Grønlandsbanken A/S
CVR no. 80050410
Notification to Nasdaq OMX Copenhagen
11/2022
Quarterly
Report
First half of 2022
Quarterly Report
First half of 2022
1
Management’s Review 2
Interim Report in headlines 2
Financial Highlights for the first half of 2022 4
Management's Review, first half of 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 Interim Report 17
Contents
Quarterly Report
First half of 2022
Management’s Review
2
Interim Report in headlines
Stable core business and market turmoil in the first
half-year
The BANK of Greenland's profit before tax amounts to DKK
45.8 million for the first half of 2022, compared to DKK 74.8
million for the first half of 2021. The profit before value
adjustments and write-downs is satisfactory at DKK 73.1
million, compared to DKK 72.0 million for the previous year.
Lending has increased by DKK 226 million since the end of
2021, amounting to DKK 4,010 million at the end of the first
half of 2022. At the start of 2022, it was expected that
Greenland's favourable economic development would result in
positive development in the Bank’s lending. Guarantees
increased by DKK 190.9 million from DKK 1,781 million at the
end of 2021 to DKK 1,972 million at the end of the first half of
2022.
Net interest, fees and other operating income in the first half of
2022 were almost unchanged at DKK 170.9 million compared
to the same period in 2021. This reflects volume increases and
mix changes in the lending structure, and an increase resulting
from such factors as an improvement in the negative deposit
interest rates, as well as fees and commission from the pension
and investment area.
Total expenses including depreciation amounted to DKK 97.8
million at the end of the first half of 2022, compared to DKK
98.3 million for the same period in 2021. The increase in
interest rates and the general market turmoil meant that value
adjustments at the end of June 2022 resulted in a capital loss of
DKK 25.2 million, compared to a capital gain of DKK 5.1 million
for the same period in 2021. The Bank’s sector shareholdings
and the currency area performed positively in the first half of
the year, while the Bank’s bond holdings generated capital
losses.
Write-downs on loans and guarantees were reduced by DKK
0.2 million from the first half of 2021 and amounted to a
modest DKK 2.1 million for the first half of 2022. The Bank
sees continued satisfactory creditworthiness in the loan
portfolio. The impact of Covid-19 on Greenland’s society is
minimal, which is, among other things, reflected in positive
development in tourism in 2022. Uncertainty primarily
concerns increasing inflation and resulting interest rate
increases, as well as geopolitical uncertainty. So far, no
significant effect can be seen in Greenland. On the basis of the
aforementioned, the Bank has reduced the Covid-19
supplement in the management reserve to a minimum. On the
other hand, the Bank has allocated a supplement of DKK 19.4
million to counter risks derived from increasing inflation and
interest rates, and poorer cyclical prospects, and the overall
management supplement to write-downs has thereby been
increased.
In the Annual Report for 2021, the forecast for the year’s
profit before tax was estimated at a range of DKK 120-140
million. This range is maintained, provided that there is no
significant negative market impact during the rest of the year.
Management’s Review
The profit after tax gives a return of 8.5% p.a. on opening equity after disbursement of dividend.
Lending and guarantees increased by a total of DKK 417 million to DKK 5.982 billion.
Deposits increased to DKK 5.6 billion.
Basic earnings per cost in DKK of 1.75 in the first half of 2022, compared to 1.73 in the first half of 2021
Write-downs and provisions of 0.03% for the period.
Capital ratio and core capital ratio of 22.8 and an individual capital requirement of 10.6%
Quarterly Report
First half of 2022
Management’s Review
3
Quarterly Report
First half of 2022
Management’s Review
4
Financial Highlights for the first half of 2022
First half-
year
First half-
year
Full year
First half-
year
First half-
year
First half-
year
2022
2021
2021
2020
2019
2018
Net interest and fee income
167,808
168,148
338,933
161,110
160,316
157,027
Value adjustments
-25,195
5,115
11,219
-7,330
2,593 -345
Other operating income
3,049
2,179
6,185
2,221
2,878
2,856
Staff and administration expenses
92,437
93,229
186,385
85,566
86,341
79,990
Depreciation and impairment of tangible assets
3,636
3,486
7,014
3,449
3,367 3,367
Other operating expenses
1,696
1,602
2,497
1,416
1,889
838
Write-downs on loans and receivables, etc.
2,112
2,331
1,537
9,845
4,787
6,666
Profit before tax
45,781
74,794
158,904
55,725
69,403
68,677
Tax
-5,893
7,882
26,072
14,754
4,877 4,632
Profit for the period
51,674
66,912
132,832
40,971
64,526
64,045
Selected balance sheet items:
Lending
4,009,541
3,824,443
3,783,681
3,736,894
3,797,656 3,552,620
Deposits
5,673,324
5,879,878
5,363,871
6,016,314
5,593,007 5,086,734
Equity
1,249,277
1,200,414
1,267,911
1,120,137
1,010,990 957,464
Total assets
7,544,633
7,537,865
7,226,988
7,507,427
6,874,825 6,275,024
Contingent liabilities
1,972,396
1,914,893
1,781,465
1,521,275
1,300,697 1,185,142
Key figures:
Capital ratio
22.8
22.7
24.4
23.3
21.1 22.1
Core capital ratio
22.8
22.7
24.4
23.3
21.1 22.1
Return on equity before tax for the period
3.6
6.3
13.0
5.1
6.9 7.2
Return on equity after tax for the period
4.1
5.6
10.9
3.7
6.6 6.8
Income per cost krone
1.5
1.7
1.8
1.6
1.7 1.8
Rate of return
0.7
0.9
1.8
0.5
0.9 1.0
Interest risk rate
1.4
1.5
1.2
1.0
2.0 1.9
Foreign exchange position
0.3
0.9
0.8
0.7
0.3 0.8
Liquidity coverage ratio
207.9
259.6
238.6
183.7
165.3 143.9
Lending plus write
-downs as a ratio of deposits 68.9
65.1
69.1
63.2
69.8 72.8
Lending as a ratio of equity
3.2
3.2
3.0
3.3
3.8 3.7
Growth in lending for the period
6.0
-4.5
-5.6
-0.6
9.4 7.0
Sum of large exposures
164.0
163.1
156.7
167.6
172.2 170.5
Write
-down ratio for the period 0.0
0.0
0.0
0.2
0.1 0.1
Accumalated write
-down ratio 3.1
3.2
3.2
3.5
3.3 3.4
Profit per share after tax for the period
28.7
37.2
73.8
22.8
35.8 35.6
Net book value per share
694.0
666.9
704.0
622.3
561.7 532.0
Stock exchange quotation/net book value per share
0.9
0.9
0.8
0.8
1.0 1.1
Quarterly Report
First half of 2022
Management’s Review
5
Management's Review, first half of 2022
Statement of income
At TDKK 113,127, compared to TDKK 114,911 for the first
half of 2021, net interest income decreased by 1.6%. The start
of 2021 was affected by a higher level of lending than at the
start of 2022. Furthermore, in recent years the Bank has seen a
change of mix in the lending structure in favour of loans at
lower margins. This had a negative impact on lending rates
during the half-year period.
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 the first half of 2022.
Fee and commission income increased by TDKK 449 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, while the payment area has a
negative impact. Net interest and fee income overall decreased
by TDKK 340 to TDKK 167,808 for the first half of 2022.
Other operating income amounted to TDKK 3,049, which is an
increase of TDKK 870 from Q1 2021. To some extent, this
reflects timing differences, and moreover the Bank realised non-
recurring income from the sale of other tangible assets in the
first half of 2022.
Staff and administration expenses are TDKK 792 lower than in
the first half of 2021, amounting to TDKK 92,437. Staff
expenses are lower, as a consequence of slightly fewer
employees, and administration expenses are also lower.
Other operating expenses, which concern operation and
maintenance of the Bank’s buildings and contributions to the
Resolution Fund, are at the level of the first half of 2021.
Depreciation of tangible assets is TDKK 150 higher than in the
first half of 2021, amounting to TDKK 3,636.
The profit before value adjustments and write-downs is a
satisfactory TDKK 73,088, compared to TDKK 72,010 in the
first half of 2021.
Value adjustments present a total capital loss of TDKK 25,195,
compared to a capital gain of TDKK 5,115 for the same period
in 2021. The Bank’s holdings of sector equities and the
currency area performed favourably in the first half of 2022.
The increase in medium- and long-term yields and the general
market turmoil caused value adjustments of bonds and listed
shares to perform negatively in the first half of 2022.
Impairment of loans, etc. amounts to TDKK 2,112, compared
to TDKK 2,331 for the same period in 2021. Since the first
outbreak of Covid-19 in Q1 2020, the Bank has continuously
reviewed both customer exposures and sectors, in order to
identify consequences of Covid-19. The impact on Greenlandic
society is very modest, and there is a positive outlook for
tourism in 2022.
Covid-19 and an uncertain geopolitical situation have presented
problems for the supply of goods, increasing inflation and
consequentially rising interest rates. 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
exposure to Ukraine or Russia.
In addition to the individual write-downs, on the basis of the
aforementioned the Bank has reduced the Covid-19
supplement to a minimum. On the other hand, the Bank has
allocated a supplement of DKK 19.4 million to counter risks
derived from rising inflation and interest rates, and a poorer
economic outlook. The total management supplements have
thereafter increased by DKK 6.3 million to DKK 39.2 million.
Financial Highlights and Key Figures
DKK 1,000
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
2022
2022
2021
2021
2021
2021
2020
2020
Net interest and fee income*
82,061
85,747 89,871
80,914
82,053
86,095
84,305 81,098
Costs, depreciation and
amortisation
48,572
49,197 51,145
46,436
49,048
49,269
51,833 46,028
Other operating income
1,414
1,635
2,244
1,762
1,040
1,139
2,026
1,122
Profit before value adjustments
and write-downs*
34,903
38,185
40,970
36,242
34,045
37,965
34,498
36,192
Value adjustments
-14,528
-10,667
3,503
2,601
1,988
3,127
4,828
2,638
Write
-downs on loans, etc. 1,394
718 -33
-761
1,409
922
2,434 549
Profit before tax
18,981
26,800
44,506
39,604
34,624
40,170
36,892
38,281
Quarterly Report
First half of 2022
Management’s Review
6
The profit before tax is TDKK 45,781, and is thereby TDKK
29,013 lower than for the same period in 2021.
Development during the quarter
After the publication of the quarterly report for Q1 2022, the
Bank has identified a technical error in the recognition of
accrual of interest receivable. The recognition error was
corrected in Q2 2022. The error has a negative impact of
TDKK 2,760 on the Bank’s interest income and profit before
tax for Q1. The Other assets item of the balance sheet is thus
TDKK 2,760 too high in Q1 2022. The Bank’s customers are
not affected by the error.
The above selected financial highlights and key figures present
the adjusted figures for Q1 2022 and Q2 2022, whereby the
marked items have been corrected for the error between the
quarters.
The corrected net interest and fee income amounted to TDKK
85,747 in Q1 and to TDKK 82,061 in Q2. The difference
between the quarters is primarily due to periodically higher fee
and commission income in Q1 compared to Q2.
Total costs in Q1 amounted to TDKK 49,197 and in Q2 to
TDKK 48,572. Staff expenses decreased in Q2, since in Q1
holiday allowance, etc. is paid, but is not paid in the subsequent
quarters. Other administrative expenses increased at the same
level in Q1 and Q2.
The profit before value adjustments and write-downs thereby
decreased in Q2, to TDKK 34,903, which is TDKK 3,282 lower
than in Q1 2022. The profit before tax declined in Q2 2022 to
DKK 19.0 million, from DKK 26.8 million in Q1 2022.
Lending increased by TDKK 121,143 in Q1, and by TDKK
104,717 in Q2, which overall corresponds to an increase of
6.0% from the end of 2021. 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 178,401 in Q1 2021 and by
TDKK 131,052 in Q2. In overall terms, the increase in deposits
from the end of 2021 thus amounts to TDKK 309,453.
Balance sheet and equity
During the first half-year, the Bank’s lending saw a satisfactory
increase of TDKK 225,860 to TDKK 4,009,541, while the
Bank’s guarantees to customers increased by TDKK 190,931
from the end of 2021 and amounted to TDKK 1,972.396 at
the end of June 2022.
The Bank reduced its holdings of listed shares and funds in the
first half of 2022, and at the end of the period shares, mainly
comprising sector equities, totalled TDKK 117,480.
Other assets amount to TDKK 100,755, having increased by
TDKK 6,957 from the end of 2021.
At the end of June 2022, the Bank’s deposits, predominantly
comprising on-demand deposits, amounted to TDKK
5,673,324, which is an increase of 5.8% 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 1,249,277.
Total assets thereby increased by TDKK 317,645 to TDKK
7,544,633.
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.
Quarterly Report
First half of 2022
Management’s Review
7
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.
Capital requirement
First half
of 2022
Year 2021
Pillar I
8.00%
8.00%
Pillar II
2.60%
2.70%
Solvency requirement
10.60%
10.7%
SIFI buffer requirement
1.50%
1.50%
Capital reserve buffer requirement
2.50%
2.50%
Capital requirement
14.60%
14.7%
MREL requirement (phased in linearly as
from 1 January 2022)
2.53%
0.00%
Total capital requirement
17.13%
14.7%
Capital base, cf. Note 19
1,197,833
1,201,358
SNP issue
49,688
49,642
MREL capital base
1,247,521
1,251,000
MREL capital ratio
23.70%
25.40%
Surplus capital
cover 6.57%
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 concerning impairment
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 22.8 at the end of the first half of
2022.
The result for the first half of 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 23.5%.
At the end of June 2022, the Bank’s individual solvency
requirement was unchanged at 10.6%. The BANK of
Greenland thereby has surplus capital cover before the buffer
requirement of 12.2%, 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 8.2%.
Quarterly Report
First half of 2022
Management’s Review
8
The BANK of Greenland’s reported individual solvency requirement according to the 8+ model
First half of 2022
Year 2021
Capital
requirement
Solvency
requirement
Capital
requirement
Solvency
requirement
Pillar I requirement
420,386
8.0
393,339
8.0
Credit risk
99,353
1.9
98,663
2.0
Market risk
20,353
0.4
21,910
0.4
Operational risk
10,455
0.2
10,117
0.2
Other risk
5,381
0.1
4,046
0.1
Capital and solvency requirement
555,928
10.6
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/
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
207.9% 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 22.0%. 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
610 at the end of the first half of 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.
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 4.8%
Liquidity benchmark
(greater than 100%)
The Bank of Greenland 210.3%
Property exposure
(less than 25% of total loans and guarantees)
The Bank of Greenland 22.0%
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 2022
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 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 in 2022.
However, a flatter development curve is expected in the
second half of 2022. Deposits are expected to be at the level
of the first half of 2022.
The Bank will be negatively affected if the development in
interest rates and inflation, and the war in Ukraine, have an
increasing impact on Greenland’s society.
Total core income is expected to decline slightly in 2022. In the
first half of 2022, the Bank experienced a change of mix in its
lending structure. This will have a reducing effect on lending
rates. The Bank’s pension, insurance and investment products
are expected to continue to develop positively.
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.
There is still considerable uncertainty in the market area, while
the interest rate development after 30 June shows a probability
of improved value adjustments in the second half-year. Capital
gains are also expected from the currency area and sector
equities.
On the presentation of the Annual Report for 2021, the profit
before tax in 2022 was expected to lie in the range of DKK
120-140 million. On the basis of the uncertainty described
above and subject to the condition of a reduced market impact,
this expectation is maintained.
Quarterly Report
First half of 2022
Management Statement
10
The Board of Directors and Executive Management have today
considered and approved the Interim Report for the period 1
January – 30 June 2022, 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 2022, and of the result of the Bank’s activities in the first
half of 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, 17 August 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
First half of 2022
Management Statement
11
Quarterly Report First half of 2022
Income Statement and Statement of Comprehensive Income
12
Income Statement and Statement of Comprehensive
Income
DKK 1,000
Notes
First half-
year
2022
hele året 2021
First half-
year
2021
3
Interest income
104,063
223,790
110,211
4
Negative interest income
-5,778
-13,033
-6,289
5
Interest expenses
512
1,019
165
6
Positive interest expenses
15,354
24,383
11,154
Net interest income
113,127
234,121
114,911
Share
dividend, etc. 1,822
913
913
7
Fees and commission income
53,092
104,794
52,643
Fees paid and commission expenses
233
895
319
Net interest and fee income
167,808
338,933
168,148
8
Value adjustments
-25,195
11,219
5,115
Other operating income
3,049
6,185
2,179
9
Staff and administration expenses
92,437
186,385
93,229
Depreciation and impairment of tangible assets
3,636
7,014
3,486
Other operating expenses
1,696
2,497
1,602
17
Write-downs on loans and receivables, etc.
2,112
1,537
2,331
Profit before tax
45,781
158,904
74,794
10
Tax
-5,893
26,072
7,882
Profit for the period
51,674
132,832
66,912
COMPREHENSIVE INCOME
Profit for the period
51,674
132,832
66,912
Other comprehensive income:
Value adjustment of properties
2,256
4,346
2,156
Value adjustment of defined
-benefit severance/pension scheme 0
-32
0
Tax on value adjustment of properties
-564
-1,152
-571
Other comprehensive income
1,692
3,162
1,585
Comprehensive income for the period
53,366
135,994
68,497
Quarterly Report First half of 2022
Balance Sheet
13
Balance Sheet
1.000 kr.
Notes
Assets
30 June 2022
31 December
2021
30 June 2021
Cash balance and demand deposits with central banks
1,134,350
1,434,027
1,723,489
11
Receivables from credit institutions and central banks
447,042
57,293
252,421
17
Loans and other receivables at amortised cost
4,009,541
3,783,681
3,824,443
12
Bonds at fair value
1,074,041
1,100,975
1,002,972
Shares, etc.
117,480
138,902
133,425
13
Assets connected to pool schemes
400,118
360,537
268,492
Land and buildings in total, domicile properties
250,305
247,292
240,607
Other tangible
assets 6,214
6,652
6,273
Other assets
100,755
93,798
81,047
Accruals and deferred income
4,787
3,831
4,696
Total assets
7,544,633
7,226,988
7,537,865
Liabilities
Liabilities to credit institutions and central banks
7,237
13,145
11,886
14
Deposits and other liabilities
5,673,324
5,363,871
5,879,878
Deposits in pool schemes
400,118
360,537
268,492
15
Issued bonds at amortised cost
49,688
49,642
0
Current tax liabilities
34,292
22,615
42,200
Other liabilities
52,991
53,911
56,131
Prepayments and deferred expenses
8,137
7,499
5,849
Total debt
6,225,787
5,871,220
6,264,436
Provisions for pensions and similar obligations
1,837
1,705
1,521
Provisions for deferred tax
50,890
68,326
52,774
Provisions for losses on guarantees
8,614
7,673
10,537
Other provisions
5,076
5,351
4,866
Provisions for losses on non-utilised credit facilities
3,152
4,802
3,317
Total
provisions 69,569
87,857
73,015
Equity
16
Share capital
180,000
180,000
180,000
Revaluation reserves
39,320
37,628
36,334
Retained earnings
1,029,957
978,283
984,080
Proposed dividend
0
72,000
0
Total equity
1,249,277
1,267,911
1,200,414
Total liabilities
7,544,633
7,226,988
7,537,865
1
Accounting policies applied
2
Accounting estimates
18
Contingent liabilities
19
Capital conditions and solvency
Quarterly Report First half of 2022
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 2021
180,000
34,749 917,168
45,000
1,176,917
Dividend paid
-45,000
Other comprehensive income
1,585
1,585
Profit for the period
66,912
66,912
Equity, 30 June 2021
180,000
36,334
984,080
0
1,200,414
Other comprehensive income
1,294 283
1,577
Profit for the period
-6,080
72,000
65,920
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
1,692
1,692
Profit for the period
51,674
51,674
Equity, 30 June 2022
180,000
39,320 1,029,957
0
1,249,277
Quarterly Report First half of 2022
Statement of Changes in Equity
15
Quarterly Report First half of 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 First half of 2022
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 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 Interim Report
1.
Accounting policies applied etc.
2.
Significant accounting estimates
Quarterly Report First half of 2022
Notes to the Interim Report
18
1.000 kr.
First half-
year
2022
Full year
2021
First half-
year
2021
3. Interest income
Lending and other
receivables 101,791
220,044
108,475
Bonds
2,272
3,746
1,736
Total interest income
104,063
223,790
110,211
4. Negative interest income
Receivables from credit institutions and central banks
-5,170
-11,008
-5,113
Foreign exchange, interest
rate, equity, commodity and other contracts, as
well as derivative financial instruments
-608
-2,025
-1,176
Total negative interest
-5,778
-13,033
-6,289
5. Interest expenses
Credit institutions and central banks
1
6
6
Deposits and other
liabilities 511
988
159
Issued bonds
0
25
0
Total interest expenses
512
1,019
165
6. Positive interest expenses
Credit institutions and central banks
11
0
0
Deposits and other liabilities
15,343
24,383
11,154
Total positive interest expenses
15,343
24,383
11,154
7. Fees and commission income
Securities and securities accounts
2,314
6,359
1,528
Payment settlement
18,446
39,654
19,859
Loan transaction fees
2,456
5,817
2,390
Guarantee commission
15,589
30,718
15,007
Other fees and commission
14,287
22,246
13,859
Total fee and commission income
53,092
104,794
52,643
8. Value adjustments
Lending at fair value
-5,520
-6,670
-2,164
Bonds
-29,093
-6,473
-4,644
Shares
1,378
12,922
7,446
Currency
2,494
4,519
2,177
Foreign exchange, interest rate, equity, commodities and other contracts, as
well as derivative financial instruments
5,546
6,921
2,300
Total value adjustments
-25,195
11,219
5,115
Quarterly Report First half of 2022
Notes to the Interim Report
19
1.000 kr.
First half-
year
2022
Full year
2021
First half-
year
2021
9. Staff and administration expenses
Staff expenses
Salaries 41,521
83,188
42,039
Other staff expenses 1,223
2,302
1,333
Pensions 5,402
10,535
5,210
Social security expenses 188
535
407
In total 48,334
96,560
48,989
Other administration expenses
44,103
89,825
44,240
Average number of FTEs
136.2
137.7
137.8
Of which salaries and remuneration to the Board of Directors and the
Executive Management
2,930
5,583
2,822
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
2,996
5,603
2,469
10. Tax
25
-% of the profit before tax 11,445
39,726
18,699
Discount for dividend tax paid
-429
-217
-217
6
-%-supplement 662
2,370
1,108
Total tax on
ordinary profit 11,678
41,879
19,590
Paid dividend tax
429
217
217
Change in deferred tax as a consequence of a change in the corporate tax
supplement
-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
-5,893
26,072
7,882
Deferred tax
1,644
3,046
571
Taxation value of dividend paid
-19,080
0
-11,925
Tax to be paid
11,543
23,026
19,236
No company tax was paid in the
period.
Quarterly Report First half of 2022
Notes to the Interim Report
20
1.000 kr.
First half-
year
2022
Full year
2021
First half-year
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 447,042
57,293
252,421
Total amounts receivable
447,042
57,293
252,421
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
400,106
359,866
268,445
Non
-invested funds 12
671
47
Total
400,118
360,537
268,492
14. Deposits
On demand
5,157,844
4,826,448
5,267,645
On terms of notice
267,113
294,802
378,599
Special deposit conditions
248,367
242,621
233,634
Total deposits
5,673,324
5,363,871
5,879,878
15. Issued bonds at amortised cost
Bond issue
49,688
49,642
0
Total
49,688
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 7,904
29,455
9,658
Reversal of
write-downs concerning redeemed facilities -8,843
-25,917
-16,441
Net write
-downs during the period as a consequence of changes in the
credit risk
3,609
-723
10,054
Losses without preceding write
-downs 433
647
215
Received for claims
previously written off -991
-1,925
-1,155
Recognised in the statement of income
2,112
1,537
2,331
Quarterly Report First half of 2022
Notes to the Interim Report
21
1.000 kr.
Stage 1 Stage 2
Stage 3
Total
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
Write-downs on non-utilised 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
Quarterly Report First half of 2022
Notes to the Interim 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 First half of 2022
Notes to the Interim Report
23
1.000 kr.
Stage 1 Stage 2
Stage 3
Total
Write-downs on loans
30.06.2021
Start of the period
14,202 71,617
86,174
171,993
New write
-downs concerning new facilities during the
year
1,297 4,089
3,393
8,779
Reversal of write
-downs concerning redeemed facilities -469 -10,104
-3,933
-14,506
Change in write
-downs at the beginning of the year –
transfer to stage 1
12,311 -11,539
-772
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-1,647 2,345
-698
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-25 -991
1,016
0
Net write
-downs as a consequence of changes in the
credit risk
-12,696 9,950
13,078
10,332
Previously written down, now finally lost
-1,776
-1,776
Interest on
written-down facilities
2,377
2,377
Write
-downs in total 12,973 65,367
98,859
177,199
Write-downs on guarantees
30.06.2021
Start of the period
554 655
8,681
9,890
New write
-downs concerning new facilities during the
year
206 392
149
747
Reversal of write
-downs concerning redeemed facilities -3 -3
-56
-62
Change in write
-downs at the beginning of the year –
transfer to stage 1
265 -165
-100
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-43 43
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
-277 1,083
-845
-39
Write
-downs in total 700 2,003
7,833
10,536
Write-downs on non-utilised drawing rights
30.06.2021
Start of the period
746 239
4,312
5,297
New write
-downs concerning new facilities during the
year
46 2
84
132
Reversal of write
-downs concerning redeemed facilities -116 -44
-1,713
-1,873
Change in
write-downs at the beginning of the year –
transfer to stage 1
116 -68
-48
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-18 45
-27
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
-463 -7
231
-239
Write
-downs in total 311 153
2,853
3,317
Quarterly Report First half of 2022
Notes to the Interim Report
24
1.000 kr.
First half-
year
2022
Full year
2021
First half-
year
2021
18. Contingent liabilities
Mortgage finance
guarantees 1,009,270
942,401
1,206,528
Registration and remortgaging guarantees
282,776
306,503
135,941
Other guarantees
680,350
532,561
572,424
Guarantees, etc. in total
1,972,396
1,781,465
1,914,893
Provision balance for
guarantees 8,614
9,890
10,537
Provision balance for non
-utilised credit facilities 3,152
5,297
3,317
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
Credit
risk 4,381,110
4,070,758
4,182,887
CVA risk
9,133
1,720
747
Market risk
224,938
204,615
182,003
Operational risk
639,644
639,644
615,611
Total risk exposure
5,254,825
4,916,737
4,981,248
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
-10,980
-10,764
-11,052
Deductions for prudent valuation
-1,447
-1,490
-1,384
Deductions for Non
-Performing Exposures -3,651
-1,379
-302
Actual core capital
1,197,833
1,201,358
1,131,104
Capital base
1,197,833
1,201,358
1,131,104
Actual core capital ratio
22.8
24.4
22.7
Capital ratio
22.8
24.4
22.7
Statutory capital ratio requirements
8.0
8.0
8.0
Quarterly Report First half of 2022
Notes to the Interim Report
25