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Islandsbanki hf. : 9M 2017 Consolidated unaudited interim financial statements

Íslandsbanki's consolidated unaudited interim financial statements 9M 2017


  • Profit after tax was ISK 10.1bn in 9M17, compared to ISK 15.6bn in 9M16 which was considerably higher due to one-off income from the sale of shares in Visa Europe. Return on equity was 7.7% in 9M17, compared to 10.3% in 9M16.
  • Earnings from regular operations was ISK 10.2bn, compared to 11.3bn in 9M16.
  • Return on equity from regular operations on 15% CET1 was 10.1% in 9M17 compared to 10.4% in 9M16.
  • Net interest income amounted to ISK 22.7bn in 9M17 (9M16 ISK 23.7bn) down 4% in the period. The net interest margin was 2.9% in 9M17 (9M16: 3.0%).
  • Net fee and commission income was ISK10.1bn in 9M17 compared to 9.9bn in 9M16, up 2% in the period.
  • Administrative costs totalled ISK 19.3bn in 9M17, down 2% from 9M16. When adjusted for one-off costs, there is a 2.7% rise in costs, or a 1.0% rise in real terms when adjusted for inflation.
  • Cost to income ratio was 60.2% in 9M17 (9M16: 55.9%), the cost to income ratio excludes the bank tax and one-off cost items.
  • Total assets amounted to ISK 1,078bn (Jun17: ISK 1,047bn), whereby loans to customers and the Bank´s liquidity portfolio account for 96% of the balance sheet.
  • Loans to customers grew by 7.8% (ISK 53.5bn) in 9M17 to ISK 741bn. Total new lending was ISK 152bn across various lending divisions.
  • Asset quality continues to improve whereby the ratio of loans more than 90 days past due was 1.1% (Jun17: 1.2%, Mar17: 1.6% and Dec16: 1.8%).
  • Deposits from customers contracted in line with expectations by 1.2% (ISK 7.3bn) in 9M17 to ISK 587bn.
  • Total capital ratio was 22.7% and CET1 ratio was 22.5% at period end, compared to 23.5% and 23.3% respectively at June 2017.
  • The liquidity position is strong and exceeds internal and external requirements. At period end, the Bank's liquidity coverage ratio (LCR) was 183% (Jun17: 171%) and the total net stable funding ratio (NSFR) was 115% (Jun17: 119%).
  • Leverage ratio was 15.3% at Sep17 compared to 15.7% at Jun17, indicating a moderate leverage in both domestic and international comparison.
  • Íslandsbanki is the only Icelandic bank to have two international credit ratings. In January 2017, Fitch upgraded the Bank to BBB/F3, with a stable outlook, and in October 2017, S&P upgraded the Bank to BBB+/A-2, with a stable outlook.


  • Profit after tax was ISK 2.1bn in 3Q17 (3Q16: ISK 2.5bn).Return on equity was 4.7% in 3Q17, compared to 5.1% in 3Q16.
  • Return on regular operations normalised on 15% CET1 was 8.1% in the quarter (3Q16: 8.4%).
  • Net interest income amount to ISK 7.5bn in 3Q17 (3Q16: ISK 7.8bn) and the net interest margin was 2.8% (3Q16: 3.0%).
  • Net fee and commission income was ISK 3.3bn in 3Q17 (3Q16: ISK 3.2bn).

Birna Einarsdóttir, Chief Executive Officer at Íslandsbanki:

'Credit growth measures 7.8% year-to-date, owing mainly to an increase in corporate lending. It is gratifying to have the opportunity to participate in a wide variety of investments undertaken by Icelandic businesses. Securities brokerage activity was brisk in Q3 and the Bank had the largest share in fixed income brokerage.

The Bank’s operating profit for the first nine months totalled ISK 10.1bn, and returns on core operations measured 10.1%, which is in line with the Bank’s target. Positive loan value adjustments have strongly affected returns, and the quality of the loan portfolio continues to improve.

Íslandsbanki’s credit rating was recently upgraded by S&P Global Ratings, supporting the positive developments in the Icelandic economy as a whole. The terms offered to the Bank in foreign capital markets have been improving and we are now on a much better competitive footing vis-à-vis foreign competitors. We welcome this trend and look forward to continued collaboration with our customers in the future.
Our relocation to our new headquarters in Norðurturn is now complete, and the advantages of increased cooperation and integration are already visible. Our activity based seating is proving successful and dozens of Icelandic firms have already visited us to learn about this progressive work environment.

Major changes lie ahead in the global financial market, with new regulations that will open the market even further for consumers. We are in the final stages of changes to our core systems which will make us even better able to embrace the exciting challenges ahead'.


Investor call in English

The Bank will host an investor call in English to present the results at 1 pm Icelandic time today, 9th of November. 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

More information

ÍSB 3Q Press Release

ÍSB 3Q 2017 Investor Presentation

ÍSB 3Q 2017 Condensed Consolidated Interim Financial Statements

ÍSB 3Q 2017 Fact Book

ÍSB 3Q 2017 Fact Sheet