Føroya Banki (FOBANK) Q3 2025 earnings summary

Executive summary

• Q3 2025 profit before tax was DKK 80m, slightly above original guidance, driven by strong customer activity and positive momentum across business areas; credit quality improved, reflected in a reversal of impairment charges.

• Net profit guidance for 2025 remains at DKK 235–265m.

• Continued growth in deposit volumes and a slight decline in lending volumes quarter-over-quarter.

• Strong capital and liquidity positions maintained.

Financial highlights

• Net interest income for Q1–Q3 2025 was DKK 293.7m, down 13% YoY; Q3 net interest income down DKK 7.2m QoQ and DKK 31.3m YoY due to lower rates and higher funding costs.

• Fee and commission income up DKK 1.9m QoQ and DKK 5.8m YoY, with net fee and commission income for Q1–Q3 up 10% to DKK 63.9m.

• Net insurance income rose, with premiums up 4.7% YoY and profit before tax for insurance up 63% YoY; Q3 net insurance result increased 18% YoY to DKK 47.5m.

• Operating costs increased 7.3% QoQ and 4.1% YoY, mainly from IT and staff costs.

• Net profit for Q1–Q3 2025 was DKK 217.7m, down from DKK 238.1m YoY.

Outlook and guidance

• Net profit guidance for 2025 remains at DKK 235–265m, reflecting strong insurance results, business growth, and robust credit quality.

• Return on equity expected between 10.4% and 11.9%.

• Expectation of further increase in demand for mortgage-broking services as interest rates have fallen.

• Full impact of recent interest rate decreases expected in the coming quarter, likely improving customer credit quality.

• Guidance subject to uncertainties including interest rates, impairments, market value adjustments, and macroeconomic factors.