Slides
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First half 2026 results Investor Presentation Føroya Banki
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Overview • Føroya Banki at a glance • Financials • Operating income • Insurance • Costs • Impairment charges • Capital ratios • Q2 Summary • The Faroese and Greenlandic economies • Appendices
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Føroya Banki at a glance Full-service bank with headquarters in the Faroe Islands • 1 branch in Greenland • 5 branches in the Faroe Islands Two active subsidiaries in the Faroe Islands • Trygd (non-life insurance) • Skyn (real estate broker) Moody’s rating: • A2 - long-term deposit rating • A3 – issuer rating (negative outlook) Leader in the Faroe Islands ~200 FTEs Challenger in Greenland Growth potential in the Faroese insurance market Presence in the North Atlantic region Total assets: DKK 15.4bn Faroe Islands: Loans: DKK 8,856m Deposits: DKK 9,515m Greenland: Loans: DKK 932m Deposits: DKK 1,898m Group figures: Loans: DKK 9,788m Deposits: DKK 11,413m Q2 2026 figures
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Financials
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Satisfactory results • Steady growth in total business volumes in Q2 2026, up by 2% compared to the previous quarter. • Increased activity in the investment sector, reflected in an 8% increase in AuM. • Total operating income in line with the previous quarter. • Cost/income ratio of 57.3% - a bit higher than the 2026 target, but a RoE after tax of 14.6% is within the target. • Low impairment charges of DKK 3m in Q2. • Increase in investment portfolio earnings due to rise in market rates. • At the end of H1 2026, the net profit for the Group was in the upper part of the guided range, but the guidance for the year is maintained at a net profit in the DKK 195-235m range. DKKm H1 2026 H1 2025 Index Q2 2026 Q1 2026 Index Net interest income 159 160 99 81 78 105 45 39 116 23 23 100 Net insurance income 28 42 65 11 16 68 Other operating income 24 37 65 13 11 115 Total operating income 256 279 92 128 128 100 Operating costs 145 137 106 73 72 102 111 142 78 55 56 97 2 7 35 3 -1 Operating profit 109 135 80 52 57 91 46 55 84 34 13 264 Profit before tax 155 190 81 85 70 122 Tax 30 36 82 16 14 114 Net profit 125 154 81 69 56 124 DKKbn Target 2026 H1 2026 H1 2025 Index Q2 2026 Q1 2026 Index Loans and advances 9.8 9.7 101 9.8 9.8 100 Deposits and other debt 11.4 10.4 110 11.4 11.1 103 Mortgage credit 3.0 2.9 104 3.0 3.1 97 Assets under management 2.4 2.2 109 2.4 2.2 108 Operating cost / income, % < 53.0 56.7 49.1 57.3 56.0 CET1 capital ratio, % 23.0 25.6 22.7 25.6 25.5 RoE after tax, % > 12.0 12.7 15.6 14.6 11.5 Key Metrics Profit before impairment charges Net impairment charges on loans Profit & Loss Net fee and commission income Investment portfolio earnings
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Stabilised interest rate level 77.6 81.3 4.1 2.4 0.9 0.9 0.0 2.9 60 65 70 75 80 85 90 Q1 2026 Lending volume Lending interest Deposit volume Deposit interest External funding Other Q2 2026 160.5 158.9 11.0 14.2 1.7 0.322.3 6.3 30 50 70 90 110 130 150 170 190 H1 2025 Lending volume Lending interest Deposit volume Deposit interest External funding Other H1 2026 YoY changes in net interest income QoQ changes in net interest income DKKm DKKm • Net interest income up by DKK 5% QoQ and down by DKK 1% YoY. • Deposit interest income reflects fluctuations in the use of high-yield deposit products. • Growth in lending volumes supports a stable level of interest income. • In response to the increase in market interest rates, the bank has announced an interest rate increase and anticipates a further increase later this year.
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Growth in business volumes 8.7 7.8 7.6 8.4 8.7 10.0 11.0 11.4 7.3 7.6 7.6 7.9 8.9 9.1 9.7 9.82.0 2.4 2.7 2.6 2.6 2.7 2.8 3.0 1.6 1.5 1.6 1.6 1.0 0.8 0.8 1.1 1.8 1.9 2.2 1.9 2.1 2.2 2.3 2.4 0 5 10 15 20 25 30 2019 2020 2021 2022 2023 2024 2025 H1 2026 Deposits Bank lending Mortgage lending Guarantees Assets under management 21.5 21.1 21.7 22.4 23.3 24.8 26.5 27.7 9.7 9.6 9.7 9.8 9.8 10.4 10.8 11.0 11.1 11.4 3 4 5 6 7 8 9 10 11 12 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Loans Deposits Loans and deposits DKKbn Business volumes DKKbn Mortgage-broking services DKKbn 2.91 2.79 2.82 3.09 3.01 0 1 2 3 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 • Growth in loans and deposits remains stable: • Lending volumes flat QoQ and up by 1% YoY. • Deposit volumes up by 3% QoQ and up by 10% YoY. • Mortgage broking services down by 3% QoQ and up by 4% YoY. • Business volumes at the end of Q2 2026 totalled DKK 27.7bn, which was 2% higher than the previous quarter and 7% higher than the same period last year.
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Increased activity • Fee and commission income flat QoQ and up by DKK 16% YoY. • The year-on-year increase reflects increased business volumes rather than an increase in costs. • Other fee and commission income includes service fees, currency exchange fees, card fees and ATM fees. 22.7 22.70.1 0.8 0.3 1.2 17 18 19 20 21 22 23 24 25 Q1 2026 Investment and trading comm. Loan, guarantee, insurance comm. Mortgage broking services Other fee and comm. income Q2 2026 39.1 45.4 0.9 5.2 0.6 0.4 36 38 40 42 44 46 48 H1 2025 Investment and trading comm. Loan, guarantee, insurance comm. Mortgage broking services Other fee and comm. income H1 2026 YoY changes in fee and commission income QoQ changes in fee and commission income DKKm DKKm
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8.7 10.6 Q1 2026 Q2 2026 82.2 85.8 46.5 57.7 0 10 20 30 40 50 60 70 80 90 100 H1 2025 H1 2026 Premium income, net Claims, net 23.1 19.4 6 8 10 12 14 16 18 20 22 24 H1 2025 H1 2026 Satisfactory insurance results • Combined ratio of 85.6% in H1 2026 compared to 76.5% in H1 2025 – still below our 2026 target of 88%. • Insurance premiums grew by 4.4% from H1 2025 to H1 2026 due to price rises and a continued inflow of new customers. • Increase in claims compared to the same period last year. • Profit before tax of DKK 19.4m for H1 2026 remains satisfactory, despite being slightly lower than in the year-earlier period. Premiums and claims Profit before tax DKKm DKKm 43.2 42.6 26.5 31.2 Q1 2026 Q2 2026
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Operating costs under pressure • Total operating costs increased by 2% QoQ and by 6% YoY: • A general increase in expenses across all areas. • The YoY increase reflects the annual salary adjustment. • Operating costs were in line with expectations for the quarter, however. Focus remains on keeping costs at a low level to improve operational efficiency. • End-of-period FTEs of 201 - down by 2 FTEs compared to H1 2025. 71.7 73.4 0.4 0.3 0.5 0.9 0.4 64 65 66 67 68 69 70 71 72 73 74 Q1 2026 Staff IT Marketing Education Other expenses Q2 2026 136.9 145.14.8 1.3 0.9 0.6 0.7 64 74 84 94 104 114 124 134 144 154 H1 2025 Staff IT Marketing Education Other expenses H1 2026 QoQ changes in operating costs YoY changes in operating costs DKKm DKKm
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42% 49% 8% Corporate sector Private sector Publice sector 10 bnDKK Customers display strong credit robustness • Strong credit quality of overall portfolio: • Impairment charges of DKK 3m in Q2 2026 compared to a reversal of DKK 1m in Q1 2026 • Discretionary management estimate of DKK 121.5m in Q2 2026. Unchanged from the previous quarter. • Related to general economic uncertainty caused by geopolitical tensions and macroeconomic developments. • Strong LTV ratios for housing loans: 92% of total housing loans below LTV of 80% and 63% below LTV of 40%. • Well-diversified corporate customer portfolio for prudent risk diversification across industries. Impairment charges LTV for housing loans1 63% 30% 8% < 40% < 80% > 80% DKKm Gross lending by sector Agriculture, forestry and fishing Corporate sector - other Manufacturing and mining Real estate Trade Transport, hotels, restaurants etc. 4.22 bnDKK 9% 6% 7% 10% 3% 7% 1) Lending for housing accounts for DKK 4.7bn of total retail lending of DKK 5.0bn DKKm -6 - 11 5 2 -9 -2 -1 3 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026
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23.3 25.6 27.4 2.3 1.8 0.0 14 16 18 20 22 24 26 28 30 Q4 2025 REA Other H1 2026 Profit H1 2026 36.3 40.2 42.0 2.4 1.6 1.8 0.1 26 28 30 32 34 36 38 40 42 44 Q4 2025 REA Addition of SnP Other H1 2026 Profit H1 2026 Strong liquidity and capital position • As of 1 January 2026, CRR 3 took effect in the Faroe Islands. The overall effect on REA was lower credit risk and lower operational risk: • REA down by 9.0% over Q2 2025 • The Systemic Risk Council has proposed an increase in the countercyclical capital buffer in the Faroe Islands from 1% to 2%, effective from 30 September 2027. • Liquidity coverage ratio (LCR) of 274% and NSFR ratio of 168%. Both well above the requirement of 100%. 2026 Target ~ 23% CET1 ratio MREL Capital Ratio 2026 Target ~ 34%
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Capital instruments and senior debt • Føroya Banki fulfils all capital requirements with the existing portfolio of capital instruments and senior debt. Going forward, the focus is on refinancing maturing debt and supporting lending growth. • In Q1 2026, the Bank issued SEK 350m (DKK 238m) in senior non-preferred bonds and repaid senior non-preferred bonds of SEK 300m (207m DKK). • The Bank issued DKK 100m in new Tier 2 bonds in May 2026 and redeemed DKK 100m of existing Tier 2 bonds in June 2026 as part of its capital refinancing. 200 250 250 238 100 0 50 100 150 200 250 300 350 400 450 500 2026 2027 2028 2029 2030 2031 Capital and Senior Debt - Q2 2026 Senior preferred Senior non-preferred Senior non-preferred Senior non-preferred Tier 2 capital Mill. DKK
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The Faroese and Greenlandic economies
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Growth remains resilient, supported by strong exports and low unemployment, while fisheries quotas and fiscal pressures are key risks. Faroese economic outlook GDP & Inflation • Expected nominal GDP growth: 5.8% in 2025, 6.2% in 2026 and 3.3% in 2027. • Expected real GDP growth: no forecast available. • Inflation: 2.4% in May 2026, the highest level in two years. Labour market and population growth • Unemployment rate: very low at 0.8% in May 2026. • Labour force: 84% of population aged 15-74 in 2025, the highest in Europe. • Population: growth higher than in the previous period. Exports & Trade • Total exports: DKK 13.8bn (+12.5% YoY), driven by seafood exports of DKK 13.1bn (+14.3% YoY). • Seafood exports: about equal shares of wild-caught fisheries and aquaculture. • Balance of trade: DKK 2.4bn surplus. -5 0 5 10 15 2019 2021 2023 2025 DKKbn Exports Balance of Trade Key risk factors • Mackerel quota: reduced by nearly half in 2026, but high prices may partly offset the impact. • Business confidence: weakened slightly in June 2026, pointing to weaker overall sentiment. • Fiscal planning: The government and municipalities record deficits. • Housing market: rising house prices and housing shortages reduce affordability for first-time buyers. • Geopolitical developments: impact on energy prices and inflation. 50 53 56 0% 1% 2% 2019 2021 2023 2025 PopulationRate Unemployment rate Population Growth is modest, while fisheries dependence and public finances are key risks. -5% 0% 5% 10% 15% 2019 2021 2023 2025 2027 Rate Nominal GDP Real GDP Forecast 0% 2% 4% 6% 8% 10% 2019 2021 2023 2025 Rate Nominal GDP Real GDP Forecast GDP & Inflation • Expected real GDP growth: below 1% following completion of major infrastructure projects. • Danish block grant: 18% of GDP has a stabilising effect. • Tourism: growth potential supported by new airports. • Inflation: 3.7% in January 2026. Exports & Trade • Total exports: DKK 7.0bn (+16.4% YoY), consisting almost entirely of wild-caught fisheries. • Balance of trade: a small surplus. Key risk factors • Public finances: weakened significantly in 2025 and sensitive to dividends from major state- owned companies. • Demographic changes: pose a major long-term challenge. • Economy highly dependent on wild-caught fisheries undergoing a potential structural shift. • Geopolitical developments: impact on energy prices and inflation. Labour market and population growth • Unemployment rate: around 3.5% in 2024, the latest available update. • Population: slow growth. Greenlandic economic outlook 55 56 57 0% 4% 8% 2019 2021 2023 2025 PopulationRate Unemployment rate Population -4 -2 0 2 4 6 8 2019 2021 2023 2025 DKKbn Exports Balance of Trade
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Summary Q2 2026
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Q2 2026 summary • Steady growth in business volumes • Total operating income unchanged • Increased activity in the investment sector • Operating costs in line with expectations • Low impairment charges • Increase in investment portfolio earnings • Continued strong liquidity and capital position
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Questions?
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Appendices
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Appendices o Group o Banking o Personal Banking o Corporate Banking o Banking – Faroe Islands o Banking – Greenland o Insurance – Trygd
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l Group Income from our core business is in line with 2025 - or higher. While insurance income and other income are lower due to exceptionally strong results in 2025. DKKm H1 2026 H1 2025 Index Q2 2026 Q1 2026 Index Q4 2025 Q3 2025 Q2 2025 Q1 2025 Net interest income 159 160 99 81 78 105 79 77 84 76 Net fee and commission income 45 39 116 23 23 100 24 21 19 20 Net insurance income 28 42 65 11 16 68 20 14 27 16 Other operating income (less reclassification) 24 37 65 13 11 115 10 11 24 13 Total operating income 256 279 92 128 128 100 132 123 154 125 Operating costs1 145 137 106 73 72 102 70 73 68 69 Profit before impairment charges 111 142 78 55 56 97 63 50 86 56 Impairment charges, net 2 7 35 3 -1 444- -2 -9 2 5 Operating profit 109 135 80 52 57 91 65 58 84 51 Investment portfolio earnings2 46 55 84 34 13 264 20 22 30 25 Profit before tax 155 190 81 85 70 122 85 80 115 76 Operating costs/income, % 57 49 57 56 53 59 44 55 Number of FTE, end of period 201 199 101 201 207 97 201 202 199 204 1 Comprises staff costs, administrative expenses and amortisation, sector costs, depreciation and impairment charges (less reclassification to non-recurring items). 2 Incl. net income from investments accounted for under the equity method (excl. sector shares). Comments on this page refer to the development in the current year compared to the same period last year.
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l Banking Satisfactory increase in deposit volumes, lending volumes and mortgage credit. DKKm H1 2026 H1 2025 Index Q2 2026 Q1 2026 Index Q4 2025 Q3 2025 Q2 2025 Q1 2025 Net interest income 159 160 99 81 78 105 79 77 84 76 Net fee and commission income 51 48 108 26 26 100 27 25 24 24 Other operating income 19 32 60 10 9 114 8 8 22 11 Total operating income 230 240 96 117 112 104 114 110 129 111 Operating costs 134 125 107 67 66 102 64 67 62 63 Profit before impairment charges 96 115 84 50 46 108 50 43 67 48 Impairment charges, net 2 7 35 3 -1 -444 -2 -9 2 5 Operating profit 94 108 87 47 47 100 52 52 66 43 Investment portfolio earnings 40 53 75 27 13 200 18 18 28 25 Profit before tax 134 162 83 74 60 122 70 70 94 68 Loans and advances 9,788 9,697 101 9,788 9,774 100 9,670 9,600 9,697 9,272 Deposits and other debt 11,413 10,407 110 11,413 11,112 103 10,957 10,835 10,407 10,306 Mortgage credit 3,015 2,909 104 3,015 3,095 97 2,824 2,789 2,909 2,906 Operating costs/income, % 58 52 57 59 56 61 48 57 Number of FTE, end of period 172 171 101 172 178 97 173 173 171 174 Comments on this page refer to the development in the current year compared to the same period last year.
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l Personal Banking Satisfactory increase in lending, mortgage credit and deposit volumes. DKKm H1 2026 H1 2025 Index Q2 2026 Q1 2026 Index Q4 2025 Q3 2025 Q2 2025 Q1 2025 Net interest income 77 79 97 39 37 106 37 37 41 37 Net fee and commission income 37 36 103 18 18 99 20 19 18 18 Other operating income 13 19 67 7 6 106 4 5 13 6 Total operating income 126 134 94 64 62 104 61 62 72 61 Operating costs 109 103 107 55 54 103 52 57 51 52 Profit before impairment charges 17 31 55 9 8 109 9 5 22 10 Impairment charges, net -4 2 251- 0 -5 -9 4 0 -1 3 Operating profit 22 30 73 9 13 66 4 4 23 7 Investment portfolio earnings 21 28 75 14 7 208 9 9 15 13 Profit before tax 43 58 74 23 20 115 14 14 38 20 Loans and advances 4,876 4,487 109 4,876 4,754 103 4,647 4,532 4,487 4,418 Deposits and other debt 6,984 6,720 104 6,984 6,248 112 6,121 6,108 6,720 6,505 Mortgage credit 2,214 2,181 102 2,214 2,223 100 2,217 2,203 2,181 2,169 Number of FTE, end of period 76 76 101 76 80 95 77 77 76 76 Comments on this page refer to the development in the current year compared to the same period last year.
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l Corporate Banking Significant increase in deposits and mortgage credit. DKKm H1 2026 H1 2025 Index Q2 2026 Q1 2026 Index Q4 2025 Q3 2025 Q2 2025 Q1 2025 Net interest income 82 82 101 42 40 104 42 39 43 39 Net fee and commission income 15 12 125 7 7 102 7 6 6 6 Other operating income 6 13 50 4 3 131 4 3 8 4 Total operating income 103 106 97 53 50 105 53 49 57 49 Operating costs 24 23 108 12 12 96 12 10 11 11 Profit before impairment charges 79 84 94 41 38 108 41 38 46 38 Impairment charges, net 7 5 132 3 4 65 -6 -9 3 2 Operating profit 72 79 92 38 34 113 47 47 43 36 Investment portfolio earnings 19 25 76 12 6 193 9 8 13 12 Profit before tax 91 104 88 51 40 126 56 56 56 47 Loans and advances 4,912 5,210 94 4,912 5,020 98 5,023 5,068 5,210 4,855 Deposits and other debt 4,429 3,687 120 4,429 4,864 91 4,835 4,726 3,687 3,802 Mortgage credit 800 728 110 800 871 92 606 585 728 736 Number of FTE, end of period 15 13 109 15 15 101 13 13 13 15 Comments on this page refer to the development in the current year compared to the same period last year.
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Banking – Faroe Islands Satisfactory increase in loans, deposits and mortgage credit. DKKm H1 2026 H1 2025 Index Q2 2026 Q1 2026 Index Q4 2025 Q3 2025 Q2 2025 Q1 2025 Net interest income 140 138 102 72 68 105 69 68 72 66 Net fee and commission income 43 40 108 22 21 104 23 21 20 20 Other operating income 16 29 56 9 7 126 7 7 19 10 Total Operating income 200 206 97 103 97 106 99 96 111 96 Operating costs 113 104 108 57 55 103 54 58 51 52 Profit before impairment charges 87 103 85 46 41 111 45 38 59 43 Impairment charges, net 5 6 84 0 5 -2 -1 7 -2 8 Operating profit 82 97 85 46 36 127 47 32 62 35 Investment portfolio earnings 33 42 78 22 11 202 15 14 22 20 Profit before tax 115 139 83 68 47 145 61 46 84 55 Loans and advances 8,856 8,221 108 8,856 8,821 100 8,690 8,490 8,221 7,874 Deposits and other debt 9,515 9,022 105 9,515 9,590 99 9,581 9,238 9,022 9,060 Mortgage credit 1,962 1,699 115 1,962 1,969 100 1,713 1,717 1,699 1,701 Operating costs/income, % 56 50 55 57 54 60 47 55 Number of FTE, end of period 152 154 99 152 158 96 156 156 154 156 Comments on this page refer to the development in the current year compared to the same period last year.
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l Banking – Greenland Significant increase in deposits. Lower economic activity in general, resulting in reduced demand for financing. DKKm H1 2026 H1 2025 Index Q2 2026 Q1 2026 Index Q4 2025 Q3 2025 Q2 2025 Q1 2025 Net interest income 19 23 82 10 9 103 9 9 12 11 Net fee and commission income 8 8 110 4 5 80 4 4 4 4 Other operating income 3 3 95 1 2 65 1 1 3 0 Total operating income 30 34 90 14 16 91 14 14 19 15 Operating costs 21 21 99 10 11 95 10 9 10 11 Profit before impairment charges 9 12 73 4 5 84 4 5 8 4 Impairment charges -3 1 339- 3 -6 -54 -1 -15 4 -3 Operating profit 12 12 101 1 11 9 5 20 4 8 Investment portfolio earnings 7 11 65 5 2 194 3 3 6 5 Profit before tax 19 23 83 6 13 44 9 24 10 13 Loans and advances 932 1,475 63 932 952 98 980 1,110 1,475 1,398 Deposits and other debt 1,898 1,385 137 1,898 1,522 125 1,375 1,597 1,385 1,246 Mortgage credit 1,053 1,210 87 1,053 1,125 94 1,111 1,072 1,210 1,205 Operating costs/income, % 70 63 71 68 72 65 56 72 Number of FTE, end of period 20 17 114 20 20 101 17 17 17 18 Comments on this page refer to the development in the current year compared to the same period last year.
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l Trygd Continued satisfactory performance. DKKm H1 2026 H1 2025 Index Q2 2026 Q1 2026 Index Q4 2025 Q3 2025 Q2 2025 Q1 2025 Premium income, net of reinsurance 86 82 104 43 43 99 42 42 42 40 Claims, net of reinsurance 58 47 124 31 27 117 22 25 20 27 Net insurance income 28 36 79 11 17 69 20 17 22 14 Net income from investment activities 6 2 360 7 -1 -852 2 4 2 0 Operating income 34 37 91 18 16 115 22 20 23 14 Operating costs 15 14 104 8 7 106 7 7 7 7 Profit before tax 19 23 84 11 9 122 15 14 17 7 Combined ratio 86 77 92 80 72 78 67 87 Claims ratio 67 57 73 61 52 59 48 66 Number of FTE, end of period 21 21 101 21 21 100 21 21 21 23 Comments on this page refer to the development in the current year compared to the same period last year.
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Disclaimer • This presentation contains statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements. • No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. • Accordingly, none of Føroya Banki or any of its principal shareholders or subsidiary undertakings or any of such person’s officers or employees or advisers accept any liability whatsoever arising directly or indirectly from the use of this document.