Grønlandsbanken A/S
CVR no. 80050410
Notification to Nasdaq OMX Copenhagen
10/2022
Quarterly Report
Q1 2022
Quarterly Report
Q1 2022
1
Management’s Review 2
Report for Q1 in headlines 2
Financial highlights for Q1 2021 4
Management's Review, Q1 2022 5
Management statement 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 Quarterly Report 17
Contents
Quarterly Report
Q1 2022
Management’s Review
2
Report for Q1 in headlines
Satisfactory Q1 for the BANK of Greenland
The BANK of Greenland’s profit before tax amounts to DKK
29.6 million for Q1 2022, compared to DKK 40.2 million for
Q1 2021. The profit before value adjustments and write-
downs is satisfactory at DKK 40.9 million, compared to DKK
37.1 million for the previous year.
Lending has increased by DKK 121 million since the end of
2021, amounting to DKK 3,905 million at the end of Q1. At
the start of 2022, it was expected that the favourable
economic development in Greenland would result in positive
development in the Bank’s lending. Guarantees increased by
DKK 4.5 million from DKK 1,781 million at the end of 2021 to
DKK 1,786 million at the end of Q1 2022.
Net interest and fee income increased by DKK 2.4 million to
DKK 88.5 million in Q1 2022 compared to the same period in
2021. The increase is due, among other things, to the
improvement in negative deposit interest rates and fees and
commission from the pension and investment area.
Total expenses including depreciation amounted to DKK 49.2
million at the end of Q1 2022, compared to DKK 49.3 million
for the same period in 2021.
The increase in medium-term and long-term interest rates and
the general market turmoil meant that value adjustments at the
end of March 2022 resulted in a capital loss of DKK 10.7
million, compared to a capital gain of DKK 3.1 million for the
same period in 2021. The Bank’s sector shareholdings and
currency area developed positively in Q1, while the Bank’s
bond holdings generated capital losses.
Impairment write-downs on loans and guarantees decreased by
DKK 0.2 million from Q1 2021 and amounted to a modest
DKK 0.7 million for Q1 2022. The Bank sees continued
satisfactory creditworthiness in the loan portfolio. The impact
of Covid-19 on Greenland’s society is moderate, and there are
signs of positive development in tourism in 2022. The Russian
invasion of Ukraine has and is expected to continue to have a
significant impact on e.g. goods supplies and inflation across
Europe. So far, no significant effect can be seen in Greenland.
The Bank does not have direct exposure to Ukraine or Russia.
On this basis, the Bank reduces the Covid-19 management
reserve, but maintains a significant management reserve to
counter risks.
In the Annual Report for 2021, the forecast for the year’s
profit before tax was estimated at an interval of DKK 120-140
million, which remains unchanged.
Management’s Review
The profit after tax gives a return of 13.5% p.a. on opening equity after disbursement of dividend.
Lending and guarantees increased by a total of DKK 126 million to DKK 5.691 billion.
Deposits increased to DKK 5.5 billion.
Core earnings per krone in costs of 1.83 in Q1 2022, compared to 1.77 in Q1 2021.
Write-downs and provisions of 0.01% for the period.
Capital ratio and core capital ratio of 24.4 and an individual capital requirement of 10.7%.
Quarterly Report
Q1 2022
Management’s Review
3
Quarterly Report
Q1 2022
Management’s Review
4
Financial highlights for Q1 2021
Q1
Q1
Full year
Q1
Q1
Q1
2022
2021
2021
2020
2019
2018
Net interest and fee income
88,507
86,095
338,933
82,880
80,554 79,586
Value adjustments
-10,667
3,127
11,219
-11,636
3,214
-1,023
Other operating income
1,635
1,139
6,185
1,087
1,495
1,311
Staff and administration expenses
47,063
47,123
186,385
44,592
43,220 40,158
Depreciation and impairment of tangible assets
1,829
1,740
7,014
1,707
1,722
1,652
Other operating expenses
305
406
2,497
212
627
531
Write
-downs on loans and receivables, etc. 718
922
1,537
9,190
1,820 3,460
Profit before tax
29,560
40,170
158,904
16,630
37,874
34,073
Tax
-10,169
-1,281
26,072
4,404
12,043 10,823
Profit for the period
39,729
41,451
132,832
12,226
25,831
23,250
Selected balance sheet items:
Lending
3,904,824
3,905,129
3,783,681
3,636,588
3,628,717 3,393,345
Deposits
5,542,272
5,571,272
5,363,871
5,742,351
5,238,496 5,282,943
Equity
1,236,483
1,174,147
1,267,911
1,090,630
988,813 933,187
Total assets
7,375,601
7,177,469
7,226,988
7,183,145
6,536,682 6,429,309
Contingent liabilities
1,786,028
1,804,673
1,781,465
1,514,627
1,270,841 1,200,728
Key figures:
Capital ratio
24.4
22.3
24.4
24.6
21.8 22.4
Core capital ratio
24.4
22.3
24.4
24.6
21.8 22.4
Return on equity before tax for
the period 2.4
3.4
13.0
1.5
3.8 3.6
Return on equity after tax for the period
3.2
3.5
10.9
1.1
2.6 2.5
Income per cost krone
1.6
1.8
1.8
1.3
1.8 1.7
Rate of return
0.5
0.6
1.8
0.2
0.4 0.4
Interest risk rate
1.2
1.6
1.2
1.0
2.3 1.3
Foreign
exchange position 0.8
0.7
0.8
0.7
0.3 0.5
Liquidity coverage ratio
236.7
290.9
238.6
284.8
293.5 203.6
Lending plus write
-downs as a ratio of deposits 68.8
70.1
69.1
64.3
71.3 67.1
Lending as a ratio of equity
3.2
3.3
3.0
3.3
3.7 3.6
Growth in
lending for the period 3.2
-2.5
-5.6
-3.2
4.5 1.8
Sum of large exposures
164.0
163.6
156.7
159.8
162.6 169.1
Write
-down ratio for the period 0.0
0.0
0.0
0.2
0.0 0.1
Accumalated write
-down ratio 3.2
3.2
3.2
3.5
3.4 3.4
Profit per share after tax for
the period 22.1
23.0
73.8
6.8
14.4 12.9
Net book value per share
687.0
652.0
704.0
606.0
549.0 518.0
Stock exchange quotation/net book value per share
0.9
1.0
0.8
0.8
1.0 1.2
Quarterly Report
Q1 2022
Management’s Review
5
Management's Review, Q1 2022
Statement of income
At TDKK 59,384, compared to TDKK 57,382 in Q1 2021, net
interest income increased by 3.5%. Lending interest rates are at
an unchanged level, while interest income from bonds and
negative interest income have improved.
Since 2020, the Bank has continuously improved the balance
between the return on the Bank’s surplus liquidity and the
negative deposit interest rates by continuously adjusting the
negative deposit interest rates. These factors had a positive
impact on net interest income in Q1 2022.
Fee and commission income increased by TDKK 227 compared
to the same period in 2021. The increased guarantee scope,
intensified investment activity and the pension area have a
positive impact on this item. Net interest and fee income
therefore also increased, and by TDKK 2,412 to TDKK 88,507
for Q1 2022.
Other operating income amounted to TDKK 1,635, which is an
increase of TDKK 496 from Q1 2021. To some extent, this
concerns timing differences, and moreover the Bank realised
non-recurring income from the sale of property, plant and
equipment in Q1 2022.
Staff and administration expenses are at the level of Q1 2021,
amounting to TDKK 47,063. This development reflects a small
decrease in staff expenses and a small increase in other
administration expenses.
Other operating expenses, which concern operation and
maintenance of the Bank’s office buildings, decreased by TDKK
101 to TDKK 302 in Q1 2022, compared to the same period
in 2021. The decrease is due to timing differences in the
payment of costs.
Depreciation of tangible assets is by and large unchanged,
amounting to TDKK 1,829, compared to TDKK 1,740 for the
same period in 2021.
The profit before value adjustments and write-downs is a
satisfactory TDKK 40,945, compared to TDKK 37,965 in Q1
2021.
Value adjustments represent a total capital loss of TDKK
10,667, compared to a capital gain of TDKK 3,127 for the same
period in 2021. The Bank’s holdings of sector equities and the
currency area developed favourably in Q1. The increase in
medium- and long-term yields and the general market turmoil
caused value adjustments of bonds and listed shares to develop
negatively in Q1 2022.
Selected highlights and key figures (not audited)
DKK 1,000
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
2022 2021 2021 2021 2021 2020 2020 2020
Net interest and fee income
88,507
89,871
80,914
82,053
86,095
84,305
81,098
78,230
Costs,
depreciation and
amortisation
49,197
51,145
46,436
49,048
49,269
51,833
46,028
43,920
Other operating income
1,635
2,244
1,762
1,040
1,139
2,026
1,122
1,134
Profit before value adjustments
and write-downs
40,945
40,970
36,242
34,045
37,965
34,498
36,192
35,444
Value adjustments
-10,667
3,503 2,601
1,988
3,127
4,828
2,638 4,306
Write-downs on loans, etc.
718
-33
-761
1,409
922
2,434
549
655
Profit before tax
29,560
44,506
39,604
34,624
40,170
36,892
38,281
39,095
Impairment of loans, etc. amounts to TDKK 718, compared to
TDKK 922 for the same period in 2021. Since the first
outbreak of Covid-19 in Q1 2020, the Bank has reviewed both
customer exposures and sectors, in order to identify
consequences of Covid-19. The impact on Greenlandic society
is now very modest, and there is a positive outlook for tourism
in 2022.
The Russian invasion of Ukraine has, and is expected to
continue to have, a significant impact on the supply of goods
and on inflation throughout Europe. So far, Greenland has not
noted any significant effect, but a certain impact must be
expected in the longer term. The Bank does not have direct
exposures to Ukraine or Russia, but the derived effects of the
invasion are also expected to affect Greenland.
Quarterly Report
Q1 2022
Management’s Review
6
In addition to the individual write-downs, the Bank has on basis
of the above mentioned reduced the Covid-19 management
reserve by DKK 5 million., but maintained a significant
management reserve to counter risks.
The profit before tax is TDKK 29,560, and is thereby TDKK
10,610 lower than in the same period in 2021.
Balance sheet and equity
During Q1 the Bank’s lending saw a satisfactory increase of
TDKK 121,143 to TDKK 3,904,824, while the Bank’s
guarantees to customers increased by TDKK 4,563 from the
end of 2021 and amounted to TDKK 1,786,028 at the end of
March 2022.
The Bank reduced its holdings of listed shares and funds in Q1
2022, and at the end of the quarter shares, mainly comprising
sector equities, totalled TDKK 117,475.
At the end of March 2022, the Bank’s deposits, which
predominantly comprise on-demand deposits, amounted to
TDKK 5,542,272, which is an increase of TDKK 178,401 from
the end of 2021.
After payment of the dividend of TDKK 72,000 for 2021
adopted by the annual general meeting, the Bank's equity was
reduced from TDKK 1,267,911 to TDKK 1,236,483.
Total assets thereby increased by TDKK 148,613 to TDKK
7,375,601.
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.
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 4 October 2021, an MREL requirement was determined
for the BANK of Greenland at 30.4% of the Bank’s risk-
weighted assets at the end of 2020. The MREL requirement is
being phased in during 2022 to 2027. The linear phasing-in
means that by 2022, the Bank must fulfil an MREL requirement
of 2.53%. 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.
Pursuant to the determination of the MREL requirement in
October 2021, the Bank issued DKK 50 million Senior-Non-
Preferred for the purpose of targeted fulfilment of the MREL
requirement.
Quarterly Report
Q1 2022
Management’s Review
7
Capital requirement
Q1 2022
Year 2021
Pillar I
8.00%
8.00%
Pillar II
2.70%
2.70%
Solvency requirement
10.70%
10.7%
SIFI buffer requirement
1.50%
1.50%
Capital reserve buffer requirement
2.50%
2.50%
Capital requirement
14.70%
14.7%
MREL requirement (phased in linearly as
from 1 January 2022)
2.53%
0.00%
Total capital require
ment 17.23%
14.7%
Capital base, cf. Note 19
1,199,874
1,201,358
SNP issue
49,665
49,642
MREL capital base
1,249,539
1,251,000
MREL capital ratio
25.40%
25.40%
Surplus capital cover
8.17%
10.70%
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 own funds and eligible
liabilities determined in 2021, 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 capital ratio was 24.4 at the end of Q1 2022.
The result for Q1 2022 has not been verified by the Bank’s
auditor and is therefore not included in the capital ratio.
Including the result for Q1 2022, the capital ratio is calculated
at 24.8%.
As at the end of March 2022, the Bank's individual solvency
requirement was compiled at an unchanged 10.7%. The BANK
of Greenland thereby has surplus capital cover before the
buffer requirements of 13.7%, or TDKK 670,654. After
deductions for the capital reserve buffer requirement of 2.5%
and the SIFI buffer requirement of 1.5%, the surplus cover is
9.7%.
The BANK of Greenland’s reported individual solvency requirement according to the 8+ model
Q1 2022 Year 2021
Capital
requirement
Solvency
requirement
Capital
requirement
Solvency
requirement
Pillar I requirement
394,087
8.0
393,339
8.0
Credit risk
99,885
2.0
98,663
2.0
Market risk
21,113
0.4
21,910
0.4
Operational risk
10,126
0.2
10,117
0.2
Other risk
3,982
0.1
4,046
0.1
Capital and solvency requirement
529,193
10.7
528,075
10.7
The BANK of Greenland has published further details of the
calculated solvency requirement in a report on its website
http://www.banken.gl/report/
Quar
terly Report Q1 2022
Management’s Review
8
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 Q1, the Bank had an LCR of 236.7% 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 48% points of the sum
of large exposures.
The exposure to property amounts to 22.7%. This exposure is
subject to considerable subordinate public financing. In addition,
some of the exposure is based on lease contracts with the
state, Greenland Government, 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
618 at the end of Q1 2022, the price of the BANK of
Greenland’s shares has increased from the end of 2021, when
the price was 598.
At the Bank’s Annual General Meeting on 29 March 2022, a
dividend payment of DKK 40 per share, or a total of DKK 72
million, to the Bank’s shareholders was adopted, and this was
paid out on 31 March 2022.
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.
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
.
Sum of large exposures
(maximum of 175% of actual core capital)
The Bank of Greenland 164.0%
Growth in lending
(less than 20% per year)
The Bank of Greenland 0.0%
Liquidity benchmark
(greater than 100%)
The Bank of Greenland 239.8%
Property exposure
(less than 25% of total loans and guarantees)
The Bank of Greenland 22.7%
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
Q1 2022
Management’s Review
9
Outlook for the remainder of 2022
It is expected that Greenland achieved positive economic
growth in 2020 and 2021, despite Covid-19. The BANK of
Greenland also expects economic growth in 2022.
On this basis, lending is expected to develop positively towards
the end of the year. Deposits are expected to be at the level of
the end of 2021.
The Bank will be affected negatively if the Covid-19 pandemic
returns to any significant extent or if the current crisis further
to Russia’s invasion of Ukraine has an increasing impact on
Greenland’s society.
Total core income is expected to increase in 2022, the primary
factors being the expected increased lending volume, the full
impact of negative deposit interest rates, and the development
in the Bank’s pension, insurance and investment products.
Total expenses including depreciation and amortisation are
expected to be moderately higher than in 2021. Staff expenses
are expected to show more subdued development.
Administration expenses are also expected to increase slightly,
primarily in the IT area.
The Bank assesses that the quality of the loan portfolio is
satisfactory. Write-downs on loans are therefore still expected
to be at a low, but normalised, level.
On the basis of the interest rate level, for 2022 as a whole
moderate capital losses on the Bank’s listed securities must still
be expected. Capital gains are expected from the currency area
and sector equities.
On presentation of the annual report for 2021, the profit
before tax expected to be achieved in 2022 was in the range of
DKK 120-140 million. On the basis of the uncertainty described
above, this expectation is maintained.
Quarterly Report
Q1 2022
Management statement
10
The Board of Directors and Executive Management have today
considered and approved the quarterly report for the period 1
January – 31 March 2022, for the public limited liability
company, GrønlandsBANKEN A/S.
The quarterly report is presented in accordance with the
Danish Financial Business Act, and the Management’s Review is
prepared in accordance with the Danish Financial Business Act.
The quarterly report is furthermore prepared in accordance
with additional Danish disclosure requirements for listed
financial companies.
It is our opinion that the quarterly report gives a true and fair
view of the Bank's assets, liabilities and financial position at 31
March 2022, and of the results of the Bank's operations for Q1
2022.
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.
Management statement
Nuuk, 10 May 2022
Executive Management
Martin Birkmose Kviesgaard
Board of Directors
Gunnar à Liða
Kristian Frederik Lennert
Maliina Bitsch Abelsen
Chair
Vice Chair
Malene Meilfart Christensen
Lars Holst
Yvonne Jane Poulsen Kyed
Niels Peter Fleischer Rex
Peter Angutinguaq Wistoft,
Ellen Dalsgaard Zdravkovic
Quarterly Report
Q1 2022
Management statement
11
Quarterly Report Q1 2022
Income statement and statement of comprehensive income
12
Income statement and statement of comprehensive
income
1.000 kr.
Notes
1. kvartal 2022
hele året 2021
1. kvartal 2021
3
Interest income
55,162
223,790
55,178
4
Negative interest income
-2,793
-13,033
-3,258
5
Interest expenses
260
1,019
125
6
Positive interest expenses
7,275
24,383
5,587
Net interest income
59,384
234,121
57,382
Share dividend, etc.
171
913
60
7
Fees and commission income
29,081
104,794
28,854
Fees paid and commission expenses
129
895
201
Net interest and fee income
88,507
338,933
86,095
8
Value adjustments
-10,667
11,219
3,127
Other operating income
1,635
6,185
1,139
9
Staff and administration expenses
47,063
186,385
47,123
Depreciation and impairment of tangible assets
1,829
7,014
1,740
Other operating expenses
305
2,497
406
17
Write
-downs on loans and receivables, etc. 718
1,537
922
Profit before tax
29,560
158,904
40,170
10
Tax
-10,169
26,072
-1,281
Profit for the period
39,729
132,832
41,451
COMPREHENSIVE INCOME
Profit for the period
39,729
132,832
41,451
Other comprehensive income:
Value adjustment of properties
1,124
4,346
1,060
Value adjustment of defined-benefit severance/pension scheme
0
-32
0
Tax on value adjustment of properties
-281
-1,152
-281
Other comprehensive income
843
3,162
779
Comprehensive income for the period
40,572
135,994
42,230
Quarterly Report Q1 2022
Balance sheet
13
Balance sheet
1.000 kr.
Notes
Assets
31 March 2022
31 December
2021
31 March 2021
Cash balance and demand deposits with central banks
1,405,167
1,434,027
1,143,058
11
Receivables from credit institutions and central banks
122,300
57,293
410,033
17
Loans and other receivables at amortised cost
3,904,824
3,783,681
3,905,129
12
Bonds at fair value
1,088,019
1,100,975
1,002,716
Shares, etc.
117,475
138,902
131,889
13
Assets connected to pool schemes
381,028
360,537
249,483
Land and buildings in total, domicile properties
247,261
247,292
240,636
Other tangible
assets 6,714
6,652
6,329
Other assets
97,987
93,798
82,366
Accruals and deferred income
4,826
3,831
5,830
Total assets
7,375,601
7,226,988
7,177,469
Liabilities
Liabilities to credit institutions and central banks
9,128
13,145
10,785
14
Deposits and other liabilities
5,542,272
5,363,871
5,571,272
Deposits in pool schemes
381,028
360,537
249,483
15
Issued bonds at amortised cost
49,665
49,642
0
Current tax liabilities
30,408
22,615
33,241
Other liabilities
50,453
53,911
63,419
Prepayments and deferred expenses
3,526
7,499
2,545
Total debt
6,066,480
5,871,220
5,930,745
Provisions for pensions and similar obligations
1,771
1,705
1,455
Provisions for deferred tax
50,607
68,326
52,484
Provisions for losses on guarantees
10,362
7,673
8,979
Other provisions
5,144
5,351
5,160
Provisions for losses on non-utilised credit facilities
4,754
4,802
4,499
Total
provisions 72,638
87,857
72,577
Equity
16
Share capital
180,000
180,000
180,000
Revaluation reserves
38,471
37,628
35,528
Retained earnings
1,018,012
978,283
958,619
Proposed dividend
0
72,000
0
Total equity
1,236,483
1,267,911
1,174,147
Total liabilities
7,375,601
7,226,988
7,177,469
1
Accounting policies applied
2
Accounting estimates
18
Contingent liabilities
19
Capital conditions and solvency
Quarterly Report Q1 2022
Statement of changes in equity
14
Statement of changes in equity
1.000 kr.
Share capital
Revaluation
reserves
Retained
earnings
Proposed
dividend
Total equity
capital
Equity, 01 January 2021
180,000
34,749 917,168
45,000
1,176,917
Dividend paid
-45,000
Other comprehensive income
779
779
Profit for the period
41,451
41,451
Equity, 31 March 2021
180,000
35,528
958,619
0
1,174,147
Other comprehensive income
2,100 283
2,383
Profit for the period
19,381
72,000
91,381
Equity, 31 December 2021
180,000
37,628 978,283
72,000
1,267,911
Equity, 01 January 2022
180,000
37,628 978,283
72,000
1,267,911
Dividend paid
-72,000
-72,000
Other comprehensive income
843
843
Profit for the period
39,729
39,729
Equity, 31 March 2022
180,000
38,471 1,018,012
0
1,236,483
Quarterly Report Q1 2022
Statement of changes in equity
15
Quarterly Report Q1 2022
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. Fees 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 20
12. Bonds 20
13. Assets connected to pool schemes 20
14. Deposits 20
15. Issued bonds at amortised cost 20
16. Share capital 20
17. Loans 20
18. Contingent liabilities 24
19. Capital conditions and solvency 24
Overview of Notes
Quarterly Report Q1 2022
Notes to the Quarterly 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 2021.
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 Quarterly Report
1.
Accounting policies applied etc.
2.
Significant accounting estimates
Quarterly Report Q1 2022
Notes to the Quarterly Report
18
1.000 kr.
Q1
2022
Full year
2021
Q1
2021
3. Interest income
Lending and other receivables
53,936
220,044
54,407
Bonds
1,226
3,746
771
Total interest income
55,162
223,790
55,178
4. Negative interest income
Receivables from credit institutions and central banks
-2,476
-11,008
-2,664
Foreign exchange, interest rate, equity, commodity and other
contracts, as
well as derivative financial instruments
-317
-2,025
-594
Total negative interest
-2,793
-13,033
-3,258
5. Interest expenses
Credit institutions and central banks
6
6
2
Deposits and other liabilities
254
988
123
Issued bonds
0
25
0
Total interest expenses
260
1,019
125
6. Positive interest expenses
Deposits and other liabilities
7,275
24,383
5,587
Total positive interest expenses
7,275
24,383
5,587
7. Fee and commission income
Securities and securities accounts
1,090
6,359
841
Payment settlement
8,951
39,654
9,917
Loan transaction fees
1,173
5,817
1,200
Guarantee commission
7,571
30,718
7,411
Other fees and commission
10,296
22,246
9,485
Total fee and commission income
29,081
104,794
28,854
8. Value adjustments
Lending at fair value
-2,904
-6,670
-1,401
Bonds
-13,266
-6,473
-3,089
Shares
1,445
12,922
5,147
Currency
1,253
4,519
1,000
Foreign exchange, interest rate, equity, commodities and other contracts, as
well as derivative financial instruments
2,805
6,921
1,470
Total value adjustments
-10,667
11,219
3,127
Quarterly Report Q1 2022
Notes to the Quarterly Report
19
1.000 kr.
Q1
2022
Full year
2021
Q1
2021
9. Staff and administration expenses
Staff expenses
Salaries 21,620
83,188
22,079
Other staff expenses 618
2,302
784
Pensions 2,691
10,535
2,566
Social security expenses 115
535
224
In total 25,044
96,560
25,653
Other
administration expenses 22,019
89,825
21,470
Average number of FTEs
137.7
137.7
138.7
Of which salaries and remuneration to the Board of Directors and the
Executive Management
1,522
5,583
1,466
Five other employees (Q1 2021: four employees) whose activities have a
significant influence on the Bank’s risk profile:
Salaries and pensions, including free car and other benefits
1,621
5,603
1,334
10. Tax
25
-% of the profit before tax 7,390
39,726
10,043
Discount for dividend tax paid
-38
-217
-13
6
-%-supplement 441
2,370
601
Total tax on
ordinary profit 7,793
41,879
10,631
Paid dividend tax
38
217
13
Change in deferred tax as a consequence of a change in the corporate tax
supplement
0
-4,099
0
Adjustment to deferred tax prior year
1,080
0
0
Taxation value of
dividend paid -19,080
-11,925
-11,925
Tax in total
-10,169
26,072
-1,281
Deferred tax
1,361
3,046
281
Taxation value of dividend paid
-19,080
0
-11,925
Tax to be paid
7,550
23,026
10,363
No company tax was paid in
the period.
Quarterly Report Q1 2022
Notes to the Quarterly Report
20
1.000 kr.
Q1
2022
Full year
2021
Q1
2021
11. Amounts receivable from credit institutions and central banks
Receivables subject to terms of notice at central banks 0
0
0
Receivables from credit institutions 122,300
57,293
410,033
Total amounts receivable
122,300
57,293
410,033
12. Bonds
Of the bond portfolio, a nominal amount of TDKK 50,000 is pledged as collateral for accounts
with Danmarks Nationalbank.
13. Assets connected to pool schemes
Investment associations
381,005
359,866
249,449
Non
-invested funds 23
671
34
Total
381,028
360,537
249,483
14. Deposits
On demand
5,014,523
4,826,448
4,959,850
On terms of notice
285,564
294,802
382,390
Special deposit conditions
242,185
242,621
229,032
Total deposits
5,542,272
5,363,871
5,571,272
15. Issued bonds at amortised cost
Bond issue
49,665
49,642
0
Total
49,665
49,642
0
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.
16. Share capital
Share capital consists of 1,800,000 shares of DKK 100.
Own shares
Number of own shares
0
0
0
17. Loans
Write
-downs on loans, guarantees and non-utilised credit facilities:
New write
-downs concerning new facilities during the period 4,325
29,455
4,376
Reversal of
write-downs concerning redeemed facilities -5,301
-25,917
-13,771
Net write
-downs during the period as a consequence of changes in the
credit risk
1,688
-723
10,838
Losses without preceding write
-downs 342
647
166
Received for claims
previously written off -336
-1,925
-687
Recognised in the statement of income
718
1,537
922
Quarterly Report Q1 2022
Notes to the Quarterly Report
21
1.000 kr.
Stage 1 Stage 2
Stage 3
Total
Write-downs on loans
31.03.2022
Start of the period
21,314 67,951
85,104
174,369
New write
-downs concerning new facilities during the
year
1,125 1,975
753
3,853
Reversal of write
-downs concerning redeemed facilities -772 -407
-3,839
-5,018
Change in write
-downs at the beginning of the year –
transfer to stage 1
14,974 -12,593
-2,381
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-390 1,232
-842
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-12 -1,314
1,326
0
Net write
-downs as a consequence of changes in the
credit
risk
-21,468 10,685
10,018
-765
Previously written down, now finally lost
-2,852
-2,852
Interest on written
-down facilities
1,280
1,280
Write
-downs in total 14,771 67,529
88,567
170,867
Write-downs on guarantees
31.03.2022
Start of
the period 744 2,071
4,858
7,673
New write
-downs concerning new facilities during the
year
135 224
38
397
Reversal of write
-downs concerning redeemed facilities 0 -23
-35
-58
Change in write
-downs at the beginning of the year –
transfer to stage 1
1,559 -1,524
-35
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-10 49
-39
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
-1,401 290
3,461
2,350
Write
-downs in total 1,024 1,043
8,295
10,362
Write-downs on non-utilised drawing rights
31.03.2022
Start of the period
1,203 1,037
2,561
4,801
New write
-downs concerning new facilities during the
year
74 0
1
75
Reversal of write
-downs concerning redeemed facilities -88 -104
-33
-225
Change in write
-downs at the beginning of the year –
transfer to stage 1
296 -290
-6
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-8 8
0
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
-330 -223
656
103
Write
-downs in total 1,147 428
3,179
4,754
Quarterly Report Q1 2022
Notes to the Quarterly Report
22
1,000 kr.
Stage 1 Stage 2
Stage 3
Total
Write-downs on loans
31.12.2021
Start of the period
14,202 71,617
86,174
171,993
New write
-downs concerning new facilities during the
year
5,424 13,766
7,459
26,649
Reversal of write
-downs concerning redeemed facilities -3,079 -11,891
-8,562
-23,532
Change in write
-downs at the beginning of the year –
transfer to stage 1
19,607 -11,812
-7,795
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-1,397 2,581
-1,184
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-59 -1,148
1,207
0
Net write
-downs as a consequence of changes in the
credit risk
-13,384 4,838
10,957
2,411
Previously written down, now finally lost
0 0
-6,975
-6,975
Interest on written
-down facilities 0 0
3,823
3,823
Write
-downs in total 21,314 67,951
85,104
174,369
Write-downs on guarantees
31.12.2021
Start of the period
554 655
8,681
9,890
New write
-downs concerning new facilities during the
year
342 677
865
1,884
Reversal of write
-downs concerning redeemed facilities -5 -4
-125
-134
Change in write
-downs at the beginning of the year –
transfer to stage 1
534 -188
-346
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-17 4,051
-4,034
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-2 -3
5
0
Net write
-downs as a consequence of changes in the
credit risk
-662 -3,117
-188
-3,967
Write
-downs in total 744 2,071
4,858
7,673
Write-downs on non-utilised drawing rights
31.12.2021
Start of the period
746 239
4,312
5,297
New write
-downs concerning new facilities during the
year
769 151
2
922
Reversal of write
-downs concerning redeemed facilities -273 -48
-1,930
-2,251
Change in write
-downs at the beginning of the year –
transfer to stage 1
159 -107
-52
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-35 58
-23
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
-163 744
252
833
Write
-downs in total 1,203 1,037
2,561
4,801
Quarterly Report Q1 2022
Notes to the Quarterly Report
23
1.000 kr.
Stage 1 Stage 2
Stage 3
Total
Write-downs on loans
31.03.2021
Start of the period
14,202 71,617
86,174
171,993
New write
-downs concerning new facilities during the
year
574 601
2,432
3,607
Reversal of write
-downs concerning redeemed facilities -281 -9,169
-2,495
-11,945
Change in write
-downs at the beginning of the year –
transfer to stage 1
21,114 -19,744
-1,370
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-1,020 1,479
-459
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-17 -635
652
0
Net write
-downs as a consequence of changes in the
credit risk
-19,255 19,523
11,222
11,490
Previously written down, now finally lost
-303
-303
Interest on written
-down facilities
1,210
1,210
Write
-downs in total 15,317 63,672
97,063
176,052
Write-downs on guarantees
31.03.2021
Start of the period
554 655
8,681
9,890
New write
-downs concerning new facilities during the
year
102 288
0
390
Reversal of write
-downs concerning redeemed facilities -3 -2
-56
-61
Change in write
-downs at the beginning of the year –
transfer to stage 1
1,862 -176
-1,686
0
Change in write
-downs at the beginning of the year –
transfer to
stage 2 -34 34
0
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-2 -2
4
0
Net write
-downs as a consequence of changes in the
credit risk
-1,804 1,007
-443
-1,240
Write
-downs in total 675 1,804
6,500
8,979
Write-downs on non-utilised drawing rights
31.03.2021
Start of the period
746 239
4,312
5,297
New write
-downs concerning new facilities during the
year
5 6
368
379
Reversal of write
-downs concerning redeemed facilities -85 -31
-1,649
-1,765
Change in write
-downs at the beginning of the year –
transfer to stage 1
40 -40
0
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-16 16
0
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
0 -14
14
0
Net write
-downs as a consequence of changes in the
credit risk
-302 122
768
588
Write
-downs in total 388 298
3,813
4,499
Quarterly Report Q1 2022
Notes to the Quarterly Report
24
1.000 kr.
Q1
2022
Full year
2021
Q1
2021
18. Contingent liabilities
Mortgage finance guarantees
1,004,580
942,401
1,114,410
Registration and remortgaging guarantees
182,416
306,503
168,632
Other guarantees
599,032
532,561
521,631
Guarantees, etc. in total
1,786,028
1,781,465
1,804,673
Provision balance for guarantees
10,362
9,890
8,979
Provision balance for non
-utilised credit facilities 4,754
5,297
4,499
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 five 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.
19. Capital conditions and solvency
C
redit risk 4,067,384
4,070,758
4,270,701
CVA risk
6,154
1,720
2,767
Market risk
212,905
204,615
189,177
Operational risk
639,644
639,644
615,611
Total risk exposure
4,926,087
4,916,737
5,078,256
Equity at the beginning of the
period 1,267,911
1,176,917
1,176,917
Comprehensive income for the period
0
135,994
0
Adjustment to deferred tax prior year
-1,080
0
0
Proposed dividend, accounting effect
19,080
-52,920
11,925
Paid dividend
-72,000
-45,000
-45,000
Framework for ratio of own shares
-11,124
-10,764
-11,160
Deductions for prudent valuation
-1,456
-1,490
-1,383
Deductions for Non
-Performing Exposures -1,484
-1,379
0
Actual core capital
1,199,847
1,201,358
1,131,299
Capital base
1,199,847
1,201,358
1,131,299
Actual core capital ratio
24.4
24.4
22.3
Capital ratio
24.4
24.4
22.3
Statutory capital ratio requirements
8.0
8.0
8.0
Quarterly Report Q1 2022
Notes to the Quarterly Report
25