9M 2019 Results Lilja B. Einarsdóttir Hreiðar Bjarnason CEO CFO
DISCLAIMER This presentation is for information purposes only and shall not be construed as an offer or solicitation for the subscription or purchase or sale of any financial instrument. The information set out in this presentation has not been independently verified. No representation or warranty is made by Landsbankinn as to the accuracy, completeness or fairness of the information or opinions contained in this presentation. This presentation may contain projections and forward-looking statements which are subject to a number of risks and uncertainties that could cause actual results to differ materially and could adversely affect the financial effects described herein. Landsbankinn accepts no liability whatsoever for any direct or indirect loss, howsoever arising, from use of this presentation. Landsbankinn assumes no obligation to update this presentation, provide any additional information or correct any errors, which may eventually become apparent. Landsbankinn 9M 2019 Results 2
Highlights – Operations Q3 2019 Highlights of Q3 2019 Profit Return on equity The Bank’s after -tax profit in Q3 in 2019 amounted to ISK 3.2 bn compared with 4,000 8% ISK 3.8 bn for the same period in 2018. Net interest income amounted to ISK 9.6 bn in Q3 compared to ISK 10.4 bn in Q3 2018. 2,000 4% 3,780 3,247 6.5% Net valuation adjustments during the period were negative by ISK 1.1 bn 5.4% compared to a negative change in the amount of ISK 89 m in Q3 of 2018. Net fee and commission income for the period amounted to ISK 2.0 bn in Q3 as 0 0% Q3 2018 Q3 2019 Q3 2018 Q3 2019 compared to ISK 1.9 bn during the same period the previous year. Operating cost was ISK 5.5 bn, as compared with ISK 5.6 bn in Q3 2018. Net interest income Cost-income ratio Return on equity (ROE) after taxes was 5.4% in Q3 2019 compared to a ROE of 12,000 60% 6.5% during the same period in 2018. 50% The cost-income ratio for Q3 was 43.9%, as compared with 45.9% for the same 8,000 40% time last year. 30% 10,370 9,631 45.9% 43.9% 4,000 20% 10% 0 0% Q3 2018 Q3 2019 Q3 2018 Q3 2019 Amounts in ISKm Landsbankinn 9M 2019 Results 3
Highlights – Operations 9M 2019 Highlights of 9M 2019 Profit Return on equity The Bank’s after -tax profit for the first nine months of 2019 amounted to ISK 14.4 16,000 10% bn, as compared to ISK 15.4 bn for the same period in 2018. 14,000 Net interest income amounted to ISK 30.1 bn compared to ISK 29.8 for the same 12,000 period in 2018. 10,000 Net valuation adjustments during the period were negative by ISK 3.4 bn as 8,000 5% 15,393 14,360 8.8% 7.9% compared with a positive change in the amount of ISK 1.6 bn for the same period 6,000 in 2018. 4,000 2,000 Net fee and commission income for the period amounted to ISK 6.1 bn compared 0 0% to ISK 5.8 bn during the same period the previous year. 9M 2018 9M 2019 9M 2018 9M 2019 Other operating income amounted to ISK 6.5 bn compared to ISK 3.8 bn for the same period in 2018. Net interest income Cost-income ratio Operating cost was ISK 17.7 bn, remaining unchanged between periods. 32,000 60% The interest margin on assets and liabilities was 2.4% at the end of September 28,000 2019, as compared to 2.7% at the end of September 2018. 50% 24,000 Return on equity (ROE) after taxes was 7.9% in the first 9M of 2019 as compared 40% 20,000 with a ROE of 8.8% for the same period in 2018. 16,000 30% 30,090 29,846 12,000 45.0% The cost-income ratio for the first nine months of the year was 41.4%, as 41.4% 20% compared with 45.0% for the same period last year. 8,000 10% 4,000 The effective income tax rate for the first 9M of 2019 was 22.1%. 0 0% 9M 2018 9M 2019 9M 2018 9M 2019 Amounts in ISKm Landsbankinn 9M 2019 Results 4
Highlights – Balance sheet Total assets amounted to ISK 1,415 bn as of the end of September 2019. Total assets Total capital ratio 1,600,000 25% Lending increased by ISK 72 billion in the first nine months of 2019. 1,400,000 Lending to corporates increased by ISK 30 bn and lending to households 20% 1,200,000 by ISK 42 bn. 1,000,000 15% 800,000 24.9% 23.6% 1,415,262 Landsbankinn’s equity was ISK 243.9 bn at the end of September 2019, up 1,326,041 10% 600,000 from ISK 239.6 bn the beginning of this year. 400,000 5% 200,000 0 0% The total capital ratio is now 23.6%, down from 24.9% at year-end 2018, 31.12.2018 30.9.2019 31.12.2018 30.9.2019 and well above the FME’s requirement of 20.4%. Loans and advances to The Bank’s AGM, held on 4 April 2019, approved a motion from the Board Liquidity coverage ratio total customers of Directors to pay a dividend in the amount of ISK 9,922 m for the 2018 250% operating year in two payments in April and in October. 1,200,000 200% 1,000,000 The total liquidity coverage ratio (LCR) is 186% as at 30 September 2019, 800,000 150% up from 158% at year-end 2018. According to the Central Bank's rules, 600,000 1,136,804 100% 1,064,532 186% there is a minimum 100% LCR requirement, both in total and in foreign 158% 400,000 currencies. 50% 200,000 0 0% 31.12.2018 30.9.2019 31.12.2018 30.9.2019 Amounts in ISKm Landsbankinn 9M 2019 Results 5
Development of KPIs Total capital ratio Return on equity Impact of bank levy Return on equity, excluding bank levy FME capital requirement 35% 20% 30% 16.0% 30.4% 30.2% 25% 1.2% 15% 26.7% 24.9% 14.8% 23.6% 20% 22.1% 21.8% 9.8% 21.4% 9.6% 9.5% 20.5% 20.4% 10% 15% 7.7% 1.6% 1.3% 1.7% 1.1% 8.2% 8.2% 7.9% 10% 5% 6.6% 5% 0% 0% 2015 2016 2017 2018 9M 2019 31.12.15 31.12.16 31.12.17 31.12.18 30.09.19 Liquidity coverage ratio total Cost-income ratio LCR total Regulatory requirements 60% 200% 186% 158% 157% 48.4% 46.1% 128% 45.5% 43.8% 40% 100% 113% 41.4% 20% 0% 2015 2016 2017 2018 9M 2019 31.12.15 31.12.16 31.12.17 31.12.18 30.09.19 Landsbankinn 9M 2019 Results 6
Ownership The Finance Ministry published an ownership policy in July 2017 in regards to equity holdings in financial companies that are supervised by the Icelandic State Icelandic State Financial Investments (ISFI). Treasury In regards to Landsbankinn the policy states Landsbankinn The Icelandic State The government will retain a significant equity stake in ~ 900 other - Own shares Financial shareholders Investments (ISFI) the bank (34-40%) to ensure stability in the domestic 0.2% 98.2% 1.6% financial sector. The remaining equity stake will be sold in the next few years given favorable market conditions. Equity in Landsbankinn will be listed on a stock exchange. Landsbankinn 9M 2019 Results 7
Credit rating Fundamental factors for Landsbankinn: Landsbankinn hf. Republic of Iceland - Foreign currency 1 Very strong capital and earnings 3 5 7 Adequate liquidity position 9 25.10.2017 25.10.2016 11 Average funding profile 13 15 Adequate business position 17 19 30.09.2016 31.03.2017 30.09.2017 31.03.2018 30.09.2018 31.03.2019 30.09.2019 Moderate risk position Icelandic sovereign Landsbankinn hf. A BBB+ Long-term rating Short-term rating A-1 A-2 Outlook Stable Negative Last rating action March 2017 July 2019 Landsbankinn 9M 2019 Results 8
Financial objectives Objective 9M 2019 Guidelines Return on equity, excluding bank levy 1 ≥ 10% Expected ROE, excluding bank levy in 2019 is 9.0 – 9.5%. 9.6% (ROE) Cost-income ratio ≤ 45% 41.4% Expected ratio in 2019 is 41-43%. (C/I ratio) The Bank's aim is to maintain capital ratios above the FME's capital requirements at any given time, Total capital ratio plus a 1.5-2.5% management buffer. ≥ 23% 23.6% (TCR) The Bank also aims to be in the highest category for risk-adjusted capital ratio, as determined and measured by the relevant credit rating agencies. Common Equity Tier 1 capital The Bank intends to raise subordinated market funding, if suitable and favourable for the Bank‘s ≥ 18% 22.3% (CET1) capital structure. ≥ 50% Dividend payout ratio 52% 2 The aim is also to make special dividend payments to further optimise the Bank's capital structure. 1 Special tax on financial institutions of 0.376% is levied of the carrying amount of total liabilities at year-end, excluding tax liabilities, in excess of ISK 50,000 million as determined for tax purposes. The special income tax on financial institutions is a non-deductible expense 2 Regular dividend payout ratio of last year profit. Landsbankinn 9M 2019 Results 9
Landsbankinn´s successes Source: Gallup Landsbankinn 9M 2019 Results 10
Ársuppgjör 2018 11
Income Statement
Income statement Change from 9M 2018 to 9M 2019 18,000 16,000 - 5,066 244 15,393 14,360 Net interest income 736 14,000 -54 101 537 2,177 Taxes Other operating expenses Salaries and related expenses FX gain (loss) Profit 9M 2019 12,000 Profit 9M 2018 292 Other income 10,000 Net adjustments in valuation Net fee and commission income 8,000 6,000 4,000 2,000 0 Amounts in ISKm Landsbankinn 9M 2019 Results 13
Recommend
More recommend
