Commissioned research: Solid as a rock
In recent years, BankNordik has benefited from a strong Faroese economy with high economic growth. This has supported both lending growth and asset quality. Since 2016, the bank has also turned its focus towards the core businesses. This has led to the divestment of Icelandic insurer Vørður and the decision to end corporate banking activities in Denmark. Both initiatives released capital and strengthened the bank’s capital ratios. BankNordik currently has a CET1 ratio of 16.3% excluding YTD profit and targets a 2020 CET1 ratio of 17%. We estimate a 2020 CET1 ratio of 18.8%, as we find it likely that BankNordik will hold additional capital in the coming years, owing to uncertainty about future MREL requirements. We arrive at a fair value range of DKK 98-117 in our base case, depending on the cost of equity applied and the level of normalised loan losses.
Marketing material commissioned by BankNordik
To learn more on Commissioned Research, please click here
The information provided within this website is intended for background information only. The views and other information provided herein are the current views of Nordea Markets as of the date of publication and are subject to change without notice. The information provided within this website is not an exhaustive description of the described product or the risks related to it, and it should not be relied on as such, nor is it a substitute for the judgement of the recipient.
The information provided within this website is not intended to constitute and does not constitute investment advice nor is the information intended as an offer or solicitation for the purchase or sale of any financial instrument. The information provided within this website has no regard to the specific investment objectives, the financial situation or particular needs of any particular recipient. Relevant and specific professional advice should always be obtained before making any investment or credit decision. It is important to note that past performance is not indicative of future results.
Nordea Markets is not and does not purport to be an adviser as to legal, taxation, accounting or regulatory matters in any jurisdiction.
The information provided within this website may not be reproduced, distributed or published for any purpose without the prior written consent from Nordea Markets.