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Interim Consolidated Statements 1H2016

Profit after tax was ISK 13.0bn in 1H16 compared to ISK 10.8bn in 1H15

1H16 Highlights:

  • Profit after tax was ISK 13.0bn in 1H16 compared to ISK 10.8bn in 1H15. The profit is driven by strong core income and the completion of the sale of Borgun's shares in Visa Europe
  • Return on equity was 12.9% in 1H16, compared to 11.7% in 1H15
  • Earnings from regular operations was ISK 8.0bn, compared to ISK 8.2bn in 1H15. Return on equity from regular operations on 14% CET1 was 11.9% in 1H16 compared to 13.9% in 1H15
  • Net interest income amounted to ISK 15.9bn in 1H16 (1H15 ISK 13.6bn) up 17.3%. The net interest margin was 3.1% in 1H16 (1H15: 2.9%)
  • Net fee and commission income was ISK 6.7bn in 1H16 (1H15 6.4bn), a 4.3% year on year increase; thereof 1.3% was achieved in the parent company
  • A a loss of 1.2bn was recognised due to building damages in current headquarters at Kirkjusandur
  • Cost to income ratio was 56.0% in 1H16 (1H15: 56.0%), the cost to income ratio excludes the Bank tax and one-off cost items
  • Loans to customers grew by 5.0% in 1H16 to ISK 698.7bn, the increase is well diversified across various lending divisions
  • Total assets amounted to ISK 1,030bn (Mar16: ISK 1,021bn)
  • Deposits from customers decreased by 4.6% in 1H16 to ISK 566bn
  • Issued two foreign denominated bond transaction in the first half of 2016 a USD 35m private placement and EUR 75m tap issue, resulting in the Bank's first EUR 300m benchmark issue
  • Total capital ratio remains strong at 28.9% (Mar16: 29.7%) and CET1 ratio was 27.1% (Mar16: 28.1%)
  • The liquidity position is strong and exceeds internal and external requirements. At June 2016, the Bank's liquidity coverage ratio (LCR) was 173% (Mar16: 154%) and the total net stable funding ratio (NSFR) was 117% (Mar16: 118%)
  • Leverage ratio was at 18.3% at the end of June compared to 18.7% at Mar16, indicating a moderate leverage
  • Ratio of loans more than 90 days past due and impaired was 2.5% (Mar16: 2.1%)
  • S&P placed the Bank´s BBB-/A-3 rating on positive outlook in January 2016, and Fitch affirmed a BBB-/F3 rating with a stable outlook in April. Íslandsbanki is the only Icelandic bank to have investment grade ratings from both S&P and Fitch

2Q16 Highlights 

  • Profit after tax was ISK 9.5bn in 2Q16 (2Q15: ISK 5.4bn)
  • Return on regular operations 14% CET1 was 13.9% in the quarter (2Q15: 12.8%)
  • Net interest income amount to ISK 8.4bn in 2Q16 (2Q15: ISK 7.4bn)
  • Net fee and commission income was ISK 3.5bn in 2Q16 (2Q15: ISK 3.5bn)

Birna Einarsdóttir, Chief Executive Officer at Íslandsbanki:

'Íslandsbanki’s performance was good in the first half of 2016, and the Bank’s position is strong. The profit for the period was about ISK 13bn, and return on capital was 12.9% The increased profit is due in large part to income from the Bank’s subsidiary Borgun. Credit growth measured 5% to June, with loans granted to a wide variety of sectors.

The streamlining of the Bank’s branch network continues, and the number of branches will be 14 at the beginning of 2017. Íslandsbanki operates the most efficient branch network in Iceland and has done so for years.

According to a new service survey, customer satisfaction has never measured higher, and satisfaction scores have risen for all service elements since last year. In addition, the Bank was named Iceland’s best bank by international financial magazine Euromoney for the fourth year in a row. This confirms that Íslandsbanki’s vision of providing the best banking services in Iceland is bearing fruit, both in operating results and in customer satisfaction levels.

There is good news about the liberalisation of capital controls, which is extremely beneficial for the Icelandic economy. Íslandsbanki is well prepared for the liberalisation process, and both its liquidity and its capital position are very strong. The Bank’s asset management function, VÍB, has collaborated for years with several of the strongest asset management firms in the world. VÍB will continue to provide sound information about foreign markets and will assist savers with diversifying their savings, thereby reducing risk.'

Investor Presentation in Icelandic

On Tuesday at 11.30 pm Icelandic time, Birna Einarsdóttir, CEO of Íslandsbanki, and Jón Guðni Ómarsson, CFO, will present the 1H2016 financial results to market participants, followed by a Q&A session. The meeting is conducted in Icelandic and held at the Bank's headquarters at Kirkjusandur.

Registration to the investor meeting at Kirkjusandur.

Investor call in English

On Tuesday, the Bank will also host an investor call in English to present the results at 10 am 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


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