SOURCE: Landsbanki Íslands hf

May 02, 2006 04:54 ET

Landsbanki - Q1 Results 2006

Profit ISK 14.3 billion

EUR 182 million

REYKJAVÍK, UK -- (MARKET WIRE) -- May 2, 2006 --

   Highlights of the Consolidated Interim Financial Statements of
                       Landsbanki for Q1 2006


  * The Bank's profit before tax was ISK 17.3 bn (EUR 220
    million), as compared with ISK 7.4 bn for Q1 of 2005.  After-tax profit was
    14.3 bn (EUR 182 m).

  * Annualised after-tax ROE for the period was 63%.

  * The Group's core income (net interest margin plus fees and
    commissions) amounted to ISK 15.8 bn (EUR 201 m), an increase
    of ISK 8.4 bn from the previous quarter while operating expenses
    increased by ISK 4 bn.

  * Trading gains and investment income amounted to ISK 11.2 bn
    (EUR 142 m), as compared to ISK 5.4 bn in Q1 2005.

  * The Bank's core income before tax was ISK 7.4 bn (EUR 94 m),
    as compared to ISK 2.7 bn for Q1 of 2005.  Pre-tax ROE from core
    income was 30%.

  * In line with the Bank's growing foreign operations, income
    from activities abroad was ISK 13 bn (EUR 165 m), as compared to
    ISK 2 bn in Q1 2005, and comprised 49% of its net operating income.

  * The Group's total assets  amounted to ISK 1,770 bn (EUR 20,4
    bn) as of the end of March 2006 compared to EUR 18,8 bn at the
    beginning of the year.

  * At the end of March 2006, the Bank's capital ratio (CAD) was
    13.0%, of which Tier I capital was 12.4%. Following the sale
    of 20% stake in Carnegie the Bank's CAD ratio is 14.6%.

CEO Sigurjón Th. Árnason:

"Landsbanki's performance this past quarter is the best ever in its history. After-tax profit amounted to ISK 14.3 bn and return on equity was 63%. The Bank's core earnings have doubled, with net interest income plus fees and commissions amounting to ISK 15.8 billion. Income streams have become more diversified from those of the previous year, and income from operations abroad now comprises 49% of net operating income. This reflects the good performance and growth of both subsidiaries and parent company establishments abroad, in addition to which Landsbanki's equity trading has been very successful. In the coming months the Bank will continue to focus on the integration of individual operating divisions and subsidiaries in the Group, as well as increasing our presentation of the Bank's activities on international financial markets still further."

CEO Halldór J. Kristjánsson:

"The past quarter has been a unique and highly instructive one for Landsbanki, as for other Icelandic financial undertakings, and the Icelandic economy as a whole. Attracting the increased attention of international investors gives Landsbanki additional opportunities to disseminate information on how its activities have been developing. In recent years, the Bank's performance and profitability have been excellent and the first quarter of 2006 was definitely no exception to this trend. Landsbanki's capital adequacy has never been stronger; following the sale of its holding in Carnegie in April, the Bank's capital ratio is 14.6%. Deposits, in particular on markets abroad, increased by 40% during the past quarter, and now comprise 27% of the Group's total funding. The Bank's entrance into new funding markets has increased the diversification of its operating risk."

For further information contact Landsbanki's CEOs:

Sigurjón Th. Árnason
Tel. +354 410-4009
+354 898 0177 and
Halldór J. Kristjánsson
Tel. +354 410 4015 / +354 820 6399

Landsbanki Consolidated Interim Financial Statements 31.03.2006:

http://hugin.info/136348/R/1048256/172689.pdf

Landsbanki Q1 2006 Results Press Release:

http://hugin.info/136348/R/1048258/172691.pdf

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