loans, etc.
-713
6,992
1,483
928
1,394
718
-33
-761
Profit before tax
53,530
49,449
43,911
19,420
18,981
26,800
44,506
39,604
Impairment of loans, etc. amounts to TDKK 6,279, compared
to TDKK 2,112 for the same period of 2022. The Bank does
not consider the increase to reflect a general increase in the
credit risk, and the creditworthiness of the loan portfolio is still
considered to be satisfactory. The impairment level is still
modest and the impairment ratio for the period is 0.1%.
Despite uncertain macroeconomic prospects as a consequence
of inflation, a higher interest rate level and geopolitical
instability, Greenland and the BANK of Greenland’s customers
have so far not been significantly affected. However, the future
economic development is subject to uncertainty.
Quarterly Report
First Half of 2023
Management’s Review
6
In addition to the individual write-downs, on this basis the Bank
has maintained a significant management reserve of DKK 38.2
million to counter risks.
The profit before tax is TDKK 102,979, having increased by
TDKK 57,198 from the same period of 2022.
Development during the quarter
Net interest and fee income amounted to TDKK 104,056 in
Q1 and to TDKK 99,933 in Q2. The difference between the
quarters is primarily due to periodically higher fee and
commission income in Q1.
Total costs in Q1 amounted to TDKK 56,914 and in Q2 to
TDKK 51,814. Staff expenses decreased in Q2, since in Q1
there is payment of holiday allowance, etc., which is not paid in
the subsequent quarters. Other administration costs also fell in
Q2 compared to Q1.
The profit before value adjustments and write-downs thereby
increased to TDKK 49,732 in Q2, which is TDKK 1,198 higher
than in Q1 2023. The profit before tax declined in Q2 2023 to
DKK 53.5 million, from DKK 49.4 million in Q1 2023.
Lending increased by TDKK 45,355 in Q1, and by TDKK
240,058 in Q2, which overall corresponds to an increase of
6.6% from the end of 2022. At the start of the year, it was
expected that the favourable economic development in
Greenland would increase the Bank's lending.
Deposits increased by TDKK 69,612 in Q1 2023 and by TDKK
50,000 in Q2. In overall terms, the increase in deposits from
the end of 2022 thus amounts to TDKK 119,612.
Balance sheet and equity
During the first half-year, the Bank’s lending showed a
satisfactory increase of TDKK 285,413 to TDKK 4,638,998,
while the Bank’s guarantees to customers decreased by TDKK
103,780 from the end of 2022 and amounted to TDKK
1,830,345 at the end of June 2023.
The Bank increased its bond holdings in the first half of 2023,
and at the end of the half-year period, bonds totalled TDKK
1,270,572.
Other assets decreased by TDKK 33,842 from the end of 2022
to June 2023. The primary reason is a reduction in the Bank’s
capital contribution to BEC.
At the end of June 2023, the Bank’s deposits, which
predominantly comprise on-demand deposits, amounted to
TDKK 6,062,029, which is an increase of TDKK 119,550 from
the end of 2022. The Bank continues to have a stable
deposit/lending ratio of approximately 131%.
After payment of the dividend of TDKK 36,000 for 2022
adopted by the Annual General Meeting, the Bank's equity
increased from TDKK 1,318,592 to TDKK 1,370,904.
Total assets thereby increased by TDKK 273,217 to TDKK
8,222,783.
Uncertainty of recognition and measurement
The principal uncertainties concerning recognition and
measurement are related to write-downs on lending, provisions
on guarantees and non-utilised credit facilities, together with
the valuation of properties, unlisted securities and financial
instruments. The management assesses that the presentation of
the accounts is subject to an appropriate level of uncertainty.
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 due to
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
inappropriate internal procedures, 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.
Quarterly Report
First Half of 2023
Management’s Review
7
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 6 December 2022, a revised MREL requirement was
determined for the BANK of Greenland, at 29.4% of the Bank’s
risk-weighted assets at the end of 2021. The MREL
requirement is being phased in during the period from 2022 to
2027. The linear phasing-in means that by 2023, the Bank must
fulfil an MREL requirement of 4.9%. This means that in the
course of the coming years, the Bank must fulfil the phased-in
requirement by issuing capital instruments and consolidation of
equity capital.
In continuation of the established MREL requirement, the Bank
made issues in 2021, 2022 and 2023. A total of DKK 75 million
was issued in Senior Non-Preferred and DKK 65 million in
subordinated debt.
Capital requirement
First half-
year 2023
Year 2022
Pillar I
8.00%
8.00%
Pillar II
3.30%
3.10%
Solvency requirement
11.30%
11.1%
SIFI buffer requirement
1.50%
1.50%
Capital reserve buffer
requirement 2.50%
2.50%
Capital requirement
15.30%
15.1%
MREL requirement (phased in linearly as
from 1 January 2022)
4.90%
2.53%
Total capital requirement
20.20%
17.6%
Capital base, cf. Note 19
1,329,065
1,300,270
SNP issue
74,633
74,563
MREL capital base
1,403,698
1,374,833
MREL capital ratio
25.40%
25.00%
Surplus capital cover
5.20%
7.37%
Solid capital base
In accordance with the Danish Financial Business Act, the Board
of Directors and the Executive Management must ensure that
the BANK of Greenland has an adequate capital base. The
capital 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 own funds and 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, just as there must
be sufficient capital to cover ongoing fluctuations in the risks
assumed by the Bank.
In 2021, the Bank’s Board of Directors therefore adopted a
capital objective with a set target for CET1 of 24%. The BANK
of Greenland’s core capital ratio was 22.9 at the end of the first
half of 2023, and the capital ratio was 24.0.
For 2023, the Bank expects more subdued growth in risk-
weighted assets and higher earnings than in 2022, whereby the
capital ratio will be closer to the target at the end of the year.
The result for the first half of 2023 has not been verified by the
Bank’s auditor and is therefore not included in the capital ratio.
Including the result for the first half of 2023, the core capital
ratio is calculated at 24.3% and the capital ratio at 25.5%.
At the end of June 2023, the Bank’s individual solvency
requirement was compiled at 11.3%. The BANK of Greenland
thereby has surplus capital cover before the buffer requirement
of 12.7%, or TDKK 706,126. After deductions for the capital
reserve buffer requirement of 2.5% and the SIFI buffer
requirement of 1.5%, the surplus cover is 8.7%.
CRR II has been introduced into Greenlandic legislation with
effect from 1 July 2023.
Quarterly Report
First Half of 2023
Management’s Review
8
The BANK of Greenland’s reported individual solvency requirement according to the 8+ model
First half-year 2023 Full year 2022
Capital
requirement
Solvency
requirement
Capital
requirement
Solvency
requirement
Pillar I requirement
442,272
8.0
440,087
8.0
Credit risk
131,434
2.4
119,785
2.2
Market risk
22,389
0.4
21,077
0.4
Operational risk
10,828
0.2
16,302
0.3
Other risk
16,017
0.3
15,323
0.2
Capital and solvency requirement
622,940
11.3
612,574
11.1
The BANK of Greenland has published further details of the
calculated solvency requirement in a report on its website
http://www.banken.gl/report/
Liquidity
The liquidity coverage ratio (LCR) is a minimum requirement of
the ratio between current assets and liabilities, to ensure a
satisfactory liquidity ratio.
At the end of the first half-year, the Bank had an LCR of
217.2% and thereby fulfils the LCR requirement of at least
100%.
The Bank’s funding is based solely on deposits.
The Supervisory Diamond for banks
The BANK of Greenland has considered the benchmarks set
out in the Danish FSA’s Supervisory Diamond for banks. The
Supervisory Diamond states five benchmarks for banking
activities which the Bank aims to fulfil. It must be noted that
publicly-owned enterprises account for 36% points of the sum
of large exposures.
The exposure to property amounts to 21.9%. 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 both of these factors contribute to stabilising
the overall sector exposure.
Investor relations
The BANK of Greenland’s overall financial objective is to
achieve a competitive return for the shareholders. At a price of
615 at the end of the first half of 2023, the price of the BANK
of Greenland’s shares has increased from the end of 2022,
when the price was 590.
At the Bank’s Annual General Meeting on 28 March 2023, a
dividend payment of DKK 20 per share, or a total of DKK 36
million, to the Bank’s shareholders was adopted, and this was
paid out on 31 March 2023.
In accordance with Section 28a of the Danish Companies Act,
six shareholders have notified shareholdings in excess of 5%.
The Bank has no holdings of own shares.
Sum of large exposures
(maximum 175% of actual core capital)
The BANK of Greenland 165.5%
Growth in lending
(less than 20% per year)
The BANK of Greenland 15.7%
Liquidity benchmark
(less than 100%)
The Bank of Greenland 218.9%
Property exposure
(less than 25% of total loans and guarantees)
The Bank of Greenland 21.9%
Stable funding
(Loans/working capital less bonds with a remaining maturity of less than 1 year) Limit value: Less than 1
The BANK of Greenland 0.6
Quarterly Report
First Half of 2023
Management’s Review
9
The BANK of Greenland’s mission, values and
corporate governance
The BANK of Greenland conducts banking activities in
Greenland in open competition with domestic and foreign
banks and provides advice and services in the financial area to
all citizens and businesses in Greenland.
The Bank's mission should be viewed in a broader perspective
whereby the BANK of Greenland can be seen as the BANK for
all of Greenland. This entails an enhanced responsibility to
participate positively and actively in society’s development and
to help to create opportunities for the benefit of Greenland,
while also ensuring sound financial activities. The BANK of
Greenland is highly aware of this vital role.
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 considers all of the Corporate
Governance recommendations and the Danish Executive
Order on Management and Control of Banks, etc. and it is the
Bank’s objective to observe these recommendations at all times
and to the greatest possible extent. The Bank’s Corporate
Governance Statement can be found on the Bank’s website
www.banken.gl
.
Outlook for the remainder of 2023
Despite inflation and interest rate increases, the BANK of
Greenland expects moderate economic growth in Greenland in
2023.
On this basis, lending is expected to develop positively towards
the end of the year, but with lower full-year growth than in
2022. Deposits are expected to be at the end-2022 level.
The Bank will be affected negatively if inflation and cyclical
trends are exacerbated or amplified to any significant degree.
Total core income is expected to increase in 2023, for which
the primary reasons are the increased lending volume and the
development in interest rates.
Total expenses including depreciation and amortisation are
expected to be higher than in 2022. Increases are expected in
the personnel area. Administration expenses are also expected
to increase, primarily in the IT area and for supplementary staff
training and consultants.
The Bank assesses that the quality of the loan portfolio is
satisfactory. Write-downs for impairment of lending are
therefore expected to continue to be at a low level.
On the basis of the level of interest rates, gains must be
expected on the Bank’s listed securities. However, the value
adjustment of the fund portfolio is subject to uncertainty.
Capital gains are expected from the currency area and sector
equities.
In the announcement to the stock exchange of 21 July 2023,
the forecast for the year's profit before tax was changed from
a range of DKK 145-185 million to a range of DKK 170-210
million, which is still maintained.
Quarterly Report
First Half of 2023
Statement by the Management
10
The Board of Directors and Executive Management have today
considered and approved the Interim Report for the period
from 1 January to 30 June 2023, for the public limited liability
company, GrønlandsBANKEN A/S.
The interim report was prepared in accordance with the
Danish Financial Business Act, and the Management’s Review
was drawn up in accordance with the Danish Financial Business
Act. The interim report is furthermore prepared in accordance
with additional Danish disclosure requirements for listed
financial companies.
It is our opinion that the Interim Report gives a true and fair
view of the Bank’s assets, liabilities and financial position at 30
June 2023, and of the result of the Bank’s activities for the first
half of 2023.
It is our opinion that the Management’s Review gives a true and
fair review of the development in the Bank’s activities and
financial affairs, as well as a description of the significant risks
and uncertainties to which the BANK of Greenland is subject.
Statement by the Management
Nuuk, 16 August 2023
Executive Management
Martin Birkmose Kviesgaard
Board of Directors
Gunnar í Liða
Kristian Frederik Lennert
Maliina Bitsch Abelsen
Chair
Vice Chair
Lars Holst
Pilunnguaq Frederikke Johansen Kristiansen
Tulliaq Angutimmarik Olsen
Niels Peter Fleischer Rex
Peter
Angutinguaq Wistoft
Ellen Dalsgaard Zdravkovic
Quarterly Report
First Half of 2023
Statement by the Management
11
Quarterly Report First Half of 2023
Income Statement and Statement of Comprehensive Income
12
Income Statement and Statement of Comprehensive
Income
DKK 1,000
Notes
First half-
year
2023
Full year 2022
First half-
year
2022
3
Interest income
186,541
227,093
104,063
4
Negative interest income
0
-1,824
-5,778
5
Interest expenses
36,019
3,040
512
6
Positive interest expenses
0
-20,995
-15,354
Net interest income
150,522
243,224
113,127
Share dividend, etc.
2,155
1,822
1,822
7
Fees and commission income
51,477
106,796
53,092
Fees paid and commission expenses
164
357
233
Net interest and fee income
203,990
351,485
167,808
8
Value adjustments
10,992
-39,356
-25,195
Other operating income
3,005
6,588
3,049
9
Staff and administration expenses
102,828
195,056
92,437
Depreciation and impairment of tangible assets
4,035
7,320
3,636
Other operating expenses
1,866
2,706
1,696
18
Write-downs on loans and receivables, etc.
6,279
4,523
2,112
Profit before tax
102,979
109,112
45,781
10
Tax
16,746
10,361
-5,893
Profit for the period
86,233
98,751
51,674
COMPREHENSIVE INCOME
Profit for the period
86,233
98,751
51,674
Other comprehensive income:
Value adjustment of properties
2,772
32,030
2,256
Value adjustment of defined
-benefit severance/pension scheme 0
-93
0
Tax on value adjustment of properties
-693
-8,007
-564
Other comprehensive income
2,079
23,930
1,692
Comprehensive income for the period
88,312
122,681
53,366
Quarterly Report First Half of 2023
Balance Sheet
13
Balance Sheet
DKK 1,000
Notes
Assets
30 June 2023
31 December
2022
30 June 2022
Cash balance and demand deposits with central banks
1,253,559
1,396,401
1,134,350
11
Receivables from credit institutions and central banks
122,634
118,619
447,042
18
Loans and other receivables at amortised cost
4,638,998
4,353,585
4,009,541
12
Bonds at fair value
1,270,572
1,156,821
1,074,041
Shares, etc.
129,587
120,063
117,480
13
Assets connected to pool schemes
423,716
394,576
400,118
Land and buildings in total
290,842
284,370
250,305
-
Domicile properties 290,842
284,370
250,305
Other tangible assets
6,425
6,007
6,214
Other assets
81,303
115,145
100,755
Accruals and deferred income
5,147
3,979
4,787
Total assets
8,222,783
7,949,566
7,544,633
Liabilities
Liabilities to credit institutions and central banks
20,063
22,598
7,237
14
Deposits and other liabilities
6,062,029
5,942,479
5,673,324
Deposits in pool schemes
423,716
394,576
400,118
15
Issued bonds at amortised cost
74,633
74,563
49,688
Current tax liabilities
44,108
18,861
34,292
Other liabilities
75,495
58,527
52,991
Prepayments and deferred expenses
6,266
7,535
8,137
Total debt
6,706,310
6,519,139
6,225,787
Provisions for pensions and similar obligations
2,246
2,097
1,837
Provisions for deferred tax
58,819
67,126
50,890
Provisions for losses on guarantees
11,331
8,036
8,614
Other provisions
4,793
5,047
5,076
Provisions for losses on non
-utilised credit facilities 4,133
4,821
3,152
Total
provisions 81,322
87,127
69,569
16
Subordinated debt
64,247
24,708
0
Total subordinated debt
64,247
24,708
0
Equity
17
Share capital
180,000
180,000
180,000
Revaluation reserves
63,730
61,651
39,320
Retained earnings
1,127,174
1,040,941
1,029,957
Proposed dividend
0
36,000
0
Total equity
1,370,904
1,318,592
1,249,277
Total liabilities
8,222,783
7,949,566
7,544,633
1
Accounting policies applied
2
Accounting estimates
19
Contingent liabilities
20
Capital conditions and solvency
Quarterly Report First Half of 2023
Statement of Changes in Equity
14
Statement of Changes in Equity
DKK 1,000
Share capital
Revaluation
reserves
Retained
earnings
Proposed
dividend
Total equity
capital
Equity, 01 January 2022
180,000
37,628 978,283
72,000
1,267,911
Dividend paid
0
0
0
-72,000
-72,000
Other comprehensive income
0
1,692
0
0
1,692
Profit for the period
0
0 51,674
0
51,674
Equity, 30 June 2022
180,000
39,320
1,029,957
0
1,249,277
Other comprehensive income
0
22,331 -93
0
22,238
Profit for the period
0
0 11,077
36,000
47,077
Equity, 31 December 2022
180,000
61,651 1,040,941
36,000
1,318,592
Equity, 01 January 2023
180,000
61,651 1,040,941
36,000
1,318,592
Dividend paid
0
0 0
-36,000
-36,000
Other comprehensive income
0
2,079 0
0
2,079
Profit for the period
0
86,233
0
86,233
Equity, 30 June 2023
180,000
63,730 1,127,174
0
1,370,904
Quarterly Report First Half of 2023
Statement of Changes in Equity
15
Quarterly Report First Half of 2023
16
1. Accounting policies applied etc. 17
2. Significant accounting estimates 17
3. Interest income 18
4. Negative interest income 18
5. Interest expenses 18
6. Positive interest expenses 18
7. Fee and commission income 18
8. Value adjustments 18
9. Staff and administration expenses 19
10. Tax 19
11. Amounts receivable from credit institutions and central banks 19
12. Bonds 19
13. Assets connected to pool schemes 20
14. Deposits 20
15. Issued bonds at amortised cost 20
16. Subordinated debt 20
17. Share capital 21
18. Loans 21
19. Contingent liabilities 24
20. Capital conditions and solvency 25
Overview of Notes
Quarterly Report First Half of 2023
Notes to the Interim Report
17
The Interim Report has been prepared in accordance with the
Danish Financial Business Act, the statutory order on financial
reports for credit institutions and investment service
companies, etc. and the Danish disclosure requirements for the
interim reports of listed financial companies.
The accounting policies applied are unchanged from the Annual
Report for 2022.
Tax, which consists of current tax and changes in deferred tax,
is recognised in the income statement when it relates to the
profit for the period, and directly in equity when it can be
attributed to items carried directly to equity.
On calculating the taxable income, Greenland allows tax
deduction of dividends for the dividend-paying company. The
taxation value of this is therefore added to equity at the time of
the Annual General Meeting’s approval of the dividend.
Deferred tax assets are recognised in the balance sheet at the
value at which the asset is expected to be realised. The interim
report has not been audited or reviewed.
The calculation of the accounting value of certain assets and
liabilities is subject to a degree of uncertainty and an estimate of
how future events will affect the value of these assets and
liabilities. The most significant estimates relate to:
• measurement of loans, guarantees and non-utilised credit
facilities;
• financial instruments;
• fair value of domicile properties; and
• provisions.
Non-listed financial instruments that primarily concern sector
equities and that are measured at estimated fair values.
The measurement of the fair value of the Bank’s head office
properties is subject to significant accounting estimates and
assessments, including expectations of the properties’ future
returns and the fixed yield ratios.
For provisions, there are significant estimates related to the
determination of the future employee turnover rate, as well as
determining the interest obligation for tax-free savings accounts.
Notes to the Interim Report
1.
Accounting policies applied etc.
2.
Significant accounting estimates
Quarterly Report First Half of 2023
Notes to the Interim Report
18
DKK 1,000
First half-
year
2023
Full year
2022
First half-
year
2022
3. Interest income
Receivables from credit institutions and central banks
19,563
1,150
0
Lending and other receivables
153,490
218,531
101,791
Bonds
12,912
7,412
2,272
Foreign
exchange, interest rate, equity, commodity and other contracts, as
well as derivative financial instruments
576
0
0
Total interest income
186,541
227,093
104,063
4. Negative interest income
Receivables from credit institutions and central banks
0
-1,074
-5,170
Foreign exchange, interest rate, equity, commodity and other contracts, as
well as derivative financial instruments
0
-750
-608
Total negative interest
0
-1,824
-5,778
5. Interest expenses
Credit institutions and central banks
81
0
1
Deposits and other liabilities
35,938
3,040
511
Total interest expenses
36,019
3,040
512
6. Positive interest expenses
Deposits and other liabilities
0
-11
-11
Deposits and other liabilities
0
-20,984
-15,343
Total positive interest expenses
0
-20,995
-15,354
7. Fee and commission income
Securities and securities accounts
1,404
8,629
2,314
Payment settlement
18,301
38,042
18,446
Loan transaction fees
2,604
5,589
2,456
Guarantee commission
15,999
32,228
15,589
Other
fees and commission 13,169
22,308
14,287
Total fee and commission income
51,477
106,796
53,092
8. Value adjustments
Lending at fair value
480
-7,577
-5,520
Bonds
4,134
-49,488
-29,093
Shares
3,967
4,486
1,378
Currency
2,966
5,473
2,494
Foreign exchange, interest rate, equity, commodities and other contracts, as
well as derivative financial instruments
-555
7,750
5,546
Total value adjustments
10,992
-39,356
-25,195
Quarterly Report First Half of 2023
Notes to the Interim Report
19
DKK 1,000
First half-
year
2023
Full year
2022
First half-
year
2022
9. Staff and administration expenses
Staff expenses
Salaries 44,909
91,485
41,521
Other staff expenses 1,654
2,271
1,223
Pensions 5,591
10,979
5,402
Social security expenses 284
484
188
In total 52,438
105,219
48,334
Other administration expenses
50,390
89,837
44,103
Average number of FTEs
140.2
137.4
136.2
Of which salaries and remuneration to the Board of Directors and the
Executive Management
3,176
5,788
2,930
Five other employees whose activities have a significant influence on the
Bank’s risk profile::
Salaries and
pensions, including free car and other benefits 3,210
6,124
2,996
10. Tax
25
-% of the profit before tax 25,746
27,278
11,445
Discount for dividend tax paid
-498
-430
-429
6
-%-supplement 0
1,637
662
Total tax on ordinary profit
25,248
28,485
11,678
Paid dividend tax
498
430
429
Change in deferred tax as a consequence of a change in the corporate tax
supplement
0
-528
0
Adjustment to deferred tax prior year
0
1,080
1,080
Other changes
0
-26
0
Taxation value of dividend paid
-9,000
-19,080
-19,080
Tax in total
16,746
10,361
-5,893
Deferred tax
693
-8,779
1,644
Taxation value of dividend paid
-9,000
0
-19,080
Tax to be paid
25,053
19,140
11,543
No
company tax was paid in the period.
11. Amounts receivable from credit institutions and central banks
Receivables from credit institutions 122,634
118,619
447,042
Total amounts receivable
122,634
118,619
447,042
12. Bonds
Of the bond portfolio, a nominal amount of TDKK 50,000 is pledged as collateral for accounts
with Danmarks Nationalbank.
Quarterly Report First Half of 2023
Notes to the Interim Report
20
DKK 1,000
First half-
year
2023
Full year
2022
First half-
year
2022
13. Assets connected to pool schemes
Investment
associations 423,623
394,308
400,106
Non
-invested funds 93
268
12
Total
423,716
394,576
400,118
14. Deposits
On demand
5,409,658
5,241,972
5,157,844
On terms of notice
378,619
442,216
267,113
Special deposit conditions
273,752
258,291
248,367
Total deposits
6,062,029
5,942,479
5,673,324
15. Issued bonds at amortised cost
Bond issue
74,633 74,563 49,688
Total
74,633 74,563 49,688
Loan raised as Senior Non
-Preferred, nominally 50,000 50,000 50,000
The loan was raised as Senior Non
-Preferred on 27 October 2021 and falls
due for full redemption on 27 October 2026. The Bank has the option of
early redemption as from 27 October 2025.
Loan raised as Senior
Non-Preferred, nominally 25,000 25,000 0
The loan was raised as Senior Non
-Preferred on 2 September 2022 and
falls due for full redemption on 2 September 2027. The Bank has the option
of early redemption as from 2 September 2026.
16. Subordinated debt
Capital certificate as below
64,247 24,708 0
In total
64,247
24,708
0
Subordinated debt included in the capital base according to CRR
64,247 24,708 0
Loan raised as subordinated debt,
nominally 25,000 25,000
Interest rate, fixed rate
6.197% 6.197%
The loan was raised on 2 September 2022 and falls due for full redemption
on 2 September 2032. The Bank has the option of early redemption as
from 2 September 2027.
Loan raised as subordinated debt, nominally
40,000
Interest rate, floating rate
Cibor 6 + 4%
The loan was raised on 1 June 2023 and falls due for full redemption on 1
June 2032. The Bank has the option of early redemption as from 1 June
2028.
Quarterly Report First Half of 2023
Notes to the Interim Report
21
DKK 1,000
First half-
year
2023
Full year
2022
First half-
year
2022
17. Share capital
Share capital consists of 1,800,000 shares of DKK 100
Own holdings og capital investments
Number of own shares
0
0
0
18. Loans
Write
-downs on loans, guarantees and non-utilised credit facilities:
New write
-downs concerning new facilities during the period 9,410
20,471
7,904
Reversal of write
-downs concerning redeemed facilities -7,267
-17,415
-8,843
Net write
-downs during the period as a consequence of changes in the
credit risk
4,568
3,146
3,609
Losses without preceding write
-downs 94
593
433
Received for claims previously written off
-526
-2,272
-991
Recognised in the statement of income
6,279
4,523
2,112
DKK 1,000
Stage 1
Stage 2
Stage 3
Total
Write-downs on loans
30.06.2023
Start of the period
28,826 64,706
86,477
180,009
New write
-downs concerning new facilities during the
year
2,795 5,068
884
8,747
Reversal of write
-downs concerning redeemed facilities -2,229 -1,680
-2,582
-6,491
Change in write
-downs at the beginning of the year –
transfer to stage 1
4,701 -3,134
-1,567
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-954 6,004
-5,050
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-130 -420
550
0
Net write
-downs as a consequence of changes in the
credit risk
-6,862 2,145
6,565
1,848
Previously written down, now finally lost
0 0
-655
-655
Interest on written
-down facilities 0 0
2,350
2,350
Write
-downs in total 26,147 72,689
86,972
185,808
Write-downs on guarantees
30.06.2023
Start of the period
1,239 1,025
5,772
8,036
New write
-downs concerning new facilities during the
year
178 133
0
311
Reversal of write
-downs concerning redeemed facilities -1 -5
-43
-49
Change in write
-downs at the beginning of the year –
transfer to stage 1
454 -38
-416
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-91 173
-82
0
Change in write
-downs at the beginning of the year –
transfer to
stage 3
-10 -48
58
0
Net write
-downs as a consequence of changes in the
credit risk
-689 224
3,498
3,033
Write-downs in total
1,080
1,464
8,787
11,331
Quarterly Report First Half of 2023
Notes to the Interim Report
22
DKK 1,000
Stage 1
Stage 2
Stage 3
Total
Write-downs on non-utilised drawing rights
30.06.2023
Start of the period
498 547
3,776
4,821
New write
-downs concerning new facilities during the
year
13 318
21
352
Reversal of write
-downs concerning redeemed facilities -51 -25
-651
-727
Change in write
-downs at the beginning of the year –
transfer to stage 1
10 -1
-9
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-5 12
-7
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
0 -1
1
0
Net
write-downs as a consequence of changes in the
credit risk
282 -79
-516
-313
Write
-downs in total 747 771
2,615
4,133
Write-downs on loans
31.12.2022
Start of the period
21,314 67,951
85,104
174,369
New write
-downs concerning new facilities during the
year
4,545 9,913
4,518
18,976
Reversal of write
-downs concerning redeemed facilities -1,757 -3,774
-11,039
-16,570
Change in write
-downs at the beginning of the year –
transfer to stage 1
17,776 -14,283
-3,493
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-1,072 6,416
-5,344
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-54 -4,530
4,584
0
Net write
-downs as a consequence of changes in the
credit risk
-11,926 3,013
12,326
3,413
Previously written down, now finally lost
0 0
-3,445
-3,445
Interest on written
-down facilities 0 0
3,266
3,266
Write-downs in total
28,826
64,706
86,477
180,009
Write-downs on guarantees
31.12.2022
Start of the period
744 2,071
4,858
7,673
New write
-downs concerning new facilities during the
year
507 547
252
1,306
Reversal of write
-downs concerning redeemed facilities -2 -36
-179
-217
Change in write
-downs at the beginning of the year –
transfer to stage 1
1,505 -1,370
-135
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-68 1,036
-968
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-3 -86
89
0
Net write
-downs as a consequence of changes in the
credit risk
-1,444 -1,137
1,855
-726
Write
-downs in total 1,239 1,025
5,772
8,036
Quarterly Report First Half of 2023
Notes to the Interim Report
23
DKK 1,000
Stage 1 Stage 2
Stage 3
Total
Write-downs on non-utilised drawing rights
31.12.2022
Start of the period
1,203 1,037
2,561
4,801
New write
-downs concerning new facilities during the
year
25 80
84
189
Reversal of write
-downs concerning redeemed facilities -231 -166
-231
-628
Change in write
-downs at the beginning of the year –
transfer to stage 1
557 -555
-2
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-41 724
-683
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-1 0
1
0
Net write
-downs as a consequence of changes in the
credit risk
-1,014 -573
2,046
459
Write
-downs in total 498 547
3,776
4,821
Write-downs on loans
30.06.2022
Start of the period
21,314 67,951
85,104
174,369
New write
-downs concerning new facilities during the
year
2,268 2,332
2,145
6,745
Reversal of write
-downs concerning redeemed facilities -1,250 -2,084
-5,065
-8,399
Change in write
-downs at the beginning of the year –
transfer to stage 1
15,085 -13,055
-2,030
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-508 5,742
-5,234
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-18 -2,803
2,821
0
Net write
-downs as a consequence of changes in the
credit risk
-20,915 8,663
17,284
5,032
Previously written down, now finally lost
0 0
-3,070
-3,070
Interest on written
-down facilities 0 0
2,307
2,307
Write-downs in total
15,976
66,746
94,262
176,984
Write-downs on guarantees
30.06.2022
Start of the period
744 2,071
4,858
7,673
New write
-downs concerning new facilities during the
year
367 352
0
719
Reversal of write
-downs concerning redeemed facilities 0 -23
-38
-61
Change in write
-downs at the beginning of the year –
transfer to stage 1
1,544 -1,458
-86
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-14 1,050
-1,036
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-3 -44
47
0
Net write
-downs as a consequence of changes in the
credit risk
-1,520 -1,028
2,831
283
Write
-downs in total 1,118 920
6,576
8,614
Quarterly Report First Half of 2023
Notes to the Interim Report
24
DKK 1,000
Stage 1
Stage 2
Stage 3
Total
Write-downs on non-utilisied drawing rights
30.06.2022
Start of the period
1,203 1,037
2,561
4,801
New write
-downs concerning new facilities during the
year
334 17
89
440
Reversal of write
-downs concerning redeemed facilities -116 -162
-105
-383
Change in write
-downs at the beginning of the year –
transfer to stage 1
530 -524
-6
0
Change in
write-downs at the beginning of the year –
transfer to stage 2
-7 663
-656
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
0 0
0
0
Net write
-downs as a consequence of changes in the
credit risk
-1,173 -630
97
-1,706
Write
-downs in total 771 401
1,980
3,152
DKK 1,000
First half-
year
2023
Full year
2022
First half-
year
2022
19. Contingent liabilities
Mortgage finance guarantees
1,013,262
989,198
1,009,270
Registration and remortgaging guarantees
220,673
300,180
282,776
Other guarantees
596,410
644,747
680,350
Guarantees, etc. in total
1,830,345
1,934,125
1,972,396
Provision balance for guarantees
11,331
8,036
8,614
Provision balance for non
-utilised credit facilities 4,133
4,821
3,152
The Bank is a member of BEC (BEC Financial Technologies a.m.b.a.). On any
withdrawal the Bank will be obliged to pay a withdrawal fee to BEC
equivalent to the preceding three years’ IT costs.
Like the
rest of the Danish banking sector, the Bank has an obligation to
make payments to the Guarantee Fund and the Resolution Fund.
Quarterly Report First Half of 2023
Notes to the Interim Report
25
DKK 1,000
First half-
year
2023
Full year
2022
First half-
year
2022
20. Capital conditions and solvency
Credit risk
4,619,682
4,619,420
4,381,110
CVA risk
13,915
13,892
9,133
Market risk
266,011
238,978
224,938
Operational risk
628,793
628,793
639,644
Total risk exposure
5,528,401
5,501,083
5,254,825
Equity at the beginning of
the period 1,318,592
1,267,911
1,267,911
Comprehensive income for the period
0
122,681
0
Adjustment to deferred tax prior year
0
0
-1,080
Proposed dividend, accounting effect
9,000
-27,000
19,080
Paid dividend
-36,000
-72,000
-72,000
Framework for ratio of own shares
-11,250
-10,620
-10,980
Deductions for prudent valuation
-570
0
0
Deductions for Non
-Performing Exposures -1,406
-1,568
-1,447
Actual core capital
-13,548
-3,842
-3,651
1,264,818
1,275,562
1,197,833
Supplementary capital
Capital base
64,247
24,708
0
1,329,065
1,300,270
1,197,833
Actual core capital ratio
Capital ratio
24.0
23.6
22.8
Statutory capital ratio requirements
22.9
23.2
22.8
Lovkrav til
kapitalprocent 8.0
8.0
8.0
Quarterly Report First Half of 2023
Notes to the Interim Report
26