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2020-01-23 22:06:29 CET 2020-01-23 22:06:29 CET REGULATED INFORMATION Arion Bank hf. - Inside informationDiscontinued operations and assets held for sale have a negative impact of ISK 8 billion on the Q4 2019 financial resultsDiscontinued operations and assets held for sale will have a negative impact of ISK 8 billion after tax on Arion Bank’s fourth quarter 2019 results. The effect on the Bank’s capital ratios is insignificant and the ratios remain robust. Arion Bank reports net earnings for 2019 of approximately ISK 1 billion after taking into account the impact of discontinued operations and assets held for sale. Discontinued operations and assets held for sale refer to assets or companies which the Bank intends to sell in the medium term and are classified in the income statement below profits from continuing operations. The negative impact on results in the quarter is chiefly attributable to two factors: Valitor The board of directors of Valitor approved a new business plan at its meeting earlier today. According to the impairment test it will be necessary to make an impairment of Valitor's intangible assets of ISK 4 billion. This impairment will be reflected in earnings from assets held for sale in the fourth quarter at Arion Bank and is additional to the operating loss of Valitor during the quarter and the cost of the company’s sale process during the year, a total of ISK 1.7 billion. The cost of reorganizing Valitor, a total of ISK 600 million, as reported in a release from the Bank on 30 December 2019, is included in this figure. Intangible assets at Valitor following this impairment amount to ISK 3.4 billion and belong to operations which have generated an operating profit. As this impairment concerns intangible assets, it has no effect on Arion Bank’s capital ratios. The organizational changes implemented by Valitor will significantly reduce the company’s investment need and operating expenses going forward and are designed to transform the company’s operating losses into positive EBITDA. Valitor is a financially robust, international payment solutions company which offers a diverse range of acquiring, payment portal and issuing services. Valitor is still in an active sale process. Stakksberg The Bank’s financial targets for the next few years, including return on equity and capital structure, remain unchanged. Contacts: This is information that Arion Bank hf. is obliged to make public pursuant to the EU Market Abuse Regulation. |
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