Íslandsbanki’s financial highlights 2019
Fourth quarter 2019 financial highlights
Birna Einarsdóttir, CEO of Íslandsbanki
In 2019, we reviewed Íslandsbanki‘s strategy and defined a new role for the Bank as “Empowering our customers to succeed.” We approved a forward-looking sustainability strategy whose aim is to integrate the Bank’s commitment to sustainability into its profit objectives.
The Bank’s operating performance in 2019 was acceptable, considering the slowdown in the economy during the year. The consolidated profit was ISK 8.5 billion. This is equivalent to a return on equity of 4.8%, which is well below our long-term target. The return on equity from regular operations based on a CET1 ratio of 16% was 6.6%.The Bank’s income rose by 7.8% during the year, and the parent company’s cost-to-income ratio declined to 62.4% from 57.1%. As in 2018, subsidiaries’ operations had a negative impact on the consolidated results. In order to improve returns, the Bank took several actions to optimise its operations under the framework of a new policy.
Growth in deposits and lending was strong during the year, at 6.8% and 6.3%, respectively. Conditions in the capital markets, both in Iceland and abroad, were favourable for the Bank, and our funding remained diverse and successful. The Bank’s liquidity and capital ratios remained strong, and well above both internal targets and regulatory requirements. As a result, Íslandsbanki remains well prepared to contribute to the growth and success of the domestic economy.
We led the market in securities brokerage, and assets under management grew markedly during the year, as did assets held in custody. Moreover, Iceland Funds had an excellent year, with funds in three out of four categories ranking first nationwide in terms of returns.
In 2019, we continued to invest in IT and reorganised our IT department as we shifted from a project-centred orientation to a product-driven model. This links our business units more closely with our digital product development, which is becoming increasingly important for our operations. We also introduced several digital solutions, among them the new Íslandsbanki banking app, automated credit score evaluation, and a mortgage application process that customers can use to apply for a loan in a matter of minutes.
As part of our strategy review, our employees have elected to emphasise four of the United Nations Global Goals for Sustainable Development: Quality Education; Gender Equality; Industry, Innovation, and Infrastructure; and Climate Action. We also decided during the year to apply the ESG criteria to the Bank’s operations. Through these efforts, the Bank aspires to be a positive force in society.
Exciting but demanding times lie ahead, and we look forward to continuing to implement our new strategy in cooperation with our customers and partner companies.
2019 Operational highlights
Investor relations
Investor call in English at 9.30 am (GMT).
On 13 February 2020 at 9.30 am (GMT), the Bank will hold an investor call. The call will begin with a short update on the Icelandic economy, followed by a review of the Bank’s financial results. The call will be in English.
Please register by sending an e-mail to: ir@islandsbanki.is. Dial-in details and presentations will be sent out to registered participants prior to the call.
Market participants meeting in Icelandic at 10.30 am (GMT).
A meeting with market participants in Icelandic will take place on 13 February 2020 at 10.30 am (GMT). The presentation will take place at the Íslandsbanki headquarters, Hagasmári 3, 9th floor, 201 Kópavogur. The presentation will be in Icelandic.
Please register by sending an e-mail to: ir@islandsbanki.is
All materials relating to the Bank’s operating results, together with information on the financial calendar and silent periods, can be found here: https://www.islandsbanki.is/en/landing/about/investor-relations
For further information:
Head of Investor Relations – Margrét Lilja Hrafnkelsdóttir, margretlhr@islandsbanki.is
Head of Communications - Edda Hermannsdottir, edda.hermannsdottir@islandsbanki.is
Íslandsbanki press releases
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About Íslandsbanki
A leader in financial services in Iceland, Íslandsbanki is a universal bank with total assets of ISK 1,199bn, a total capital ratio of 22.4% and a 25-40% market share across all domestic business segments at year-end 2019.
Íslandsbanki's purpose is to move Iceland forward by empowering our customers to succeed. Driven by the vision to be #1 for service, Íslandsbanki's relationship banking business model is propelled by three business divisions that manage and build relationships with the Bank's customers.
Íslandsbanki has developed a wide range of online services such as the Íslandsbanki and Kass apps, enabling customers to do their banking anywhere and anytime. At the same time, the Bank continues to operate the most efficient branch network in Iceland through its strategically located 14 branches.
Íslandsbanki has a BBB+/A-2 rating from S&P Global Ratings.
www.islandsbanki.is
Disclaimer
This press release may contain “forward-looking statements,” involving uncertainty and risks that could cause actual results to differ materially from results expressed or implied by the statements. Íslandsbanki hf. undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. It is the investor's responsibility to not place undue reliance on these forward-looking statements which only reflect the date of this press release. Forward-looking statements should not be considered as guarantees or predictions of future events and all forward-looking statements are qualified in their entirety by this cautionary statement.
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