In the first half of 2018, Landsbankinn’s net after-tax profit was ISK 11.6 billion as compared with an ISK 12.7 billion profit for the same period in 2017. Return on Equity (ROE) for the period was 9.9% on an annualised basis as compared with 10.6% for H1 in 2017. Operating costs remained near as unchanged between H1 2018 and H1 2017.
Net interest income was ISK 19.5 billion, up by 7.2% between periods. Net fee and commission income amounted to ISK 3.9 billion, compared to ISK 4.4 billion during H1 of 2017. Value changes in the credit portfolio were positive by ISK 1.7 billion as compared with ISK 1.3 billion during the same period of 2017. The default ratio was 0.6% in H1 of 2018 as compared with 1.1% in H1 of 2017.
Total operating income in H1 2018 amounted to ISK 29.0 billion, compared to ISK 29.3 billion in H1 2017. Other operating income amounted to ISK 3.9 billion, compared to ISK 5.4 billion a year earlier, with the decline due primarily to adverse conditions on securities markets.
The interest margin on assets and liabilities was 2.7% in H1 of 2018, up from 2.5% in the same period of 2017.
The Bank’s operating costs amounted to ISK 12.2 billion in H1 2018, which is a 0.9% increase from H1 2017. Labour cost accounts for ISK 7.5 billion of that figure as compared with ISK 7.1 billion for the same period in 2017, which is a 5.4% increase due mostly to contractual wage increases. Other operating expenses dropped by 5.7% as compared with H1 2017 and amounted to ISK 4.6 billion as compared with ISK 4.9 billion in H1 of 2017.
As of 30 June this year, Landsbankinn's equity amounted to ISK 232.1 billion and its capital adequacy ratio was 24.1%.
Lilja Björk Einarsdóttir, CEO of Landsbankinn:
“Landsbankinn’s performance in the first half of 2018 was good and the results confirm that the Bank’s operations are robust whether one looks to profit, lending or operating expenses.
The success of cost-efficiency measures implemented throughout the Bank’s operations can be seen in stable operating costs, despite considerable investment in the continued development of core systems, net security and digital solutions. Landsbankinn is placing increased emphasis on digital services and the solutions introduced recently by the Bank have all been very well received. More new digital service solutions will be introduced in the near future, as customers clearly wish to be able to tend to their banking business quickly and safely, any time and any place. Moving forward we will see significant changes to the framework of the financial system. Landsbankinn will participate fully in these developments and is well positioned to take advantage of the opportunities they bring.
Lending and deposits with Landsbankinn grew considerably between periods, reflecting stronger economic activity and the Bank’s increased market share, currently 37.9% of the retail market and 37.1% in the corporate market. Landsbankinn is strongly positioned to provide universal financial services to companies and the Bank’s asset management function has garnered good results, despite challenging conditions in equity markets recently.
International rating agency S&P Global Ratings recently confirmed the Bank’s rating grade at BBB+ with stable outlook. S&P’s announcement mentions various characteristics of the Icelandic financial market, both advantage differences on the credit market and impact from the small scale of the market. It is satisfying to see that Landsbankinn has managed to achieve good results despite various challenges and we will continue to do our utmost to provide customers with responsible and competitive financial services.”
Investor call in English
Landsbankinn will be hosting an investor call in English covering the main results of H1 2018 on Friday, 27 July, at 10 am local time. Please register participation by emailing ir@landsbankinn.is.
For further information contact:
Rúnar Pálmason, Public Relations, pr@landsbankinn.is, tel: +354 410 6263
Hanna Kristín Thoroddsen, Investor Relations, ir@landsbankinn.is, tel: +354 410 7310
Attachments
