Grønlandsbanken Publishes Annual Report for 2024

Grønlandsbanken has today published its annual report for 2024. The Bank achieved a profit before tax of DKK 245.7 million, compared to DKK 244.6 million in 2023, in line with the revised guidance issued in October 2024 of DKK 225–250 million.

At the same time, Grønlandsbanken announces a new initiative to support tourism investments in Greenland.

However, the geopolitical situation creates uncertainty as the Bank looks ahead.

 

Earnings Declined in the Final Quarter

The result for the 2024 financial year ends at a strong level as expected, though impacted by falling interest rates.

CEO Martin Kviesgaard states:
"As expected, our result declined significantly in the last quarter, with a pre-tax profit of DKK 52.1 million, compared to DKK 73.8 million in the same quarter of 2023. This is primarily due to the declining interest rate environment and lower market value adjustments."

"The interest rate decline was truly felt in the latter part of the year, and we expect further rate cuts in 2025."

 

Growth in the Bank

Once again, the Bank experienced solid growth in 2024, with lending increasing by 4.5% to just over DKK 5 billion, and total assets surpassing DKK 10 billion for the first time. Lending to Greenlandic customers increased, alongside deposits which rose by more than DKK 700 million. Pension savings also made a noticeable impact.

"We are very pleased with the development, and I believe it shows that we are in a strong competitive position," says Martin Kviesgaard.

"Customers have received a fairly attractive deposit interest rate during the year, and we can see that deposits have grown significantly. Across Greenland, we are part of the country's development – which means more lending to new activities – and we are investing significantly in enhancing the customer experience."

 

Interest Rate Cuts Came Later Than Expected

2024 began with relatively high interest rates, which negatively affected investment appetite in society, as rate cuts came later than anticipated.

Net interest income rose by DKK 35.2 million to DKK 470.3 million in 2024, driven by strong lending activity. In addition, the interest rate environment boosted returns from the Bank’s bond holdings and deposits with Danmarks Nationalbank.

 

Fee and commission income declined compared to the previous year.

“It’s clear that the higher interest rates dampened customers’ investment appetite. On the other hand, we are now seeing a notable decline in interest rates, and we expect that to increase demand for home, boat, and car purchases in 2025. It will also make it easier for businesses to pursue profitable investments.”

 

Costs Increased as Expected

“In addition to collectively agreed wage increases, we anticipated higher expenses related to staffing and especially IT, rising compliance requirements, and emergency preparedness. This is not unique to us—it’s something all banks are dealing with, but it is costly,” says the CEO.

Impairments Remain at a Low Level

Write-downs and provisions amounted to DKK 18.9 million in 2024, compared to DKK 14.2 million in 2023.

"Despite the increase, we still consider this to be low, and it clearly indicates that society and our customers are financially resilient. It shows we are in a good position, despite major global upheavals throughout 2024," says the CEO.

 

Gains on Securities

Despite slightly lower gains, the Bank’s bond and sector equity holdings, as well as currency operations, contributed positively to the 2024 result. Total market value adjustments amounted to DKK 28.6 million, compared to DKK 40.1 million in 2023.

 

Tourism Industry – An Important Economic Pillar

Grønlandsbanken wants to accelerate tourism development with a bold new initiative.

“Local tourism holds great potential. From our dialogue with stakeholders across Greenland, it's clear that now is the time to invest. It’s important to seize the opportunities presented by new infrastructure, and we want to help move things forward. In the coming weeks, we will introduce a special product for tourism development. We've allocated up to DKK 100 million in specially favorable growth capital for the tourism sector. This could be a decisive contribution to help individual tourism operators make their next investment and strengthen their equity. We believe this can provide a strong boost to tourism investment,” says Martin Kviesgaard.

 

An Unusual Start to a New Year

As inflation comes under control in Europe, it is expected that short-term interest rates will fall and costs will decrease.

“This is clearly positive for our customers and beneficial in the long run. However, it also means a significantly different earnings level for the Bank in 2025, as lower interest rates will have a negative short-term effect—but we’re fine with that.”

“On the other hand, we must acknowledge that the geopolitical uncertainty and its impact on Greenland is truly extraordinary. It can be quite difficult to assess the effect this will have on our customers and the Greenlandic economy, both in the short and long term,” concludes Martin Kviesgaard.

The Bank's guidance for profit before tax in 2025 is DKK 150–185 million.