Profit
ISK 25 billion
Return
on Equity (ROE) 46%
Highlights of the Consolidated Financial
Statements of Landsbanki for 2005
Income Statement
·
Profit before tax and goodwill impairment for the
year amounted to ISK 33.8 billion (bn) as compared to ISK 14.5 bn for 2004.
·
Net after-tax profit amounted to ISK 25 bn.
·
After-tax ROE for the year was 46%.
·
Net interest income amounted to ISK 22.9 bn as
compared to ISK 14.7 bn the previous year. This is a YoY increase of 56%.
·
Net commission income amounted to ISK 16.7 bn,
increasing by 88% or ISK 7.8 bn in comparison with the previous year.
·
The Group’s core income (interest and commission
income) increased by 68% or ISK 16 bn in 2005.
·
Net interest spread dropped by 0.4 percentage
points, from 2.6% to 2.2%.
·
Trading gains and investment income amounted to
ISK 21.3 bn, as compared to ISK 9.8 bn in 2004.
·
Net operating revenues increased by 82%, or ISK
27.5 billion, amounting to ISK 61 bn in 2005.
·
Income from operations abroad increased by ISK
7.7 bn, amounting to ISK 10.4 bn or 20% of net operating revenues.
·
The Bank’s Cost Income ratio for the year was
34%.
·
Impairment on loans and advances amounted to ISK
6.2 bn.
Balance Sheet
·
The Bank’s total assets almost doubled during the
year, amounting to ISK 1,405 bn, as compared to ISK 737 bn at the end of 2004.
·
Loans and advances increased by ISK 457 billion,
amounting to ISK 1,071 bn at the end of 2005.
·
Landsbanki’s equity was ISK 110 bn, increasing by
192% during 2005. The Bank issued new share capital of ISK 11.4 bn nominal
value at the end of March 2005 and ISK 40 bn in September 2005.
·
The Bank's capital ratio (CAD) was 13.1% at the end of the year. Tier 1 capital was 11,9%.
CEO Sigurjón Th. Árnason:
“Landsbanki’s
performance this past year is the best ever in its history. Net interest and
commission income, which comprise the Group’s core income, increased by close
to 70%, or by ISK 16 billion, while operating expenses rose by ISK 6.5 billion.
The Bank wrote off goodwill following the integration of assets of Burðarás hf.
amounting to ISK 3.3 billion; if this is taken into consideration, profit
before tax for the year was ISK 34 billion. The Bank’s balance sheet has grown by almost
ISK 670 billion, or 91% during 2005. Here Landsbanki is in a unique position,
since its expansion is almost completely organic growth. In view of its strong
equity position, the Bank has substantial capacity to expand further. Landsbanki’s
development of international corporate and investment banking activities are
proceeding well and today it has over 600 employees, working in 12 countries.”
CEO
Halldór J. Kristjánsson:
“The
year 2005 marks something of a turning point in Landsbanki’s history. The
Bank’s international activities have become more firmly rooted, and its
acquisition of three international securities brokerages substantially
reinforces plans to continue European expansion. These acquisitions add
additional income sources, in addition to improving the Bank’s risk
diversification. Landsbanki’s London Branch has also grown rapidly. Income from
operations abroad now accounts for around 20% of the Group’s total income, a
percentage which will increase still further in 2006. Landsbanki’s funding has
been very successful and efforts will continue to increase both the diversity
of its funding and the relative share of long-term credit. These aspects,
together with its strong equity position, lay the foundation for Landsbanki’s strategy
of further development as an international corporate and investment bank.”
A copy of Landsbanki's financial statements for
2005 is available on the Bank’s website: www.landsbanki.is or from its
headquarters at Austurstræti 11, Reykjavík.
For further information
contact Landsbanki’s CEOs:
CEOs Sigurjón Th. Árnason,
Tel. +354 410-4009 / +354 898 0177 and Halldór J. Kristjánsson, Tel. +354 410
4015 / +354 820 6399.