Føroya Banki (FOBANK) Q1 2025 earnings summary

Executive summary

• Net profit after tax reached DKK 61m in Q1 2025, reflecting growth in customer numbers, deposits, lending, and mortgage credit, with income from interest, fees, and insurance slightly above expectations.

• Operating income remained strong despite a continued decrease in net interest income; costs remained stable and credit quality stayed strong.

• Lending volumes increased by 2% QoQ and 4% YoY; deposit volumes rose 3% QoQ and 15% YoY.

• Insurance operations saw improved results, with premiums up 3.3% and a combined ratio of 86.5%.

• The bank maintains a strong liquidity and capital position, with a CET1 ratio of 23.5% and LCR of 261.1%.

Financial highlights

• Net profit after tax for Q1 2025 was DKK 61m, up 11% year-over-year.

• Net interest income was DKK 98.2m, down 13% YoY; net fee and commission income DKK 21.2m; net insurance result DKK 10.7m, up 14% YoY.

• Total assets reached DKK 14.8bn, up DKK 0.3bn from year-end; deposits rose to DKK 10.3bn.

• Operating cost/income ratio was 55.1%, slightly above the 2026 target.

• Return on equity (RoE) after tax annualised at 12.6%.

Outlook and guidance

• 2025 net profit guidance maintained at DKK 210-240m, with RoE expected between 10.4% and 11.9%.

• Guidance subject to uncertainty from impairment charges, market value adjustments, and macroeconomic developments.

• Further increase in demand for mortgage broking services expected as interest rates are anticipated to fall.