2017-08-17 10:33:34 CEST

2017-08-17 10:33:34 CEST


REGLERAD INFORMATION

Engelska Isländska
Íslandsbanki hf. - Half Year financial report

Islandsbanki hf. : 1H2017 Consolidated Interim Financial Statements 


Íslandsbanki's Condensed Consolidated Interim Financial Statements 1H 2017

1H17 HIGHLIGHTS:

  * 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.







2Q17 HIGHLIGHTS:

  * 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 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/ir.

For information on Íslandsbanki's financial calendar and silent periods see
http://www.islandsbanki.is/english/investor-relations/calendar/.



For further information:

  * Investor Relations - Tinna Molphy, tinna.molphy@islandsbanki.is, tel
    +354 440 3187.
  * Media Relations - Edda Hermannsdottir, edda.hermannsdottir@islandsbanki.is
    and tel: +354 440 4005.






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