Interim report (Q1 and Q3)
Landsbankinn hf.: Landsbankinn's results for the first nine months of 2019
In the first nine months of 2019, Landsbankinn's after-tax profit was ISK 14.4 bn as compared with ISK 15.4 bn for the same period in 2018.Return on equity (ROE) for the period was 7.9% on an annualised basis as compared to 8.8% during the same period of 2018.
Net interest income was ISK 30.1 billion, compared to ISK 29.8 billion for the same period last year. Net commission income amounted to ISK 6.1 bn, increasing by 5% from the same period the previous year. Negative value changes amounted to ISK 3.4 bn in the period, as compared with positive value changes of ISK 1.6 bn in the same period of 2018. At the end of September 2019, the default rate was 0.8% as compared with 0.5% for the same period in 2018.
The Bank’s operating income in the first nine months of 2019 was ISK 39.3 bn as compared to ISK 41.1 bn for the same period the previous year. Other operating income amounted to ISK 6.5 bn as compared with ISK 3.8 bn in the same period the previous year, which is a 72% increase.
The interest spread on assets and liabilities was 2.4% in the first nine months of 2019, a change from 2.7% in the same period of 2018.
The Group’s operating expenses in the first nine months of 2019 totalled ISK 17.7 billion, remaining more or less unchanged between periods. Labour cost accounts for ISK 10.7 bn of that figure as compared with ISK 10.8 bn for the same period in 2018, which is a 0.9% decrease. Other operating expenses amounted to ISK 7 billion, remaining unchanged between years.
The cost-income ratio for the first nine months of the year was 41.4%, as compared to 45.0% for the same period last year.
Lending increased by 6.8% since the beginning of the year, or by just over ISK 72.3 bn. Customer deposits with Landsbankinn increased by 1.5% this year to date, or by ISK 10.7 billion.
Landsbankinn’s equity amounted to ISK 243.9 bn as at 30 September this year and its CAR was 23.6%.
Lilja Björk Einarsdóttir, CEO of Landsbankinn:
“Landsbankinn’s nine-month results reflect its stable and sound operation. Costs continue to decrease while revenue grows. The cost-income ratio for the period was 41.4%, lower than for the same period last year. Surveys show that Landsbankinn’s customers are increasingly more satisfied with the service and that trust in the Bank has grown. We intend to continue on this path; to offer top quality and secure financial service while maintaining a focus on cost-efficiency and emphasis on the integration of social responsibility in the Bank’s strategy and operation. The results also reflect the contracting economy. The corporate operating environment is now more challenging and leads to some impairment.
Landsbankinn has lowered interest rates lately. This year, non-indexed variable interest rates on housing loans have been lowered by 0.8 percentage points – non-indexed housing loans are the most common form of financing for individuals. Around 340 families and individuals financed their first housing purchase with the Bank this quarter, overwhelmingly with non-indexed loans. When interest rates trend downwards, deposit rates unavoidably also fall, with common deposit rates being lowered by 0.7 percentage points. In this manner, we accommodate customers who have entrusted us with their savings, as well as customers who have taken out loans. Landsbankinn’s interest rate decisions are based on more factors than Central Bank rates, such as market rates and terms on the Bank’s other funding sources. The Bank has generally reacted quickly to interest rate decreases and offers very competitive terms on the market.
On 2 October, the Bank paid the latter of two scheduled dividend payments for 2018 to shareholders. This latter payment amounted to ISK 4,961 million; together, both dividend payments for 2018 amounted to ISK 9.9 billion. This brings Landsbankinn’s total dividend payments since 2013 to around ISK 142 billion.
Landsbankinn’s employees have recently featured prominently in public debate on changes to banking services and related challenges. The Bank’s experts have spoken and written about open banking and means and ways of increasing cyber security. We warmly appreciate that customers have made a point of complimenting the Bank’s employees on their contribution and swift action to prevent cybercrime. This shows that numerous experts are working behind the scene at the Bank to ensure stable and safe operations. Landsbankinn’s employees are highly motivated and, as always, we emphasise offering customer exceptional services.”
6 February 2020 – Annual Financial Statements 2019
27 March 2020 – Annual General Meeting 2020
7 May 2020 – Q1 2020 results
30 July 2020 – Q2 2020 results
29 October 2020 – Q3 2020 results
11 February 2021 – Annual Financial Statements 2020
Teleconference to present results
Landsbankinn's results for the first nine months of 2019 will be presented at a teleconference for market actors at 10:00, Friday 25 October. The meeting will be held in English. Please register for participation by emailing firstname.lastname@example.org.
For further information contact:
Rúnar Pálmason, Public Relations, email@example.com, tel: +354 410 6263
Hanna Kristín Thoroddsen, Investor Relations, firstname.lastname@example.org, tel: +354 410 7310