Føroya Banki P/F: Satisfactory first quarter performance

30.4.2026 08:00:01 CEST | Føroya Banki | Interim report (Q1 and Q3)

Announcement no. 6/2026

"Our performance for the first quarter was satisfactory with good momentum in the underlying business and a net profit of DKK 56m. The period was characterised by strong customer activity and deposit, lending and mortgage growth, resulting in an overall 3% increase in business volume. The core business generated income in line with expectations and on a par with the preceding quarter. However, returns on the investment portfolio were lower than expected due to financial market volatility. Costs were in line with the guided level, reflecting continued disciplined cost management. We note with satisfaction that our customers are financially robust with strong credit quality, and that we were consequently able to reverse impairment charges during the quarter. The outlook for the rest of the year is marked by persistent geopolitical tensions and expected rate hikes driven by growing inflation. At the same time, we expect the underlying business to continue its stable, positive development," says CEO Turið F. Arge.

Highlights of Føroya Banki's interim report for Q1 2026

DKKm	Q1 2026	Q1 2025	Index	Q1 2026	Q4 2025	Index	Q3 2025	Q2 2025	Q1 2025
Net interest income	78	76	102	78	79	99	77	84	76
Net fee and commission income	23	20	115	23	24	95	21	19	20
Net insurance income	16	16	105	16	20	82	14	27	16
Other operating income (less reclassification)	11	13	86	11	10	112	11	24	13
Operating income	128	125	103	128	132	97	123	154	125
Operating costs	72	69	104	72	70	103	73	68	69
Profit before impairment charges	56	56	101	56	63	90	50	86	56
Impairment charges, net	-1	5	-14	-1	-2	29	-9	2	5
Operating profit	57	51	112	57	65	87	58	84	51
Investment portfolio earnings	13	25	51	13	20	63	22	30	25
Profit before tax	70	76	92	70	85	82	80	115	76
Tax	14	15	94	14	15	94	17	21	15
Net profit	56	61	92	56	71	79	64	93	61
Loans and advances	9.774	9.270	105	9.774	9.670	101	9.598	9.695	9.270
Deposits and other debt	11.096	10.299	108	11.096	10.948	101	10.803	10.383	10.299
Mortgage credit	3.095	2.906	106	3.095	2.824	110	2.789	2.909	2.906
Equity	1.870	1.788	105	1.870	2.015	93	1.945	1.881	1.788
Total capital ratio, incl. MREL capital, %	40,2	36,0		40,2	36,3		36,6	35,9	36,0
CET 1 capital, %	25,5	23,5		25,5	23,3		23,1	22,7	23,5
ROE, %	11,5	12,6		11,5	14,3		13,3	20,3	12,6
Liquidity Coverage Ratio (LCR), %	322,4	261,1		322,4	306,4		294,5	259,7	261,1
Operating cost/income, %	56	55		56	53		59	44	55
Number of FTE, end of period	207	204	101	207	201	103	202	199	204

Business developments
Overall, the first quarter was characterised by business volume growth, reflected in a 1% increase in lending, a 1% increase in deposits and a 10% increase in mortgage activities compared to Q4 2025. Premium income from the Group's non-life insurance business grew by 4%, and investments were stable with an unchanged level of assets under management during the period. The total business volume grew by 3% during Q1 2026.

Capital ratios
At 31 March 2026, the Group's CET 1 capital ratio was 25.5%, against 23.5% at 31 December 2025. The total capital ratio including MREL was 40.2% at 31 March 2026, against 36.3% at 31 December 2025. At 1 January 2026, the Capital Requirements Regulation (CRR3) was implemented in the Faroe Islands. Its effect on REA was lower credit risk and lower operational risk. The above capital ratio developments were due to the implementation of CRR3. The net profit of DKK 56m for Q1 2026 is not included in the calculation of capital ratios.

Guidance for 2026
The Bank confirms the previously announced 2026 net profit guidance of DKK 195-235m.The guidance is subject to uncertainty related to developments in interest rates, returns on the investment portfolio, impairment charges, insurance performance and geopolitical factors.

Føroya Banki has banking activities in Greenland and the Faroe Islands and insurance activities in the Faroe Islands. Founded in the Faroe Islands 120 years ago, the Group has total assets of DKK 15.0bn and 207 employees. The Bank is subject to the supervision of the Danish Financial Supervisory Authority and is listed on Nasdaq Copenhagen.

Further details are available in the Q1 2026 interim report.

For further information, please call:
Rúna N. Rasmussen, Investor Relations, tel. [phone]