GrønlandsBANKEN A/S : Interim report first half of 2023

The BANK of Greenland	Notification to Nasdaq OMX Copenhagen
CVR no. 80050410	12/2023

Quarterly Report

First Half of 2023

Quarterly Report First Half of 2023

1

Contents

Management's Review	2
Interim Report in headlines	2
Financial highlights for the first half of 2023	4
Management's Review, first half of 2023	5
Statement by the Management	10
Income Statement and Statement of Comprehensive Income	12
Balance Sheet	13
Statement of Changes in Equity	14
Overview of Notes	16
Notes to the Interim Report	17

Quarterly Report First Half of 2023

Management's Review

2

Management's Review

Interim Report in headlines

Excellent first half-year for the Bank

The BANK of Greenland's profit before tax amounts to DKK

103.0 million for the first half of 2023, compared to DKK 45.8 million for the first half of 2022. The profit before value adjustments and write-downs is satisfactory at DKK 98.3 million, compared to DKK 73.1 million for the previous year.

Lending has increased by DKK 285 million since the end of 2022, amounting to DKK 4,639 million at the end of the first half of 2022. The economic development in Greenland continues to be favourable, with positive development in the Bank's lending. Guarantees decreased by DKK 104 million from DKK 1,934 million at the end of 2022 to DKK 1,830 million at the end of the first half of 2023.

Net interest and fee income increased by DKK 36.2 million to DKK 204 million in the first half of 2023 compared to the same period in 2022. The increase is primarily due to the record-high lending volume and the development in the level of interest rates in 2022 and 2023. Compared to the first half of 2022, total loans and guarantees increased by DKK 629 million up to the end of the first half of 2023.

Total expenses including depreciation amounted to DKK 108.7 million at the end of the first half of 2023, compared to DKK 97.8 million for the same period of 2022.

The increase concerns personnel expenses as a consequence of increases due to collective agreement-based adjustments and an increase in the number of employees, as well as other administrative expenses, where the increase can be attributed primarily to IT costs and a few larger one-off cost items.

At the end of the first half of 2023, value adjustments show a capital gain of DKK 11.0 million, compared to a capital loss of DKK 25.2 million for the same period of 2022. Th new interest rate trends resulted in positive development in the Bank's bond holdings. Similarly, the Bank's sector shareholdings also performed positively.

Impairments of loans and guarantees amounted to DKK 6.3 million in the first half of 2023, compared to DKK 2.1 million in the first half of 2022. The Bank sees continued satisfactory creditworthiness in the loan portfolio. In addition to the Bank's individual impairment models, a management supplement of DKK 38.2 million is allocated. In particular, the supplement accommodates the risks associated with increasing inflation and interest rates, and greater cyclical uncertainty.

In the announcement to the stock exchange of 21 July 2023, the forecast for the year's profit before tax was changed from a range of DKK 145-185 million to a range of DKK 170-210 million, which is still maintained.

The profit before tax gives a return of 15.9% p.a. on opening equity after disbursement of dividend.

Lending and guarantees increased by a total of DKK 181 million to DKK 6.469 billion.

Deposits increased to DKK 6.1 billion.

Basic earnings per cost in DKK of 1.90 in the first half of 2023, compared to 1.75 in the first half of 2022

Write-downs and provisions of 0.1% for the period.

Solvency ratio of 24.0 and a capital requirement of 11.3%.

Quarterly Report First Half of 2023

Management's Review

4

Financial highlights for the first half of 2023

	First half-	First half-		First half-	First half-	First half-
	year	year	Full year	year	year	year
	2023	2022	2022	2021	2020	2019
Net interest and fee income	203,990	167,808	351,485	168,148	161,110	160,316
Value adjustments	10,992	-25,195	-39,356	5,115	-7,330	2,593
Other operating income	3,005	3,049	6,588	2,179	2,221	2,878
Staff and administration expenses	102,828	92,437	195,056	93,229	85,566	86,341
Depreciation and impairment of tangible assets	4,035	3,636	7,320	3,486	3,449	3,367
Other operating expenses	1,866	1,696	2,706	1,602	1,416	1,889
Write-downs on loans and receivables, etc.	6,279	2,112	4,523	2,331	9,845	4,787
Profit before tax	102,979	45,781	109,112	74,794	55,725	69,403
Tax	16,746	-5,893	10,361	7,882	14,754	4,877
Profit for the period	86,233	51,674	98,751	66,912	40,971	64,526
Selected balance sheet items:
Lending	4,638,998	4,009,541	4,353,585	3,824,443	3,736,894	3,797,656
Deposits	6,062,091	5,673,324	5,942,479	5,879,878	6,016,314	5,593,007
Equity	1,370,904	1,249,277	1,318,592	1,200,414	1,120,137	1,010,990
Total assets	8,222,783	7,544,633	7,949,566	7,537,865	7,507,427	6,874,825
Contingent liabilities	1,830,345	1,972,396	1,934,125	1,914,893	1,521,275	1,300,697
Key figures:
Capital ratio	24.0	22.8	23.6	22.7	23.3	21.1
Core capital ratio	22.9	22.8	23.2	22.7	23.3	21.1
Return on equity before tax for the period	7.7	3.6	8.4	6.3	5.1	6.9
Return on equity after tax for the period	6.4	4.1	7.6	5.6	3.7	6.6
Income per cost krone	1.9	1.5	1.5	1.7	1.6	1.7
Rate of return	1.0	0.7	1.2	0.9	0.5	0.9
Interest risk rate	1.3	1.4	1.2	1.5	1.0	2.0
Foreign exchange position	0.3	0.3	0.5	0.9	0.7	0.3
Liquidity coverage ratio	217.2	207.9	220.5	259.6	183.7	165.3
Lending plus write-downs as a ratio of deposits	74.4	68.9	71.5	65.1	63.2	69.8
Lending as a ratio of equity	3.4	3.2	3.3	3.2	3.3	3.8
Growth in lending for the period	6.6	6.0	15.1	-4.5	-0.6	9.4
Sum of large exposures	166.5	164.0	167.3	163.1	167.6	172.2
Write-down ratio for the period	0.0	0.0	0.1	0.0	0.2	0.1
Accumalated write-down ratio	3.0	3.1	3.0	3.2	3.5	3.3
Profit per share after tax for the period	47.9	28.7	54.9	37.2	22.8	35.8
Net book value per share	761.6	694.0	732.6	666.9	622.3	561.7
Stock exchange quotation/net book value per share	0.8	0.9	0.8	0.9	0.8	1.0