The BANK of Greenland
CVR no. 80050410
Notification to Nasdaq OMX Copenhagen
17/2022
Quarterly Report
Q1
– Q3 2022
Quarterly Report
Q1 – Q3 2022
1
Management’s Review 2
Overview of the first three quarters 2
Financial Highlights for Q1 – Q3 of 2022 4
Management’s Review Q1 - Q3 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
Table of Contents
Quarterly Report
Q1 – Q3 2022
Management’s Review
2
Overview of the first three quarters
Increasing business volume and continued market
turbulence
The BANK of Greenland's profit before tax is DKK 65.2 million
at the end of September 2022, compared to DKK 114.4 million
for the same period of 2021. The profit before value
adjustments and write-downs is satisfactory at DKK 113.9
million, compared to DKK 108.3 million for the previous year.
Lending has increased by DKK 317.4 million since the end of
2021, amounting to DKK 4,101 million at the end of Q3 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 262.6 million from DKK 1,781 million at the end of 2021
to DKK 2,044 million at 30 September 2022.
Net interest and fee income amount to DKK 255.2 million for
the first three quarters of 2022, compared to DKK 249.1
million for the same period of 2021. This reflects volume
increases and mix changes in the lending structure, and an
increase resulting from such factors as an improvement in fees
and commission from the pension and investment area.
Total expenses including depreciation amount to DKK 145.8
million at the end of Q3 2022, compared to DKK 144.8 million
for the same period of 2021.
The increase in interest rates and the general market turmoil
meant that value adjustments at the end of September 2022
resulted in a capital loss of DKK 45.7 million, compared to a
capital gain of DKK 7.7 million for the same period in 2021.
The Bank’s sector shareholdings and currency area developed
positively in the first three quarters of 2022, while the Bank's
bond holdings generated capital losses.
Write-downs on loans and guarantees amount to a modest
DKK 3.0 million at 30 September 2022. The Bank sees
continued satisfactory creditworthiness in the loan portfolio.
Uncertainty primarily concerns increasing inflation and resulting
interest rate increases, as well as geopolitical uncertainty. So far
without any significant effect in Greenland, although the Bank
has allocated a supplement of DKK 30.0 million to counter risks
derived from increasing inflation and interest rates, and poorer
economic outlook, and the overall management supplement to
write-downs has thereby been increased.
In a stock exchange announcement dated 19 October 2022,
the Bank reduced its expectations of the profit for the year
before tax to DKK 90-120 million from the previously
estimated interval of DKK 120-140 million in the Annual
Report for 2021. The adjusted expectations are maintained.
Management’s Review
The profit after tax gives a return of 7.2% p.a. on opening equity after disbursement of dividend.
Lending and guarantees increased by a total of DKK 580 million to DKK 6.145 billion.
Deposits increased to DKK 5.8 billion.
Core earnings per krone in costs of 1.78 at 30 September 2022, compared to 1.75 at 30 September
2021.
Write-downs and provisions of 0.05% for the period.
Capital ratio of 22.7 and core capital ratio of 22.2, with an individual capital requirement of 10.7%
Quarterly Report
Q1 – Q3 2022
Management’s Review
3
Quarterly Report
Q1 – Q3 2022
Management’s Review
4
Financial Highlights for Q1 – Q3 of 2022
Q1 - Q3
Q1 - Q3
Full year
Q1 - Q3
Q1 - Q3
Q1 - Q3
2022
2021
2021
2020
2019
2018
255,178
249,061
338,933
239,671
240,099 233,129
-45,672
7,716
11,219
-4,691
9,823
503
4,563
3,942
6,185
3,343
4,280
4,134
138,304
137,545
186,385
126,964
124,789 115,426
5,488
5,214
7,014
5,213
5,023
5,101
2,036
1,992
2,497
1,746
1,852
1,216
-downs on loans and receivables, etc. 3,040
1,570
1,537
10,394
6,615 9,115
65,201
114,398
158,904
94,006
115,923
106,908
-747
18,377
26,072
24,898
19,666 16,800
65,948
96,021
132,832
69,108
96,257
90,108
4,101,071
3,814,849
3,783,681
3,734,998
3,693,537 3,460,949
5,786,992
5,634,605
5,363,871
5,909,284
5,629,837 4,935,056
1,264,404
1,230,319
1,267,911
1,149,052
1,043,379 984,177
7,752,312
7,352,102
7,226,988
7,447,672
6,986,261 6,158,154
2,044,097
1,937,514
1,781,465
1,585,426
1,403,000 1,222,946
22.7
22.7
24.4
23.0
22.3 21.8
22.2
22.7
24.4
23.0
22.3 21.8
5.1
9.5
13.0
8.4
11.4 11.3
5.2
8.0
10.9
6.2
9.5 9.4
1.4
1.8
1.8
1.7
1.8 1.8
0.9
1.3
1.8
0.9
1.4 1.5
1.3
1.4
1.2
1.1
2.4 2.3
0.6
0.9
0.8
0.6
0.4 0.8
230.9
273.4
238.6
243.1
153.8 351.4
-downs as a ratio of deposits 69.0
64.4
69.1
63.9
67.2 73.3
3.2
3.1
3.0
3.3
3.5 3.5
8.4
-4.8
-5.6
-0.7
6.4 4.3
167.5
161.3
156.7
168.4
173.3 165.8
-down ratio for the period 0.1
0.0
0.0
0.2
0.1 0.2
-down ratio 3.0
3.2
3.2
3.3
3.4 3.5
36.6
53.3
73.8
38.4
53.5 50.1
702
684
704
638
580 547
0.8
0.9
0.8
0.9
0.9 1.1
Quarterly Report
Q1 – Q3 2022
Management’s Review
5
Management’s Review Q1 - Q3 2022
Statement of income
At TDKK 175,800, compared to TDKK 172,289 for the first
three quarters of 2021, net interest income increased by 2%.
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 in
2022. Interest rate increases in the money markets in Q3
improved the return on the Bank’s surplus liquidity. The
interest rate increases will also improve the Bank’s lending rates
going forward.
At the end of Q3, the Bank phased out negative deposit
interest rates for private customers, and reduced negative
deposit interest rates for business customers.
Fee and commission income increased by TDKK 1,565
compared to the same period of 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
increased overall by TDKK 6,117 to TDKK 255,178 in the first
nine months of 2022.
Other operating income amounts to TDKK 4,563, which is an
increase of TDKK 621 from Q3 2021. To some extent, this
reflects timing differences, and moreover the Bank realised non-
recurring income from the sale of property, plant and
equipment.
Staff and administration expenses are TDKK 759 higher than at
30 September 2021, amounting to TDKK 138,304. Despite
slightly fewer employees, staff costs are marginally higher than
for the same period last year, which is primarily due to
adjustment of collective agreements. Administration expenses
are at the level of the same period of 2021.
Other operating expenses, which concern operation and
maintenance of the Bank’s buildings and contributions to the
Resolution Fund, are at the same level as at 30 September
2021.
Depreciation of tangible assets is TDKK 274 higher than in the
first three quarters of 2021, amounting to TDKK 5,488.
The profit before value adjustments and write-downs is a
satisfactory TDKK 113,913 at 30 September 2022, compared
to TDKK 108,252 for the same period of 2021.
Value adjustments present a total capital loss of TDKK 45,672,
compared to a capital gain of TDKK 7,716 for the same period
in 2021. The Bank’s holdings of sector equities and the
currency area performed favourably during the period. 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 the first three quarters of 2022.
Impairment of loans, etc. amounts to TDKK 3,040, compared
to TDKK 1,537 for the same period in 2021. Covid-19 and an
uncertain geopolitical situation have presented problems for the
supply of goods, increasing inflation and consequentially rising
interest rates. In Greenland, the effect so far is limited. 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 allocated a supplement of DKK
30.0 million to counter risks derived from rising inflation and
interest rates, and a poorer economic outlook. The total
management supplements have thereby increased by DKK 10.7
million to DKK 49.1 million in 2022.
The profit before tax is TDKK 65,201, and is thereby TDKK
49,197 lower than for the same period in 2021.
Financial highlights and key figures
DKK 1,000
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
2022
2022
2021
2021
2021
2021
2020
2020
Net interest and fee income
87,370
82,061 85,747
89.871
80,914
82,053
86,095 84,305
Costs, depreciation and
amortisation
48,059
48,572 49,197
51,145
46,436
49,048
49,269 51,833
Other operating income
1,514
1,414
1,635
2,244
1,762
1,040
1,139
2,026
Profit before value adjustments
and write-downs
40,825
34,903
38,185
40,970
36,242
34,045
37,965
34,498
Value adjustments
-20,477
-14,528
-10,667
3,503
2,601
1,988
3,127
4,828
Write
-downs on loans, etc. 928
1,394 718
-33
-761
1,409
922 2,434
Profit before tax
19,420
18,981
26,800
44,506
39,604
34,624
40,170
36,892
Quarterly Report
Q1 – Q3 2022
Management’s Review
6
Development during the quarter
Net interest and fee income amounted to TDKK 85,747 in Q1,
to TDKK 82,061 in Q2 and to TDKK 87,370 in Q3. The
difference between Q1 and Q2 is primarily due to periodically
higher fee and commission income in Q1 compared to Q2. In
Q3, the aforementioned interest rate increases are the reason
for the positive development in both the Bank’s liquidity
positions and bond yields.
Total costs in Q1 amounted to TDKK 49,197, and in Q2 to
TDKK 48,572. In Q3, the item amounted to TDKK 48,059.
Staff expenses decreased in Q2, since in Q1 holiday allowance,
etc. is paid, but is not paid in the subsequent quarters. In Q3,
the number of employees is lower than in the previous
quarters. Other administrative expenses were at the same level
in Q1 and Q2, but decreased in Q3.
The profit before value adjustments and write-downs
amounted to TDKK 34,903 in Q2, which is TDKK 3,282 lower
than in Q1 2022. From Q2 to Q3, the profit before value
adjustments and write-downs increased by TDKK 5,922 to
TDKK 40,825. The profit before tax in Q1 amounted to TDKK
26,800, in Q2 to TDKK 18,981 and in Q3 to TDKK 19,420.
Lending increased by TDKK 121,143 in Q1 and by TDKK
104,717 in Q2. In Q3, lending increased by TDKK 91,530,
which overall corresponds to an increase of 8.4% 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 Q3, deposits increased by TDKK
113,668. In overall terms, the increase in deposits from the end
of 2021 thus amounts to TDKK 423,121.
Balance sheet and equity
During the first three quarters the Bank’s lending saw a
satisfactory increase of TDKK 317,390 to TDKK 4,101,071,
while the Bank’s guarantees to customers increased by TDKK
262,632 from the end of 2021 and amounted to TDKK
2,044,097 at the end of September 2022.
The Bank reduced its holdings of listed shares and funds during
2022, and at the end of the quarter shares, mainly comprising
sector equities, totalled TDKK 118,444.
Other assets amount to TDKK 118,361, having increased by
TDKK 24,563 from the end of 2021. This is primarily due to
adjustment of the Bank’s capital contributions to BEC.
The Bank’s deposits, predominantly comprising on-demand
deposits, amounted to TDKK 5,786,992 at the end of
September 2022, which is an increase of 7.9% 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 1,264,404.
Total assets thereby increased by TDKK 525,324 to TDKK
7,752,312.
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.
Quarterly Report
Q1 – Q3 2022
Management’s Review
7
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. In addition, in September 2022 an additional DKK
25 million was issued as Senior-Non-Preferred, as well as DKK
25 million in supplementary Tier 2 capital.
Capital requirement
Q3 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 requirement
17.23%
14.7%
Capital base, cf. Note 19
1,223,641
1,201,358
SNP issue
74,528
49,642
MREL capital base
1,298,169
1,251,000
MREL capital ratio
24.04%
25.40%
Surplus capital cover
6.81%
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 core capital ratio was 22.2 at the end of the first
half of 2022, and the capital ratio was 22.7.
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.
If the result for the first nine months of 2022 is recognised, the
capital ratio can be calculated at 23.6%.
As at the end of September 2022, the Bank's individual
solvency requirement was calculated at 10.7%. The BANK of
Greenland thereby has surplus capital cover before the buffer
requirement of 12.0%, or TDKK 648,241. After deductions for
the capital reserve buffer requirement of 2.5% and the SIFI
buffer requirement of 1.5%, the surplus cover is 8.0%.
Quarterly Report
Q1 – Q3 2022
Management’s Review
8
The BANK of Greenland’s individual solvency requirement determined according to the 8+ model
Q1 - Q3 2022
Year 2021
Capital
requirement
Solvency
requirement
Capital
requirement
Solvency
requirement
Pillar I
requirement 431,594
8.0
393,339
8.0
Credit risk
97,605
1.8
98,663
2.0
Market risk
21,859
0.4
21,910
0.4
Operational risk
15,990
0.3
10,117
0.2
Other risk
8,352
0.2
4,046
0.1
Capital and solvency requirement
575,400
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/
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
230.9% 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 53% points of the sum
of large exposures.
The exposure to property amounts to 23.3%. 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. The price of
the BANK of Greenland’s share is by and large unchanged at
595 at 30 September 2022, compared to 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
Sum of large exposures
(maximum 175% of actual core capital)
The BANK of Greenland 167.5 %
Growth in lending
(less than 20% per annum)
The BANK of Greenland 7.5%
Liquidity benchmark
(greater than 100%)
The BANK of Greenland 233.1%
Property exposure
(less than 25% of total loans and
guarantees)
The BANK of Greenland 23.3%
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 – Q3 2022
Management’s Review
9
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.
Outlook for the remainder of 2022
The BANK of Greenland expects continued economic growth
in 2022.
Lending developed positively in 2022. A flatter development
curve is expected in the last quarter of 2022. Deposits are
expected to be at the level of 30 September 2022, or
marginally lower.
Inflation development and the ongoing war in Ukraine have so
far had only a limited impact on Greenland. Total core income
is expected to be higher than in 2021 as a consequence of the
most recent quarter’s interest rate development. 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. However,
in the fourth quarter, an increased holiday pay obligation will be
recognised as an extraordinary expense, as a result of a
changed calculation method. 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.
In the market area, there is still considerable uncertainty
concerning the development in interest rates and thereby the
performance of the Bank’s bond portfolio. Capital gains are also
expected from the currency area and sector equities.
In the stock exchange announcement of 19 October 2022, the
Bank reduced its expectations of the profit for the year before
tax to DKK 90-120 million, which is maintained.
Quarterly Report
Q1 – Q3 2022
Management Statement
10
The Board of Directors and Executive Management have today
considered and approved the quarterly report for the period 1
January - 30 September 2022 for the 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 30
September 2022, and of the result of the Bank's activities for
the first three quarters 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, 2 November 2022
Executive
Management
Martin Birkmose Kviesgaard
Board of Directors
Gunnar í 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 – Q3 2022
Management Statement
11
Quarterly Report Q1 – Q3 2022
Income Statement and Statement of Comprehensive Income
12
Income Statement and Statement of Comprehensive
Income
DKK 1,000
Notes
Q1 - Q3 2022
Full year 2021
Q1 - Q3 2021
3
Interest
income 160,638
223,790
165,537
4
Negative interest income
-5,465
-13,033
-9,661
5
Interest expenses
1,010
1,019
808
6
Positive interest expenses
21,637
24,383
17,222
Net interest income
175,800
234,121
172,289
Share dividend, etc.
1,822
913
913
7
Fees and commission income
77,852
104,794
76,287
Fees paid and commission expenses
296
895
428
Net interest and fee income
255,178
338,933
249,061
8
Value adjustments
-45,672
11,219
7,716
Other operating income
4,563
6,185
3,942
9
Staff and administration expenses
138,304
186,385
137,545
Depreciation and impairment of tangible assets
5,488
7,014
5,214
Other operating expenses
2,036
2,497
1,992
17
Write
-downs on loans and receivables, etc. 3,040
1,537
1,570
Profit before tax
65,201
158,904
114,398
10
Tax
-747
26,072
18,377
Profit for the period
65,948
132,832
96,021
COMPREHENSIVE INCOME
Profit for the period
65,948
132,832
96,021
Other comprehensive income:
Value adjustment of properties
3,393
4,346
3,240
Value adjustment of defined-benefit severance/pension scheme
0
-32
0
Tax on value adjustment of properties
-848
-1,152
-859
Other comprehensive income
2,545
3,162
2,381
Comprehensive income for the period
68,493
135,994
98,402
Quarterly Report Q1 – Q3 2022
Balance Sheet
13
Balance Sheet
DKK 1,000
Notes
Assets
30 Sep 22
31 December
2021
30 June 2021
Cash balance and demand deposits with central banks
1,232,568
1,434,027
1,516,828
11
Receivables from credit institutions and central banks
352,114
57,293
263,909
17
Loans and other receivables at amortised cost
4,101,071
3,783,681
3,814,849
12
Bonds at fair value
1,150,641
1,100,975
1,002,138
Shares, etc.
118,444
138,902
135,791
13
Assets connected to pool schemes
417,404
360,537
285,756
Land and buildings in total, domicile properties
250,530
247,292
237,952
Other tangible assets
5,925
6,652
6,471
Other assets
118,361
93,798
83,842
Accruals and deferred income
5,254
3,831
4,566
Total assets
7,752,312
7,226,988
7,352,102
Liabilities
Liabilities to credit institutions and central banks
16,699
13,145
14,015
14
Deposits and other liabilities
5,786,992
5,363,871
5,634,605
Deposits in pool schemes
417,404
360,537
285,756
15
Issued
bonds at amortised cost 74,528
49,642
0
Current tax liabilities
39,439
22,615
52,695
Other liabilities
54,380
53,911
60,064
Prepayments and deferred expenses
4,183
7,499
2,578
Total debt
6,393,625
5,871,220
6,049,713
Provisions for pensions and similar obligations
1,903
1,705
1,587
Provisions for deferred tax
51,174
68,326
53,061
Provisions for losses on guarantees
7,842
7,673
7,472
Other provisions
5,006
5,351
5,167
Provisions for losses on non-utilised credit facilities
3,666
4,802
4,783
Total provisions
69,591
87,857
72,070
16
Subordinated debt
24,692
0
0
Total subordinated debt
24,692
0
0
Equity
17
Share capital
180,000
180,000
180,000
Revaluation reserves
40,173
37,628
37,130
Retained earnings
1,044,231
978,283
1,013,189
Proposed dividend
0
72,000
0
Total equity
1,264,404
1,267,911
1,230,319
Total liabilities
7,752,312
7,226,988
7,352,102
1
Accounting policies applied
2
Accounting
estimates
19
Contingent liabilities
20
Capital conditions and solvency
Quarterly Report Q1 – Q3 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
-45,000
Other comprehensive income
2,381
2,381
Profit for the period
96,021
96,021
Equity, 30 September 2021
180,000
37,130
1,013,189
0
1,230,319
Other
comprehensive income
498 283
781
Profit for the period
-35,189
72,000
36,811
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
2,545
2,545
Profit for the period
65,948
65,948
Equity, 30 September 2022
180,000
40,173 1,044,231
0
1,264,404
Quarterly Report Q1 – Q3 2022
Statement of Changes in Equity
15
Quarterly Report Q1 – Q3 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 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 20
18. Loans 20
19. Contingent liabilities 24
20. Capital conditions and solvency 24
Overview of Notes
Quarterly Report Q1 – Q3 2022
Notes to the Quarterly Report
17
The Interim Report has been prepared in accordance with the
Danish Financial Business Act, the statutory order for 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
• commissions.
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 bond for tax-free savings accounts.
Notes to the Quarterly Report
1.
Accounting policies applied, etc.
2.
Significant accounting estimates
Quarterly Report Q1 – Q3 2022
Notes to the Quarterly Report
18
DKK 1,000
Q1 -
Q3
2022
Full year
2021
Q1 -
Q3
2021
3. Interest income
Lending and other receivables
156,007
220,044
162,913
Bonds
4,631
3,746
2,624
Total interest income
160,638
223,790
165,537
4. Negative interest income
Receivables from credit institutions and central banks
-4,675
-11,008
-7,937
Foreign exchange, interest rate, equity, commodities and other contracts, as
well as
derivative financial instruments
-790
-2,025
-1,724
Total negative interest
-5,465
-13,033
-9,661
5. Interest expenses
Credit institutions and central banks
0
6
6
Deposits and other liabilities
1,010
988
802
Issued bonds
0
25
0
Total interest expenses
1,010
1,019
808
6. Positive interest expenses
Credit institutions and central banks
11
0
0
Deposits and other liabilities
21,626
24,383
17,222
Total positive interest expenses
21,637
24,383
17,222
7. Fees and commission income
Securities and securities accounts
3,062
6,359
2,301
Payment settlement
28,372
39,654
29,783
Loan transaction fees
3,829
5,817
3,987
Guarantee commission
24,070
30,718
22,485
Other fees and commission
18,519
22,246
17,731
Total fee and commission income
77,852
104,794
76,287
8. Value adjustments
Lending at fair value
-7,651
-6,670
-2,762
Bonds
-52,849
-6,473
-5,446
Shares
2,762
12,922
9,811
Currency
4,286
4,519
3,253
Foreign exchange, interest rate, equity, commodity and other contracts, as
well as derivative financial instruments
7,780
6,921
2,860
Total value adjustments
-45,672
11,219
7,716
Quarterly Report Q1 – Q3 2022
Notes to the Quarterly Report
19
DKK 1,000
Q1 -
Q3
2022
Full year
2021
Q1 -
Q3
2021
9. Staff and administration expenses
Staff expenses
Salaries 61,965
83,188
61,490
Other staff expenses 1,886
2,302
1,613
Pensions 8,117
10,535
7,856
Social security expenses 264
535
629
In total 72,232
96,560
71,588
Other
administration expenses 66,072
89,825
65,957
Average number of FTEs
136.3
137.7
137.2
Of which salaries and remuneration to the Board of Directors and the
Executive Management
4,346
5,583
4,180
Five other employees (Q3 2021: four employees) whose activities have a
significant influence on the Bank’s risk profile:
Salaries and pensions, including free car and other benefits
4,422
5,603
3,635
10. Tax
25% of the profit before tax
16,300
39,726
28,600
Discount for dividend tax paid
-429
-217
-217
6%
-supplement 952
2,370
1,702
Total tax on
ordinary profit 16,823
41,879
30,085
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
-748
26,072
18,377
Deferred tax
1,928
3,046
859
Taxation value of dividend paid
-19,080
0
-11,925
Tax to be paid
16,404
23,026
29,443
No company tax was paid
during the period.
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 352,114
57,293
263,909
Total amounts receivable
352,114
57,293
263,909
12. Bonds
Of the bond portfolio, a nominal amount of TDKK 50,000 is pledged as collateral for accounts
with Danmarks Nationalbank.
Quarterly Report Q1 – Q3 2022
Notes to the Quarterly Report
20
DKK 1,000
Q1 -
Q3
2022
Full year
2021
Q1 -
Q3
2021
13. Assets connected to pool schemes
Investment associations
417,318
359,866
285,611
Non
-invested funds 86
671
145
Total
417,404
360,537
285,756
14. Deposits
On demand
5,209,531
4,826,448
5,018,464
On terms of notice
284,110
294,802
375,608
Time deposits
40,000
0
0
Special deposit conditions
253,351
242,621
240,533
Total deposits
5,786,992
5,363,871
5,634,605
15. Issued bonds at amortised cost
Bond issue
74,528
49,642
0
Total
74,528
49,642
0
Loans are raised as Senior Non
-Preferred:
-
DKK 50 million raised on 27/10/2021 and falling due for full redemption on
27/10/2026. The Bank has the option of early redemption as from
27/10/2025.
-
DKK 25 million raised on 2/9/2022 and falling due for full redemption on
2/9/2027. The Bank has the
option of early redemption as from 2/9/2026.
16. Subordinated debt
Supplementary capital Tier 2:
Capital certificate, fixed rate 6,197%
24,692
0
0
Total
24,692
0
0
Subordinated debt included in the capital base
24,692
0
0
Loan was raised on 2/9/2022 and falls due for full redemption on 2/9/2032.
The Bank has the option of early redemption as from 2/9/2027.
17. Share capital
Share capital consists of 1,800,000 shares of DKK 100.
Own shares
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 year 10,252
29,455
20,260
Reversal of write
-downs concerning redeemed facilities -14,714
-25,917
-21,329
Net write
-downs during the period as a consequence of changes in the
credit risk
8,951
-723
3,792
Losses without preceding write
-downs 547
647
393
Received for claims previously written off
-1,996
-1,925
-1,546
Recognised in the statement of income
3,040
1,537
1,570
Quarterly Report Q1 – Q3 2022
Notes to the Quarterly Report
21
DKK 1,000
Stage 1 Stage 2
Stage 3
Total
Write-downs on loans
30.09.2022
Start of the period
21,314 67,951
85,104
174,369
New write
-downs concerning new facilities during the
year
3,605 4,091
1,591
9,287
Reversal of write
-downs concerning redeemed facilities -1,636 -2,561
-9,881
-14,078
Change in write
-downs at the beginning of the year –
transfer to stage 1
16,157
-12,469
-3,688
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-1,407
6,948
-5,541
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-28
-3,253
3,281
0
Net write
-downs as a consequence of changes in the
credit risk
-23,062
18,477
14,831
10,246
Previously written down, now finally lost
-3,191
-3,191
Interest on written
-down facilities
3,159
3,159
Write
-downs in total 14,943 79,184
85,665
179,792
Write-downs on guarantees
30.09.2022
Start of the period
744 2,071
4,858
7,673
New write
-downs concerning new facilities during the
year
545 279
0
825
Reversal of write
-downs concerning redeemed facilities -1 -24
-49
-74
Change in write
-downs at the beginning of the year –
transfer to stage 1
1,449 -1,367
-82
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-55 1,116
-1,061
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-3 -42
45
0
Net write
-downs as a consequence of changes in the
credit risk
-1,312 -1,450
2,180
-582
Write
-downs in total 1,368 583
5,891
7,842
Write-downs on non-utilised drawing rights
30.09.2022
Start of the period
1,203 1,037
2,561
4,801
New write
-downs concerning new facilities during the
year
33 72
35
140
Reversal of write
-downs concerning redeemed facilities -167 -164
-231
-562
Change in write
-downs at the beginning of the year –
transfer to stage 1
451
-451
0
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-24
684
-660
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
-740
-906
933
-713
Write
-downs in total 755 272
2,639
3,666
Quarterly Report Q1 – Q3 2022
Notes to the Quarterly Report
22
DKK 1,000
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 – Q3 2022
Notes to the Quarterly Report
23
DKK 1,000
Stage 1 Stage 2
Stage 3
Total
Write-downs on loans
30.09.2021
Start of the
period 14,202 71,617
86,174
171,993
New write
-downs concerning new facilities during the
year
2,952 9,503
5,626
18,081
Reversal of write
-downs concerning redeemed facilities -1,689 -10,722
-6,789
-19,200
Change in write
-downs at the beginning of the year –
transfer to stage 1
19,270
-11,577
-7,693
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-1,696
3,162
-1,466
0
Change in write
-downs at the beginning of the year –
transfer to stage 3
-28
-1,024
1,052
0
Net write
-downs as a consequence of changes in the
credit risk
-19,082
13,142
12,714
6,774
Previously written down, now finally lost
-1,913
-1,913
Interest on written
-down facilities
3,064
3,064
Write
-downs in total 13,929 74,101
90,769
178,799
Write-downs on guarantees
30.09.2021
Start of the period
554 655
8,681
9,890
New write
-downs concerning new facilities during the
year
357 390
1,174
1,921
Reversal of write
-downs concerning redeemed facilities -4 -4
-125
-133
Change in write
-downs at the beginning of the year –
transfer to stage 1
402 -198
-204
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-42 4,042
-4,000
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
-570 -2,057
-1,579
-4,206
Write
-downs in total 695 2,826
3,951
7,472
Write-downs on non-utilised drawing rights
30.09.2021
Start of the period
746 239
4,312
5,297
New write
-downs concerning new facilities during the
year
15 231
12
258
Reversal of write
-downs concerning redeemed facilities -230 -48
-1,718
-1,996
Change in write
-downs at the beginning of the year –
transfer to stage 1
108
-78
-30
0
Change in write
-downs at the beginning of the year –
transfer to stage 2
-2
25
-23
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
-190
490
924
1,224
Write
-downs in total 447 845
3,491
4,783
Quarterly Report Q1 – Q3 2022
Notes to the Quarterly Report
24
DKK 1,000
Q1 -
Q3
2022
Full year
2021
Q1 -
Q3
2021
19. Contingent liabilities
Mortgage finance guarantees
999,100
942,401
1,121,493
Registration and remortgaging guarantees
340,221
306,503
248,506
Other guarantees
704,776
532,561
567,515
Guarantees, etc. in total
2,044,097
1,781,465
1,937,514
Provision balance for guarantees
7,842
9,890
7,472
Provision balance for non
-utilised credit facilities 3,666
5,297
4,783
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.
20. Capital conditions and solvency
Credit risk
4,487,750
4,070,758
4,211,475
CVA risk
21,254
1,720
738
Market risk
251,326
204,615
166,978
Operational risk
639,644
639,644
615,611
Total risk exposure
5,399,974
4,916,737
4,994,802
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 -10,710
-10,764
-10,800
Deductions for prudent valuation
-1,526
-1,490
-1,382
Deductions for Non
-Performing Exposures -2,726
-1,379
-131
Actual core capital
1,198,949
1,201,358
1,131,529
Supplementary capital
24,692
0
0
Capital base
1,223,641
1,201,358
1,131,529
Capital ratio
22.7
24.4
22.7
Actual core capital ratio
22.2
24.4
22.7
Statutory capital ratio requirements
8.0
8.0
8.0
Quarterly Report Q1 – Q3 2022
Notes to the Quarterly Report
25