Landsbankinn hf. - Interim report (Q1 and Q3)

Landsbankinn hf. : Landsbankinn reports an ISK 7.6 bn profit in the first three months of 2017

In the first three months of 2017, Landsbankinn's net after-tax profit was ISK
7.6 bn as compared with an ISK 3.3 bn profit for the same period in 2016.
Net interest income was ISK 8 bn, up by 7.4% between periods. Net commission
income amounted to ISK 2.1 bn, increasing by 7% from the same period the
previous year. Other operating income amounted to ISK 3.8 bn as compared with
ISK 1.8 bn in Q1 of 2016. This increase is largely due to positive value changes
in unlisted equities.
Annualised ROE was 12.5% as compared with 5% for the same period the previous
year.
The Bank's operating income in the first three months of the year amounted to
ISK 15.7 bn as compared with ISK 11.5 bn for the same period in 2016, which is
an increase of 36% between periods. Operating expenses dropped by 5.4% as
compared with the same period in 2016. Total operating expenses in Q1 of 2017
amounted to ISK 5.9 bn. Operating expenses less wages and related expenses
amounted to ISK 2.4 bn, decreasing by 2.9% from the same period the previous
year.
The interest margin on assets and liabilities was 2.2% in Q1 2017, up from 1.9%
in Q1 2016.
Landsbankinn's loan portfolio grew by ISK 19 bn in the first three months of
2017, particularly due to new housing loans, despite heavy and growing
competition in the loan market. The increase reflects both Landsbankinn's higher
market share and great price increases in the real estate market.
The default ratio continues to fall and was 1.3% in Q1, as compared with 1.7%
for the same period last year.
The cost-income ratio for the first three months of the year was 42.5%, as
compared with 55.8% for the same time last year. The difference is the result of
both higher income and lower operating expenses.
Landsbankinn's equity amounted to ISK 233.9 bn at the end of March this year and
its total capital ratio was 27.4%. Landsbankinn pays dividend in the total
amount of ISK 24.8 bn this year. Dividend is paid in two instalments; ISK 13 bn
in dividend for the operating year 2016, the equivalent of 78% of the year's
profit, was paid to shareholders on 29 March 2017. The second instalment is a
special dividend, payable to shareholders on 20 September 2017, in the amount of
ISK 11.8 bn.
Lilja Björk Einarsdóttir, CEO of Landsbankinn:
"Landsbankinn's Q1 results are good and its performance more positive than
expected. Revenue continues to increase, with the Bank benefiting from positive
developments in the economy and a growing market share. The Bank shows good
profitability and visible results from improvements to its operations. While
irregulars affect the quarter's performance to some extent, the Bank's core
operations show evidence of smooth and steady growth. We maintain our strong
position in the corporate market and capital markets. Landsbankinn now holds a
39.2% share in the retail market, according to Gallup polls. We are extremely
pleased about these poll results, as the Bank places great emphasis on ensuring
that customers consider us a trusted financial partner. The fact that customers
increasingly choose to bank with Landsbankinn is an acknowledgement of our
efforts. The default ratio has never been lower and we welcome this confirmation
of the improved standing of our customers."
For further information contact:
Rúnar Pálmason, Public Relations, pr@landsbankinn.is, tel: +354  410 6263 /
899 3745

Hanna Kristín Thoroddsen, Investor Relations, ir@landsbankinn.is, tel:
+354  4107310


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Attachments:

Landsbankinn Q1 results 2017 - Press-release.pdf

Landsbankinn Q1 results 2017 - Presentation.pdf

Landsbankinn Q1 2017 Cond. Consolidated Interim Financial Statemen.pdf