Føroya Banki (FOBANK) investor relations material

Executive summary

• Business volumes grew by 3% quarter-over-quarter and 7% year-over-year, driven by increases in lending, deposits, and mortgage credit.

• Net profit for Q1 2026 was DKK 55.9m, reflecting satisfactory performance and strong customer activity.

• Operating income remained stable sequentially, with a slight decline due to lower insurance and investment returns.

• Insurance operations delivered strong results, with premiums up 7.1% and a combined ratio of 79.5%.

• Operating costs increased by 2.8% QoQ and 4.2% YoY, mainly due to higher IT expenses.

• Impairment charges were reversed by DKK 1m, reflecting strong credit quality, but management increased provisions by DKK 5m due to renewed uncertainty from rising oil prices and inflation.

Financial highlights

• Net interest income was DKK 94.3m, down 4% YoY; net fee and commission income rose 8% to DKK 22.8m; net insurance result increased to DKK 16m.

• Operating income was DKK 128m, DKK 5m lower than Q4 2025, mainly due to lower insurance income.

• Profit before tax was DKK 70m, up from DKK 56m in Q4 2025.

• Loans and advances grew 1% to DKK 9.8bn; deposits rose 1% to DKK 11.1bn; total assets reached DKK 15.0bn.

• Operating cost/income ratio was 56%, slightly above the 2026 target of 53%.

Outlook and guidance

• Lending and deposit growth expected to continue, supported by stable interest rates.

• 2026 guidance maintained: net profit expected in the DKK 195–235m range, return on equity between 10% and 12%.

• External funding costs anticipated to decline in Q2 after a temporary increase in Q1.

• Focus remains on operational efficiency and cost control.

• Outlook remains subject to uncertainties from interest rates, investment returns, impairments, insurance performance, and geopolitical factors.