Íslandsbanki‘s 1H 2011 results
- Annualized return on equity for the period was 12.9% compared to 17.3% in 1H 2010. This is in line with return targets of the Icelandic State Financial Investments and the Bank´s other owner.
- The total capital ratio at the end of the period was 28%, well above the 16% The Financial Supervisory Authority minimum requirements.
- The Bank´s liquidity position is strong and well above The Financial Supervisory Authority minimum requirements.
- Tax charges and National Insurance for the period amounted to ISK 2,782m.
Íslandsbanki hf. presents its reviewed consolidated interim financial statements, for the first half of 2011, which have been prepared on a going concern basis. The Bank returned a profit of ISK 8,062m for the period. Tax and National Insurance for the period amounted to ISK 2,782m. The Bank's total capital ratio of 28% exceeds the 16% minimum set by the Icelandic Financial Supervisory Authority (FME). Return on equity was 12,9% for the period.
- Profit after tax was ISK 8,062m which is comparable to 1H 2010.
- Net interest income was ISK 16,303m compared to ISK 17,438m in 1H 2010. This is partly due to a decrease in interest on equity and lower interest rate levels.
- Net fee and commission income was ISK 3,013m compared to ISK 3,332m in 1H 2010. The decrease is due to changes in ownership of Borgun, a former subsidiary of the bank.
- Tax and National Insurance for the period amounted to ISK 2,782m. Thereof, income tax was ISK 2,067m, bank tax was ISK 110m, National Insurance was ISK 371m and a new two year tax introduced to finance tax credits for mortgage holders was ISK 234m.
- Net valuation changes on loans and receivables amounted to a charge of ISK 255m compared to a 474m charge in 1H 2010.
- Net foreign exchange gain was ISK 336m compared to ISK 53m in 1H 2010.
- The Bank recognised an ISK 432m charge to the Investors' and Depositors' Guarantee Fund during the period.
- The core cost/income ratio was 50.8% for the period compared to 44.8% in 1H 2010. The cost/income ratio for the parent company was 46.7%.
- The average number of full time equivalent employees (FTEs) for the group was 1,258 at the end of the period compared to 1,080 in 1H 2010. The difference is mainly explained by new subsidiaries, held for sale, joining the group, e.g. Jardboranir hf. and BLIH ehf.
- Total assets at 30 June 2011 were ISK 683bn with little change from the year-end 2010.
- Return on equity for the period was 12.9% (annualised) compared to 17.3% in Q1 2010. This reduction is due, amongst other things, to higher equity and lower interest rates. The return on equity is in line with the return targets of the Icelandic State Financial Investments and the Bank's other owner.
- The total capital ratio at the end of the period was 28%, well above the 16% minimum requirements imposed by The Financial Supervisory Authority. At year-end 2010 this ratio was 26,6%.
- The Bank´s liquidity ratios were 38% and 21% at the end of the period which is well above The Financial Supervisory Authority minimum requirements of 20% and 5%.
- Loans to customers and credit institutions totalled ISK 551bn and total deposits amounted to ISK 415bn at the end of the period. Loans to customers and credit institutions were ISK 546bn at year-end 2010 and total deposits totalled ISK 423bn at the same time.
- The deposit/loan ratio was 75.2% at the end of the period compared to 77.5% at year-end 2010.
- Equity as at 30 June 2011 amounted to ISK 129bn compared to 121bn at year-end 2010.
- No dividends have been paid out since the establishment of the Bank in 2008.
Birna Einarsdóttir, CEO of Íslandsbanki:
"The results for the first half of 2011 show that Íslandsbanki´s core business has strengthened, evidencing more balance in the day-to-day operations. In the first half, the Bank continued to emphasise the restructuring of retail and corporate portfolios, along with strengthening its infrastructure. Concurrently, Íslandsbanki reorganised the Bank´s business units to make them better equipped to efficiently service their customers. This has principally been achieved by allowing two of the Bank´s key customer-facing units, the Wealth Management Division and the Leasing Division, a greater measure of operational independence under the new brands VÍB and Ergo respectively. These changes have met with early approval from customers. The Bank has also streamlined its branch network by merging two branches in Reykjavik."