In the first nine months of 2018, Landsbankinn's after-tax profit was ISK 15.4 bn as compared to ISK 16.8 bn for the same period in 2017. Annualised ROE was 8.8% as compared to 9.4% for the same period the previous year.
Net interest income was ISK 29.8 bn, up by 10.3% between periods. Net commission income amounted to ISK 5.8 bn, increasing by 12% from the same period the previous year. Positive value changes amounted to ISK 1.6 bn in the period, as compared with ISK 2.1 bn in the same period of 2017. At the end of September 2018, the default rate was 0.5% as compared with 1.0% for the same period in 2017.
The Bank’s operating income in the first 9M of 2018 was ISK 41.1 bn as compared to ISK 41.6 bn for the same period of 2017. Other operating income amounted to ISK 3.8 bn as compared to ISK 5.9 bn in the same period of 2017, which is a 36% decrease. Unfavourable conditions on securities markets account for this decrease for the most part.
The interest margin on assets and liabilities was 2.7% in the first nine months of 2018, up from 2.5% in the same period of 2017.
The Group’s operating expenses in the first 9M of 2018 totalled ISK 17.7 billion, remaining unchanged between periods. Labour cost accounts for ISK 10.8 bn of that figure as compared with ISK 10.3 bn for the same period in 2017, which is a 4.3% increase. Other operating expenses are down by 5.5% compared to the same period last year and amount to ISK 7.0 bn.
The cost-income ratio for the first 9M of the year was 45.0%, as compared to 44.7% for the same period last year.
Lending increased by 12.1% since the beginning of the year, or by just over ISK 112.4 bn. Growth of the lending portfolio is for both households and corporates. Customer deposits with Landsbankinn increased by 14.5% this year to date, or by ISK 87.5 billion.
Landsbankinn’s equity amounted to ISK 235.9 bn as at 30 September this year and its CAR was 24.8%. On 19 September, Landsbankinn paid a special dividend in the amount of ISK 9.5 bn. This year, the Bank has paid a total of ISK 24.8 bn in dividend with total dividend payments from the Bank since 2013 amounting to ISK 131.7 bn. Around 99.7% of dividend payments accrue to the National Treasury.
Lilja Björk Einarsdóttir, CEO of Landsbankinn:
“I am pleased to see the see the Bank’s market share at the end of the year’s third quarter measures close to an all-time high. It is also great to see how well customers have received h a number of new digital solutions we have introduced recently. Our aim is to provide outstanding digital service, as well as enhance personal advice and strengthen relationships. Landsbankinn’s employees possess a great deal of knowledge and we are proud of the fact that 90 of our employees are accredited as a Financial Consultant. This valuable knowledge and experience is imperative in our 360° Review, a comprehensive financial consultation for individuals, which the Bank first began offering in 2015. Our experience of the 360° Review has been good and in September this year, we introduced tailored financial consultancy for small and medium-sized enterprises based on the same methodology. This new financial consultancy service is called a 360° Corporate Conversation and has been well received.
On the balance sheet, both lending and deposits have increased considerably this year and in August, the Bank’s financing was strengthened further with the issuance of its first subordinated bond. This issuance is an important milestone along the Bank’s path to its stated 10% profitability goal. In that regard, it is also important that operations continue to be run prudently. The Bank’s cost-income ratio in the first nine months of the year is 45% and costs, measured in ISK, are similar to the previous year. We will continue our efforts to increase efficiency and take every opportunity to lower costs.
This year to date, and especially in the third quarter, the securities market has been volatile for various reasons. Landsbankinn is a market maker for numerous Icelandic companies. In that role, the Bank contributes to normal price formation and saleability on markets for Icelandic investors, regardless of economic conditions.
Overall, Landsbankinn’s position is strong. Building on a foundation of solid equity and robust financing, the Bank is well placed to operate in a dynamic environment.”
Investor call in English
Landsbankinn will be hosting an investor call in English covering the main results for the first nine months of 2018 on Friday, 26 October, 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
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