- Landsbankinn's after-tax profit in 2018 was ISK 19.3 bn.
- Return on equity (ROE) was 8.2% in 2018, the same as in 2017.
- The cost-income ratio decreased between years and was 45.5% in 2018.
- Landsbankinn’s credit portfolio grew by ISK 138.9 bn. The default ratio was 0.8% at year-end as compared to 0.9% at the end of 2017.
- Landsbankinn's equity amounted to ISK 239.6 bn at year-end 2018 and its total capital ratio was 24.9% of risk-weighted assets.
- A proposal will be made to the AGM to pay an ISK 9.9 bn dividend to shareholders for the year 2018.
- Landsbankinn's annual report and risk report for 2018 are published alongside the annual financial statements.
The profit of Landsbankinn hf. in 2018 was ISK 19.3 bn after taxes, as compared with ISK 19.8 bn in 2017. After-tax ROE was 8.2% in 2018, the same as in 2017. Net interest income increased by ISK 4.5 bn between years, amounting to ISK 40.8 bn in 2018. Net fee and commission income amounted to ISK 8.2 bn, more or less unchanged from the previous year. Other operating income amounted to ISK 3.6 bn, a YoY decrease of 49%. Unfavourable conditions on securities markets are the main reason for the decrease. Positive value changes in 2018 amounted to ISK 1.4 bn as compared with a positive value change of ISK 1.8 bn in 2017. The net interest margin on assets and liabilities was 2.7% compared to 2.5% the previous year.
Operating expenses were ISK 23.9 bn, up by 0.4% between years. Wages and related expenses amounted to ISK 14.6 bn as compared with ISK 14.1 bn the previous year, which is a 3.8% increase between years. Other operating expenses decreased by 4.5%.
Pre-tax profit in 2018 amounted to ISK 30 bn, as compared to ISK 29.7 bn in 2017. Imputed taxes, including a special financial management tax on wages, amount to ISK 11.4 bn in 2018 as compared with ISK 10.6 bn in 2017.
Landsbankinn's total assets increased by ISK 133.2 bn between years and amounted to ISK 1,326 bn at year-end 2018. Lending increased by 15.0% between years, or by just over ISK 138.9 bn. There was in increase in lending to both retail and corporate customers. The default ratio continues to decline and stood at 0.8% at year-end 2018 as compared with 0.9% at year-end 2017.
At the end of 2018, deposits from customers amounted to ISK 693 bn as compared with ISK 605 bn at year-end 2017.
Landsbankinn’s equity at year-end 2018 was ISK 239.6 bn, as compared with ISK 246.1 bn at year-end 2017. In 2018, Landsbankinn paid ISK 24.8 bn in dividend to shareholders. Landsbankinn’s capital ratio at year-end 2018 was 24.9%, compared to 26.7% at year-end 2017. Landsbankinn shall maintain a minimum core capital of 20.5%, according to FME’s total requirements.
The Board of Directors of Landsbankinn will propose to the AGM on 20 March 2019 that shareholders be paid a dividend amounting to ISK 0.42 per share for the year 2018, a total amount of ISK 9.9 bn. The dividend payment represents around 52% of the year's profit.
Lilja Björk Einarsdóttir, CEO of Landsbankinn:
“Landsbankinn has strengthened its position in 2018 - increased market share, improved operating outcome and increased customer satisfaction and trust encourages us to do even better.
Successful introduction of new digital service solutions for customers have resulted in increased operating efficiency. The credit portfolio grew considerably, somewhat in excess of plans, yet in line with the Bank’s strategy and its defined lending policy. Results from a focus on increasing operating efficiencies clearly manifested in unchanged total operating costs between years, despite contractual wage increases, as operating expenses other than wages decreased by 4.5%. The Bank’s cost-income ratio fell to 45.5%. Return on equity (ROE) was 8.2% in 2018.
Landsbankinn places key emphasis on ensuring that services meet customer needs and that the Bank’s operation is sound in both the short and long term. There are great opportunities in the current technological advances and changes to financial services; simultaneously, the Bank faces a significant challenge in meeting increased demands in this field.
We are grateful for the degree of trust and confidence our customers have in the Bank. Landsbankinn's market share has grown steadily and is now the largest among the country’s banks, for the fifth consecutive year. The Bank's market share in retail banking is 38% and 34% in the corporate sector. Customer satisfaction scores higher than before, confidence in the Bank has increased and it is especially pleasing that surveys show that Landsbankinn’s customers are more likely to recommend their bank than are the customers of other banks.
Product development, changes and innovation are a constant and necessary aspect of the Bank’s growth and operation, and improved service to customers. The year 2018 was characterised by many exciting innovations in digital services and it can safely be said that the Bank’s services have never changed as dramatically in as short a time before. The Bank’s offering of new solutions builds on a solid foundation where robust technological capability, exceptional employees, a strong market share, varied service channels and emphasis on strengthening and maintaining personal business relationships are key.”
Teleconference to present results
A teleconference to present the Bank's 2018 financial statement will be held for analysts on Friday, 8 February, at 10 am localtime. The meeting will be held in English. Please register for participation by emailing ir@landsbankinn.is .
Landsbankinn's financial calendar
20 March 2019 - Annual General Meeting
2 May 2019 - Q1 2019 results
25 July 2019 - H1 2019 results
24 October 2019 - Q3 2019 results
6 February 2020 - Annual Financial Statements 2019
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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