SOURCE: Glitnir

August 01, 2008 04:56 ET

Glitnir Second Quarter 2008 results

REYKJAVIK, ICELAND--(Marketwire - August 1, 2008) -

1H 08 profit before tax ISK 15.4 bn. (EUR 121m)
Total recognised earnings in equity ISK 40 bn. (EUR 316m) in 1H 08
Strong liquidity position of EUR 8.1 bn.

FINANCIAL HIGHLIGHTS

--  Net profit ISK 7.6 bn. up 29,3% from Q1 08
--  Record quarter for net operating income, ISK 26.9 bn., a 5% increase
    from ISK 25.6 bn. in Q1 08
--  Return on equity 17,0% compared 15,0% in Q1 08
--  Net Interest income ISK 17.8 bn. growing 28.9% QoQ
--  Fees and commissions remain strong at ISK 9.3 bn. despite a slight
    drop from Q1 08
--  Net operating expenses were ISK 14.8 bn. rising by 7.2% from Q1 08.
--  Real growth of the loan portfolio negative by ISK 45 bn. from the
    previous quarter
--  Liquidity position remains strong at 8.1 bn. euro
--  CAD ratio rises to 11.2%. Tier 1 capital ratio stands at 8,0% up from
    7.7% in Q1 08.
    

OPERATIONAL HIGHLIGHTS

--  Core earnings have increased by 10% on average each quarter (CQGR)
    from Q2 07
--  Core profit before tax[1] grew 19.9% QoQ and 25.9% YoY.
--  Cost / Income ratio is stable at  55%
--  Continued strong performance by Capital Markets, Corporate Banking and
    Investment Banking units in the first half of 08
--  40% of advisory fees YTD originated through niche related activities.
    Solid pipeline going forward.
--  Launch of a new international deposit product, Save&Save, in Norway
    and Iceland. This product will be introduced in other markets in the coming
    quarters.
--  Successful issue of EUR 900m covered bond in Norway during the quarter
    

Lárus Welding, Glitnir CEO: "We are very content with the results for the second quarter, where our core profits have risen by nearly 20% for the second consecutive quarter. As a result of our strategy and the initiatives we have adopted since Q4 2007, the bank has shown great resilience in a challenging market environment. We have continued to successfully increase our core income and profits while at the same time focusing on several cost cutting initiatives. We estimate that these co-ordinated efforts will start to bear real fruit in the second half of the year.

During the first half, we have successfully raised EUR 2.4 bn in funding while paying outstanding maturities of EUR 2.1 bn. At the same time we have maintained a strong CAD ratio of 11.2% despite a severe weakening of the ISK. We have also been successful in deleveraging our balance sheet. The bank's liquidity position remains strong at EUR 8.1 bn.

At the end of the quarter, the bank launched a new international deposit product, Save&Save, in Norway and Iceland which will be expanded into other markets in due course.

Looking forward, we will continue to focus on our core operations leveraging on the bank's niche strategy and the positive outlook for the global food and energy sectors where we have a strong market presence.

In our immediate plans we do not expect the wholesale funding markets to improve in the near future. With our strong asset quality intact we will continue to manage our balance sheet, further diversifying our funding sources and deleveraging non-core assets."

Lárus Welding Rósant Már  Bjorn Richard Johansen Sigrún Hjartardóttir
              Torfason
CEO           CFO         MD, Corp.              Investor Relations
                          Communication
phone: +354   phone: +354 phone: +47 47 800 100  phone: +354 440 4748
440 4005      440 4743    or                     or
                          brj@glitnir.no         SiHj@glitnir.is

[1] Net profit - other operating income


Glitnir's condensed consolidated interim accounts can be found on www.glitnirbank.com

Glitnir Condensed Consolidated Interim Account June 2008 -- http://hugin.info/133924/R/1239861/265685.pdf

Glitnir Bank Q2 08 results press release -- http://hugin.info/133924/R/1239861/265686.pdf

http://www.glitnirbank.com

Contact Information

  • Lárus Welding
    CEO
    phone: +354 440 4005

    Rósant Már Torfason
    CFO
    phone: +354 440 4743

    Bjorn Richard Johansen
    MD, Corp. Communication
    phone: +47 47 800 100 or
    brj@glitnir.no

    Sigrún Hjartardóttir
    Investor Relations
    phone: +354 440 4748 or
    SiHj@glitnir.is