Føroya Banki: Q3 continuing trends from Q2 - Nordea

Q3 2024 profit before loan losses came in at DKK 66m, DKK 7m (10%) below our estimate. This was mainly due to fee income being DKK 3m below our estimate, driven by misses on securities trading and custody accounts, as well as credit transfers. NII was similarly DKK 2m below our estimate, as a result of limited lending growth. Net insurance income was in line with our estimate, while costs were DKK 1m higher than our estimate. Meanwhile, both loan losses and market value adjustments were significantly better than our estimate, hence Q3 2024 net profit ended at DKK 96m, DKK 7m (8%) better than our estimate. As expected, Q3 saw no dividend announcements. We estimate 2024 dividends of DKK ~400m (of which: DKK 200m as extraordinary dividends), reflecting Føroya Banki’s 2026 strategy target of lowering its CET1 ratio to ~23%. Finally, the CET1 ratio was 25.1%, in line with our estimate. The 2024 net profit guidance of DKK 275-300m was reiterated once more, but noted to be subject to slight uncertainty regarding impairment charges, market value adjustments and macroeconomic developments. We estimate DKK 290m.