In the first three months of 2017, Landsbankinn's net after-tax profit was ISK 7.6 bn as compared with an ISK 3.3 bn profit for the same period in 2016.
Net interest income was ISK 8 bn, up by 7.4% between periods. Net commission income amounted to ISK 2.1 bn, increasing by 7% from the same period the previous year. Other operating income amounted to ISK 3.8 bn as compared with ISK 1.8 bn in Q1 of 2016. This increase is largely due to positive value changes in unlisted equities.
Annualised ROE was 12.5% as compared with 5% for the same period the previous year.
The Bank's operating income in the first three months of the year amounted to ISK 15.7 bn as compared with ISK 11.5 bn for the same period in 2016, which is an increase of 36% between periods. Operating expenses dropped by 5.4% as compared with the same period in 2016. Total operating expenses in Q1 of 2017 amounted to ISK 5.9 bn. Operating expenses less wages and related expenses amounted to ISK 2.4 bn, decreasing by 2.9% from the same period the previous year.
The interest margin on assets and liabilities was 2.2% in Q1 2017, up from 1.9% in Q1 2016.
Landsbankinn's loan portfolio grew by ISK 19 bn in the first three months of 2017, particularly due to new housing loans, despite heavy and growing competition in the loan market. The increase reflects both Landsbankinn's higher market share and great price increases in the real estate market.
The default ratio continues to fall and was 1.3% in Q1, as compared with 1.7% for the same period last year.
The cost-income ratio for the first three months of the year was 42.5%, as compared with 55.8% for the same time last year. The difference is the result of both higher income and lower operating expenses.
Landsbankinn's equity amounted to ISK 233.9 bn at the end of March this year and its total capital ratio was 27.4%. Landsbankinn pays dividend in the total amount of ISK 24.8 bn this year. Dividend is paid in two instalments; ISK 13 bn in dividend for the operating year 2016, the equivalent of 78% of the year's profit, was paid to shareholders on 29 March 2017. The second instalment is a special dividend, payable to shareholders on 20 September 2017, in the amount of ISK 11.8 bn.
Lilja Björk Einarsdóttir, CEO of Landsbankinn:
"Landsbankinn's Q1 results are good and its performance more positive than expected. Revenue continues to increase, with the Bank benefiting from positive developments in the economy and a growing market share. The Bank shows good profitability and visible results from improvements to its operations. While irregulars affect the quarter's performance to some extent, the Bank's core operations show evidence of smooth and steady growth. We maintain our strong position in the corporate market and capital markets. Landsbankinn now holds a 39.2% share in the retail market, according to Gallup polls. We are extremely pleased about these poll results, as the Bank places great emphasis on ensuring that customers consider us a trusted financial partner. The fact that customers increasingly choose to bank with Landsbankinn is an acknowledgement of our efforts. The default ratio has never been lower and we welcome this confirmation of the improved standing of our customers."
For further information contact:
Rúnar Pálmason, Public Relations, pr@landsbankinn.is , tel: +354 410 6263 / 899 3745
Hanna Kristín Thoroddsen, Investor Relations, ir@landsbankinn.is , tel: +354 4107310
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