Føroya Banki P/F

Investor Presentation • Aug 5, 2025

Increased activity and satisfactory results forH1 2025

Turið F. Arge, CEO 5 August 2025

Overview

• •Føroya Banki at a glance

• •Financials

• •Operating income

• •Insurance
• •Costs
• •Impairment charges
• •Capital ratios
• • The Faroese and Greenlandic economy
• •Summary H1 2025
• •Appendices

FøroyaBanki at a glance

• • Full-service banking institution with headquarters in the Faroe Islands:
  • •5 branches in the Faroe Islands
  • •1 branch in Greenland

•

• •Føroya Banki operates three subsidiaries in the Faroe Islands:
  • • Trygd(non-life insurance)
    • NordikLív(life insurance)
  • • Skyn (real estate broker)
• • Moody's A1 long-term deposit and issuer rating of the bank was reaffirmed in 2024, albeit with a negative outlook.
• • The Group has a total of approximately 200 full-time employees.
• •While maintaining a leading position in the Faroe Islands, Føroya Banki is a challenger in Greenland. Furthermore, the Group sees a growth potential in the Faroese insurance market.

Presence in the North Atlantic region

Faroe Islands Loans: DKK 8,221m Deposits: DKK 9,022m

Market share: ~40%

Group figures

Loans: DKK 9,697m

2024: DKK 421m

Deposits: DKK 10,407m

Net interest and fee income

Gross premiums 2024: DKK 176m

Strong performance

• • Solid 4.7% improvement in total business volumes in H1 :
  • • Increase in lending volumes, mortgage credit and deposit volumes
• • The decline in interest rates is offset by increased lending activity, leading to higher net interest income.

• •Solid insurance results with few large claims.

• • The significant increase in other operating income is mainly attributable to one-off factors, including:

  • • extraordinary income originating from the Bank's ownership in sector companies
  • •sale of one of the Bank's branch offices
• • Outlook 2025: Net profit guidance raised to DKK 235- 265m (from DKK 210-240m).
  • • Driven by strong insurance results, growth in business activity, low impairment charges and extraordinary income

Pr f & Lo i t o ss
D K Km		Q 2 2 0 2 5	Q 1 2 0 2 5	In de x
Ne in inc t te t res om e		8 4	6 7	0 1 1
Ne fe d c iss ion inc t e a n om m om e		1 9	2 0	9 7
Ne ins inc t ura nc e om e		2 7	1 6	1 7 2
O he ing inc t t r o p era om e		2 4	3 1	8 1 5
O ing inc t p er a om e		1 5 4	1 2 5	1 2 4
Op ing t ts era co s		6 8	6 9	9 9
Pr f be fo ha i im irm t t c o re p a en rg	es	8 6	5 6	1 5 4
Ne ha loa im irm t t c p a en rg es o n ns	2	5	3 4
O ing f i t t p er a p ro	8 4	5 1	1 6 6
Inv fo l io ing tm t p t es en or ea rn s	3 0	2 5	1 2 2
Pr f be fo i t ta o re x		1 1 5	7 6	1 5 1
Ta x		2 1	1 5	1 4 6
Ne f i t p t ro		9 3	6 1	1 5 3
	Ke M ics tr y e
bn D K K	Ta t 2 rg e 2 6 0	Q 2 2 0 2 5	Q 1 2 0 2 5	In de x
Lo d a dv an s a n an ce s		9. 7	9. 3	1 0 5
d o he de b De i ts t t p os an r		0. 1 4	0. 3 1	0 1 1
d M i tg t or ag e c re		2. 9	2. 9	0 0 1
/ Op % ing inc t t era co s om e,	5 3. 0 <	4 4. 1	5 5. 1
C E T 1 c l ra % i io, ta t ap	2 3. 0	2 2. 7	2 3. 5
Ro E a f ( l d ) *, % ise te ta an nu r x a	1 2. 0 >	1 5. 6	1 2. 6

*Non-recurring items are excluded in the annualisation

DKKbn

Interest rates decreasing

• • Net interest income up by DKK 7.8m QoQ and down by DKK 21.5m YoY, primarily due to:
  • • Lower interest rates reduce interest income, while the increase in lending volumes prompts a QoQ rise in income.
• • The continued decrease in interest rates is advantageous for our customers and is expected to improve customers' credit quality even further.

• • Satisfactory development in lending and deposit volumes:

• •Lending volumes up by 5% QoQ and by 7% YoY

• • Deposit volumes up by 1% QoQ and by 13% YoY
• • Sound balance between deposits and lending, leading to a favourable position for pursuing our strategic plans towards 2026.

Increased activity in the investment sector YoY

Fee and commission income down by DKK 0.5m QoQ and up by DKK 2.7m YoY.

•

•

•

• Increase in investment activity during the past year.
• Mortgage broking services flat QoQ and up by 15% YoY:
  • • A significant increase in demand for mortgage loans in Greenland, especially from our corporate customers.
  • • We expect a further increase in demand for mortgage broking services in 2025, as the level of interest rates keeps falling.

2.62 2.59 2.58 2.74 2.91 2.91 3 36.4 39.1 1.5 1.1 0.4 0.2 35 35 36 36 37 37 38 38 39 39 40 40 H1 2024 Investment and trading comm. Loan, guarantee, insurance comm. Mortgage broking services Other fee and comm. income H1 2025 YoY changes in fee and commission income Mortgage-broking services DKKm DKKbn

Profit before taxDKKm

Few claims resulted in strong insurance performance

•Combined ratio of 76.5% for H1 2025 compared to 94.5% for H1 2024 – still well below our 2026 target of 88%.

• •Insurance premiums grew by 4.6% in 2025 due to price rises and a continued inflow of new customers.
• • Fewer insurance claims than expected in H1 2025 resulted in a YoY decrease, primarily due to the absence of storms and large claims during the period.
• • This resulted in a highly satisfactory profit before tax for H1 2025.

Cost/income ratio of 49.1%

•

•

Total operating costs increased by 2.9% YoY but decreased by 1.0% QoQ. Total costs are lower than expected for this quarter:

• • Increase in staff costs and marketing costs compared to previous quarter.
• • Year-on-year, IT costs have increased due to increased prices, and staff costs have increased due to the yearly salary adjustments.
• End-of-period FTE of 199 - down by 5 FTE compared to Q1 2025.
• •Operating costs are under pressure because of a general increase in costs. Focus is still on keeping costs on a low level to improve operational efficiency and to meet the 2026 C/I target.

YoY changes in operating costs

DKKm

Customers display strong credit robustness in general

•Impairment charges of DKK 2m in Q2 2025 compared to DKK 5m in Q1 2025.

• • Evenly distributed between individual and statistical impairment charges.
• • Discretionary management estimate of DKK 101.5m in Q2 2025. Unchanged from 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.

1) Lending for housing accounts for DKK 4.3bn of total retail lending of DKK 4.6bn

Strong capital and liquidity positions

REA up by 4.1% over Q4 2024 to DKK 7,545m due to increase in lending volumes.

•

•

•

• The Faroese and Greenlandic authorities have announced an increase in the SIFI capital buffer from 2% to 3% (FO) as of 1 July 2025 and the countercyclical capital buffer from 0% to 1% (GL) as from 2026. The Bank already complies with the higher capital requirements announced by the authorities.
• The Bank is in a dispute with the Danish tax-authorities regarding the sale of the Group's Danish activities in 2021. The potential impact on the equity may amount to up to 25m DKK and is presented as a contingent liability in the half-year report.
• •In June, Føroya Banki issued Senior Non-preferred bonds amounting to DKK 250m. In the same process, the Bank repaid Senior Non-preferred bonds for DKK 150m.
• •Liquidity coverage ratio (LCR) of 259.7% and NSFR ratio of 158.3%. Both well above the requirement of 100%.

Changes in CET1 ratio

Changes in MREL Capital Ratio

Faroese economic outlook

•

•

•

Strong and growing economy, but an ageing population raises concerns regarding fiscal stability.

Strong economy

GDP & Inflation

• •Economic growth expected to continue. Outlook for 2025: 5.0% p.a. (nominal prices)
• Inflation has decreased steadily after Covid – in May'25 it stood at 0.7% p.a.

Positive trade balance

Imports to the Faroe Islands have decreased more than exports, resulting in an increased positive balance of trade

Low unemployment and population growth

• Unemployment rate remains low, standing at 0.9% in May 2025
• • Population at all-time high, but growth rate has slowed significantly

Tourism rebounding

• •Record number of passengers flying through Vágar Airport and record number of hotel nights in 2025
• •Contribution to economy growing rapidly

Downside risks

Restrictions on trade

• The US has introduced historically high import tariffs, ranging from 10% to 54%. International trade will be negatively impacted, which is especially detrimental to small, open economies.

Exports

• Exports are down approximately 8% from peak levels in 2023 at DKK 12.5bn due to lower catch volumes (pelagic) and lower salmon prices.

Long-term fiscal stability

•Significant deficits ought not to occur in a period when the economy is firing on all cylinders. The Faroes are facing long-term challenges (pensions) due to an ageing population.

Business confidence (ESI)

• Overall confidence is 8, which is lower than the long term average of 14. Construction confidence is down, due to lower demand while confidence within Services is marginally up.

Greenlandic economic outlook

Moderate economic growth, new airport opened in Nuuk, but structural challenges remain.

Moderate growth momentum

2 4 6 2019 2021 2023 2025Rate in %

GDP

•

•

•

• Continued economic growth, but at a lower rate (2025 est. 0.4% (real))
• Stabilised by Danish block grant, which constitutes around a quarter of GDP

Decreasing unemployment

• Unemployment has decreased in recent years. Latest data indicate a slight increase from record low levels
• • Very tight labour market in large towns and for skilled labour

Tourism rebounding / Airport capacity

• • Record number of passengers flying to and from Greenland and record number of hotel nights in 2025
• •New international flights to Nuuk (New York & Reykjavik) are likely to have a material effect on the tourist industry

Downside risks and structural challenges

2027

2029

2025

Export•

• Record strong exports in 2023, but as at end 1Q'25 export is down 17% from peak level
• • Balance of trade remains negative, but reduced compared to previous years

Structural challenges

• The unemployment rate for people with basic education (9 years) has decreased but remains persistently high (red line) compared to the average rate

Long-term fiscal stability

• Greenland's public finances are projected to deteriorate in the coming years due to an ageing population (reduced revenues and higher expenditures)

Inflation

• After low inflation rates in 2020 and 2021, the rate has increased and is forecast at 2.9% in 2025

H1 in summary

• • Solid performance, although interest rates continue to decrease
• • Good growth in lending, deposits and mortgage credit
• • Extraordinary income increases net profit
• • Low impairment level – general customer credit robustness
• • Continued strong liquidity and capital positions
• • Revised net profit guidance from DKK 210-240m to DKK 235- 265m

Questions?

Appendices

oGroup

• oBanking
• oPersonal Banking
• oCorporate Banking
• oBanking –Faroe Islands

• oBanking – Greenland

• oInsurance –Trygd

• oDevelopments in business volumes
• oCredit quality of loan portfolio

Group

Increase in total operating profit despite a decline in interest income.

DK Km	H1 20 25	H1 20 24	Ind ex	Q 2 2 02 5	Q 1 2 02 5	Ind ex	Q 4 2 02 4	Q 3 2 02 4	Q 2 2 02 4	Q 1 2 02 4
Ne t in ter t in es co me	160	182	88	84	76	110	78	87	90	92
Ne t fe nd iss ion inc e a co mm om e	39	36	10 7	19	20	97	19	18	17	19
Ne t in inc su ran ce om e	42	27	158	27	16	172	10	20	15	12
Oth e ( sif ) ting inc les las ica tion er op era om s r ec	37	21	174	24	13	185	9	10	10	11
To tal ati in op er ng co me	27 9	26 6	105	154	125	124	117	135	132	135
1 Op ting sts era co	137	133	103	68	69	99	72	l 69	68	65
Pro fit be for e i air nt ch mp me arg es	142	133	106	86	56	154	46	66	63	70
Imp air nt ch t me arg es , ne	7	16	43	2	5	34	-11	-6	-7	23
Op ofi ati t er ng pr	135	118	115	84	51	166	57	72	70	47
3 rtfo Inv tme nt lio rni es po ea ngs	55	58	95	30	25	122	31	48	35	23
Pro fit be for e t ax	190	175	108	115	76	15 1	88	119	105	70
Op ting sts /inc % era co om e,	49	50		44	55		61	51	52	48
of of Nu mb FT E, e nd riod er pe	199	20 9	96	199	20 4	98	20 7	20 6	20 9	20 9

1 Comprises staff costs, administrative expenses and amortisation, sector costs, depreciation and impairment charges (less reclassification to non-recurring items).

2 Reclassified from Staff costs and administrative expenses.

3 Incl. net income from investments accounted for under the equity method (excl. sector shares).

Banking

Satisfactory increase in lending volumes, deposit volumes and mortgage credit.

DK Km	H1 202 5	H1 202 4	Ind ex	Q2 20 25	Q1 20 25	Ind ex	Q4 20 24	Q3 20 24	Q2 20 24	Q1 20 24
Ne t in inc ter est om e	160	182	88	84	76	110	78	87	90	92
Ne t fe nd mis sio n in e a com com e	48	44	107	24	24	98	23	22	21	23
Oth ing inc rat er ope om e	32	19	174	22	11	204	9	9	9	10
To tal tin inc op era g om e	240	245	98	129	111	117	110	118	l 120	125
Op ting sts era co	125	121	104	62	63	98	67	63	62	59
Pro fit be for e i air nt ch mp me arg es	115	124	93	67	48	141	44	55	58	66
Imp airm ch ent t arg es , ne	7	16	43	2	5	34	-11	-6	-7	23
Op tin rof it era g p	108	108	100	66	43	154	55	61	65	44
fol Inv est nt p ort io e ing me arn s	53	52	103	28	25	113	29	43	33	19
fit for Pro be e t ax	162	160	101	94	68	139	84	104	97	63
Loa and ad ns va nce s	9, 697	9, 023	107	9, 697	9, 272	105	9, 086	9, 072	9, 023	8, 915
De its and ot her de bt pos	10, 40 7	9, 180	113	10, 407	10, 306	101	10, 007	9, 359	9, 180	8, 930
Mo edi rtg t age cr	2, 909	2, 585	113	2, 909	2, 906	100	2, 74 1	2, 579	2, 585	2, 62 1
Op ting sts /inc % era co om e,	52	49		48	57		60	53	52	47
Nu mb of FTE d o f p erio d er , en	171	178	96	171	174	98	177	175	178	178

Personal Banking

Satisfactory increase in lending volumes and deposit volumes.

DK Km	H1 202 5	H1 20 24	Ind ex	Q 2 2 025	Q 1 2 025	Ind ex	Q 4 2 024	Q 3 2 024	Q 2 2 024	Q 1 2 024
Ne t in ter est inc om e	79	96	82	41	37	111	40	46	47	60
Ne t fe nd iss ion inc e a co mm om e	36	34	106	18	18	99	18	17	16	18
Oth rat ing inc er ope om e	19	11	176	13	6	215	6	11	l 6	6
To tal tin inc op era g om e	134	141	95	72	61	118	64	75	69	84
Op ting sts era co	103	99	104	51	52	98	55	52	51	48
Pro fit be for e i air nt ch mp me arg es	31	42	75	22	10	222	9	23	18	34
Imp air nt c har t me ges , ne	2	-2 -	106	-1	3	-37	-2	-8	4	-6
Op tin rof it era g p	30	44	68	23	7	32 6	10	31	13	39
fol Inv est nt p ort io e ing me arn s	28	27	106	15	13	112	15	23	17	14
Pro fit be for e t ax	58	70	82	38	20	185	26	54	30	53
Loa and ad ns va nce s	4, 48 7	4, 202	107	4, 48 7	4, 41 8	102	4, 373	4, 298	4, 202	4, 124
De its and her de bt ot pos	6, 720	6, 161	109	6, 720	6, 505	103	6, 228	6, 161	6, 161	788 5,
Mo ed it rtg age cr	2, 181	2, 174	100	2, 181	2, 169	101	2, 175	2, 160	2, 174	2, 191
Nu mb of FTE d o f p erio d er , en	76	80	95	76	76	99	79	77	80	79

Corporate Banking

A significant increase in corporate mortgage loans, primarily in Greenland.

DK Km	H1 202 5	H1 202 4	Ind ex	Q2 20 25	Q1 20 25	Ind ex	Q4 20 24	Q3 20 24	Q2 20 24	Q1 20 24
Net int st i ere nco me	82	86	95	43	39	109	38	40	43	33
Net fe nd mis sio n in e a com com e	12	11	111	6	6	94	6	5	5	5
Oth rat ing inc er ope om e	13	7	171	8	4	190	2	-2	3	l 3
To tal tin inc op era g om e	106	104	102	57	49	115	46	44	51	42
Op ting sts era co	23	22	104	11	11	96	11	11	11	11
Pro fit be for e i air nt ch mp me arg es	84	82	102	46	38	120	35	33	40	32
Imp airm ent ch t arg es, ne	5	18	29	3	2	121	-10	2	-11	29
Op tin rof it era g p	79	24	322	43	36	120	45	-2	11	5
Inv ortf olio rnin est nt p me ea gs	25	25	101	13	12	115	14	20	16	5
fit for Pro be e t ax	104	90	116	56	47	119	58	50	67	10
Loa and ad ns van ces	5, 210	4, 821	108	5, 210	4, 855	107	4, 713	4, 774	4, 821	4, 791
De its and oth deb t pos er	3, 687	3, 019	122	3, 687	3, 802	97	3, 779	3, 198	3, 019	3, 143
Mo rtga dit ge cre	728	41 1	177	728	736	99	565	419	41 1	430
Nu mb of FTE d o f p erio d er , en	13	15	91	13	15	92	15	15	15	15

Banking – Faroe Islands

Solid increase in deposit and lending volumes, as well as mortgage credit.

DK Km	H1 202 5	H1 202 4	Ind ex	Q2 20 25	Q1 20 25	Ind ex	Q4 20 24	Q3 20 24	Q2 20 24	Q1 20 24
Net int st i ere nco me	138	150	92	72	66	110	66	73	74	75
fe Net nd mis sio n in e a com com e	40	37	107	20	20	100	20	18	18	19
Oth rat ing inc er ope om e	29	18	162	19	10	182	8	6	9	8
Op To tal tin inc era g om e	206	206	100	111	96	115	94	97	101	103
Op ting sts era co	104	103	101	51	52	98	55	53	53	50
Pro fit be for e i air nt ch mp me arg es	103	103	100	59	43	136	39	44	48	53
Imp airm ch ent t arg es, ne	6	-18 -	34	-2	8	-28	3	3	-2	-15
Op rof tin it era g p	97	120	80	62	35	175	36	41	51	68
Inv fol io e ing est nt p ort me arn s	42	39	109	22	20	113	23	33	24	14
Pro fit be for e t ax	139	159	87	84	55	153	58	74	75	82
Loa and ad ns van ces	8, 22 1	7, 515	109	8, 22 1	7, 874	104	7, 658	7, 580	7, 515	7, 433
De its and ot her de bt pos	9, 022	7, 975	113	9, 022	9, 060	100	8, 604	8, 29 1	7, 975	7, 775
Mo edi rtg t age cr	1, 699	1, 609	106	1, 699	1, 70 1	100	1, 718	1, 571	1, 609	1, 638
Op /inc % ting sts era co om e,	50	50		47	55		60	54	53	48
Nu mb of FTE d o f p erio d er , en	154	159	97	154	156	99	158	158	159	159

Banking – Greenland

The slight decrease in bank loans is offset by the significant increase in mortgage loans. Deposit volumes continue to develop positively.

DK Km	H1 202 5	H1 202 4	Ind ex	Q2 20 25	Q1 20 25	Ind ex	Q4 20 24	Q3 20 24	Q2 20 24	Q1 20 24
Net int st i ere nco me	23	32	72	12	11	115	12	14	15	17
Net fe nd mis sio n in e a com com e	8	7	110	4	4	85	3	4	3	4
Oth rat ing inc er ope om e	3	1	527	3	0	895	0	3	0	l 1
To tal tin inc op era g om e	34	39	86	19	15	124	16	21	18	23
Op ting sts era co	21	18	121	10	11	97	12	9	9	9
Pro fit be for e i air nt ch mp me arg es	12	22	58	8	4	192	5	12	9	14
Imp airm ent ch arg es	1	34	2	4	-3	-12 4	-15	-8	-5	38
Op tin rof it era g p	12	-12 -	97	4	8	54	19	20	14	-25
ortf Inv est nt p olio rnin me ea gs	11	13	88	6	5	114	6	10	8	5
Pro fit be for e t ax	23	1	2, 533	10	13	79	25	30	22	-19
Loa and ad ns van ces	1, 475	1, 508	98	1, 475	1, 398	106	1, 428	1, 492	1, 508	1, 482
De its and oth deb t pos er	1, 385	1, 205	115	1, 385	1, 246	111	1, 403	1, 067	1, 205	1, 155
Mo rtga dit ge cre	1, 210	977	124	1, 210	1, 205	100	1, 022	1, 009	977	983
Op /inc % ting sts era co om e,	63	45		56	72		64	47	43	40
of f p Nu mb FTE d o erio d er , en	17	19	90	17	18	94	18	17	19	19

Trygd

Strong results for H1 2025, primarily driven by few large claims and storms.

DK Km	H1 202 5	H1 202 4	Ind ex	Q2 20 25	Q1 20 25	Ind ex	Q4 20 24	Q3 20 24	Q2 20 24	Q1 20 24
Pre miu m i t of ins nco me , ne re ura nce	82	79	105	42	40	104	38	40	40	39
Cla t of ims ins , ne re ura nce	47	60	77	20	27	75	32	22	29	31
Ne t in inc su ran ce om e	36	18	195	22	14	159	6	18	11	8
Net inc e f inv est nt a ctiv ities om rom me	2	6	30	2	0	297 6	2	4	2	l 3
Op tin inc era g om e	37	24	157	23	14	170	7	21	13	11
Op ting sts era co	14	15	92	7	7	96	6	7	8	8
Pro fit be for e t ax	23	8	275	17	7	250	1	14	5	3
Co mb ine d r atio	77	95		67	87		102	74	93	99
Cla ims tio ra	57	77		48	66		85	55	73	81
of f p Nu mb FTE d o erio d er , en	21	23	93	21	23	93	23	23	23	23

Developments in business volumes

The business volume at the end of H1 2025 is DKK 26.0bn, which is 4.7% higher than the end of last year.

Business volumes (sum of deposits, lending, guarantees and AUM)

Credit quality of the loan portfolio

Good credit quality in general

	Q 2 2 0 2 4	Q 2 2 0 2 5	h c a n g e
P f l i i h k t t t o r o o w o u w e a n e s s	0 1 3 7,	8, 3 3 5	1, 3 2 2
P t f l i i t h k o r o o w s o m e w e a n e s s	4, 0 0 7	3, 7 1 6	-2 9 1
f P t l i i t h k o r o o e a n e s s w w	4 9 8	3 0 6	-1 9 3
f h i h d o w c u n s e c u r e -	4 4	1 2	-3 3
i i t m p a r m e n s -	1 0	6	-4
P t f l i i t h O I E o r o o w	4 2 9	3 3 2	-9 7
f h i h d o w c u n s e c u r e -	8 8	8 8
i i t m p a r m e n s -	5 8	4 4	-1 3
P t f l i / i d i i d l l i f i t i o r o o o n a c a s s c a o n w v u	2 7	2 8	1
T l t o a	1 1, 9 7 3	1 2, 7 1 6	7 4 2

Total loan portfolio (gross exposure) includes

• •Loans and advances
• •Credits
• •Unused credits
• • Guarantees

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.