Financial statement for the first 9 months
Highlights of the first 9 months of 2014
- Profit after tax was ISK 18.2bn in 9M14 (9M13: ISK 15.4bn)
- Return on equity was 13.8% in 9M14 (9M13: 13.4%). This improvement in 9M is despite the equity base increasing 14% YoY from 160bn to 181bn.
- Net interest income amounted to ISK 20.6bn in 9M14 (9M13: ISK 21.9bn).
- Net fee and commission income was 8.5bn in 9M14 (9M13: 7.6bn). This increase can mainly be attributed to Retail, Markets, Wealth and fee generating subsidiaries.
- Cost to income ratio was 54.4% (9M13: 58.4%); Results from cost projects coming through.
- Total capital ratio remains strong at 29.4% (YE13: 28.4%), and Core Tier 1 ratio was 26.3% (YE13: 25.1%).
- LPA ratio was 7.0% (YE13: 8.3%). Ratio of loans more than 90 days past due was 3.1% (YE13: 3.5%).
- Total assets were ISK 931bn (YE13: ISK 866bn) a 7.5% growth since YE13
Highlights of 3Q
- Profit after tax was ISK 3.5bn in 3Q14 (3Q13: ISK 4.2bn)
- Return on equity was 7.9% in the quarter (3Q13: 10.6%)
- Net interest income amounted to ISK 7.1bn in 3Q14 (3Q13: ISK 7.4bn). The net interest margin was 3.1% in 3Q14 (3Q13: 3.5%) and is now at expected long term level.
- Net fee and commission income was ISK 2.8bn in 3Q14 (3Q13: ISK 2.5bn) a 16% increase.
- Total assets were ISK 931bn (Jun14: ISK 908bn) or 3% growth.
- Total deposits increased to ISK 561bn (Jun14: ISK 543bn), due to normal fluctuation in deposits from customers and credit institutions.
“I am pleased with the results for the first nine months of the year which are in line with expectations. It will, however, continue to be challenging to strengthen the core operations through cost reduction and increased revenue growth. We have focused on increasing operational efficiency, achieving a 6.4% reduction in administrative expenses year on year. Loans to customers have increased by ISK 54 billion this year.
Íslandsbanki has always been strong in product development and is responsive to customer needs. Good example of this is the first-time-buyer loan we announced during the quarter, a housing loan on better terms for those who are taking their first step on the housing ladder. We are also constantly developing the App and see a 100% increase in the number of transactions from the beginning of the year, and 45,000 customers have now downloaded it.
It is estimated that about 5,000 of the Banks´s customers are entitled to the debt relief program for CPI linked mortgages that the Icelandic government is implementing. This program is funded through a special bank tax, and the Bank´s estimated payment this year is ISK 2.4 billion. It is important that this temporary tax remains just that - temporary. Increased taxation harms Icelandic banks very directly, allowing foreign banks a competitive advantage in lending to Iceland´s largest companies. “