Landsbankinn hf.: Financial results of Landsbankinn for the first three months of 2024
May 02 2024 - 8:25AM
Landsbankinn hf.: Financial results of Landsbankinn for the first
three months of 2024
- Landsbankinn's net profit in the first three months of 2024 was
ISK 7.2 billion.
- Return on equity (ROE) in the period was 9.3%, compared with
11.1% for the same period the previous year.
- The net interest margin was 2.9%. The net interest margin of
domestic households was 2% and remains stable.
- Net interest income amounted to ISK 14.4 billion and net fee
and commission income was ISK 2.7 billion.
- Net impairments were negative by ISK 2.7 billion and include an
ISK 2.0 billion collective allowance against uncertainty related to
natural disaster on the Reykjanes peninsula.
- The cost/income ratio was 33.6%, compared with 33.3% in the
first quarter of 2023.
- The total capital ratio was 24.9% at the end of the period. The
total capital requirement of the Financial Supervisory Authority of
the Central Bank of Iceland is 20.7%.
- In March, Landsbankinn finalised the sale of green bonds in the
amount of EUR 300 million, with subscriptions coming in at more
than six times the size of the issuance.
- Also in March, the Bank issued two Tier 2 bonds, one
non-indexed series in the amount of ISK 3 billion and one
inflation-linked series in the amount of ISK 12 billion.
- The Bank’s AGM, held on 19 April 2024, agreed to pay a dividend
to shareholders in the amount of ISK 16.5 billion, or ISK 0.70 per
share, for the operating year 2023. The dividend is equivalent to
around 50% of the Group’s 2023 profit. As a result, total dividend
paid by Landsbankinn in 2013-2024 will amount to ISK 191.7
billion.
- In January, for the fifth year in a row, customers in the
banking market are most satisfied with Landsbankinn’s services,
according to the Icelandic Performance Satisfaction Index
2023.
- In early April, S&P Global Ratings upgraded the Bank’s
credit rating to BBB+/A-2 with stable outlook.
Lilja Björk Einarsdóttir, CEO of
Landsbankinn:
“It is quite a milestone that Landsbankinn’s balance sheet has
now exceeded ISK 2,000 billion, doubling in size from its initial
balance sheet in 2008. The balance sheet has grown surely and
steadily, and in the first quarter of this year, the increase
amounts to just under ISK 72 billion. A growing balance sheet
enables us to provide even better support for Icelandic industry
and society. Strong lending activity is a core function of the
Bank’s operation. There has been moderate growth in housing
mortgages and more refinancing activity. Corporate lending grew
steadily to reach an increase of ISK 30 billion in the quarter.
The Bank’s funding was exceptionally successful in the quarter.
We issued subordinated bonds in the amount of ISK 15 billion and
EUR 300 million green bonds at favourable terms. In April, we
received the enjoyable news that international rating firm S&P
Global Ratings had raised the Bank’s credit rating a notch.
Profitability has dwindled slightly but remains close to our
long-term target. The main reason for lower profitability is the
increased allowance the Bank made in the quarter against seismic
and volcanic activity in the Grindavík area. It is important that
the Bank has the financial strength to respond to the effect of
this natural disaster and that it continues to be able to support
its Grindavík customers. We expect profitability to grow again as
the year progresses and to hover above the Bank’s target. It is
worth noting that the recently raised reserve requirement of the
Central Bank of Iceland (CBI) means that Landsbankinn will sit with
ISK 40 billion on a non-interest-bearing account with the CBI, a
20% increase from the previous requirement. The cost increase for
the Bank comes to ISK 1 billion per year.
The Bank’s results reflect solid and robust operations. We
continue to develop exciting and efficient new solutions for
customers. Among new solutions in the first quarter is the option
to refinance housing mortgages through self-service in
Landsbankinn’s app. This has never been possible before in Iceland
and the solution is innovative even by international standards. It
will certainly simplify life for customers. We introduced our
chatbot Ellí in the quarter with immediate success - she currently
finalises around half of all customer queries in the web chat on
landsbankinn.is. Customers have been very happy with the chatbot
service. It has also been gratifying to see that customers
regularly use the chat function to leave reviews of the Bank’s
service and their interaction with employees. By continuing to
develop new solutions, we provide even better service to
Landsbankinn’s customers, who are the most satisfied in the banking
market.”
Landsbankinn's financial calendar
- Q2 2024 results 18 July 2024
- Q3 2024 results 23 October 2024
- Annual results 2024 30 January 2025
For further information contact:
Public Relations, pr@landsbankinn.is
Investor Relations, ir@landsbankinn.is
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