Economic contraction ahead but the Bank’s position is sound
In his final address as Chairman of Íslandsbanki, Mr. Sophusson referred to the Bank´s strong position which was even more important now, when the economy has been hit hard by the COVID-19 pandemic. Fortunately, the Icelandic authorities, financial sector, and private sector are generally well prepared for such a shock. The decision to reduce the countercyclical capital buffer to zero was important for the Icelandic commercial banks in order for them to effectively react to current challenges facing companies and households. It was now time for the Government to follow through with the lowering of the bank tax. Despite Parliament´s 2019 approval for a gradual reduction of the bank tax to 0.145% over a period of several years, taxes on Icelandic banks remain about five times higher than those in neighbouring countries. The current approved reduction should nevertheless be effective immediately due to today´s pressing situation.
Mr. Sophusson presented proposals to the AGM, including a proposal that a dividend to shareholders for the 2019 financial year shall not be paid in light of uncertainties due to unprecedented circumstances in the financial markets, a proposal to approve the Bank’s compensation policy and on the election of the Board of Directors and alternates. Finally, Mr. Sophusson thanked the departing Board members for good cooperation. Hallgrímur Snorrason, newly elected Chairman of the Board, was thankful for the election and welcomed the new members of the Board.
A personal touch in a digital world
Íslandsbanki CEO Birna Einarsdóttir also reviewed the Bank’s strong position in view of the extraordinary circumstances caused by the COVID-19 pandemic. The Bank has strong capital and liquidity ratios and is therefore well prepared to work with households and businesses to find the solutions they need.
Birna gave an overview of the Bank´s 2019 financial performance and the Bank’s vision of providing the best possible banking services in an environment where the main challenge is to maintain a personal touch in a digital world. The Bank was in contact with its customers 47 million times last year, with 99% of that contact taking place digitally. Birna also mentioned the strategy work carried out with Boston Consulting Group during the year, noting that key elements of that work are well advanced or complete. Among these projects was the implementation of a new sustainability strategy that was formulated with employee participation and is being incorporated into all aspects of the Bank’s activities.
Results of the AGM
The proposals presented to the AGM can be found on the Bank‘s website:
- Board report on the Bank‘s activities in 2019 Friðrik Sophusson, Chairman of the Board of Íslandsbanki, delivered the Board report on the Bank’s activities in 2019.
- Approval of the Bank’s annual accounts for 2019 Birna Einarsdóttir, Chief Executive Officer of Íslandsbanki, reviewed the Bank’s annual accounts and spoke briefly about the Bank’s strategy and key projects in the year 2020. The AGM then approved the Bank’s audited consolidated annual accounts for 2019.
- Resolution on Bank’s dividends and the disposal of profit in 2019 The AGM approved, notwithstanding the Bank’s long-term dividend payout ratio target of 40-50%, that a dividend to shareholders for the 2019 financial year shall not be paid in light of uncertainties due to unprecedented circumstances in the financial markets. The Board may convene a special shareholder meeting later in the year where a proposal regarding payment of dividends of profit for previous fiscal years could be suggested.
- Election to the Board of Directors and alternates The following were re-elected to the Board of Directors: Anna Þórðardóttir, Árni Stefánsson, Heiðrún Jónsdóttir og Hallgrímur Snorrason, who was also elected Chairman of the Board. Flóki Halldórsson, Frosti Ólafsson and Guðrún Þorgeirsdóttir were elected as new members of the Board. Óskar Jósefsson and Herdís Gunnarsdóttir were elected as alternates.
- Election of an audit firm The AGM approved that Ernst & Young would remain the Bank’s external auditing firm until the next AGM.
- Decision on the remuneration of Board of Directors and alternates for the coming electoral term The AGM approved the proposal for remuneration to Board members and alternates.
- Proposal to approve the the Bank’s compensation policy The AGM approved the proposed Compensation Policy for the Bank.
- Other business No other business was lawfully proposed at the meeting.