Føroya Banki (FOBANK) Q2 2025 earnings summary

Executive summary

• H1 2025 saw increased activity and satisfactory results, with growth in lending, deposits, and mortgage credit volumes, and extraordinary income boosting net profit.

• Net profit guidance for 2025 was raised to DKK 235-265m, up from DKK 210-240m, reflecting strong insurance results, low impairments, and one-off gains.

• H1 2025 pre-tax profit reached DKK 190m, up 8% year-over-year, exceeding expectations due to strong insurance, increased lending, and one-off gains.

• The bank maintains strong liquidity and capital positions, with continued focus on operational efficiency and cost control.

• Operating income rose, costs and impairment charges were lower than estimated, and credit quality remained robust.

Financial highlights

• Total operating income for H1 2025 rose to DKK 279m, up 5% year-over-year; net interest income fell to DKK 160m from DKK 182m.

• Net insurance income surged 58% year-over-year to DKK 42m, while other operating income increased 74% to DKK 37m.

• Profit before tax for H1 2025 was DKK 190m, up 8% year-over-year.

• Cost/income ratio improved to 41.8% from 44.6% year-over-year.

• Business volumes reached DKK 26.0bn at H1 2025, a 4.7% increase from year-end 2024.

Outlook and guidance

• Net profit guidance for 2025 was revised upward to DKK 235-265m, driven by strong insurance, business growth, low impairments, and extraordinary income.

• Return on equity expected between 10.4% and 11.9%; guidance subject to interest rate, impairment, and macroeconomic uncertainties.

• Continued growth in mortgage broking and investment activity is expected, especially in Greenland.