9M2012 Interim Financial Statements

29.11.2012 - IR Releases

Highlights of the Unaudited Statements

  • Profit after tax was ISK 16.2bn compared to ISK 11.3bn for the first 9 months in 2011. 
  • Profit after tax for 3Q2012 was ISK 4.6bn compared to ISK 3.3bn in 3Q2011. 
  • Profit after tax from regular operations, defined as earnings excluding one-off items was ISK 10.8bn in the first 9 months of 2012, compared to ISK 11.4bn during the same period in 2011. 
  • Tax and levies paid to government institutions amounted to ISK 6.7bn in 9M12 compared to ISK 4.5bn for the same period in 2011. 
  • Net valuation changes on the loan portfolio resulted in a gain of ISK 2.8bn in 9M2012 compared to a loss of ISK 0.8bn during the same period in 2011. 
  • Return on equity was 16.3% compared to 11.9% in 2011. Return on equity from regular operations was 10.9% compared to 12.0% in 9M11. 
  • Around 19,300 individuals and 3,340 corporates have received write offs, debt forgiveness or some form of debt correction since the Bank’s establishment, totaling ISK 420bn to date.
  • Total assets were ISK 813bn at end of September 2012, compared to ISK 796bn at year-end 2011. 
  • Total deposits were ISK 524bn at end of September 2012, compared to ISK 526bn at year-end 2011. 
  • The net interest margin was 3.9% in the first 9 months of 2012, compared to 4.8% in the same period 2011.
  • Equity was ISK 140bn having increased by 13.2% throughout the first 9 months of 2012. The total capital ratio was 24.3% at the end of the period. 

Birna Einarsdóttir, Chief Executive Officer of Íslandsbanki:

“I am broadly pleased with the Q3 financial results, which are in line with the previous quarterly results of 2012. Íslandsbanki´s employees can be proud of the progress that we have made since the establishment of the bank in 2008. We have a strong liquidity position and our capital ratios are well above the FME´s limits.

Fee and commission income has increased year on year, in part because of an increase in activity in Icelandic capital markets and more demand for corporate finance advisory. There are clear signs that the financial markets are more active than in recent years. Íslandsbanki managed the bond offering of Eik, a real-estate company, which was the largest private sector bond offering since late 2008, and it marks a milestone in corporate financing. Furthermore, the bank oversaw the listing of Eimskip shares and it is working on the planned listing of Vodafone shares on the NASDAQ OMX Iceland Stock Exchange, as well as working on the listing of other Icelandic companies.

Íslandsbanki continued to issue Covered Bonds; two existing issues were tapped in November and in October the Bank completed its first issue of non-CPI-linked bonds. Íslandsbanki has issued covered bonds amounting to ISK 11.4 billion since the beginning of December of 2011 – issues which have all been well received.

The Icelandic Supreme Court ruling in October in the case of Borgarbyggð broadened the scope of the previous precedent that was set by its February 2011 ruling on the recalculation of ISK denominated loans that were illegally indexed to foreign currencies. Prior to the ruling in October, the Icelandic banks had jointly chosen to take 11 trial cases to the courts in order to clarify their position about the recalculation of these loans in light of the February ruling. Íslandsbanki believes that most of the matters have now been clarified by the October ruling and has decided to drop three of the cases so as to speed up the recalculation process. The bank stands by its earlier statements that the customer’s rights will always be valued and it will now set about recalculating 14,000 loans.”

Financial Results Announcement

Financial Results Presentation

Condensed Consolidated Interim Financial Statement