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Islandsbanki — Financial Supplement Data 2021
Feb 10, 2021
2190_rns_2021-02-10_9ef85a40-c9de-43d1-b237-d5bffa475fdf.pdf
Financial Supplement Data
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4Q2020
Íslandsbanki Factbook
440 4000
@islandsbanki
islandsbanki.is
Supplementary information for market participants (Unaudited)
Íslandsbanki Factbook 2020
Contents
Investor relations information
Page
3
Overview
- Key performance indicators 4
- Income statement 5
- Balance sheet 6
- Net interest income 7
- Net fee & commissions income 8
- Loans to customers 9
- Capital and risk exposure amount 10
9 Quarters review
- Key performance indicators 11
- Income statement 12
- Balance sheet 13
- Net interest income 14
- Net fee & commissions 15
- Loans to customers 16
-
Capital and risk exposure amount 17
-
Allocation and impact report 18
- Macroeconomics 19
- Other information 20
- Financial targets 21
- Ratings 22
- Disclaimer 23
Investor relations
IR contact
Email: [email protected]
Investor relations web-site
https://www.islandsbanki.is/en/landing/about/investor-relations
Investor call in English on Thursday 11 February 2021 at 9.30 AM (GMT)
The Bank will host an investor call in English at 09.30 AM (GMT) on Thursday, 11 February.
The call will start with a short macro update on the Icelandic economy, followed by a review of the financial results a
Please register by sending email to: [email protected].
Dial-in details and investor material will be sent out prior to the call.
Additional investor material
All presentation material will subsequently be available and archived on the Bank's investor relations website where on the Bank's financial calendar and silent periods is also available:
https://www.islandsbanki.is/en/landing/about/investor-relations
Financial calendar
Íslandsbanki plans to publish its interim financial statements according to the financial calendar below:
Annual General Meeting — 18 March 2021
1Q2021 results — 5 May 2021
2Q2021 results — 28 July 2021
3Q2021 results — 27 October 2021
Please note that these dates are subject to change.
Íslandsbanki Factbook 2020
Key performance indicators - 5 years
| 2020 | 2019 | 2018 | 2017 | 2016 | |
|---|---|---|---|---|---|
| Profitability | |||||
| Return on equity (after tax) | 3.7% | 4.8% | 6.1% | 7.5% | 10.2% |
| ROE margin^{1} | 2.6% | 1.2% | 2.1% | 3.1% | 4.9% |
| Return on assets | 0.5% | 0.7% | 1.0% | 1.3% | 1.9% |
| Earnings per share | 0.72 | 0.92 | 1.01 | 1.10 | 1.40 |
| Core income / total operating income^{2} | 1.02 | 0.97 | 0.98 | 0.99 | 0.86 |
| Net interest margin | |||||
| Net interest margin on total assets | 2.6% | 2.7% | 2.9% | 2.9% | 3.1% |
| Efficiency | |||||
| Cost-to-income ratio^{3} | 54.3% | 58.8% | 66.3% | 62.5% | 56.9% |
| Number of FTEs at period end - Consolidated^{4} | 779 | 984 | 1,075 | 1,042 | 1,075 |
| Number of FTEs at period end - Parent^{4} | 745 | 749 | 834 | 860 | 910 |
| Number of branches at period end | 12 | 14 | 14 | 14 | 15 |
| Assets | |||||
| Loans to customers (ISKm) | 1,006,717 | 899,632 | 846,599 | 755,175 | 687,840 |
| LTV on mortgages to individuals^{5} | 64.0% | 62.0% | 61.0% | 63.3% | 67.2% |
| Risk exposure amount / total assets | 69.4% | 73.7% | 74.8% | 74.9% | 67.2% |
| Financial strength | |||||
| Equity as % of total assets | 13.9% | 15.0% | 15.6% | 17.5% | 17.1% |
| Liquidity | |||||
| Liquidity coverage ratio (LCR) - All currencies | 196% | 155% | 172% | 142% | 200% |
| Liquidity coverage ratio (LCR) - Domestic currency | 95% | 110% | |||
| Liquidity coverage ratio (LCR) - Foreign currencies | 463% | 325% | 544% | 155% | 347% |
| Net stable funding ratio (NSFR) - All currencies | 123% | 119% | 114% | 117% | 123% |
| Net stable funding ratio (NSFR) - Foreign currencies | 179% | 156% | 149% | 122% | 144% |
| Term deposits % of total deposits | 24.6% | 28.0% | 27.1% | 29.4% | 35.0% |
| Customer loans to customer deposits ratio | 148.2% | 145.5% | 146.2% | 133.2% | 115.8% |
| Capital | |||||
| Tier 1 ratio | 20.1% | 19.9% | 20.3% | 22.6% | 24.9% |
| Tier 2 ratio | 2.9% | 2.5% | 1.9% | 1.5% | 0.3% |
| Total capital ratio | 23.0% | 22.4% | 22.2% | 24.1% | 25.2% |
| Leverage ratio | 13.6% | 14.2% | 14.6% | 16.2% | 16.0% |
| Risk exposure amount (ISKm) | 933,521 | 884,550 | 845,949 | 775,492 | 704,177 |
- ROE in excess of risk-free rate
- Core income is defined as net interest income plus net fee & commission income
- Cost income ratio excludes bank tax and income deemed as one-off
- Numbers exclude seasonal employees
- The average LTV can be calculated in many different ways and therefore the definition is important for comparison to other banks.
The weight is Íslandsbanki's total amount outstanding on the property and the LTV used is the maximum LTV of all Íslandsbanki's loans of the property
Íslandsbanki Factbook 2020
Income statement - 5 year summary
| ISK million | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|
| Interest income | 55,695 | 61,965 | 61,675 | 56,767 | 60,503 |
| Interest expense | (22,324) | (29,143) | (29,738) | (26,768) | (28,701) |
| Net interest income | 33,371 | 32,822 | 31,937 | 29,999 | 31,802 |
| Fee and commission income | 12,651 | 12,052 | 19,853 | 20,855 | 21,818 |
| Fee and commission expense | (2,126) | (1,153) | (7,626) | (7,105) | (8,095) |
| Net fee and commission income | 10,525 | 10,899 | 12,227 | 13,750 | 13,723 |
| Net financial income (expense) | (1,391) | (820) | (962) | (715) | 6,096 |
| Net foreign exchange gain | 451 | 139 | 1 | 527 | 443 |
| Other operating income | 197 | 2,125 | 1,784 | 628 | 652 |
| Other net operating income | (743) | 1,444 | 823 | 440 | 7,191 |
| Total operating income | 43,153 | 45,165 | 44,987 | 44,189 | 52,716 |
| Administrative expenses | (22,746) | (24,488) | (27,650) | (26,968) | (27,121) |
| Contribution to the Depositors' and Investors' Guarantee Fund | (679) | (936) | (1,173) | (1,083) | (1,063) |
| Bank tax | (1,588) | (3,528) | (3,281) | (2,892) | (2,843) |
| Total operating expenses | (25,013) | (28,952) | (32,104) | (30,943) | (31,027) |
| Profit before net impairment on financial assets | 18,140 | 16,213 | 12,883 | 13,246 | 21,689 |
| Net impairment on financial assets | (8,816) | (3,480) | 1,584 | 1,556 | 735 |
| Profit before tax | 9,324 | 12,733 | 14,467 | 14,802 | 22,424 |
| Income tax expense | (2,472) | (3,909) | (4,734) | (4,151) | (5,205) |
| Profit for the period from continuing operations | 6,852 | 8,824 | 9,733 | 10,651 | 17,219 |
| Discontinued operations, net of income tax | (97) | (370) | 912 | 2,575 | 2,939 |
| Profit for the period | 6,755 | 8,454 | 10,645 | 13,226 | 20,158 |
| Basic earnings per share from profit (loss) for the period | 0.72 | 0.92 | 1.01 | 1.10 | 1.40 |
Íslandsbanki Factbook 2020
Balance sheet - 5 year summary
| ISK million | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|
| Cash and balances with Central Bank | 78,948 | 146,638 | 135,056 | 189,045 | 275,453 |
| Loans to credit institutions | 89,920 | 54,376 | 41,577 | 26,617 | 17,645 |
| Bonds and debt instruments | 128,216 | 52,870 | 69,415 | 27,090 | 31,256 |
| Derivatives | 6,647 | 5,621 | 4,550 | 2,896 | 1,953 |
| Loans to customers | 1,006,717 | 899,632 | 846,599 | 755,175 | 687,840 |
| Shares and equity instruments | 14,851 | 18,426 | 13,074 | 10,177 | 10,626 |
| Investments in associates | 775 | 746 | 682 | 704 | 450 |
| Property and equipment | 7,341 | 9,168 | 5,271 | 7,128 | 6,211 |
| Intangible assets | 3,478 | 4,330 | 5,002 | 4,231 | 2,672 |
| Other assets | 4,125 | 6,608 | 9,177 | 12,759 | 13,448 |
| Non-current assets and disposal groups held for sale | 3,173 | 1,075 | - | - | - |
| Total Assets | 1,344,191 | 1,199,490 | 1,130,403 | 1,035,822 | 1,047,554 |
| Deposits from Central Bank and credit institutions | 39,758 | 30,925 | 15,619 | 11,189 | 4,922 |
| Deposits from customers | 679,455 | 618,313 | 578,959 | 567,029 | 594,187 |
| Derivative instruments and short positions | 6,936 | 6,219 | 5,521 | 5,492 | 4,798 |
| Debt issued and other borrowed funds | 387,274 | 306,381 | 300,976 | 217,748 | 212,468 |
| Subordinated loans | 27,194 | 22,674 | 16,216 | 9,505 | - |
| Tax liabilities | 5,450 | 7,853 | 7,150 | 7,787 | 8,473 |
| Other liabilities | 11,920 | 27,063 | 29,649 | 36,027 | 43,781 |
| Total Liabilities | 1,157,987 | 1,019,428 | 954,090 | 854,777 | 868,629 |
| Share capital | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 |
| Share premium | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 |
| Reserves | 6,181 | 7,065 | 6,499 | 6,179 | 4,139 |
| Retained earnings | 113,529 | 105,569 | 102,496 | 107,387 | 105,563 |
| Total Shareholder's Equity | 184,710 | 177,634 | 173,995 | 178,566 | 174,702 |
| Non-controlling interests | 1,494 | 2,428 | 2,318 | 2,479 | 4,223 |
| Total Equity | 186,204 | 180,062 | 176,313 | 181,045 | 178,925 |
| Total Liabilities and Equity | 1,344,191 | 1,199,490 | 1,130,403 | 1,035,822 | 1,047,554 |
Íslandsbanki Factbook 2020
Net interest income - 5 year summary
| ISK million | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|
| Cash and balances with Central Bank | 1,750 | 4,452 | 7,279 | 10,541 | 11,507 |
| Loans at amortised cost | 51,628 | 54,837 | 52,462 | 45,162 | 47,084 |
| Financial assets mandatorily at fair value through profit or loss | 2,314 | 2,630 | 1,825 | - | - |
| Financial assets designated at fair value through profit or loss | - | - | - | 50 | 1,672 |
| Financial assets held for trading | - | - | - | 879 | 99 |
| Other assets | 3 | 46 | 109 | 135 | 141 |
| Total interest income | 55,695 | 61,965 | 61,675 | 56,767 | 60,503 |
| Deposits from Central Bank and credit institutions | (736) | (625) | (409) | (170) | (275) |
| Deposits from customers | (7,700) | (15,242) | (16,539) | (17,461) | (20,382) |
| Debt issued and other borrowed funds at fair value through profit and loss | (608) | (734) | (963) | - | - |
| Debt issued and other borrowed funds at amortised cost | (11,179) | (9,818) | (9,035) | (8,107) | (7,384) |
| Subordinated loans | (763) | (501) | (198) | (14) | (627) |
| Other interest expense | (1,338) | (2,223) | (2,594) | (1,016) | (33) |
| Total interest expense | (22,324) | (29,143) | (29,738) | (26,768) | (28,701) |
| Net interest income | 33,371 | 32,822 | 31,937 | 29,999 | 31,802 |
| Interest spread (as the ratio of net interest income to the average carrying amount of total assets) | 2.6% | 2.7% | 2.9% | 2.9% | 3.1% |
Íslandsbanki Factbook 2020
Net fee & commission income - 5 year summary
| ISK million | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|
| Asset management | 2,382 | 2,225 | 2,116 | 1,964 | 1,757 |
| Investment banking and brokerage | 2,487 | 2,430 | 2,303 | 2,280 | 1,987 |
| Payment processing | 4,378 | 3,810 | 12,065 | 13,094 | 14,705 |
| Loans and guarantees | 2,014 | 1,510 | 1,467 | 1,427 | 1,449 |
| Other fee and commission income | 1,390 | 2,077 | 1,902 | 2,090 | 1,920 |
| Total fees and commission income | 12,651 | 12,052 | 19,853 | 20,855 | 21,818 |
| Brokerage | (360) | (337) | (300) | (128) | (109) |
| Clearing and settlement | (1,766) | (806) | (7,302) | (6,956) | (7,963) |
| Other fee and commission expense | - | (10) | (24) | (21) | (23) |
| Total fee and commission expense | (2,126) | (1,153) | (7,626) | (7,105) | (8,095) |
| Net fee and commission income | 10,525 | 10,899 | 12,227 | 13,750 | 13,723 |
Íslandsbanki Factbook 2020
Loans to customers - 5 year summary
| ISK million | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|
| Individuals | 437,377 | 349,181 | 319,390 | 299,350 | 286,177 |
| Commerce and services | 124,260 | 126,488 | 124,242 | 112,144 | 97,943 |
| Construction | 42,352 | 44,420 | 29,095 | 24,797 | 27,878 |
| Energy | 8,673 | 7,887 | 6,858 | 7,109 | 7,216 |
| Financial services | 1,539 | 2,315 | 1,704 | 26 | 85 |
| Industrial and transportation | 78,561 | 82,288 | 79,824 | 69,961 | 63,090 |
| Investment companies | 23,440 | 23,590 | 23,799 | 19,726 | 14,402 |
| Public sector and non-profit organisations | 10,911 | 12,312 | 12,087 | 11,871 | 12,835 |
| Real estate | 157,502 | 145,559 | 142,885 | 127,067 | 100,020 |
| Seafood | 122,102 | 105,592 | 106,715 | 84,853 | 80,243 |
| Loans to customers before collective impairment allowance | 1,006,717 | 899,632 | 846,599 | 756,904 | 689,889 |
| Collective impairment allowance | - | - | - | (1,729) | (2,049) |
| Loans to customers | 1,006,717 | 899,632 | 846,599 | 755,175 | 687,840 |
Loans to customers - by product
| Overdrafts | 42,212 | 48,938 | 48,581 | 45,650 | 45,383 |
|---|---|---|---|---|---|
| Credit cards | 16,888 | 19,026 | 18,242 | 18,800 | 19,188 |
| Mortgages | 377,155 | 281,499 | 249,296 | 225,765 | 211,233 |
| Capital leases | 44,194 | 45,623 | 45,116 | 40,765 | 40,415 |
| Government guarantee schemes | 3,594 | - | - | - | - |
| Other loans | 522,674 | 504,546 | 485,364 | 425,924 | 373,670 |
| Loans to customers before collective impairment allowance | 1,006,717 | 899,632 | 846,599 | 756,904 | 689,889 |
| Collective impairment allowance | - | - | - | (1,729) | (2,049) |
| Loans to customers | 1,006,717 | 899,632 | 846,599 | 755,175 | 687,840 |
Íslandsbanki Factbook 2020
Capital and risk exposure amount - 5 year summary
| ISK million | 2020 | 2019 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|
| Ordinary share capital | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 |
| Share premium | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 |
| Reserves | 6,181 | 7,065 | 6,499 | 6,179 | 4,139 |
| Retained earnings | 113,529 | 105,569 | 102,496 | 107,387 | 105,563 |
| Non-controlling interests | 1,494 | 2,428 | 2,318 | 2,479 | 4,223 |
| IFRS 9 reversal due to transitional rules | 5,164 | - | - | - | - |
| Fair value changes due to own credit standing | 238 | 392 | 376 | - | - |
| Tax assets | (259) | (476) | (215) | (4) | (4) |
| Intangible assets | (3,478) | (4,330) | (5,002) | (4,231) | (2,672) |
| Other regulatory adjustments | - | - | - | (1,285) | (924) |
| Total CET1 capital | 187,869 | 175,648 | 171,472 | 175,525 | 175,325 |
| Tier 2 capital | |||||
| Qualifying subordinated liabilities | 27,194 | 22,674 | 16,216 | 9,505 | - |
| General credit risk adjustments | - | - | - | 1,729 | 2,049 |
| Total capital base | 215,063 | 198,322 | 187,688 | 186,759 | 177,374 |
| Risk exposure amount | |||||
| - due to credit risk | 830,141 | 789,180 | 750,801 | 682,525 | 615,465 |
| - due to market risk: | 16,626 | 7,919 | 7,622 | 8,102 | 7,243 |
| Market risk, trading book | 11,306 | 6,488 | 6,649 | 6,709 | 6,418 |
| Currency risk | 5,320 | 1,431 | 973 | 1,393 | 825 |
| - due to credit valuation adjustment | 1,728 | 2,027 | 2,385 | 1,534 | - |
| - due to operational risk | 85,026 | 85,424 | 85,141 | 83,331 | 81,469 |
| Total risk exposure amount | 933,521 | 884,550 | 845,949 | 775,492 | 704,177 |
| Capital ratios | |||||
| Tier 1 ratio | 20.1% | 19.9% | 20.3% | 22.6% | 24.9% |
| Tier 2 ratio | 2.9% | 2.5% | 1.9% | 1.5% | 0.3% |
| Total capital ratio | 23.0% | 22.4% | 22.2% | 24.1% | 25.2% |
| Leverage ratio | 13.6% | 14.2% | 14.6% | 16.2% | 16.0% |
Íslandsbanki Factbook 2020
| Key performance indicators - 9 quarters | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2020 | 2020 | 2020 | 2019 | 2019 | 2019 | 2019 | 2018 | |
| Profitability | |||||||||
| Return on equity (after tax) | 7.6% | 7.4% | 2.8% | -3.0% | 3.7% | 4.7% | 4.9% | 5.9% | 3.2% |
| ROE margin* | 7.1% | 6.7% | 1.1% | -5.3% | 0.9% | 1.4% | 1.1% | 2.1% | -1.0% |
| Return on assets | 1.1% | 1.0% | 0.4% | -0.4% | 0.5% | 0.7% | 0.7% | 0.9% | 0.5% |
| Earnings per share | 0.34 | 0.31 | 0.17 | -0.10 | 0.21 | 0.21 | 0.24 | 0.26 | 0.15 |
| Net interest margin | |||||||||
| Net interest margin on total assets | 2.5% | 2.5% | 2.6% | 2.8% | 2.7% | 2.7% | 2.8% | 2.7% | 3.0% |
| Efficiency | |||||||||
| Cost-to-income ratio² | 51.7% | 46.7% | 57.5% | 62.9% | 62.9% | 56.3% | 56.5% | 59.6% | 68.5% |
| Number of FTEs at period end - Consolidated³ | 779 | 778 | 980 | 980 | 984 | 1,022 | 1,053 | 1,078 | 1,075 |
| Number of FTEs at period end - Parent co.³ | 745 | 744 | 735 | 746 | 749 | 784 | 806 | 834 | 835 |
| Asset quality | |||||||||
| Loans to customers (ISKm) | 1,006,717 | 970,309 | 933,320 | 923,850 | 899,632 | 909,175 | 894,446 | 873,530 | 846,599 |
| LTV on mortgages to individuals⁴ | 64.0% | 64.0% | 63.0% | 62.0% | 62.0% | 61.0% | 61.0% | 61.0% | 61.0% |
| Risk exposure amount / total assets | 69.4% | 70.9% | 70.8% | 72.6% | 73.7% | 74.0% | 74.1% | 73.6% | 74.8% |
| Financial strength | |||||||||
| Equity as % of total assets | 13.9% | 13.7% | 13.8% | 14.3% | 15.0% | 14.4% | 14.3% | 14.4% | 15.6% |
| Liquidity | |||||||||
| Liquidity coverage ratio (LCR) | 196% | 136% | 179% | 177% | 155% | 174% | 185% | 158% | 172% |
| Liquidity coverage ratio (LCR) - Domestic currency | 95% | 96% | 119% | 110% | |||||
| Liquidity coverage ratio (LCR) - Foreign currencies | 463% | 405% | 325% | 324% | 325% | 484% | 456% | 453% | 544% |
| Net stable funding ratio (NSFR) - All currencies | 123% | 113% | 117% | 120% | 119% | 117% | 117% | 115% | 114% |
| Net stable funding ratio (NSFR) - Foreign currencies | 179% | 149% | 147% | 151% | 156% | 163% | 179% | 166% | 149% |
| Term deposits % of total deposits | 24.6% | 25.0% | 25.7% | 27.4% | 28.0% | 28.5% | 28.2% | 28.0% | 27.1% |
| Customer loans to customer deposits ratio | 148.2% | 138.9% | 137.0% | 142.6% | 145.5% | 149.0% | 145.2% | 142.9% | 146.2% |
| Capital | |||||||||
| Tier 1 ratio | 20.1% | 19.4% | 19.4% | 19.2% | 19.9% | 19.0% | 18.8% | 19.1% | 20.3% |
| Tier 2 ratio | 2.9% | 2.8% | 2.8% | 2.7% | 2.5% | 2.4% | 2.6% | 1.8% | 1.9% |
| Total capital ratio | 23.0% | 22.2% | 22.2% | 21.9% | 22.4% | 21.4% | 21.4% | 20.9% | 22.2% |
| Leverage ratio | 13.6% | 13.4% | 13.4% | 13.5% | 14.2% | 13.6% | 13.4% | 13.5% | 14.6% |
| Risk exposure amount (ISKm) | 933,521 | 942,339 | 923,133 | 911,375 | 884,550 | 912,843 | 911,784 | 886,901 | 845,949 |
- ROE in excess of risk-free rate
- Cost income ratio excludes bank tax and income deemed as one-off
- Numbers exclude seasonal employees
- The average LTV can be calculated in many different ways and therefore the definition is important for comparison to other banks.
The weight is Íslandsbanki's total amount outstanding on the property and the LTV used is the maximum LTV of all Íslandsbanki's loans of the property
Íslandsbanki Factbook 2020
| Income statement - 9 quarter summary | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
|---|---|---|---|---|---|---|---|---|---|
| ISK million | 2020 | 2020 | 2020 | 2020 | 2019 | 2019 | 2019 | 2019 | 2018 |
| Net interest income | 8,258 | 8,305 | 8,228 | 8,580 | 8,291 | 8,190 | 8,404 | 7,937 | 8,294 |
| Net fee and commission income | 2,865 | 2,862 | 2,307 | 2,491 | 2,945 | 2,549 | 2,758 | 2,647 | 3,478 |
| Net financial income (expense) | 783 | (255) | (181) | (1,738) | (840) | (602) | 180 | 442 | (637) |
| Net foreign exchange gain (loss) | 87 | 101 | 208 | 55 | 116 | 159 | (15) | (121) | 76 |
| Other operating income | 63 | 44 | 71 | 19 | 920 | 37 | 27 | 1,141 | 120 |
| Other net operating income | 933 | (110) | 98 | (1,664) | 196 | (406) | 192 | 1,462 | (441) |
| Total operating income | 12,056 | 11,057 | 10,633 | 9,407 | 11,432 | 10,333 | 11,354 | 12,046 | 11,331 |
| Administrative expenses | (6,073) | (5,110) | (5,871) | (5,692) | (6,447) | (5,608) | (6,220) | (6,213) | (7,465) |
| Contribution to the Depositors' and Investors' Guarantee Fund | (154) | (50) | (247) | (228) | (216) | (210) | (198) | (312) | (299) |
| Bank tax | (414) | (416) | (399) | (359) | (814) | (900) | (934) | (880) | (740) |
| Total operating expenses | (6,641) | (5,576) | (6,517) | (6,279) | (7,477) | (6,718) | (7,352) | (7,405) | (8,504) |
| Profit before net impairment on financial assets | 5,415 | 5,481 | 4,116 | 3,128 | 3,955 | 3,615 | 4,002 | 4,641 | 2,827 |
| Net impairment on financial assets | (1,829) | (1,058) | (2,439) | (3,490) | (1,463) | (208) | (902) | (907) | (297) |
| Profit (loss) before tax | 3,586 | 4,423 | 1,677 | (362) | 2,492 | 3,407 | 3,100 | 3,734 | 2,530 |
| Income tax expense | (234) | (1,350) | (119) | (769) | (659) | (1,328) | (726) | (1,196) | (1,118) |
| Profit (loss) for the period from continuing operations | 3,352 | 3,073 | 1,558 | (1,131) | 1,833 | 2,079 | 2,374 | 2,538 | 1,412 |
| Discontinued operations, net of income tax | 173 | 288 | (313) | (245) | (174) | 7 | (254) | 51 | (8) |
| Profit (loss) for the period | 3,525 | 3,361 | 1,245 | (1,376) | 1,659 | 2,086 | 2,120 | 2,589 | 1,404 |
Íslandsbanki Factbook 2020
Balance sheet - 9 quarter summary
| ISK million | 31.12.20 | 30.09.20 | 30.06.20 | 31.03.20 | 31.12.19 | 30.09.19 | 30.06.19 | 31.03.19 | 31.12.18 |
|---|---|---|---|---|---|---|---|---|---|
| Cash and balances with Central Bank | 78,948 | 95,022 | 103,569 | 123,062 | 146,638 | 129,115 | 122,794 | 129,039 | 135,056 |
| Loans to credit institutions | 89,920 | 61,898 | 70,307 | 84,263 | 54,376 | 66,409 | 77,387 | 65,145 | 41,577 |
| Bonds and debt instruments | 128,216 | 149,426 | 140,422 | 69,368 | 52,870 | 73,899 | 77,033 | 80,809 | 69,415 |
| Derivatives | 6,647 | 3,731 | 6,366 | 4,772 | 5,621 | 5,438 | 5,843 | 4,837 | 4,550 |
| Loans to customers | 1,006,717 | 970,309 | 933,320 | 923,850 | 899,632 | 909,175 | 894,446 | 873,530 | 846,599 |
| Shares and equity instruments | 14,851 | 14,657 | 10,943 | 12,496 | 18,426 | 19,200 | 19,176 | 15,268 | 13,074 |
| Investments in associates | 775 | 750 | 750 | 712 | 746 | 687 | 687 | 682 | 682 |
| Property and equipment | 7,341 | 7,409 | 7,549 | 8,015 | 9,168 | 9,442 | 9,504 | 9,642 | 5,271 |
| Intangible assets | 3,478 | 3,554 | 3,667 | 3,736 | 4,330 | 4,709 | 4,882 | 4,868 | 5,002 |
| Other assets | 4,125 | 17,159 | 6,370 | 5,154 | 6,608 | 15,781 | 18,224 | 21,408 | 9,177 |
| Non-current assets and disposal groups held for sale | 3,173 | 4,809 | 19,993 | 20,263 | 1,075 | - | - | - | - |
| Total Assets | 1,344,191 | 1,328,724 | 1,303,256 | 1,255,691 | 1,199,490 | 1,233,855 | 1,229,976 | 1,205,228 | 1,130,403 |
| Deposits from Central Bank and credit institutions | 39,758 | 36,438 | 35,461 | 33,773 | 30,925 | 31,808 | 19,830 | 16,404 | 15,619 |
| Deposits from customers | 679,455 | 698,610 | 681,223 | 647,795 | 618,313 | 610,281 | 615,869 | 611,303 | 578,959 |
| Derivative instruments and short positions | 6,936 | 8,406 | 7,519 | 12,045 | 6,219 | 7,910 | 6,903 | 7,325 | 5,521 |
| Debt issued and other borrowed funds | 387,274 | 324,752 | 321,803 | 322,280 | 306,381 | 331,938 | 337,473 | 325,035 | 300,976 |
| Subordinated loans | 27,194 | 26,798 | 25,834 | 24,456 | 22,674 | 21,993 | 23,431 | 16,468 | 16,216 |
| Tax liabilities | 5,450 | 7,137 | 6,438 | 8,155 | 7,853 | 10,127 | 8,674 | 8,303 | 7,150 |
| Other liabilities | 11,920 | 44,074 | 45,256 | 27,645 | 27,063 | 41,814 | 42,012 | 46,769 | 29,649 |
| Total Liabilities | 1,157,987 | 1,146,215 | 1,123,534 | 1,076,149 | 1,019,428 | 1,055,871 | 1,054,192 | 1,031,607 | 954,090 |
| Share capital | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 |
| Share premium | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 |
| Reserves | 6,181 | 7,258 | 7,262 | 8,016 | 7,065 | 6,801 | 6,816 | 6,776 | 6,499 |
| Retained earnings | 113,529 | 108,383 | 105,681 | 104,349 | 105,569 | 103,785 | 101,534 | 99,401 | 102,496 |
| Total Shareholder's Equity | 184,710 | 180,641 | 177,943 | 177,365 | 177,634 | 175,586 | 173,350 | 171,177 | 173,995 |
| Non-controlling interests | 1,494 | 1,868 | 1,779 | 2,177 | 2,428 | 2,398 | 2,434 | 2,444 | 2,318 |
| Total Equity | 186,204 | 182,509 | 179,722 | 179,542 | 180,062 | 177,984 | 175,784 | 173,621 | 176,313 |
| Total Liabilities and Equity | 1,344,191 | 1,328,724 | 1,303,256 | 1,255,691 | 1,199,490 | 1,233,855 | 1,229,976 | 1,205,228 | 1,130,403 |
Íslandsbanki Factbook 2020
Íslandsbanki Factbook 2020
| Net interest income - 9 quarter summary | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
|---|---|---|---|---|---|---|---|---|---|
| ISK million | 2020 | 2020 | 2020 | 2020 | 2019 | 2019 | 2019 | 2019 | 2018 |
| Cash and balances with Central Bank | 105 | 235 | 408 | 1,002 | 1,009 | 993 | 1,184 | 1,266 | 1,603 |
| Loans at amortised cost | 12,511 | 13,001 | 14,026 | 12,090 | 13,273 | 13,194 | 15,208 | 13,162 | 14,521 |
| Financial assets mandatorily at fair value through profit or loss | 661 | 583 | 519 | 551 | 606 | 743 | 713 | 568 | 498 |
| Other assets | - | 1 | - | 2 | 14 | 10 | 12 | 10 | 9 |
| Total interest income | 13,277 | 13,820 | 14,953 | 13,645 | 14,902 | 14,940 | 17,117 | 15,006 | 16,631 |
| Deposits from Central Bank and credit institutions | (124) | (192) | (199) | (221) | (237) | (159) | (122) | (107) | (106) |
| Deposits from customers | (1,376) | (1,625) | (2,236) | (2,463) | (3,064) | (3,475) | (4,660) | (4,043) | (4,389) |
| Debt issued and other borrowed funds at fair value through profit and loss | (162) | (150) | (154) | (142) | (176) | (184) | (194) | (180) | (250) |
| Debt issued and other borrowed funds at amortised cost | (2,826) | (2,979) | (3,327) | (2,047) | (2,414) | (2,271) | (2,914) | (2,219) | (2,676) |
| Subordinated loans | (193) | (211) | (193) | (166) | (160) | (168) | (93) | (80) | (109) |
| Other interest expense | (338) | (358) | (616) | (26) | (560) | (493) | (730) | (440) | (807) |
| Total interest expense | (5,019) | (5,515) | (6,725) | (5,065) | (6,611) | (6,750) | (8,713) | (7,069) | (8,337) |
| Net interest income | 8,258 | 8,305 | 8,228 | 8,580 | 8,291 | 8,190 | 8,404 | 7,937 | 8,294 |
14
Íslandsbanki Factbook 2020
| Net fee and commission income - 9 quarter summary | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
|---|---|---|---|---|---|---|---|---|---|
| ISK million | 2020 | 2020 | 2020 | 2020 | 2019 | 2019 | 2019 | 2019 | 2018 |
| Asset management | 636 | 576 | 605 | 565 | 590 | 512 | 575 | 548 | 587 |
| Investment banking and brokerage | 656 | 684 | 576 | 571 | 688 | 598 | 613 | 531 | 621 |
| Payment processing | 1,081 | 1,697 | 786 | 814 | 987 | 947 | 1,046 | 830 | 3,243 |
| Loans and guarantees | 690 | 514 | 427 | 383 | 389 | 367 | 376 | 378 | 336 |
| Other fee and commission income | 410 | 322 | 228 | 430 | 734 | 373 | 385 | 585 | 786 |
| Total fee and commission income | 3,473 | 3,793 | 2,622 | 2,763 | 3,388 | 2,797 | 2,995 | 2,872 | 5,573 |
| Brokerage | (127) | (67) | (113) | (53) | (128) | (65) | (75) | (69) | (91) |
| Clearing and settlement | (481) | (864) | (202) | (219) | (324) | (174) | (174) | (134) | (1,988) |
| Other fee and commission expense | - | - | - | - | 9 | (9) | 12 | (22) | (16) |
| Total fee and commission expense | (608) | (931) | (315) | (272) | (443) | (248) | (237) | (225) | (2,095) |
| Net fee and commission income | 2,865 | 2,862 | 2,307 | 2,491 | 2,945 | 2,549 | 2,758 | 2,647 | 3,478 |
15
Loans to customers - 9 quarter summary
| ISK million | 31.12.20 | 30.09.20 | 30.06.20 | 31.03.20 | 31.12.19 | 30.09.19 | 30.06.19 | 31.03.19 | 31.12.18 |
|---|---|---|---|---|---|---|---|---|---|
| Individuals | 437,377 | 379,966 | 355,524 | 347,539 | 349,181 | 345,234 | 334,749 | 324,245 | 319,390 |
| Commerce and services | 124,260 | 121,951 | 122,581 | 127,887 | 126,488 | 130,879 | 135,041 | 130,325 | 124,242 |
| Construction | 42,352 | 44,550 | 46,463 | 45,621 | 44,420 | 33,865 | 33,445 | 31,466 | 29,095 |
| Energy | 8,673 | 8,316 | 8,344 | 8,024 | 7,887 | 6,803 | 6,934 | 6,911 | 6,858 |
| Financial services | 1,539 | 1,776 | 2,239 | 1,436 | 2,315 | 2,768 | 23 | 2,575 | 1,704 |
| Industrial and transportation | 78,561 | 82,458 | 83,731 | 84,709 | 82,288 | 84,127 | 81,784 | 80,986 | 79,824 |
| Investment companies | 23,440 | 24,747 | 24,578 | 25,184 | 23,590 | 27,507 | 26,052 | 24,657 | 23,799 |
| Public sector and non-profit organisations | 10,911 | 11,622 | 11,641 | 11,339 | 12,312 | 11,615 | 11,453 | 11,528 | 12,087 |
| Real estate | 157,502 | 165,370 | 150,090 | 149,138 | 145,559 | 156,548 | 153,077 | 148,765 | 142,885 |
| Seafood | 122,102 | 129,553 | 128,129 | 122,973 | 105,592 | 109,829 | 111,888 | 112,072 | 106,715 |
| Loans to customers | 1,006,717 | 970,309 | 933,320 | 923,850 | 899,632 | 909,175 | 894,446 | 873,530 | 846,599 |
| Loans to customers - by product | |||||||||
| Overdrafts | 42,212 | 43,294 | 47,513 | 44,929 | 48,938 | 54,510 | 51,836 | 53,120 | 48,581 |
| Credit cards | 16,888 | 16,060 | 16,704 | 15,621 | 19,026 | 19,777 | 17,492 | 16,253 | 18,242 |
| Mortgages | 377,155 | 316,896 | 293,838 | 285,670 | 281,499 | 274,186 | 267,762 | 255,579 | 249,296 |
| Capital leases | 44,194 | 45,514 | 45,039 | 47,872 | 45,623 | 46,583 | 50,588 | 47,309 | 45,116 |
| Government guarantee schemes | 3,594 | 1,658 | - | - | - | - | - | - | - |
| Other loans | 522,674 | 546,887 | 530,226 | 529,758 | 504,546 | 514,119 | 506,768 | 501,269 | 485,364 |
| Loans to customers | 1,006,717 | 970,309 | 933,320 | 923,850 | 899,632 | 909,175 | 894,446 | 873,530 | 846,599 |
Íslandsbanki Factbook 2020
Íslandsbanki Factbook 2020
| Capital and risk exposure amount | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 |
|---|---|---|---|---|---|---|---|---|---|
| ISK million | 2020 | 2020 | 2020 | 2020 | 2019 | 2019 | 2019 | 2019 | 2018 |
| Ordinary share capital | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 |
| Share premium | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 | 55,000 |
| Reserves | 6,181 | 7,258 | 7,262 | 8,016 | 7,065 | 6,801 | 6,816 | 6,776 | 6,499 |
| Retained earnings | 113,529 | 108,383 | 105,681 | 104,349 | 105,569 | 103,785 | 101,534 | 99,401 | 102,496 |
| Non-controlling interests | 1,494 | 1,868 | 1,779 | 2,177 | 2,428 | 2,398 | 2,434 | 2,444 | 2,318 |
| IFRS 9 reversal due to transitional rules | 5,164 | 4,088 | 3,810 | - | - | - | - | - | - |
| Fair value changes due to own credit standing | 238 | -239 | (427) | (773) | 392 | 731 | 760 | 871 | 376 |
| Tax assets | (259) | (173) | (88) | (30) | (476) | (445) | (394) | (292) | (215) |
| Intangible assets | (3,478) | (3,554) | (3,667) | (3,736) | (4,330) | (4,709) | (4,882) | (4,868) | (5,002) |
| Other regulatory adjustments | - | - | - | - | - | - | - | - | - |
| Total CET1 capital | 187,869 | 182,631 | 179,350 | 175,003 | 175,648 | 173,561 | 171,268 | 169,332 | 171,472 |
| Tier 2 capital | |||||||||
| Qualifying subordinated liabilities | 27,194 | 26,798 | 25,834 | 24,456 | 22,674 | 21,993 | 23,431 | 16,468 | 16,216 |
| Total regulatory capital | 215,063 | 209,429 | 205,184 | 199,458 | 198,322 | 195,554 | 194,699 | 185,800 | 187,688 |
| Risk exposure amount | |||||||||
| - due to credit risk | 830,141 | 836,662 | 821,457 | 811,936 | 789,180 | 815,266 | 809,840 | 789,806 | 750,801 |
| - due to market risk: | 16,626 | 18,748 | 14,435 | 12,350 | 7,919 | 10,482 | 13,988 | 9,877 | 7,622 |
| Market risk, trading book | 11,306 | 15,281 | 12,024 | 9,095 | 6,488 | 8,736 | 10,072 | 7,843 | 6,649 |
| Currency risk FX | 5,320 | 3,467 | 2,411 | 3,255 | 1,431 | 1,746 | 3,916 | 2,034 | 973 |
| - due to credit valuation adjustment | 1,728 | 1,505 | 1,817 | 1,665 | 2,027 | 1,954 | 2,815 | 2,077 | 2,385 |
| - due to operational risk | 85,026 | 85,424 | 85,424 | 85,424 | 85,424 | 85,141 | 85,141 | 85,141 | 85,141 |
| Total risk exposure amount | 933,521 | 942,339 | 923,133 | 911,375 | 884,550 | 912,843 | 911,784 | 886,901 | 845,949 |
| Capital ratios | |||||||||
| Tier 1 ratio | 20.1% | 19.4% | 19.4% | 19.2% | 19.9% | 19.0% | 18.8% | 19.1% | 20.3% |
| Tier 2 ratio | 2.9% | 2.8% | 2.8% | 2.7% | 2.5% | 2.4% | 2.6% | 1.8% | 1.9% |
| Total capital ratio | 23.0% | 22.2% | 22.2% | 21.9% | 22.4% | 21.4% | 21.4% | 20.9% | 22.2% |
| Leverage ratio | 13.6% | 13.4% | 13.4% | 13.5% | 14.2% | 13.6% | 13.4% | 13.5% | 14.6% |
17
Allocation and Impact of Eligible Projects for Íslandsbanki's Sustainable Financing Framework
| Allocation to Eligible Projects | Selected impact indicators | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Amount outstanding 31.12.2020 | Share of funding | Share of capex | Avoided greenhouse gas emissions | Clean vehicles^{1} | Clean energy produced | Green building | Additional waste recycled | Companies supported^{2} | Dwellings | Students reached | Avoided greenhouse gas emissions per million ISK | Avoided greenhouse gas emissions per million EUR^{3} | |
| ISK million | % | % | tCO2e | number of | GWh | number of | tonnes | number of | number of | number of | tCO2e | tCO2e | |
| Clean Transportation | 3,392 | 100% | 100% | 1,734 | 1,190 | 0.5 | 79.7 | ||||||
| Renewable energy | 6,307 | 100% | 100% | 3,500 | 87 | 0.6 | 86.6 | ||||||
| Green buildings | 1,502 | 11% | 100% | 1 | |||||||||
| Sustainable waste management | 902 | 30% | 100% | 530 | 800 | 0.6 | 91.7 | ||||||
| Government defined company support | 3,271 | n.a. | 0% | 342 | |||||||||
| Affordable housing | 2,242 | 100% | 100% | 140 | |||||||||
| Education and vocational training | 7,061 | 60% | 100% | 3,000 | |||||||||
| 24,677 | 5,764 | 1,190 | 87 | 1 | 800 | 342 | 140 | 3,000 |
- in addition 11 charging stations and 24 electric bikes were funded
- Average loan size ISK 9.6 m
- EUR/ISK=156 on 31.12.2020
Íslandsbanki Factbook 2020
Macroeconomics - summary
| 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | |
|---|---|---|---|---|---|---|---|---|---|
| YoY change, % | |||||||||
| GDP growth | -10.4 | -10.9 | -2.5 | 4.2 | 1.0 | 2.8 | -0.3 | 4.4 | 2.5 |
| Total investment | -15.2 | -18.1 | 2.7 | -4.2 | 2.9 | -8.2 | -18.9 | -1.0 | -6.4 |
| Business investment | -21.8 | -13.8 | 13.3 | 0.6 | -5.3 | -26.9 | -35.9 | -22.9 | -17.5 |
| Residential investment | -6.9 | -19.2 | -5.2 | 13.4 | 51.8 | 41.3 | 21.8 | 4.2 | -3.4 |
| Personal consumption | -2.3 | -8.8 | 0.9 | 1.1 | 2.6 | 1.1 | 2.6 | 3.5 | 5.1 |
| Unemployment rate, % of workforce | 5.1 | 6.9 | 3.6 | 3.3 | 3.5 | 4.4 | 3.0 | 2.4 | 2.2 |
| Current account, % of GDP | -0.2 | -0.9 | 1.7 | 6.6 | 8.8 | 2.9 | 7.2 | 1.5 | 10.4 |
| International investment position, % of GDP | 33.4 | 27.9 | 22.6 | 21.7 | 20.1 | 17.2 | 18.1 | 9.5 | 10.9 |
| Gross general govt. debt, % of GDP | 68.6 | 70.5 | |||||||
| Household debt, gross, % of GDP | 82.1 | 78.0 | 75.5 | 74.7 | 75.0 | 75.3 | 74.6 | 74.9 | 73.9 |
| Corporate debt, gross, % of GDP | 94.8 | 91.4 | 89.6 | 84.2 | 86.3 | 89.1 | 90.8 | 90.3 | 89.7 |
| YoY change, % | |||||||||
| Inflation | 3.2 | 2.5 | 2.1 | 2.5 | 3.1 | 3.4 | 3.1 | 3.3 | 2.7 |
| Residential real estate price index | 7.4 | 6.2 | 4.7 | 4.4 | 3.3 | 4.7 | 5.3 | 6.1 | 5.8 |
| Wages | 6.5 | 6.7 | 4.9 | 4.3 | 4.3 | 5.4 | 5.7 | 6.1 | 6.1 |
| Real wages | 3.1 | 4.1 | 2.8 | 1.7 | 1.2 | 1.9 | 2.5 | 2.8 | 3.3 |
| ISK index, average | 207.8 | 203.2 | 186.4 | 180.6 | 182.1 | 181.8 | 179.2 | 180.2 | 164.2 |
| Central bank policy rate (1W) | 1.0 | 1.0 | 1.8 | 3.1 | 3.6 | 4.3 | 4.5 | 4.5 | 4.3 |
| Long-term nominal yield | 2.6 | 2.5 | 3.1 | 3.6 | 3.8 | 4.2 | 5.2 | 5.9 | 5.6 |
| Long-term real yield | -0.4 | 0.0 | 0.5 | 0.8 | 0.8 | 1.1 | 1.4 | 1.5 | 1.8 |
Íslandsbanki Factbook 2020
Íslandsbanki Factbook 2020
Other
| Currencies | 31.12.20 | 30.09.20 | 30.06.20 | 31.03.20 | 31.12.19 | 30.09.19 | 30.06.19 | 31.03.19 | 31.12.18 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Currencies | | | | | | | | | |
| USD | 127.2 | 138.5 | 138.6 | 141.7 | 121.1 | 123.7 | 124.5 | 122.6 | 120.4 |
| GBP | 173.6 | 177.7 | 170.2 | 175.2 | 159.4 | 152.2 | 157.8 | 159.7 | 154.8 |
| EUR | 156.1 | 162.2 | 155.4 | 155.3 | 135.8 | 135.1 | 141.7 | 137.5 | 120.9 |
| DKK | 21.0 | 21.8 | 20.9 | 20.8 | 18.2 | 18.1 | 19.0 | 18.4 | 18.4 |
| SEK | 15.6 | 15.4 | 14.8 | 14.0 | 13.0 | 12.6 | 13.4 | 13.2 | 13.3 |
| CHF | 144.4 | 150.1 | 145.8 | 146.8 | 125.1 | 124.3 | 127.7 | 123.1 | 120.9 |
20
Financial targets
ROE at 7.6% in the fourth quarter – all other targets met in 2020
| Target | 2020 | Guidance | |
|---|---|---|---|
| ROE in excess of risk-free rate | 4-6% | 2.6% | — Target of 4-6% on top of risk-free rate. Risk-free rate is currently 0.5% |
| — 8-10% ROE is based on average expected risk-free rates through the business cycle. Based on the risk-free rate of 0.5% the ROE target in the very short term is 4.5-6.5% | |||
| Return on equity | 8-10% | 3.7% | — The COVID-19 pandemic had a material adverse effect on the Bank’s earnings in 2020 and therefore the ROE target will not be met this year. The Bank will strive to get back on track to reach its ROE targets from 2021 onwards |
| Cost / Income ratio¹ | <55% | ✓ 54.3% | — The Bank continues to invest in IT infrastructure and process efficiency to improve the C/I ratio in the medium to long term |
| Tier 1 capital ratio | >13.2-14.7% | ✓ 20.1% | — Based on a management buffer of 50-200bp, the CET1 target range is currently 13.2-14.7% |
| — Long term CET1 target is >16%. In line with the target range, the Bank expects to maintain a CET1 ratio of over 16% in the medium to long term | |||
| — The Bank is substantially over capitalized with regard to the current regulatory requirement, which is a favourable position to tie in in light of the economic uncertainties relating to COVID-19 | |||
| Total capital ratio | >17.5-19.0% | ✓ 23.0% | — Based on the regulatory capital requirement with a management buffer of 50-200 bp |
| — Current capital requirement is 17.0% including recent suspension of the countercyclical capital buffer in March 2020 | |||
| Dividend payout ratio | 40-50% | ✓ 50% | — The Board of Directors proposes that ISK 3.4bn will be paid in dividends to shareholders, which is 50% of profits in 2020 and is in line with the Bank’s policy of paying dividends of 40-50% of the profit of the year |
| — The Board may convene a special shareholders’ meeting later in the year to propose payment of additional dividends if the Bank’s accumulated capital reserves are considered to exceed its long-term capital requirements |
- Calculated as (Administrative expenses + Contribution to the Depositors' and Investors' Guarantee Fund – One off items) / (Total operating income – one-off items)
Íslandsbanki Factbook 2020
Íslandsbanki S&P credit ratings
Rating lowered in April 2020
BBB/A-2 Stable Outlook
Press Release 24 April 2020
In late April 2020 S&P lowered Íslandsbanki's rating to BBB/A-2 with a stable outlook from previous BBB+/A-2 with a negative outlook
In its report, S&P expects Íslandsbanki to enter this crisis on a more solid foothold than the 2008 financial crisis. The 'BBB' rating level and stable outlook factor in the solid market position of the bank in Iceland, which has a relatively advanced digitalised banking platform. In S&P's view, the bank is well ahead of many other European banks in its preparation for technological disruption. S&P also notes the Bank's funding and liquidity metrics are adequate for the Bank's risk profile, with comfortable liquidity ratios and liquid assets covering more than 3x the average short-term funding in 2019. Moreover, S&P states that the wholesale funding needs are limited in 2020, which coupled with the additional central bank liquidity facilities announced recently by the Icelandic Central Bank, eases pressure on liquidity needs
S&P's rationale for the change is mostly derived from its view that economic activity will reduce in Iceland and Europe in 2020 and thus could impair Íslandsbanki's asset quality, increase credit losses, reduce business and revenue generation, and potentially erode its capital. S&P's view is that Iceland's operating environment will remain challenging, affected by the 2020 economic recession, declining interest rates, stiff competition from pension funds in mortgage lending and thus contributing to the declining profitability of the Bank
| Íslandsbanki | S&P |
|---|---|
| Long-term | BBB |
| Short-term | A-2 |
| Outlook | Stable |
| Affirmed (date) | April 20 |
| Icelandic sovereign | S&P |
| --- | --- |
| Long-term | A |
| Short-term | A-1 |
| Outlook | Stable |
| Affirmed (date) | November 20 |
Íslandsbanki Factbook 2020
Disclaimer
All information contained in this document should be regarded as preliminary and based on company data available. Due care and attention has been used in the preparation of forecast information. However, actual results may vary from their forecasts, and any variation may be materially positive or negative. Forecasts, by their very nature, are subject to uncertainty and contingencies, many of which are outside the control of Íslandsbanki.
Íslandsbanki cannot guarantee that the information contained herein is without fault or entirely accurate. The information in this material is based on sources that Íslandsbanki believes to be reliable. Íslandsbanki can however not guarantee that all information is correct. Furthermore, information and opinions may change without notice. Íslandsbanki is under no obligation to make amendments or changes to this publication if errors are found or opinions or information change. Íslandsbanki accepts no responsibility for the accuracy of its sources.
Íslandsbanki and its management may make certain statements that constitute "forward-looking statements". These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as "anticipates," "targets," "expects," "estimates," "intends," "plans," "goals," "believes" and other similar expressions or future or conditional verbs such as "will," "should," "would" and "could."
The forward-looking statements represent Íslandsbanki's current expectations, plans or forecasts of its future results and revenues and beliefs held by the company at the time of publication. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and are often beyond Íslandsbanki's control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.
Forward-looking statements speak only as of the date they are made, and Íslandsbanki undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.
Íslandsbanki does not assume any responsibility or liability for any reliance on any of the information contained herein. Íslandsbanki is the owner of all works of authorship including, but not limited to, all design, text, sound recordings, images and trademarks in this material unless otherwise explicitly stated. The use of Íslandsbanki's material, works or trademarks is forbidden without written consent except were otherwise expressly stated. Furthermore, it is prohibited to publish material made or gathered by Íslandsbanki without written consent.
Íslandsbanki Factbook 2020
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