Interim Consolidated Statements 1Q2016

11.05.2016 - IR Releases

Consolidated Interim Financial Statements 1Q2016

The Consolidated Interim Financial Statements for 1Q2016 was confirmed by the Bank’s Board of Directors and CEO at a board meeting held 11 May 2016. The financial statements are not audited or reviewed by the Bank’s auditors.


  • Profit after tax was ISK 3.5bn in 1Q16 compared to ISK 5.4bn in 1Q15. The difference is mainly due to higher income from the irregular line items net loan impairment and net financial income in 1Q15.
  • Return on equity was 6.9% in 1Q16, compared to 11.8% in 1Q15.
  • Earnings from regular operations was 3.6bn, compared to 4.4bn in 1Q15. Return on equity from regular operations on 14% CET1 was 10.1% in 1Q16 compared to 15.0% in 1Q15.
  • Net interest income amounted to ISK 7.5bn in 1Q16 (1Q15 ISK 6.2bn) up 22%. The net interest margin was 2.9% in 1Q16 (1Q15: 2.7%).
  • Net fee and commission income was ISK 3.1bn in 1Q16 (1Q15 2.9bn), a 8.3% year on year increase; thereof 2.6% was achieved in the parent company.
  • Cost to income ratio was 58.3% in 1Q16 (1Q15: 55.3%). The cost to income ratio excludes the Bank tax and one-off cost items.
    Loans to customers grew by 1.7% in the first quarter to 677.1bn. The increase is well diversified across various lending divisions.
  • Total assets amounted to ISK 1,021bn (Dec15: ISK 1,046bn).
    Deposits from customers decreased by 8.2% in the quarter to ISK 544bn, which was in line with expectations due to the old estates' composition agreements and pay-out of stability contributions.
  • The Bank issued one successful foreign denominated bond transaction during the period, a USD 35m private placement.
  • Total capital ratio remains strong at 29.7% (Dec15: 30.1%) and CET1 ratio was 28.1% (Dec15: 28.3%).
  • The liquidity position is strong and exceeds internal and external requirements. At March 2016, the Bank's liquidity coverage ratio (LCR) was 154% (Dec15: 143%) and the total FX net stable funding ratio (NSFR) was 118% (Dec15: 120%).
  • Leverage ratio was at 18.7% at the end of March compared to 18.1% at year-end, indicating a moderate leverage.
  • Ratio of loans more than 90 days past due and impaired was 2.1% (Dec15: 2.2%).
  • S&P placed the Bank´s BBB-/A-3 rating on positive outlook in January 2016, and Fitch affirmed a BBB-/F3 rating with a stable outlook in April. Íslandsbanki is the only Icelandic bank to have investment grade ratings from both S&P and Fitch.

Birna Einarsdóttir, Chief Executive Officer at Íslandsbanki:

The year has begun well for Íslandsbanki, and earnings are in line with management’s expectations. We see growth in interest income and in commission and fee income. The Bank’s loan book has grown by 2 percent quarter-on-quarter. Its liquidity position is very strong, and the Bank is therefore well prepared to participate in a wide range of projects. Core operations remain strong, and efforts to simplify and strengthen the Bank’s product offerings have borne fruit. Wage costs have risen in the wake of collective bargaining agreements, as they have for other companies, and are in line with the wage index.

The Bank recently announced the cancellation of borrowing fees for first-time homebuyers, in an effort to meet the needs of this rapidly growing group. At the same time, the Bank rolled out a new online credit assessment process that enables applicants to sign their applications electronically. This is part of Íslandsbanki’s move towards fuller digitisation, in line with our goal of simplifying the mortgage lending process for our customers and strengthening the service we provide.

At the beginning of 2016, Íslandsbanki issued a bond in the amount of USD 35 million on favourable terms, after the outlook on its S&P credit rating was changed from stable to positive. The Bank has also been an active issuer of bills and covered bonds in the domestic market.

This autumn, Íslandsbanki will move its headquarters to the North Tower in Kópavogur, thereby unifying its operations, which are currently in four locations. Significant streamlining will therefore take place when the Bank opens its modern and progressive headquarters.

Investor call in English

The Bank will host an investor call in English today 11 may to present the results at 1 pm 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 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

For information on Íslandsbanki's financial calendar and silent periods see


Jón Guðni Ómarsson, CFO of Íslandsbanki goes through the first quarter of 2016.

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