In the first six months of 2017, Landsbankinn's after-tax profit was ISK 12.7 bn compared to ISK 11.3 bn for the same period in 2016. Annualised return on equity was 10.6% compared to 8.6% in the same period in 2016. The cost-ratio decreased and is now 43%.
Net interest income amounted to ISK 18.2 bn, up 3.2% between periods. Net commission income amounted to ISK 4.4 bn, up 13.8% from the same period last year. Value adjustments decreased by ISK 1 bn between periods and the percentage of loans in arrears continues to decrease, was 1.1% in the first half of the year compared to 1.7% in the same period in 2016.
The Bank's operating income in the first half of the year amounted to ISK 29.3 bn compared to ISK 28.6 bn in the same period 2016, up 2.5% between periods. Other operating income amounted to ISK 5.4 bn compared to ISK 4.8 bn the same period last year, mainly due to positive fair value adjustments of unlisted equities.
The interest margin on assets and liabilities was 2.5% in the first half of 2017 compared to 2.3% for the same period last year.
The Bank's operating costs amounted to ISK 12 bn in the first half of 2017, down by 1.7% compared to the same period in 2016. Thereof, labour costs were ISK 7.1 bn, decreasing by 2.3% from the same period in 2016. Other operating costs amounted to ISK 4.9 bn, decreasing by 0.8% compared to the same period in 2016.
The cost-income ratio for the first six months of the year was 43.0%, down 4.3 percentage points compared to the same period last year. The reduction in the cost-income ratio is driven by positive financial markets and lower operating costs.
Landsbankinn's equity was ISK 238.9 bn as at 30 June and the equity ratio was 27.6%.
The CEO of Landsbankinn, Lilja Björk Einarsdóttir, commented:
"Landsbankinn's performance in the first half of 2017 was good and demonstrates the Bank's stability and solid operations. Growth in operating income is both attributed to general increased economic activity and increased market share. Ongoing rationalisation measures resulted in lower operating costs.
I speak for all the staff at Landsbankinn when I say that it is pleasing to see increased customer satisfaction and that customer confidence in the Bank is growing. Another positive development is seeing the percentage of customers' loans in arrears continues to go down and the level is currently at 1.1% which is a major improvement compared to recent years.
An important milestone was reached when Landsbankinn fully repaid the outstanding balance of the bond that was issued to LBE, formerly Landsbanki Islands hf., in 2009. The early repayment of the bond demonstrates Landsbankinn's improved borrowing terms on international financial markets and we will see signifcant savings in financing costs. The impact will be fully felt in third quarter of 2017 and improved terms can increase the Bank's competitiveness in providing foreign currency loans."
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
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