Islandsbanki hf. : 1H2017 Consolidated Interim Financial Statements
Íslandsbanki's Condensed Consolidated Interim Financial Statements 1H 2017
- Profit after tax was ISK 8.0bn in 1H17, compared to ISK 13.0bn in 1H16 which was considerably higher due to one-off income from sale of shares in Visa Europe. Return on equity was 9.2% in 1H17, compared to 12.9% in 1H16.
- Earnings from regular operations was ISK 7.4bn, compared to 8.0bn in 1H16.
- Return on equity from regular operations on 15% CET1 was 11.2% in 1H17 compared to 11.3% in 1H16.
- Net interest income amounted to ISK 15.2bn in 1H17 (1H16 ISK 15.9bn) down 4% in the period. The net interest margin was 2.9% in 1H17 (1H16: 3.1%).
- Net fee and commission income was ISK 6.8bn in 1H17 compared to 6.7bn in 1H16, up 2% in the period.
- Administrative costs totalled ISK 13.3bn in 1H17, down 6% from 1H16.
- Cost to income ratio was 59.2% in 1H17 (1H16: 55.8%), the cost to income ratio excludes the bank tax and one-off cost items.
- Total assets amounted to ISK 1,047bn (Mar17: ISK 1,029bn), whereby loans to customers and liquidity portfolio account for 96% of the balance sheet.
- Loans to customers grew by 4.9% (ISK 34.0bn) in 1H17 to ISK 722bn. Total new lending was ISK 108bn across various lending divisions.
- Asset quality continues to improve whereby the ratio of loans more than 90 days past due and impaired continues to improve and was 1.2% (Mar17: 1.6% and Dec16: 1.8%).
- Deposits from customers contracted in line with expectations by 3.7% (ISK 21.8bn) in 1H17 to ISK 572bn.
- Total capital ratio was 23.5% and CET1 ratio was 23.3% at period end, compared to 23.1% and 22.8% respectively at March 2017.
- The liquidity position is strong and exceeds internal and external requirements. At period end the Bank's liquidity coverage ratio (LCR) was 171% (Mar17: 181%) and the total net stable funding ratio (NSFR) was 119% (Mar17: 121%).
- Leverage ratio was 15.7% at June17 compared to 15.5% at Mar17, indicating a moderate leverage.
- Íslandsbanki is the only Icelandic bank to have two international credit ratings. In January 2017, Fitch upgraded the Bank to BBB/F3, with a stable outlook, and in October 2016, S&P upgraded the Bank to BBB/A-2, with a positive outlook.
- Profit after tax was ISK 5.0bn in 2Q17 (2Q16: ISK 9.5bn).
- Return on regular operations normalised on 15% CET1 was 11.8% in the quarter (2Q16: 13.3%).
- Net interest income amount to ISK 7.8bn in 2Q17 (2Q16: ISK 8.4bn) and the net interest margin was 3.0% (2Q16: 3.3%).
- Net fee and commission income was ISK 3.5bn in 2Q17 (2Q16: ISK 3.5bn).
Birna Einarsdóttir, Chief Executive Officer at Íslandsbanki:
"The first half of 2017 was an eventful time for Íslandsbanki. Loans to customers increased by 4.9% over the period, with growth spread evenly across customer groups. At the same time, the non-performing loan ratio fell from 1.8% at year-end 2016 to 1.2% by mid-2017. Some 40% of the branch network's corporate loans are to firms in regional Iceland. That percentage has been on the rise in recent years.
Investment banking activities are robust, and the Corporate Finance team worked on a number of interesting projects during the period, including acting as advisor on the proposed merger of Iceland Travel and Grayline, as well as finalising the sale of Icelandic Gadus
Earnings from regular operations generated a profit of ISK 7.4bn for the six-month period, for an 11.2% return on core operations, slightly above expectations.
We have introduced progressive changes aimed at making the Bank's organisational structure fully customer-oriented. The move to our new headquarters will be finalised in September, bringing all of our business and support units together under a single roof and generating significant cost savings. Our employees have already cut their printing in half, in line with our strong emphasis on reducing paper use in an activity based workplace. I am convinced that, with the momentum from our united headquarters, Íslandsbanki is in good competitive form.
A different kind of competition is just ahead, however: the Íslandsbanki Reykjavík Marathon, which takes place on Saturday. Registration is up year-on-year, and we hope that Iceland's largest fund-raising effort will once again set a new record in the number of pledges made to charity."
Investor Presentation in Icelandic @12.30
Today, Thursday 17 August at 12.30 pm Icelandic time, Birna Einarsdóttir, CEO of Íslandsbanki, and Jón Guðni Ómarsson, CFO, will present the financial results to market participants, followed by a Q&A session. The meeting is conducted in Icelandic and held at the Bank's new headquarters at Hagasmári 3.
Investor call in English @10.30am
The Bank will also host an investor call in English to present the results at 10.30am Icelandic time. The call will start with a short macro update on the Icelandic economy, followed by a review of the financial results and Q&A. Please register by replying to email@example.com. Dial-in details and presentation will be sent out two hours prior to the call.
All presentation material will subsequently be available and archived on www.islandsbanki.is/ir.
For information on Íslandsbanki's financial calendar and silent periods see http://www.islandsbanki.is/english/investor-relations/calendar/.
Video - Islandsbanki 1H 2017 financial results
Jón Guðni Ómarsson, CFO of Íslandsbanki goes over the results of the first half of 2017: