Net loss of ISK 8.4 billion after taxes
Strong CAD at 14.1% and solid liquidity position in a challenging market
environment
Good prospects for second quarter 2008
Highlights from the First Quarter 2008:
• Net losses before taxes of ISK 10.4 billion with all of SPRON's listed
holdings marked to market. Losses from holdings in Exista amounted to ISK 8.2
billion and trading book ISK 2.0 billion
• Decreased market risk with sale of holdings in trading book during the period
• Net interest income ISK 830 million, increased by 79% from the same period
last year
• Net commission income ISK 335 million, increased by 7% from the same period
last year
• Net operating income negative by ISK 8.8 billion
• Core earnings ISK 876 billion and after tax ROE 12.6%
• Customer deposits increased by 10% from year end 2007
• Customer deposits 53.2% of loans to customers
• Loans to customers amounted to ISK 176.8 million
• Total assets amounted to ISK 254.7 billion, increased by 13.6% from year end
2007
• Equity at year end amounted to ISK 17.8 billion
• Dividends paid out during the period amounted to ISK 1.6 billion for 2007
• Subordinated loan amounting to ISK 5 billion finalised during the quarter
• The bank's capital adequacy ratio was 14.1% at the end of the period
• Refinancing for 2008 complete - liquidity ensured to 2010
Gudmundur Hauksson, CEO of SPRON:
“SPRON's results for the first quarter of 2008 are clearly affected by the
challenging market conditions in the beginning of the year with the Group
reporting a loss which is primarily due to losses in investments. The worst
seems to behind us in the stock market with our investments increasing in value
in the beginning of the second quarter. Our core operations are strong and have
strengthened considerably during the year with our interest income increasing
by 79% compared with the same period last year. The Group has considerably
more indexed linked assets than liabilities which leaves the Group well
prepared to meet the current increase in inflation. Market conditions will
remain challenging and we will be placing our focus firmly on securing the
bank's access to liquidity and maintaining a strong CAD ratio. We have
mortgages suitable for securitization of value close to ISK 30 billion, that
can be turned into cash via repurchase agreements. This is extremely important
in the current liquidity crisis and will take care of the group's funding needs
to 2010. The second quarter starts off well and our adjustments to the current
market conditions, prospects are good taking into consideration the general
market conditions that now prevail.“
Prospects
Market conditions continue to affect prospects domestically as well as
internationally. Given these circumstances the Group will focus on its core
operations which has strengthend considerably during the year. The Group is
well financed and has met its refinancing years up to 2010. The Group's CAD
ratio is also strong. However, in light of uncertainty in the financial
markets the management of SPRON believe that the previously published goal of
15% return on equity will not be met during the year and will not issue a new
goal in light of the challenging market conditions. Prospects for the Group
are good considering the current operating environment.
Board of Directors Approval and Auditing
The Board of Directors of SPRON hf. approved the financial statements for the
first quarter at a board meeting today, 30 April 2008. The Interim Consolidated
Financial Statements have been audited by SPRON's auditors, KPMG.
Presentation to shareholders and market participants
A presentation for shareholders and market participants will be held on
Wednesday 30 April at 17:00 p.m. at Hilton Reykjavik Nordica. Gudmundur
Hauksson CEO and Valgeir M. Baldursson CFO will present the bank's results and
answer questions. The meeting will be in Icelandic and can be viewed from the
Group's website www.spron.is. Questions can be sent to the meeting via email
ir@spron.is Information regarding the presentation will be made available after
the meeting on SPRON's website www.spron.is and the Nasdaq OMX Nordic
Exchange's website, www.nasdaqomxgroup.com.
Further information
For further information please contact:
Gudmundur Hauksson CEO, tel: +354 550 1213
Valgeir M. Baldursson CFO, tel: +354 550 1774 /+354 897 8939
Publication of interim results for 2008
Q2 2008 30 July 2008
Q3 2008 29 October 2008
Q4 2008 4 February 2009
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