Annual Report 2024
Letter to our stakeholders
2024 was generally a year of positive business trends for the
Føroya Banki Group. If we take a slightly broader perspective,
we also saw inflation being brought under control and interest
rates coming down following several years of rising interest
rates and high inflation.
Sustainability – adapting to new requirements
Operating an efficient, responsible and sustainable business
enables us to promote stability and make a positive impact on
the communities we are part of. In 2024, we continued our long-
standing efforts to become a more sustainable business and
help our customers make sustainable choices. During the year,
all our personal customer advisers received training in engaging
with customers on sustainability issues – a similar course to the
one our corporate customer advisers completed in 2023.
Solid financial performance
Our financial performance for the year showed sound core
operations, an improved profit before tax compared to 2023, and
a return on equity of close to 16%. The positive performance
was backed by growth in deposits and lending and increased
investment activity. Costs were kept in line with the original
guidance for the year, resulting in a cost/income ratio of 53%.
We reversed impairment charges for the eighth year running,
reflecting the sound credit quality of our customers.
In response to the upcoming stricter sustainability data
management and reporting requirements, we made the
necessary preparations in 2024 for reporting under the CSRD
effective from the 2025 financial year.
A digital milestone
We delivered a profit after tax of DKK 310m and at the general
meeting on 27 March we expect to recommend a dividend
distribution of DKK 350m (DKK 36.46 per share), of which DKK
133m is originating from a capital optimisation and DKK 217m
represents 70% of the net profit for 2024.
Continually improving customer experiences was a key focus of
our strategy work in 2024, so it was a milestone when, towards
the end of the year, we launched a feature making it possible for
customers to set up accounts directly in our online banking
solution in seconds. The event marked an important step on our
digital journey, as this technical solution has laid the groundwork
for the digitalisation of even more services that will enhance the
user experience on our digital platforms in the future.
New name and new strategy
Since the Danish business was sold in 2021, our focus has been
on providing outstanding services and advice to customers in
the Faroese and Greenlandic markets. As a step on our
transformation journey, we changed the Group’s name from
BankNordik to the original Føroya Banki in March, and in
November we adopted the locally rooted name of Bankivik for
the Greenlandic business.
High level of employee and customer satisfaction
In our annual customer satisfaction survey, we were pleased to
see positive development, particularly in the assessment of our
digital solutions. This is a clear indication that the work we are
doing to enhance our digital platforms fulfils a real need among
our customers.
In August, we announced a new strategy for the period leading
up to 2026, which is to maintain the Bank’s strong market
position in the Faroe Islands, to consolidate our position in the
Faroese insurance market and to become an even more
significant financial partner for customers in Greenland. Our
goal of sustainable growth during the strategy period will be
achieved through a targeted strategic focus on good, preferably
digital, customer experiences and profitability.
A high customer satisfaction score is not achieved through
digitalisation alone, however, and we are very aware of the
important role our employees play in gaining customer loyalty.
We are continually striving to ensure employee wellbeing and
development in our organisation, and we were therefore very
heartened by the sky-high wellbeing and loyalty scores in the
annual employee satisfaction survey.
Risk outlook marked by geopolitical uncertainty
The geopolitical situation in 2024 was strained as war, growing
tension and uncertainties led to increased focus on
cybersecurity and digital resilience, not least in the financial
sector. Global economic policy shifts may have a destabilising
effect on the markets we operate in. We must therefore be
prepared to navigate change and make sure that we have
sufficient insight and knowledge to be able to make considered
decisions.
Advising customers during times of uncertainty and change
requires skills and experience, and I have immense respect for
our incredibly talented employees. On that note, I would like to
thank each and every one of our employees for their exceptional
efforts in 2024. I would also like to thank all of our customers for
their great support, which we experience on a daily basis.
Turið F. Arge
Chief Executive Officer
In times of uncertainty, a sound capital structure is key, and our
robust capital position enables us to comply with the ever-
stricter capital requirements.
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