Íslandsbanki`s Condensed Consolidated Interim Financial Statements 1H 2017
1H17 HIGHLIGHTS:
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Profit after tax was ISK 8.0bn in 1H17, compared to ISK 13.0bn in 1H16 which was considerably higher due to one-off income from sale of shares in Visa Europe. Return on equity was 9.2% in 1H17, compared to 12.9% in 1H16.
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Earnings from regular operations was ISK 7.4bn, compared to 8.0bn in 1H16.
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Return on equity from regular operations on 15% CET1 was 11.2% in 1H17 compared to 11.3% in 1H16.
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Net interest income amounted to ISK 15.2bn in 1H17 (1H16 ISK 15.9bn) down 4% in the period. The net interest margin was 2.9% in 1H17 (1H16: 3.1%).
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Net fee and commission income was ISK 6.8bn in 1H17 compared to 6.7bn in 1H16, up 2% in the period.
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Administrative costs totalled ISK 13.3bn in 1H17, down 6% from 1H16.
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Cost to income ratio was 59.2% in 1H17 (1H16: 55.8%), the cost to income ratio excludes the bank tax and one-off cost items.
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Total assets amounted to ISK 1,047bn (Mar17: ISK 1,029bn), whereby loans to customers and liquidity portfolio account for 96% of the balance sheet.
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Loans to customers grew by 4.9% (ISK 34.0bn) in 1H17 to ISK 722bn. Total new lending was ISK 108bn across various lending divisions.
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Asset quality continues to improve whereby the ratio of loans more than 90 days past due and impaired continues to improve and was 1.2% (Mar17: 1.6% and Dec16: 1.8%).
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Deposits from customers contracted in line with expectations by 3.7% (ISK 21.8bn) in 1H17 to ISK 572bn.
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Total capital ratio was 23.5% and CET1 ratio was 23.3% at period end, compared to 23.1% and 22.8% respectively at March 2017.
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The liquidity position is strong and exceeds internal and external requirements. At period end the Bank`s liquidity coverage ratio (LCR) was 171% (Mar17: 181%) and the total net stable funding ratio (NSFR) was 119% (Mar17: 121%).
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Leverage ratio was 15.7% at June17 compared to 15.5% at Mar17, indicating a moderate leverage.
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Íslandsbanki is the only Icelandic bank to have two international credit ratings. In January 2017, Fitch upgraded the Bank to BBB/F3, with a stable outlook, and in October 2016, S&P upgraded the Bank to BBB/A-2, with a positive outlook.
2Q17 HIGHLIGHTS:
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Profit after tax was ISK 5.0bn in 2Q17 (2Q16: ISK 9.5bn).
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Return on regular operations normalised on 15% CET1 was 11.8% in the quarter (2Q16: 13.3%).
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Net interest income amount to ISK 7.8bn in 2Q17 (2Q16: ISK 8.4bn) and the net interest margin was 3.0% (2Q16: 3.3%).
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Net fee and commission income was ISK 3.5bn in 2Q17 (2Q16: ISK 3.5bn).
Birna Einarsdóttir, Chief Executive Officer at Íslandsbanki:
"The first half of 2017 was an eventful time for Íslandsbanki. Loans to customers increased by 4.9% over the period, with growth spread evenly across customer groups. At the same time, the non-performing loan ratio fell from 1.8% at year-end 2016 to 1.2% by mid-2017. Some 40% of the branch network`s corporate loans are to firms in regional Iceland. That percentage has been on the rise in recent years.