Íslandsbanki publishes a pillar 3 report

31.03.2015

  • Non-performing ratio low in comparison to European banks
  • Increase in the number of phishing attacks without resulting to financial losses
  • Upcoming wage negotiations and the possible lifting of capital controls create uncertainty

 

Íslandsbanki has published a Pillar 3 Report for the year 2014. The report provides information to market participants and other stakeholders that facilitate a better understanding of the Bank’s risk profile and capital adequacy. The report shows that at year-end 2014 the Bank was in compliance with internal and external risk limits. The Bank’s liquidity and equity position is strong and the Bank is well prepared for the possible lifting of capital controls in Iceland.

Low non-performing ratio in comparison to European banks

The credit quality of the loan portfolio has increased and non-performing ratios have decreased considerably. Compared to statistics from the European Banking Authority (EBA), Íslandsbanki’s non-performing ratios rank among the best third of European banks.

Phishing attacks increase

In 2014, a total of 334 loss events were registered in the Bank’s loss event database. Most of the registered operational risk events occurred without causing a loss. There was an increase in the category “External fraud” which is mainly due to enhanced surveillance, increase in credit card frauds reported and an increase in the number of phishing attacks but no losses were registered due to such attacks in 2014. 

Regulatory and business environment

Key economic figures indicate that the economy is in good health but the upcoming wage negotiations and delays and the possible lifting of capital controls pose a threat to the system in the short-term. Implementation of the revised European capital requirements directive (CRD IV) and the accompanying regulations will be a challenge for the legislative and regulatory bodies in Iceland, both due to constitutional issues and the scope of the changes that are needed on current legislation to ensure full and complete implementation into Icelandic law. 

Sverrir Örn Þorvaldsson, Chief Risk Officer:
“Íslandsbanki is constantly improving its risk and capital management infrastructure. The Pillar 3 Report provides insight into the Bank’s risk profile and risk management within the Bank. The Bank believes that an open and transparent disclosure is essential in building confidence and maintaining good relations with its shareholders and other stakeholders. The report shows that at year-end 2014 the Bank fulfilled all internal and external risk limits. Íslandsbanki’s equity and liquidity position is strong and the Bank is well prepared for the implementation on the European capital requirements directive (CRD IV) in Iceland.”

 

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