Q Results. Landsbankinn hf. Steinþór Pálsson. Hreiðar Bjarnason CEO CFO

Transcription

1 Q1 215 Results Landsbankinn hf. Steinþór Pálsson CEO Hreiðar Bjarnason CFO

2 Highlights Operations» The Bank s after-tax profit in Q1 was ISK 6.4 billion, as compared with ISK 4.3 billion for Q1 of 214» Net interest income amounted to ISK 7.3 bn, down by 7% as compared with the same period in 214» Net commission income increases by 8% as compared with the same period the previous year» The ratio of interest spread to average capital position was 2.6% in Q1 of 215 as compared to 2.7% for the same period in 214» After-tax return on equity (ROE) was 1.6% as compared with 7.3% for the same period in 214» Operating costs increase by 3% as compared with the same period in 214» The cost-income ratio decreased between periods, was 48% in Q1 215 as compared to 72% for Q1 in 214 Balance sheet» Landsbankinn s total assets amounted to ISK 1,172 bn as of the end of March 215» The impact of the merger with Sparisjóður Vestmannaeyja is only evident in the balance sheet towards the end of Q1 215; the merger did not impact the Bank's operation in Q1 215» Deposits from customers have grown by 13% during the year and lending by 2%» The Bank's liquidity position is very strong, both in foreign currency and Icelandic króna» Loans 9 days in arrears remain unchanged from the beginning of the year, at 2.3%» Landsbankinn paid just under ISK 24 bn in dividends to its owners in Q1 which leads to a decrease in equity and CAR» The Bank's equity currently amounts to ISK bn and has decreased by 7% since the beginning of the year» The Bank's capital adequacy ratio (CAR) is now 26.7%, up from 29.5% at the end of 214 2

3 Main results 1F 215 1F Profit after taxes 6,412 4,288 29,737 28,759 Return on equity after taxes 1.6% 7.3% 12.5% 12.4% Interest spread as a ratio of av. total assets 2.6% 2.7% 2.4% 3.1% Cost-income ratio* 48.% 72.% 56.% 42.9% Real change in operating expenses 1.3% 3.3% 5.9% -1.1% Total assets 1,172,38 1,153,84 1,98,37 1,151,516 Loans to customers 735, , ,355 68,468 Deposits from customers 624,63 468, , ,662 Capital ratio (CAR) 26.7% 24.8% 29.5% 26.7% Net stable funding ratio FX NSFR 142% 134% Liquidity ratio LCR total 118% 14.% 131% 12.% Liquidity ratio LCR FX 379% 224.% 614% 28.% Net FX position 19,95 18,436 2,32 14,457 Arreas (>9 days) 2.3% 5.% 2.3% 5.3% Full-time eqv. postitions 1,12 1,178 1,126 1,183 *Cost-income ratio= Total operating expenses less expensed equity-based wage items/(net operating revenue-value change of lending) 3

4 Development of KPIs Landsbankinn target Return on equity 14% Capital adequacy ratio (CAR) 35% 12% 1% 8% 6% 8.4% 12.% 12.4% 12.5% 1.6% 3% 25% 2% 15% 21.4% 25.1% 26.7% 29.5% 26.7% 4% 1% 2% 5% % Q 215 % Cost-income ratio excluding valuation adjustments 6% Arrears (> 9 days) 15% 13.9% 4% 4.6% 45.% 42.9% 56.% 48.% 1% 8.3% 2% 5% 5.3% 2.3% 2.3% % Q 215 %

5 Q1 215 Results 5

6 Profit Q1 214 Net interest income Net adjustments in valuation Net fee and commission income Other income FX gain (loss) Salaries and related expenses Other operating expenses Share in profit of associates Taxes Profit Q1 215 Income Statement Change from Q1 214 to Q , 5, ,412 6, 5, 4, 4, ,574 3, 2, 123 1, 6

7 Income Statement Q1 215 Q1 214 Change Net interest income 7,269 7, % Net adjustments in valuation 1,596 4,17-2,574-62% Net interest income after adjustments in valuation 8,865 12,25-3,16-26% Net fee and commission income 1,641 1, % Other net operating income 4, ,77 564% Total operating income 14,683 12,643 2,4 16% Salaries and related expenses 3,72 3, % Other operating expenses 2,58 2, % Total operating expenses 6,282 6, % Share in profit of associates, net of income tax % Profit before tax 8,41 6,55 1,86 28% Income tax expense 1,998 2, % Profit for the period 6,412 4,288 2,124 5%» Net interest income decreases by 7%» Valuation adjustments in lending are positive by ISK 1,6 bn» Net commission income increases by 8%» Other operating income increases mostly due to higher equity prices» Wages and related expenses increase by 7% due for the most part to costs from termination of employment expensed during the year» Operating costs decreases by 3%» Effective tax rate is 15.6% 7

8 Net interest income and valuation adjustments Q1 215 Q1 214 Change Interest income 12,738 14,45-1,712-12% Interest expense -5,469-6,595 1,126-17% Net interest income 7,269 7, % Net adjustments to loans and advances acquired at deep discount 6,711-6,711-1% Net impairment loss on loans 3,611-2,541 6, % Loss from foreign currency linkage of loans and advances to customers -2,15-2,15 Net valuation adjustments 1,596 4,17-2,574-62% Net interest income after net valuation adjustments 8,865 12,25-3,16-26%» Lower inflation has a deciding influence on decreased interest revenues» Valuation adjustment in lending result in ISK 1.6bn in revenue in Q1 215» The Bank's net interest spread decreases to 2.6% in Q1 215, from 2.7% in Q

9 Net operating income Income mix 2% Net interest income Net interest income 4, 5% 1% 11% 24% 48% Equities Net commissions and fees Net adjustments in valuation Bonds FX gain Other 35, 3, 25, 2, 15, 1, 5, 8,58 9,229 9,977 5,776 7,742 7,782 7,34 7,57 9,74 1,2 7,118 7,385 7,145 8,553 9,879 7,855 7, Q4 Q3 Q2 Q1 Net adjustments in valuation Net commissions and fees 25, 2, 15, 1, 5, -5, -1, -15, -2, -25, -3, 15,958 8,8-1, ,17 1,596-4,718-21, Q2-Q4 Q1 7, 6, 5, 4, 3, 2, 1, 1,18 1,64 1,8 1,326 1,151 1,275 1,126 1,3 1,597 1,43 1,187 1,9 1,3 1,2 1,363 1,518 1, Q4 Q3 Q2 Q1 9

10 Net operating income Equities Bonds 18, 4,5 16, 4, 14, 12, 1, 8, 6, 4, 2, -2, 6,492 9,26 4,63 2,627 6,55 2,541 2,4 3, Q2-Q4 Q1 3,5 3, 2,5 2, 1,5 1, 5-5 3,143 2,481 1, , Q2-Q4 Q1 FX gain 5, 4, 2,45 3, 2, 1, -1, -2, 1,82-2,579 2,116 1, Q2-Q4 Q1-3,

11 Operating expenses Salaries and related expenses* 16, Other operating expenses 12, 14, 12, 1, 8, 6, 4, 2, 3,477 3,85 3,58 4,44 3,13 2,81 3,19 2,73 3,364 3,122 3,288 2,933 2,31 3,232 3,173 3,455 3, Q4 Q3 Q2 Q1 1, 8, 6, 4, 2, 2,618 2,858 2,372 3,313 1,885 2,64 2,371 2,164 3,185 2,716 2,593 2,395 2,378 2,715 2,611 2,649 2, Q4 Q3 Q2 Q1 Full time employees 1,35 1,3 1,25 1,311» In the first quarter of 215, all employees of Sparisjóður Vestmannaeyja became 1,2 1,15 1,1 1,5 1, 95 1,233 1,183 1,126 1,12 employees of Landsbankinn. Upon the merger, full-time equivalent positions increased by 22.» Since end of year 211, full time equivalent positions have decreased by *213, less expensed equity-based wages 11

12 Taxes Q1 215 Q1 214 Change Income tax 93 1, % Special financial activities tax on profits % 1,178 1, % Tax on liabilities of financial institutions % Special financial activities tax on salaries % Total 2,153 2, % 1 A 6% additional tax on pre-tax profit over ISK 1, million 2 Special tax on financial institutions is.376% levied on the carrying amount of total liabilities at year-end in excess of ISK 5, million 3 5.5% tax on salaries and is expensed in the line item "Salaries and related expenses" in the income statement 12

13 Balance sheet - assets Change Cash and balances with CB 14,347 1,16 4,187 41% Bonds and debt instruments 25,5 243,589 6,416 3% Equities and equity instruments 33,354 29,433 3,921 13% Loans and advances to fin institutions 86,951 49,789 37,162 75% Loans and advances to customers 735, ,355 17,124 2% Other assets 34,638 28,832 5,86 2% Assets classified as held for sale 17,66 18, %» Lending to customers amounts to ISK 37 bn in the first quarter 215 yet installments and other factors contribute to a total increase in lending of ISK 17 bn during the period Total 1,172,38 1,98,37 74,1 7% Assets 1% 75% 5% 25% % 1% 2% 2% 1% 1% 2% 21% 25% 22% 21% 4% 3% 9% 6% 3% 6% 3% 3% 5% 7% 56% 61% 59% 65% 63% 6% 5% 4% 2% 3% 2% 3% 2% 3% 2% Cash and balances with CB Bonds and debt instruments Equities and equity instruments Loans and advances to fin institutions Loans and advances to customers Other assets Assets classified as held for sale 13

14 Balance sheet - loans Amounts in ISKbn Loans to customers Loans to individuals ISK-CPI loans ISK loans FX loans ISK-CPI loans ISK loans FX loans Problem loans * Loans to corporates 35% 31.4% 6 3% 25% 2% 15% 1% 5% % 25.9% 12.% 23.1% 1.8% 13.9% 5.5% 6.3% 4.1% 8.3% 4.% 5.3% 1.8% 2.3% 2,3% Arrears > 9 days Loans and advances with individual allowance ISK-CPI loans ISK loans FX loans * Problem loans are defined as loans and advances with individual allowance and / or more than 9 days in arrears 14

15 Balance sheet - loans Loans by industry sectors 3, , 2, 15, 1, 5, Public entites Individuals Fisheries Construction and real estate companies Holding companies Retail Services ITC Manifacturing Agriculture Other Loans to individuals by loan type 12, , 8, 6, 4, 2, Indexed mortgage loans Non-indexed mortgage loans Vehicle financing Other 15

16 FX assets and liabilities 45, 4, 35, 3, 25, 2, 15, 1, 5, Loans and advances to financial institutions 77,396 High qual. liquid assets 72,334 Other assets Other liabilities 41,344 9,97 Loans 25,46 FX assets Deposits 163,6 Secured bonds & subordinated loans 23,481 FX liabilitites Net FX balance 25, 2, 15, 1, 5, -5, -1, -15, -2, -25, 2,34 2,32 19,95 14,457-2, Maturity profile 45, 8 8 3,428 3, 8 4,71 37,193 37,193 ISK FX 15, 3,535 28,324 28, ,48 2,

17 Balance sheet liabilities and equity Change Due to financial institutions and CB 57,19 53,827 3,192 6% Deposits from customers 624,63 551,435 72,628 13% Secured bonds 21,92 27,28 3,874 2% Subordinated loans Other liabilities 46,19 35,277 1,832 31% Equity 233,86 25,83-16,943-7% Total 1,172,38 1,98,37 74,1 7% Deposits 7, 624,63 6, 551,435 5, 443,59 421,58 456,662 4, 3, 2, 167, ,876 98,718 1, 53,827 57, Due to financial institutions and CB Deposits from customers Liabilities and equity 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 1% 9% 39% 39% 3% 29% 3% 1% 15% 4% 21% 19% 3% 4% 3% 5% 5% 5% 53% 18% 4% 18% 21% 21% 23% 2% Due to financial institutions and CB Deposits from customers Secured bonds Other liabilities Liabilities associated with assets classified as held for sale Equity 17

18 Capital ratio and liquid assets Capital adequacy ratio (CAR) 25% 2%» Dividend payment in Q1 215 explains the decrease in Capital adequacy ratio (CAR) from end of year 15% 1% 21.4% 25.1% 26.7% 29.5% 26.7% 214» The Bank is well above its 2% CAR benchmark 5% % Liquidity coverage ratio total Liquidity coverage ratio FX 14% 12% 1% 8% 12% 14% 11% 18% 131% 118% 7% 6% 5% 4% 614% 379% 6% 4% 3% 2% 28% 224% 28% 222% 2% 1% % % LCR total Regulatory requirement LCR FX Regulatory requirement 18

19 Other aspects of Landsbankinn s operations» Towards the end of March, the Financial Supervisory Authority (FME) decided on the merger of Landsbankinn and Sparisjóður Vestmannaeyja. The merger became effective as of Sunday, 29 March. As of that time, all employees of the savings bank became employees of Landsbankinn and the Bank took over all assets and liabilities of the savings bank.» A new version of online banking for individuals was introduced in January. Online banking has been completely redesigned and now sports a new user interface, new structure and new features.» In February, the panel of the Icelandic Web Awards named Landsbankinn online banking the best service website.» Growth continues in new housing loans, with the increase having reached just over 49% between years.» In the first quarter of 215 Landsbankinn was the largest broker on Nasdaq OMX Iceland in bonds, with 24.2% market share and also the largest broker in stocks with 28.2% market share.» The Bank's AGM, held on 18 March, approved an ISK 24 bn dividend payment to the Bank's owners.» In March, Landsbankinn was the first bank in Iceland to be awarded the golden seal of PwC's Equal Pay Audit. Landsbankinn is also the largest company to participate in and pass the Equal Pay Audit.» For the second year running, the magazine Global Finance has named Landsbankinn the best bank in Iceland.» Also for the second year in a row, International Finance magazine named Landsbankinn the best bank in Iceland and Landsbankinn's online bank the best online banking service.» For the first time, Landsbankinn's annual report was published in electronic format only, on the Bank's new annual report website. 19

20 Annex further information 2

21 Key financial ratios Q1 215 Q Q4 214 Q3 214 Q2 214 Q1 214 Profit after taxes 6,412 4,288 29,737 28,759 25,494 9,752 5,17 1,59 4,288 Return on equity before taxes 13.9% 11.2% 16.7% 17.6% 14.% 18.6% 11.1% 25.9% 11.2% Return on equity after taxes 1.6% 7.3% 12.5% 12.4% 12.% 15.9% 8.6% 18.4% 7.3% Capital ratio (CAR) 26.7% 24.8% 29.5% 26.7% 25.1% 29.5% 27.1% 26.8% 24.8% Net interest income 7,269 7,855 28,73 34,314 35,584 5,776 7,57 7,385 7,855 Interest spread as a ratio of average total assets 2.6% 2.7% 2.4% 3.1% 3.2% 2.% 2.4% 2.6% 2.7% Cost-income ratio * 48.% 72.% 56.% 42.9% 45.% 57.7% 56.2% 43.7% 72.% Net stable funding ratio NSFR FX 142% 134% 134% Liquidity ratio LCR total 118% 14% 131% 12% 131% 18% 11% 14% Liquidity ratio LCR FX 379% 224% 614% 28% 614% 222% 28% 224% Operating expenses as a ratio of average total assets** 2.2% 2.1% 2.1% 2.% 2.2% 2.5% 1.8% 2.% 2.1% Total assets 1,172,38 1,153,84 1,98,37 1,151,516 1,84,787 1,98,37 1,21,247 1,154,598 1,153,84 Loans / deposits ratio 117.9% 145.5% 13.3% 149.% 158.2% 13.3% 144.6% 147.8% 145.5% Full-time eqv. postitions 1,12 1,178 1,126 1,183 1,233 1,126 1,166 1,162 1,178 * Cost-income ratio = Total operating expenses excl. equity settled employee share-based salaries / (Total operating income - net valuation adjustments) ** Excluding equity settled employee share-based payments 21

22 Operations Q1 215 Q1 214 Breyting Q4 214 Q3 214 Q2 214 Q1 214 Net interest income 7,269 7, % 28,73 34,314 5,776 7,57 7,385 7,855 Net valuation adjustments 1,596 4,17-2,574-62% 2,128 8,362 6,11 2,581 7,276 4,17 Change in contingent bond - liability to purchase own shares 4,691 Net interest income after valuation adjustments 8,865 12,25-3,16-26% 48,21 47,367 11,877 9,638 14,661 12,25 Net fee and commission income 1,641 1, % 5,836 5,291 1,64 1,275 1,43 1,518 Net foreign exchange gain (loss) % 67 1, Other net operating income 4, , % 9,45 11,776 4, , Total operating income 14,683 12,643 2,4 16% 63,149 65,581 18,431 11,81 2,274 12,643 Salaries and related expenses 3,72 3, % 13,567 12,613 3,85 3,19 3,288 3,455 Equity-settled employee share-based salaries 4,691 Other operating expenses 2,7 2, % 8,545 8,5 2,635 1,74 1,965 2,25 Depreciation and amortisation % Contribution to the Depositors' and Investors' Guarantee Fund % 1,34 1, Total operating expenses 6,282 6, % 24,88 27,251 7,118 5,183 5,683 6,14 Share in profit of associates, net of income tax % 465 2, Profit before tax 8,41 6,55 1,86 28% 39,526 41,42 11,438 6,618 14,92 6,55 Income tax expense 1,998 2, % 9,789 12,283 1,686 1,511 4,33 2,262 Profit for the period 6,412 4,288 2,124 5% 29,737 28,759 9,752 5,17 1,59 4,288 22

23 Balance Sheet Change Cash and balances with CB 14,347 1,16 4,187 41% 21,52 25,898 8,823 Bonds and debt instruments 25,5 243,589 6,416 3% 29, ,28 221,848 Equities and equity instruments 33,354 29,433 3,921 13% 36,275 36,881 46,37 Loans and advances to fin institutions 86,951 49,789 37,162 75% 67,916 64,349 1,133 Loans and advances to customers 735, ,355 17,124 2% 68, ,87 639,13 Other assets 34,638 28,832 5,86 2% 29,719 38,44 65,959 Assets classified as held for sale 17,66 18, % 25,23 25,32 53,552 Total 1,172,38 1,98,37 74,1 7% 1,151,516 1,84,787 1,135,482 Due to financial institutions and CB 57,19 53,827 3,192 6% 167,218 98, ,876 Deposits from customers 624,63 551,435 72,628 13% 456, ,58 443,59 Secured bonds 21,92 27,28 3,874 2% 239,642 39, ,92 Subordinated bonds Other liabilities 43,14 32,443 1,697 33% 42,75 29,687 31,485 Liabilities associated with assets classified as held for sale 2,969 2, % 3, ,385 Equity 233,86 25,83-16,943-7% 241, ,166 2,244 Total 1,172,38 1,98,37 74,1 7% 1,151,516 1,84,787 1,135,482 23

24 Segments Q1 215 Personal Banking Corporate Banking Markets Treasury Support Functions Support Functions Total Net interest income (expense) 2,91 3, , ,269 Net valuation adjustments 1, ,596 Net fee and commission income ,641 Other net operating income , ,177 Total operating income (expense) 4,96 3,816 1,166 4, ,683 Operating expenses -1, , ,282 Share in profit of equity-accounted associates, net of income tax Profit (loss) before cost allocation and tax 3,491 3, ,317-3, ,41 Cost allocated from support functions to business segments -1,468-1, ,62 Profit (loss) before tax 2,23 2, , ,41 Total assets 361, ,736 11,393 54,455 31, ,823 1,172,38 Total liabilities 314,53 362,66 5,65 416,69 31, , ,52 Allocated capital 47,195 93,76 5,743 87, ,86 24