Interim consolidated financial statements 1Q2013

30.05.2013 - IR Releases

Highlights

  • Profit after tax was ISK 4.6bn in 1Q13, compared to ISK 5.6bn for the same period in 2012. The difference is primarily driven by lower net interest income and fluctuations in the ISK.
  • Return on equity decreased to 12.2% (1Q2012: 17.7%). The YoY decrease in ROE is primarily driven by higher equity which has increased by 18% YoY, from ISK 129bn to ISK 152bn.
  • Total taxes and levies paid to government institutions amounted to ISK 2.1bn in 1Q2013, compared to ISK 2.2bn in 1Q2012.
  • Around 35,900 individuals and 3,900 corporates have received write-offs, debt forgiveness or some form of debt correction since the Bank’s establishment, totalling ISK 490bn to date.
  • Total assets remained on par at ISK 829bn (FY2012: ISK 823), with loans to customers down 3% to ISK 543bn (FY2012: ISK 558bn). 
  • The net interest margin was 3.6% (FY2012: 3.9% and 1Q2012: 4.4%) and is decreasing in line with expectations as deep discount following the acquisition of Glitnir loan book is being amortized. 
  • Net fee and commission income increased to ISK 2.5bn (1Q2012: ISK 2.1bn), a YoY increase of 17% which can mainly be attributed to markets, retail banking, wealth management and fee generating subsidiaries.
  • Net valuation changes on the loan portfolio resulted in a gain of ISK 3.1bn, compared to a loss of ISK 1.5bn during the same period in 2012. 
  • Total deposits reduced to ISK 492bn (FY2012: ISK 509bn). As deposits to customers remained on par, the decrease is primarily due to movements in deposits from credit institutions.
  • Equity was ISK 152bn, up 3% from year-end 2012 and 18% YoY. Total capital ratio strengthened to 26.2% (2012: 25.5%), and Tier 1 ratio was 22.9% (FY2012: 22.0%). 
  • The Bank´s liquidity position is strong and is well above both the FME and Central Bank’s regulatory requirements.

Birna Einarsdóttir, Chief Executive Officer of Íslandsbanki:

“Net income from core operations in the first quarter of 2013 was in line with expectations. The effort to drive efficiencies is beginning to show results with costs declining 3% year-on-year. Net fee and commission income is up 17% from the previous year partly as a result of increasing market activity in Iceland. Íslandsbanki is the largest issuer of covered bonds in the country, and it began issuing commercial paper this quarter – the first bank to do so in Iceland since 2008. 

20,000 of the Bank´s customers received a rebate on interest charges in February amounting to a total of ISK 2.5bn. Customers had these rebates deposited into a new term deposit product to encourage savings, and it is gratifying to see that 50% of that refund is still held on deposit with us.

Capital levels remain robust at 26.2% - well over the Icelandic FSA´s requirement - but this high number is affecting the Bank´s return on equity.”

Investor call in English

Later today, the Bank will host an investor call in English at 1pm Icelandic time. The call will start with a short macro update on the Icelandic economy, followed by a review of the 1Q2013 interim financial results and Q&A. To register for the conference call, please e-mail: ir@islandsbanki.is. 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

Further information:

Netspjall