Landsbankinn hf.: Financial results of Landsbankinn for the first three months of 2019In the first three months of 2019, Landsbankinn's after-tax profit was ISK 6.8 bn as compared with ISK 8.1 bn for the same period in 2018. Return on Equity (ROE) for the period was 11.2% compared to 13.7% during the same period of 2018. Net interest income was ISK 10.2 bn, up by 6.3% between periods. Net commission income amounted to ISK 2.1 bn, increasing by 21.8% from the same period the previous year. Impairment amounted to ISK 1 bn in the period, as compared with positive value changes of ISK 1 bn in the same period of 2018. At the end of March 2019, the default rate was 0.7% as compared with 0.6% for the same period in 2018. The Bank’s operating income in the first three months of 2019 was ISK 15 bn as compared to ISK 16.8 bn for the same period the previous year. Other operating income was ISK 3.7 bn, compared to ISK 4.5 bn for the same period of 2018. The interest margin on assets and liabilities was 2.5% in the first three months of 2019, up from 2.7% in the same period of the previous year. The Bank's operating expenses in the first three months of 2019 amounted to ISK 6.2 billion as compared with ISK 6 billion for the same period in 2018, which is an increase of 3.4%. The cost-income ratio for the first three months of the year was 38.7%, as compared with 37.9% for the same time last year. Lending increased by 2.9% since the beginning of the year, or by just over ISK 31 bn. Growth of the lending portfolio is driven by both households and corporates. Deposits with Landsbankinn increased by ISK 2 bn from the beginning of the year. As of 31 March this year, Landsbankinn's equity amounted to ISK 246.2 billion and its capital adequacy ratio was 23.8%. The Bank’s AGM, held on 4 April 2019, approved a motion from the Board of Directors to pay a dividend in the amount of ISK 9,922 m. The dividend payment leads to a decrease in equity in Q2 2019. Lilja Björk Einarsdóttir, CEO of Landsbankinn: “Landsbankinn’s operations and balance sheet are robust and its profitability good, as evidenced by the Bank’s results for the first quarter of 2019. Lending continues to grow, both to companies and individuals, and the Bank’s credit portfolio is strong. There was a bump in commission income alongside increasing activity. The numerous digital solutions the Bank has introduced recently have been very positively received by customers and have already lead to increased efficiency in the Bank’s operation. Landsbankinn has recently made a significant investment in new core systems which form the foundation for further innovation and development of banking services. Alongside investment in new technology, care has been taken to exercise restraint to contain operating costs. The Bank’s cost-income ratio for the first quarter was 38.7%, which is well below the Bank’s upper limit. The results for the first quarter of 2019 provide us with a solid impetus for the rest of the year. Recently, upheaval in the travel industry and uncertainty in the labour market has had a marked effect on the economy. The impact is felt in the Bank’s results as the reporting standard IFRS 9 provides for a forward-looking assessment of expected credit losses (ECL). On the other hand, it should be noted that the full impact on the economy has yet to be felt. Landsbankinn will continue to place firm emphasis on providing customers with outstanding service and ensuring that the Bank’s operation is robust in both the short and longer term.” For further information contact: Rúnar Pálmason, Public Relations, pr@landsbankinn.is, tel: +354 410 6263 Hanna Kristín Thoroddsen, Investor Relations, ir@landsbankinn.is, tel: +354 410 7310
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