2015-05-12 20:18:19 CEST

2015-05-12 20:19:24 CEST


REGULATED INFORMATION

Islandic English
Arion Bank hf. - Financial Statement Release

Arion Bank’s Q1 2015 financial results 


Arion Bank's net earnings for the first three months of 2015 were significantly
affected by irregular items. The main factors were one-off events such as the
Bank's sale of shares in the real estate company Reitir and the international
drinks manufacturer Refresco Gerber and the subsequent stock market listing of
these companies. Arion Bank reported net earnings of ISK 14.9 billion for the
first three months of 2015, compared with ISK 2.9 billion for the same period
of 2014. Return on equity was 35.1%, compared with 7.8% in the same period of
2014. Net earnings from regular operations amounted to ISK 4.0 billion for the
first quarter of 2015, compared with ISK 1.7 billion for the same period last
year. Return on equity from regular operations was 9.8%, compared with 4.6% for
the first quarter of 2014. Total assets amounted to ISK 1,004.3 billion,
compared with ISK 933.7 billion at the end of 2014. 

The Bank's capital ratio at the end of the period was 23.9%, compared with
26.3% at the end of 2014, and Tier 1 was 21.2%, compared with 21.8% at the end
of 2014. 



Highlights of the Interim Financial Statements

  -- Net earnings of ISK 14.9 billion, compared with ISK 2.9 billion during the
     same period of 2014.
  -- Net earnings from regular operations amounted to ISK 4.0 billion, compared
     with ISK 1.7 billion for the same period last year.
  -- The capital ratio was 23.9% at the end of the period, compared with 26.3%
     at the end of 2014.
  -- Return on equity was 35.1%, compared with 7.8% in the same period of 2014.
     Return on equity from regular operations was 9.8% during the first quarter
     of 2015, compared with 4.6% during the same period last year.
  -- Net interest income of ISK 5.8 billion, compared with ISK 5.5 billion
     during the same period of 2014.
  -- Net commission income of ISK 3.8 billion, compared with ISK 3.1 billion
     during the same period of 2014.
  -- Operating income increased between years and amounted to ISK 21.8 billion,
     compared with ISK 9.0 billion during the same period of 2014. This sharp
     increase is related to the profit from sale and valuation change of
     shareholdings in the real estate company Reitir fasteignafélag hf. and the
     valuation change in Refresco Gerber in connection with the listing of the
     companies.
  -- Net valuation change during the period is positive, amounting to ISK 1.8
     billion, compared with ISK 2.0 billion during the same period of 2014.
  -- Income tax and the bank levy amounted to ISK 2.5 billion, compared with ISK
     1.9 billion during the same period of 2014.
  -- The cost-to-income ratio was 29.3%, compared with 69.0% in the same period
     of 2014. The cost-to-income ratio for regular operations was 53.2%,
     compared with 69% during the same period of 2014.
  -- Total equity amounted to ISK 177.1 billion, compared with ISK 162.2 billion
     at the end of 2014.



Höskuldur H. Ólafsson, CEO of Arion Bank:

“The financial results for the first three months of 2015 are excellent. The
Bank's performance exceeded all expectations following the successful stock
market listing and sale of the Bank's holdings in two companies, the
international drinks manufacturer Refresco Gerber and the real estate company
Reitir. The financial results were positively affected by these irregular items
and because it is the first quarter, the effect on key indicators is
significant. While it represents a strong start to the year, irregular items
will clearly not have such a substantial impact during the rest of the year. 

Regular operations performed well in the first quarter and generated strong
earnings. Return on equity from regular operations was just under 10% for the
period. We are continuing to strengthen the Bank's underlying operations. We
have placed emphasis on increasing the proportion of commission income in the
Bank's overall income and we achieved 19% growth in this area over last year.
More than 80% of commission income is derived from corporate clients, while
approximately 20% comes from services to retail customers. 

An important milestone was achieved during the quarter when the Bank issued
bonds in euros for EUR 300 million. It represented the largest bond issue by an
Icelandic bank for many years. This bond issue clearly demonstrates the
economic progress made in Iceland and reflects investors' confidence in the
Bank and its efforts in recent years. 

The number of sessions in the Arion app exceeded the number of sessions in the
online bank in a single month for the first time during the quarter. This
service has opened up new possibilities for customers and the pace of change
has surpassed our own ambitious targets. There are now around 40,000 active
users of the Arion app. This bears testament to the changing landscape in
banking services and our heavy investment in technology is clearly paying off
for our customers."



Conference call in English

Arion Bank will be hosting a conference call in English tomorrow, Wednesday 13
May at 10:00 BST (11:00 CET), where Stefán Pétursson CFO, will present the 2015
first quarter results. Those who would like to participate in the conference
call can send an e-mail to ir@arionbanki.is and will then receive instructions
with dial in details. 



For further information please contact Haraldur Gudni Eidsson of Arion Bank's
Communications division at haraldur.eidsson@arionbanki.is, or tel. +354 856
7108.