Financial results of Landsbankinn for the

  • Landsbankinn’s profit in the first nine months of 2022 amounted to ISK 11.3 billion, including ISK 5.8 billion in the third quarter.
  • Return on equity (ROE) for the first nine months of the year was 5.6% and 8.5% in the third quarter. A decrease in the fair value of the Bank’s equity portfolio is having a negative impact on its profitability this year.
  • Net commission income increased 14.3% year-on-year, mainly due to increased activity in asset management and market operations.
  • Net interest income increased by 17.6%, mainly due to a growing loan portfolio and higher interest rates.
  • The ratio of operating expenses to average total assets is now 1.3% and has never been so low.
  • The cost/income ratio was 48.9% over the first nine months of the year; 43.2% in the third quarter.
  • The imputed tax rate for the first nine months of the year is 40.4%, compared to 19.9% ​​for the same period of 2021. The profit before tax for the first nine months of the year amounts to ISK 19.0 billion and taxes charged over ISK. 7.7 billion. Information on the final tax payments for 2022 will be published in the annual financial statements.
  • About a quarter of new auto loans in the third quarter were for the purchase of electric vehicles and the ratio is increasing.
  • Since the launch of securities trading in the app, self-service securities transactions have increased significantly. Around 90% of fund subscriptions and securities contracts are concluded in the app or online banking.

In the first nine months of the year, net interest income amounted to ISK 33.6 billion, compared to ISK 28.6 billion in the same period of the previous year, a 17.6% increase between periods. Landsbankinn’s net fee and commission income was ISK 7.9 billion, compared to ISK 6.9 billion for the same period a year earlier. Other operating income was negative ISK 3.8 billion; was positive of ISK 10.2 billion in the same period of 2021. Net reversal of credit impairment was ISK 2.7 billion compared to ISK 3.8 billion in the same period of 2021 This is largely due to the fact that it is no longer necessary to make a specific collective provision against uncertainty about the ultimate impact of Covid-19.

The interest margin on average total assets was 2.6% in the first nine months of 2022, compared to 2.3% in the same period a year earlier.

The Bank’s operating expenses amounted to ISK 17.1 billion during the period, compared to ISK 17.5 billion for the same period of the previous year. Salaries and related expenses amounted to ISK 10.5 billion, compared to ISK 10.7 billion in the same period of the previous year. Other operating expenses amounted to ISK 6.7 billion, unchanged from the same period in 2021.

The cost/income ratio for the first nine months of 2022 is 48.9%, compared to 41.7% for the same period of 2021.

Landsbankinn’s total assets increased by ISK 41.3 billion during the period, amounting to ISK 1,771 billion as of September 30, 2022. Customer loans increased by ISK 108.9 billion ISK in the first nine months of 2022. At the end of September 2022, customer deposits amounted to 968.0 billion ISK, compared to 900.1 billion ISK at the end of 2021, an increase of 67.9 billion from ISK.

Landsbankinn’s equity stood at ISK 273.4 billion as of September 30 this year and its total capital ratio was 24.2%.

Lilja Björk Einarsdóttir, CEO of Landsbankinn:
“The Bank’s fee income increased more than expected, mainly due to increased activity and market share, and interest income from a larger credit portfolio is good. Expenses are falling at the same time, with operating expenses relative to total assets at a historically low level. We continue to feel the negative effect of the decline in unlisted share prices, leading to profitability for the year below our objectives. Given this fluctuating element, the Bank’s results are very good and its position solid in all areas.

Customer satisfaction with our service is high and it is telling that market research dating back to 2018 shows almost continuously that most would recommend Landsbankinn. Our main objective is to provide customers with favorable conditions while guaranteeing satisfactory and regular performance. At the same time, it is clear that the Bank’s funding conditions are increasing, competition for customer deposits is intensifying and bond yields are higher than before. We faced increased competition for customer deposits by offering a monthly interest rate of 5.25% on in-app savings. Within the app, clients can also buy and sell Landsbréf funds and trade domestic stocks on the Primary Market and First North. Investing and saving in the app has never been easier.

Landsbankinn Corporate Finance achieved good results and participated in several successful projects this year. We are the largest lender in the domestic corporate market and a strong corporate finance business enables us to better serve the different needs of corporate clients. In the first nine months of the year, business loans increased by ISK 53 billion, and business vehicle and equipment financing is growing strongly. We remain active in financing residential housing, contributing to the supply of new housing in a growing community. Despite rising interest rates, we remain a major lender to the construction industry. We also see export sectors doing well, including the travel industry, but we think business leaders are being cautious when it comes to major investment decisions. It is undeniable that the economic uncertainty is considerable, but the economic forecasts recently published by the Bank include grounds for optimism. Economic growth is good and the domestic outlook is much better than in most neighboring countries. Default rates are at an all-time high.

We are always looking to the future and continue to focus on sustainability. At the Landsbankinn Sustainability Forum in September, we invited strong companies to present methods to increase sustainability in the construction, transport, seafood and fishing industry. We also want to draw attention to successful efforts by awarding the Landsbankinn Sustainable Finance Label to projects and companies that meet the sustainability requirements.

As recent coverage has pointed out, losses suffered by individuals and businesses as a result of cybercrime are far too common. In October, we took part in a campaign to strengthen cybersecurity by organizing two seminars, one for seniors and the other for companies. In addition to education and a strong commitment to long-standing collaboration both nationally and internationally, we meet stringent security certification requirements ourselves.

The Bank’s financial position is strong and its equity very good, especially compared to non-domestic banks, and well above the regulatory requirements of the Central Bank of Iceland’s Financial Supervisory Authority. Securing a good return on equity from such strength can be difficult, but the success of the Bank’s operations has enabled us to pay a dividend of ISK 20 billion to owners this year. We will continue our efforts to manage the Bank well and meet customer needs. The solutions and services offered by the Bank depend on our excellent team of employees ready to surpass themselves to meet new challenges and cope with rapid change. We are grateful for the trust and business and offer a warm welcome in branches across the country, in the app, by phone and web chat. Mutual trust and a personal approach to banking continue to speak for themselves.

Financial calendar of Landsbankinn

2022 annual results February 2, 2023

Annual General Meeting March 22, 2023

Q1 2023 results May 4, 2023

Q2 2023 results July 20, 2023

Q3 2023 results October 26, 2023

2023 annual results February 1, 2024

For more information, contact:

Rúnar Palmason, Public Relations, [email protected]

Hanna Kristín Thoroddsen, Investor Relations, [email protected]

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