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Annual Consolidated Statements 2016

Profit after tax was ISK 20.2bn in 2016, compared to ISK 20.6bn in 2015. The profit in 2016 was driven by strong core income and the completion of the sale of Borgun's, the Bank’s subsidiary, shares in Visa Europe, compared to a high net loan impairment gain in 2015.

Íslandsbanki’s 2016 Consolidated Annual Financial Statement

Highlights in 2016 were:

  • Profit after tax was ISK 20.2bn in 2016, compared to ISK 20.6bn in 2015. The profit in 2016 was driven by strong core income and the completion of the sale of Borgun's, the Bank’s subsidiary, shares in Visa Europe, compared to a high net loan impairment gain in 2015.
  • Return on equity was 10.2% in 2016, compared to 10.8% in 2015.
  • Earnings from regular operations was ISK 15.1bn, compared to ISK 16.2bn in 2015. Return on equity from regular operations on 15% CET1 was 10.7% in 2016 compared to 12.4% in 2015.
  • Net interest income amounted to ISK 31.8bn in 2016 (2015 ISK 28.0bn) up 14%. The net interest margin rose to 3.1% in 2016 (2015: 2.9%), in part due to a reversal of previously impaired interest, high interest rate environment and rising equity levels.
  • Net fee and commission income was ISK 13.7bn in 2016 compared to 13.2bn in 2015.
  • A one-off loss of ISK 1.7bn was recognised due to building damages in former headquarters at Kirkjusandur and relocation to new headquarters.
  • Cost to income ratio was 56.9% in 2016 (2015: 56.2%), the cost to income ratio excludes the Bank tax and one-off cost items. 55% is the long term target.
  • Total assets amounted to ISK 1,048bn (Sep16: ISK 1,068bn), whereby loans to customers and liquidity portfolio account for 93% of balance sheet.
  • Loans to customers grew by 3.3% in 2016 to ISK 688bn. Total new lending was ISK 163bn across various lending divisions, but strengthening of the ISK had some dampening effect on the growth of the portfolio.
  • Ratio of loans more than 90 days past due and impaired was 1.8% (FY15: 2.2%).
  • Deposits from customers closed at comparable levels to 2015. Expected outflows with the easing of the capital controls have not come to fruition.
  • Total capital ratio was 25.2% and CET1 ratio was 24.9% as a result of the subordinated loan of EUR 138m being prepaid in September.
  • The liquidity position is strong and exceeds internal and external requirements. At December 2016, the Bank's liquidity coverage ratio (LCR) was 187% (Sep16: 195%) and the total net stable funding ratio (NSFR) was 123% (Sep16: 126%)
  • Leverage ratio was at 16.0% at Dec16 compared to 18.1% at Dec15, indicating a moderate leverage.
  • The Bank has issued three notes in FX over the period. Making the Bank fully market funded, Íslandsbanki issued a 4-year EUR 500m (ISK 65bn) 1.75% Fixed Rate Note, corresponding to a spread of 200 basis points over mid-swaps in August (now trading at Z+97bp). This followed a USD 35m private placement in January and EUR 75m tap issue in May.
  • Íslandsbanki is the only Icelandic bank to have two international credit ratings. In October 2016, S&P upgraded the Bank to BBB/A-2, with a positive outlook, and in January 2017 Fitch upgraded the Bank to BBB/F3, with stable outlook

Highlights in 4Q16 were:

  • Profit after tax was ISK 4.6bn in 4Q16 (4Q15: ISK 3.9bn).
  • Return on regular operations on 15% CET1 was 11.7% in the quarter (4Q15: 12.8%).
  • Net interest income amounted to ISK 8.1bn in 4Q16 (4Q15: ISK 7.0bn).
  • Net fee and commission income was ISK 3.8bn in 4Q16 (4Q15: ISK 3.2bn).

Birna Einarsdóttir, Chief Executive Officer:

Íslandsbanki returned another solid performance in 2016, a year that was marked by several milestones in the Bank’s development. Our core operations continued to produce stable income and consistent returns. Loan portfolio restructuring has been finalised, all holdings in non-related businesses have been divested, and asset quality continues to improve.

The Bank successfully raised its profile in capital markets, at home and abroad, with a EUR 500 million benchmark bond, which has performed very well in the aftermarket. In December 2016 the Bank paid the Government an extraordinary dividend of ISK 27bn, bringing the total dividends in 2016 to ISK 37bn, thereby taking the first steps towards capital optimisation and eventual privatisation.

The Iceland sovereign ratings were all raised in the past year, to A-3/A-/BBB+, reflecting the progress the country has made towards full capital account liberalisation and declining debt levels. Indeed, Íslandsbanki, the only bank to have two international ratings, also received upgrades to BBB by both Standard & Poor’s and Fitch Ratings.

For four years in a row, Íslandsbanki has been named Iceland’s #1 bank in the Icelandic Customer Satisfaction Index. For eight years running, we have been voted Iceland’s most professional bank and its best provider of financial
services to companies. The year culminated in the move to our new headquarters, where the activity-based working environment will surely bring organisational flexibility and greater support for our relationship banking model and our vision to be #1 for service.

Investor Presentation in Icelandic

Today at 12.30 pm Icelandic time, Birna Einarsdóttir, CEO of Íslandsbanki, and Jón Guðni Ómarsson, CFO, will present the financial results to market participants, followed by a Q&A session. The meeting is conducted in Icelandic and held on the ground floor of the Bank's new headquarters at Hagasmári 3.

Investor call in English

The Bank will also host an investor call in English to present the results at 2 pm Icelandic time. The call will start with a short macro update on the Icelandic economy, followed by a review of the financial results and Q&A. Please register by replying to Dial-in details and presentation will be sent out two hours prior to the call.

All presentation material will subsequently be available and archived on

For information on Íslandsbanki's financial calendar and silent periods see

More information