In the first three months of 2018, Landsbankinn's net after-tax profit was ISK 8.1 billion. Profit for the same period of 2017 amounted to ISK 7.6 billion. Return on equity (ROE) in Q1 was 13.7% compared to 12.5% during the same period of 2017.
Net interest income was ISK 9.6 billion, up by 20.2% between periods. Net commission income amounted to ISK 1.7 billion, decreasing by 20.1% as compared with the same period the previous year. Positive value changes amounted to ISK 1.0 billion in Q1, as compared with ISK 1.8 billion in Q1 2017.
Other operating income amounted to ISK 4.5 billion as compared with ISK 3.8 billion in Q1 of 2017, which is an 18% increase between periods. The default ratio continued to drop, was 0.6% in Q1 as compared with 1.3% for the same period of 2017.
The interest margin on assets and liabilities was 2.7% in Q1 2018, up from 2.2% in Q1 2017.
The Bank's operating income in the first three months of the year amounted to ISK 16.8 billion as compared with ISK 15.7 billion for the same period in 2017, which is an increase of 7% between periods. Operating expenses increased by 1.4% as compared with the same period in 2017. Total operating expenses in Q1 2018 amounted to ISK 6 billion as compared with ISK 5.9 billion in Q1 2017. Operating expenses less wages amounted to ISK 2.3 billion, decreasing by 3.8% from the same period the previous year.The cost-income ratio for the first three months of the year was 37.9%, as compared with 42.5% for the same period last year.
Landsbankinn's lending portfolio grew by ISK 11 billion during the period, with lending to both individuals and corporate clients increasing. Deposits from customers with Landsbankinn increased by 2.8% between periods, or by ISK 16.9 billion. Individuals deposits account for around ISK 8 billion of the increase.
As of 31 March this year, Landsbankinn's equity amounted to ISK 228.6 billion and its capital adequacy ratio was 24.7%. Landsbankinn pays dividend in the total amount of ISK 24.8 bn this year. Dividends are paid in two instalments, ISK 15.4 billion in dividend for the operating year 2017, which is equivalent to 78% of that year's profit, and a special dividend to shareholders in the amount of ISK 9.5 billion, to be paid to shareholders on 19 September 2018.
Lilja Björk Einarsdóttir, CEO of Landsbankinn:
"Landsbankinn's performance in the first quarter of 2018 was positive. A higher market share alongside stronger economic activity have contributed to a significant growth in both lending and deposits between periods. At the same time, the Bank has achieved positive results through efficiency measures and a more favourable funding structure. It is enjoyable that we continue to see the increasingly stronger position of both households and companies reflected in the both growing deposits and not least in falling default rates.
Landsbankinn places strong emphasis on building solid and long-term business relationships with both individuals and corporations. We consider this strong focus to be one of the main reasons that surveys show increased satisfaction with the Bank's services, record-high trust in the Bank and a growing market share in both the retail and corporate markets.
In recent months, Landsbankinn has introduced several new electronic service solutions, including the Landsbankinn App. The Bank had previously offered customers the opportunity to adjust their overdraft manually through online banking and apply for payment equalisation for their credit cards online. Reception of these solutions has exceeded all expectations - customers clearly appreciate the opportunity to tend to their banking business via computer or mobile device, anywhere and anytime it suits them. Towards the end of 2017, Landsbankinn implemented a new payment and deposit system from Sopra, the first Icelandic bank to do so. The Bank can base future digital growth on solid foundations and will place even more emphasis on innovative electronic solutions."
Landsbankinn will be hosting an investor call in English covering the main results of Q1 2018 on Friday 4 May at 10:00 am local time. Please register participation by emailing ir@landsbankinn.is.
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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