Banks in Greenland

Overview of Banks in Greenland

Greenland is world’s largest island. However, in terms of the banking system, Greenland isn’t the one that stands in the crowd. It is considered as the autonomous constituent country within the Kingdom of Denmark. Since Greenland is within Denmark, Denmark controls the financial and monetary regulations in Greenland.

There are two prominent banks in Greenland –

  • Bank of Greenland
  • Bank Nordik

Bank of Greenland is the only local commercial bank of Greenland. Before 1985, there was a bank named Nuna Bank which served the local customers. But in 1985, Bank of Greenland and Nuna Bank were merged with each other and Bank of Greenland became the sole commercial service provider to local customers.

Structure of Banks in Greenland

Since the number of licensed banks is just two, naturally the structure of these two banks would be quite similar; but it is not the case in reality. There are only two kinds of banks –

  • Commercial bank
  • Bank that offers insurance and other financial products.

In Greenland, there’s only one commercial bank and another bank is a bank that offers financial products and insurance services. As per the report of Moody’s Investors Service, the Danish banking system is quite supportive of Greenland’s banking system since Denmark is the authority on financial and monetary regulatory matters of Greenland. It is also expected that the operating conditions of the Danish banking system will be able to support better within the next 12 to 18 months.

Top Banks in Greenland

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There are only two top banks in Greenland, even if it is world’s largest island.

We will go in detail about the two top banks of Greenland and would try to investigate how they have evolved and how they have expanded their horizons. We will also look at the key figures of these banks.

#1. Bank of Greenland:

This is the only commercial bank of Greenland. Previously, there was a bank called Nuna Bank which served the customers of Greenland. But on 8th June 1985, Bank of Greenland and Nuna Bank (previously named “Bikuben”) got merged with the capital of DKK 120 million and Bank of Greenland had become the sole provider of commercial services to the local customers. The bank was founded in the year 1967, on the day of May, 26, almost 50 years ago. This bank was opened by few Danish banks – Danske Bank, Privatbanken, Kjobenhavns Handelsbank etc. When this bank was established, it was still a province of Denmark. The operations of Bank of Greenland started on 1st July, 1967. Few local branches were opened in Sisimiut, Qaqortoq, and Ilulissat in the year 1985. Later in 1989, another branch in Maniitsoq was opened. The head-quarter of Bank of Greenland is located in Nuuk, Greenland. Currently, Martin Kviesgaard has been serving as the CEO of Bank of Greenland. This bank is listed on Copenhagen Stock Exchange as GRLA. In the year 2010, it had 2700 shareholders. Naturally, the numbers and intensity both have increased over time. Now Bank of Greenland serves more than 20,000 customers. Profit before taxes of Bank of Greenland has been performing poorer for the last two years. The profit before taxes for the years 2016 and 2015 were TDKK 113,420 and TDKK 106,625 respectively. If we have a glance at the profit before taxes for the year 2014, 2013, and 2012, we would see that the figures were much better – TDKK 131,433, TDKK 123,501, and TDKK 135,541 Bank of Greenland understands its corporate social responsibility. That’s why they believe to serve the residents of Greenland with financial education. In the year 2014, Bank of Greenland launched an initiative of learning, Qassit.gl. As per the Bank of Greenland, this new initiative would support the students in 8th-10th grade to understand mathematics and social education. The Bank of Greenland also understands the value of supporting small entrepreneurs who are not able to get started with their business due to lack of funding. That’s why they have set aside a pool of money just for smaller entrepreneurs to improve the economic growth and job market of Greenland.

#2. Bank Nordik:

Bank Nordik is the only competitor of Bank of Greenland. Bank of Greenland was the only major bank that served the local customers in Greenland. Later Bank Nordik came along and acquired 12 branches of Sparkbank in Greenland in February 2010. In 2011, it has also acquired a portion of assets of Amagebanken. However, Bank Nordik was established in the year 1906, almost 111 years ago. Its head-quarter is located in Torshavn, Faroe Islands. Prior to coming to Greenland, it had a major business in Faroe Islands, Iceland, and Denmark. With Greenland, they only enhanced their reach and territory. Bank Nordik was previously called as Foroya Banki. In the Faroe Islands, it has over 40% market share because it is one of the two full-service banking firms in the Faroe Islands. In the year 2016, it was reported that the profit of Bank Nordik was DKK 227 million. In the same year, the total assetsThe Same Year, The Total AssetsTotal Assets is the sum of a company's current and noncurrent assets. Total assets also equals to the sum of total liabilities and total shareholder funds. Total Assets = Liabilities + Shareholder Equityread more acquired of Bank Nordik were DKK 15.5 billion, quite a good figure for one of the two major banks in Greenland. The total equity of Bank Nordik as per the last report (in the year 2016) was commendable. The total equity of this bank in 2016 was DKK 1.9 billion. As per the report of 2009, it was found that around 415 employees work in Bank Nordik. The number of employees must have increased since the operations have expanded a lot more since the year 2010. Stine Bosse has been serving the customers of Greenland, Faroe Islands, Iceland, and Denmark as the Chairman of Bank Nordik. In Greenland, Bank Nordik has a branch in Nuuk, the capital city. Since Nuuk is the largest city of Greenland, it makes sense to build a branch to reach the majority of customers of Greenland. But as per Moody’s Investors Service, the outlook of Bank Nordik is negative. Moody’s Investors Service has rated its outlook as negative because it is not easy for Bank Nordik to face the constant challenges of its expansion in Danish regions and in the coming years, the challenges will only increase.

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