Banks in Greenland

Publication Date :

17 Jul, 2023

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Table Of Contents

Overview of Banks in Greenland

Banks in Greenland, the largest island in the world are controlled and regulated by Denmark since it is a part of the state of Denmark. The two prominent banks in the country are the Bank of Greenland and BankNordik.The former is the longest-serving bank in the country. It merged with Nuna Bank in 1985 and became the sole commercial service provider.

Being an island country, most of its income is through fishery and the last decade has seen a significant amount of growth through the large public sector and elaborate foreign trade plans. The growth is supported and funded directly or indirectly through the above-mentioned banks. While the Bank of Greenland is the only commercial service provider, Nuna Bank deals with financial and insurance-related services.

Overview of Banks in Greenland

Structure

Since we have established the fact that there are only two licensed banks, it would be a normal occurrence if they had similar structures too. However, it is different in reality. The two types of banks in the country are:

Commercial bank
The bank that offers insurance and other financial products

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

Top Banks in Greenland

There are only two banks in Greenland, even if it is the world’s largest island. We will detail the two top banks of Greenland and 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. The BANK of Greenland:

It is the only commercial bank in Greenland. Previously, a bank called Nuna Bank served Greenland's customers. But on 8th June 1985, BANK of Greenland and Nuna Bank (formerly named “Bikuben'') merged with a capital of DKK 120 million. As a result, the BANK of Greenland had become the sole provider of commercial services to local customers. The bank was founded in 1967, on 26th May, almost 50 years ago.

This bank was opened by a few Danish banks – Danske Bank, Privatbanken, Kjøbenhavns Handelsbank, etc. When this bank was established, it was still a province of Denmark. The operations of the BANK of Greenland started on 1st July 1967. In 1985, a few local branches in Sisimiut, Qaqortoq, and Ilulissat opened. Later in 1989, it opened another branch in Maniitsoq.

The head-quarter of the Bank of Greenland is located in Nuuk, Greenland. Currently, Martin Kviesgaard has been serving as the CEO of the BANK of Greenland. This bank is listed on the Copenhagen Stock Exchange as GRLA. In the year 2010, it had 2,700 shareholders. Naturally, the numbers and intensity have both increased over time. Now, the BANK of Greenland serves 50,000 customers. Profit before taxes of the BANK of Greenland has been performing poorer for the last two years.

The earnings before taxes at the end of September 2021 were DKK 114.4 million compared to DKK 94.0 million for the same period of 2020. If we look at the profit before taxes for 2014, 2013, and 2012, we would see that the figures were much better – DKK 131,433, DKK 123,501, and DKK 135,541. The BANK of Greenland understands its corporate social responsibility. That is why they believe in serving Greenland's residents with financial education. In 2014, the 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 cannot start their businesses due to a shortage of funding. That is why they have set aside a pool of money just for smaller entrepreneurs to improve Greenland's economic growth and the job market.

#2. BankNordik:

BankNordik is the only competitor of the BANK of Greenland. The BANK of Greenland was the only major bank that served the local customers in Greenland. Later, BankNordik acquired 12 branches of Sparkbank in Greenland in February 2010. In 2011, it also received a portion of the assets of Amagebanken. However, BankNordik was established in 1906, almost 111 years ago. Its head-quarter is located in Torshavn, Faroe Islands. Before coming to Greenland, they had a major business in the Faroe Islands, Iceland, and Denmark.

Greenland only enhanced their reach and territory. BankNordik was previously called Foroya Banki. The Faroe Islands has over 40% market share because it is one of the two full-service banking firms. In 2016, they reported that BankNordik was DKK 227 million. In the same year, the total assets acquired by BankNordik were DKK 15.5 billion, quite a good figure for one of the two major banks in Greenland.

The total equity of BankNordik as per the last report (in 2016) was commendable. The total equity of this bank in 2016 was DKK 1.9 billion. As per the report of 2009, they found that around 415 employees work at BankNordik. The number of employees must have increased since the operations have expanded more since 2010. Stine Bosse has been serving the customers of Greenland, Faroe Islands, Iceland, and Denmark as the Chairman of BankNordik. In Greenland, BankNordik has a branch in Nuuk, the capital city. Since Nuuk is the largest city in Greenland, it makes sense to build an extension to reach the majority of the customers of Greenland. But as per Moody’s Investors Service, the outlook of BankNordik is negative. Moody’s Investors Service has rated its outlook as negative because it is not easy for BankNordik to face the constant challenges of its expansion in Danish regions. In the coming years, the challenges will only increase.