H1 2004 Performance Presentation of Landsbanki slands hf Reykjavk, - PowerPoint PPT Presentation

H1 2004 Performance Presentation of Landsbanki Íslands hf Reykjavík, 29 July 2004 Sigurjón T. Árnason Halldór J. Kristjánsson GMD’s & CEO’s

Landsbanki H1 interim accounts • The presentation compares H1 results of the years 2004 and 2003 of Landsbanki Group. • Landsbanki acquired a 100% stake in Landsbanki Luxembourg S.A. in Q2 2003 and therefore previous years results are not fully comparable. • Earnings of Landsbanki Group amounted to ISK 7,426 million before taxes. • Earnings after taxes amounted to ISK 6,035 million, increasing by 394% from previous year. • Total assets grew to ISK 558 billion, which is an increase of 25% for the first six months of the year 2004. • Return on equity before taxes and minority interests was 68% in H1 2004 and return on equity after taxes was 54% for the period.

Profit and loss account 2004 2003 30.6.2004 30.6.2003 Diff % Q2 Q1 Q4 Q3 Interest revenues.......................... 15,523 10,025 5,498 55% 8,772 6,751 6,453 5,393 Interest expenses......................... 9,142 5,848 3,294 56% 5,306 3,836 3,721 2,971 Net interest revenues 6,381 4,177 2,204 53% 3,466 2,915 2,732 2,422 Net profit from shareholdings....... 44 67 -23 -34% 26 18 6 71 Commissions and fees................. 4,460 3,366 1,095 33% 2,054 2,406 1,818 1,774 Commission expenses................. -597 -314 -284 90% -301 -296 -299 -230 Trading gains................................ 5,382 752 4,630 616% 1,161 4,221 807 1,114 Other revenues............................. 74 548 -474 -86% 26 48 110 60 Operating revenues 9,363 4,420 4,944 112% 2,966 6,397 2,443 2,789 Net operating revenues 15,744 8,597 7,147 83% 6,432 9,313 5,175 5,211 ISK million

Interest spread as a ratio of average capital position 4.0% 3.45% 3.5% 3.25% 2.99% 3.0% 2.86% 2.83% 2.62% 2.58% 2.5% 2.0% 1998 1999 2000 2001 2002 2003 06 2004

Net profit from shareholdings Book Total Owner- Profit value profit ship share VISA - Iceland Ltd........................... 504 93 38% 35 Eurocard - Iceland Ltd.................... 191 87 20% 17 Intrum Justitia hf............................. 86 54 25% 11 The Bank's Data Center................. 465 35% Other partially owned companies... 99 -19 1,345 44 ISK million

Commissions and fees 2004 2003 30.6.2004 30.6.2003 Diff % Q2 Q1 Q4 Q3 Securities..................................... 1,090 841 249 30% 359 732 396 396 Asset management...................... 481 318 162 51% 258 223 273 85 Foreign trade............................... 743 542 201 37% 343 400 106 338 Lending........................................ 412 324 87 27% 202 209 206 164 Cards........................................... 423 393 30 8% 210 213 205 202 Interbank revenues...................... 507 333 174 52% 256 251 227 200 Collection and payment services. 203 236 -33 -14% 113 90 119 128 Other commissions and fees....... 69 78 -8 -11% 36 34 33 35 Subsidiaries................................. 533 302 231 77% 277 256 255 226 4,460 3,366 1,095 33% 2,054 2,406 1,818 1,774 Commission expenses................. 597 314 284 90% 301 296 299 230 Net commissions and fees........ 3,863 3,052 811 27% 1,753 2,110 1,520 1,544 ISK million

Trading gains 2004 2003 30.6.2004 30.6.2003 Diff % Q2 Q1 Q4 Q3 Foreign exchange............. 139 95 44 46% 64 75 93 -35 Bond trading..................... 670 280 390 140% 66 604 -67 -179 Stock trading..................... 4,572 377 4,196 1114% 1,031 3,542 781 1,328 5,382 752 4,630 616% 1,161 4,221 807 1,114 ISK million

Profit and loss account 2004 2003 30.6.2004 30.6.2003 Diff % Q2 Q1 Q4 Q3 Net operating revenues.................. 15,744 8,597 7,147 83% 6,432 9,313 5,175 5,211 Payroll expenses............................ 3,321 2,431 891 37% 1,701 1,620 1,741 1,485 Administrative expenses................ 2,140 1,641 499 30% 1,124 1,015 1,079 842 Depreciation of fixed assets........... 715 460 255 55% 235 480 388 459 Other expenses.............................. 173 197 -24 -12% 20 153 4 89 Operating expenses 6,349 4,728 1,621 34% 3,080 3,269 3,212 2,874 Net provision for credit losses........ 1,969 2,430 -461 -19% 978 991 1,418 809 Profit before taxes 7,426 1,439 5,988 416% 2,374 5,053 545 1,528 Taxes............................................. 1,337 165 1,172 710% 405 931 75 216 Profit before minority interests 6,090 1,274 4,816 378% 1,968 4,121 470 1,312 Minority interests............................ 54 53 2 3% 27 27 28 19 Net profit 6,035 1,221 4,814 394% 1,941 4,094 442 1,293 ISK million

Cost-income ratio 75% 75% 71 % 70% 70% 66% 65% 61 % 60% 57% 55% 50% 45% 40% 40% 35% 30% 25% 20% 1998 1999 2000 2001 2002 2003 06 2004

Ratio of provision to lending position at period- end 1.6% 1.47% 1.4% 1.33% 1.17% 1.2% 1.0% 0.92% 0.88% 0.87% 0.83% 0.8% 0.6% 0.4% 0.2% 0.0% 1998 1999 2000 2001 2002 2003 06 2004

Overdue loans 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 31.12.1998 2.3% 3.5% 31.3.1999 30.6.1999 30.9.1999 31.12.1999 2.1% 3.4% 31.3.2000 30.6.2000 30.9.2000 31.12.2000 2.4% 3.6% 31.3.2001 30.6.2001 30.9.2001 31.12.2001 2.5% 5.1% 3.4% 31.3.2002 30.6.2002 30.9.2002 31.12.2002 3.2% 4.9% 4.0% 31.3.2003 30.6.2003 30.9.2003 1.8% 2.3% 31.12.2003 1.1% 3.4% 31.3.2004 1.5% 2.2% 30.6.2004 > 90 days > 30 days Total overdue 1.0% 1.2% 1.9%

Provisions for credit losses 06 2004 2003 2002 2001 2000 1999 1998 Provisions made............................................. 1,995 4,787 2,893 2,322 1,402 1,145 1,000 Write-offs........................................................ 1,643 3,709 1,571 1,191 742 768 1,202 Collected previously written-off loans............. 26 131 30 24 62 39 58 Addition from partially owned subsidiary........ 471 20 157 Reserves at period-end.................................. 8,051 7,700 6,622 4,829 3,678 2,863 2,486 thereof - general.......................................... 2,508 2,201 1,864 1,412 1,350 1,069 842 - special........................................... 5,543 5,498 4,757 3,417 2,329 1,794 1,644 Provision account as a % of lending.............. 1.9% 2.4% 3.1% 2.4% 2.2% 2.2% 2.2% Provision as a % of lending............................ 0.9% 1.5% 1.3% 1.2% 0.8% 0.9% 0.9% General provisions as a % of lending............. 0.6% 0.7% 0.9% 0.7% 0.8% 0.8% 0.7% ISK million

Profit 8,000 7,426 Profit before taxes and minority interests Profit after taxes 7,000 6,035 6,000 5,000 4,000 3,512 2,956 3,000 2,549 2,028 1,846 2,000 1,749 1,668 1,504 1,093 955 920 911 1 ,000 0 1 998 1 999 2000 2001 2002 2003 06 2004 ISK million

Return on equity before taxes and minority interest 68.1% 70% 60% 50% 40% 30% 20.9% 17.5% 20% 17.0% 13.9% 12.7% 12.6% 1 0% 0% 1 998 1 999 2000 2001 2002 2003 06 2004

Return on equity after taxes 60% 54.0% 50% 40% 30% 17.6% 20% 13.5% 13.1% 12.4% 11.5% 8.1% 1 0% 0% 1 998 1 999 2000 2001 2002 2003 06 2004

Profit by Business Segments – H1 2004 Asset Commercial Securities Management & Banking Trading Private Banking Other Total ISK Million Net interest revenues........... 6,081 -189 488 0 6,381 Operating revenues.............. 1,724 1,667 591 0 3,982 Trading gains........................ -28 5,384 26 0 5,382 Net operating revenues..... 7,777 6,862 1,105 0 15,744 Operating expenses........... 3,879 851 654 965 * 6,349 Provisions for credit losses... 1,812 5 152 0 1,969 Pre tax profit....................... 2,087 6,005 299 -965 7,426 * ISK 596 Million expenses from Q1 ISK million

Revenue breakdown by countries Iceland Britain Luxembourg Total Net interest revenues.................. 4,990 416 974 6,381 Net profit from shareholdings..... 44 0 0 44 Net commissions........................ 3,405 251 207 3,863 Trading gains.............................. 5,356 0 26 5,382 Other revenues........................... 74 0 0 74 13,869 667 1,208 15,744 ISK million

Total assets 600 558 Loans have increased by 100% in the last 15 months 550 500 448 450 400 350 278 300 269 239 250 1 93 200 1 58 150 100 50 0 1998 1999 2000 2001 2002 2003 06 2004 ISK billion