Íslandsbanki hf. - Half Year financial report

Islandsbanki hf. : 2Q15 Condensed Consolidated Interim Financial Statements

HIGHLIGHTS
1H 2015
  * Profit after tax was ISK 10.8bn in 1H15 compared to ISK 14.7bn in 1H14. The
    difference is mainly due to irregular items.
  * Return on regular operations on 14% CET1 was 13.9% in 1H15 compared to
    12.4% in 1H14.
  * Total capital ratio remains strong at 28.3% (Mar15 28.4%) and Core Tier 1
    ratio was 25.8% (Mar15: 25.7%)
  * Net interest income amounted to ISK 13.6bn in 1H15 (1H14 ISK 13.6bn). The
    net interest margin was 2.9% in 1H15 (1H14: 3.1%).
  * Net fee and commission income was ISK 6.4bn in 1H15 (1H14 5.7bn), a 13.2%
    year on year increase.
  * Cost to income ratio was 56.0% in 1H15 (1H14: 55.6%). Cost to income-ratio
    excludes Bank tax and one-off cost items.
  * Leverage ratio was at 18.3% at the end of the period, indicating a moderate
    leverage.
  * Ratio of loans more than 90 days past due and impaired was 2.7% (Mar15:
    3.0%).
  * Total assets amounted to ISK 976bn (Mar15: ISK 926bn).

2Q 2015
  * Profit after tax was ISK 5.4bn in 2Q15 (2Q14: ISK 6.4bn).
  * Return on regular operations 14% CET1 was 12.8% in the quarter (2Q14: 9.3%)
  * Net interest income amount to ISK 7.4bn in 2Q15 (2Q14: ISK 6.9bn)
  * Net fee and commission income was ISK 3.5bn in 2Q15 (2Q14: ISK 2.8), a
    24.8% increase.

Birna Einarsdóttir, Chief Executive Officer at Íslandsbanki:"Íslandsbanki made a good progress in the first half of 2015. The Bank's core
business showed steady growth in lending, deposits and net fees and commissions.
New loan loans increased by 3% over the period, in line with GDP growth. We were
pleased to receive investment grade recognition both from Fitch and S&P.

Salaries and related expenses remain unchanged and the bank continues to reduce
costs whilst streamlining its operations. The bank's capital and liquidity
ratios remain strong, both of particular importance in this period when the
lifting of capital controls has come to the fore. Íslandsbanki's role in this
process is an important one, and the bank is working closely with its owners and
the government. Íslandsbanki has entered into Heads of Agreement negotiations
with Glitnir, with both parties co-operating to facilitate the Glitnir's
composition. The outcome of this agreement will change the bank's balance sheet
considerably.

Customers' needs for transacting when and wherever they want is growing rapidly.
The bank has responded by expanding its mobile service. The ISB app for personal
banking customers is now more heavily used than the Online Bank and is still
developing. In 2015 the increase of active users of the mobile app was 43%, and
37% of users use it once or more per day on average. The online bank is a big
area of focus for the bank, and surveys show that our customers are the most
satisfied of online banking customers.

Íslandsbanki issued a new Global Compact Report yesterday which complies to GRI
standards. The report issues nine key tasks in social responsibility. The
largest projects are responsible lending, responsible purchases and responsible
investments. The Bank is also proud to sponsor the Reykjavík Marathon which was
held last weekend with over 15,000 participants, and resulted in a charity
contribution of ISK 78 million."



Today, Tuesday 25 August at 12.30 pm, 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 headquarters at Kirkjusandur.
Registration to the investor meeting at Kirkjusandur.
The Bank will also host an investor call in English to present the results at 2
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 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 further information:
Investor Relations - Guðbjörg Birna Björnsdóttir, ir@islandsbanki.is and tel:
+354 440 4752.
Media Relations - Edda Hermannsdóttir, pr@islandsbanki.is and tel:
+354 440 4005.





[HUG#1947307]

Attachments:

ÍSB - 2Q15 Investor Presentation.pdf

Condensed Consolidated Interim Financial Statements ÍSB 30.6.2015.pdf

ÍSB - 2Q15 Reults Announcement.pdf