SOURCE: Landsbanki Íslands hf

January 28, 2008 12:31 ET

Landsbanki financial results 2007

REYKJAVÍK, ICELAND--(Marketwire - January 28, 2008) -



Landsbanki Íslands hf. - 2007 Results Net After-tax Profit ISK 40 billion Return on Equity (ROE) 27%

Highlights of the Consolidated Annual Financial Statements of Landsbanki for 2007

* Profit in 2007 amounted to ISK 39.9 billion (bn) (EUR 456m) The bank's pre-tax profit was ISK 45.6 bn (EUR 520m). After-tax ROE was 27%.

* The group's core income (net interest income plus fees and commissions) amounted to ISK 93.4 bn (EUR 1.1bn) in 2007, an increase of 34% over the previous year.

* Core earnings generation is steadily becoming more diversified; the share of core earnings originating abroad in 2007 was 52%, compared to 49% in 2006.

* Fees and commissions amounted to ISK 39.4bn (EUR 449m) compared to ISK 28.4bn in 2006.

* Trading and investment income amounted to ISK 16.6bn (EUR 189m) compared to ISK 19.6bn in 2006.

* The bank's liquidity position is very strong, with liquid assets of close to EUR 9bn at year-end 2007. Foreign debt maturing in 2008, however, amounts to only EUR 0.8bn.

* The bank's total assets amounted to ISK 3,058bn (EUR 33.4bn) at year-end 2007 compared with ISK 2,173bn at the beginning of the year.

* Loans to customers at year-end 2007 totalled ISK 2,023bn (EUR 22.1bn). Customer deposits, on the other hand, amounted to ISK 1,421bn (EUR 15.5bn) or close to ¿ of total lending. Customer deposits have increased by 108% during the year.

* Landsbanki has no direct or indirect exposure to structured credit obligations (such as CDOs, SIVs and CLOs) in its loan portfolio.

* The bank's capital ratio (CAD rules) was 11.7% at year-end 2007. Tier 1 capital was 10.1%.


Highlights of Q4 2007:

* The bank's after-tax profit in Q4 was ISK 4.9bn (EUR 56m).

* Net income from operations in Q4 was ISK 24.8bn (EUR 283m).

* The Bank's net interest income was ISK 15.2 bn (EUR 174m) in Q4, as compared with ISK 14.4bn in Q3 2007.

* Fees and commissions in Q4 were ISK 9.7bn (EUR 110m).

* The group's core earnings of ISK 24.9bn (EUR 284m) were the highest ever in a single quarter.


CEO Sigurjón Þ. Árnason:

"Landsbanki's operations were very successful in 2007, with a profit of ISK 40bn and ROE of 27%. The group's income generation is becoming steadily more diversified, in addition to which the ROE of its pre-tax core earnings has been steady at around 24-26%. The bank's liquidity position is strong, due in particular to the strong growth of its foreign deposit programmes. Foreign bond issues maturing in 2008 are relatively insignificant at EUR 800m, compared to the bank's liquid assets, which are close to EUR 9bn. Furthermore, Landsbanki's loan portfolio is high quality and the bank has no structured credit exposures such as CDOs, SIVs, etc. The unusual circumstances currently prevailing on international financial markets actually present opportunities for banks like Landsbanki."

CEO Halldór J. Kristjánsson:

"The positive results of a variety of actions taken in recent quarters are clearly evident in Landsbanki's 2007 performance. Market risk has been reduced, risk on the bank's loan portfolio is well diversified and the bank's funding situation is strong. Deposits currently amount to ¿ of customer lending, and close to 150,000 customers have accounts under Landsbanki's Icesave on-line deposit programme in the UK. New products were introduced in Icesave this year, with the result that 14% of deposits are now term deposits rather than easy access savings. This ensures further risk diversification of group deposits. In Q4 Landsbanki concluded a USD 400m subordinated loan, providing additional reinforcement for its equity position; the bank's capital ratio and liquidity are currently among the best anywhere in Northern Europe. The ongoing integration of operating units has proceeded well this year, with the bank placing emphasis on presenting a clear picture of its own activities and the general economic situation in Iceland in times of global financial market turbulence."

The annual financial statements of Landsbanki Íslands hf. for 2007 are available on the bank's website, www.landsbanki.com

Attachments:

http://hugin.info/136348/R/1185849/237469.pdf

http://hugin.info/136348/R/1185849/237470.pdf

http://hugin.info/136348/R/1185849/237471.pdf

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Contact Information

  • For further information contact Landsbanki's CEOs:

    Sigurjón Th. Árnason
    Tel. +354 410-4009
    +354 898 0177

    Halldór J. Kristjánsson
    Tel. +354 410 4015
    +354 820 -6399.