Tilkynning frá OMX | 14.2.

Islandsbanki hf.: 2017 Consolidated Annual Audited Financial Statements

2017 HIGHLIGHTS

 * Profit after tax was ISK 13.2bn in 2017, compared to ISK 20.2bn in 2016. The
 profit in 2016 was considerably higher due to one-off income from the sale
 of subsidiary Borgun's shares in Visa Europe. Return on equity was 7.5% in
 2017, compared to 10.2% in 2016.
 * Earnings from regular operations was ISK 13.8bn, compared to 15.1bn in 2016.
 * Return on equity from regular operations on 15% CET1 was 10.3% in 2017
 compared to 10.7% in 2016.
 * Net interest income amounted to ISK 30.0bn in 2017 (2016 ISK 31.8bn) down
 5.7% in the period. The net interest margin was 2.9% in 2017 (2016: 3.1%).
 * Net fee and commission income was ISK 13.8bn in 2017 compared to 13.7bn in
 2016, up 0.2% in the period.
 * Administrative costs totalled ISK 27.0bn in 2017, marginally above 2016.
 When adjusted for one-off costs, there is a 4.5% rise in costs, or a 2.7%
 rise in real terms when adjusted for inflation. This is mainly a result of
 investments in IT, including the Sopra Banking Platform, which will replace
 the Bank's core deposit and payment systems. The Bank's head office
 operations were consolidated into new headquarters at Norðurturn in
 Kópavogur adding front end costs.
 * Cost to income ratio was 62.5% in 2017 (2016: 56.9%), the cost to income
 ratio excludes the bank tax and one-off cost items.
 * Total assets amounted to ISK 1,036bn (Sep17: ISK 1,078bn), whereby loans to
 customers and the Bank's liquidity portfolio account for 92% of the balance
 sheet.
 * Loans to customers grew by 9.8% (ISK 67.3bn) in 2017 to ISK 755bn. Total new
 lending was ISK 199bn during the year across various lending divisions.
 * Asset quality continues to improve whereby the ratio of loans more than 90
 days past due was 1.0% (Sep17: 1.1%).
 * Deposits from customers contracted in line with expectations by 4.6% (ISK
 27bn) in 2017 to ISK 567bn.
 * Total capital ratio was 24.1% and CET1 ratio was 22.6% at period end,
 compared to 22.6% and 22.5% respectively at September 2017.
 * The liquidity position is strong and exceeds internal and external
 requirements. At period end, the Bank's liquidity coverage ratio (LCR) was
 142% (Sep17: 183%) and the total net stable funding ratio (NSFR) was 117%
 (Sep17: 115%).
 * Leverage ratio was 16.2% at Dec17 compared to 15.3% at Sep17, indicating a
 moderate leverage in both domestic and international comparison.
 * Íslandsbanki is the only Icelandic bank to have two international credit
 ratings. In January 2017, Fitch upgraded the Bank to BBB/F3, with a stable
 outlook, and in October 2017, S&P Global Ratings upgraded the Bank to
 BBB+/A-2, with a stable outlook. Fitch affirmed the rating in December 2017.

4Q17 HIGHLIGHTS

 * Profit after tax was ISK 3.1bn in 4Q17 (4Q16: ISK 4.6bn). Return on equity
 was 6.9% in 4Q17, compared to 9.0% in 4Q16.
 * Return on regular operations normalised on 15% CET1 was 8.1% in the quarter
 (4Q16: 11.7%).
 * Net interest income amount to ISK 7.3bn in 4Q17 (4Q16: ISK 8.1bn) and the
 net interest margin was 2.8% (4Q16: 3.2%).
 * Net fee and commission income was ISK 3.6bn in 4Q17 (4Q16: ISK 3.8bn).

Birna Einarsdóttir, Chief Executive Officer

2017 was a transformative year for us at Íslandsbanki. We introduced a new
organisational structure, completed the move to our new headquarters, and
revamped the Bank's core systems. We continued to prepare the Bank for a changed
international regulatory framework, technological challenges, and the prospect
of new competitors in the market.

In spite of these major changes, the Bank performed strongly during the year.
Our loan portfolio grew by 9.8% with ISK 199bn issued in new loans, and our
profit for the year was ISK 13.2bn after tax with returns on regular operations
measuring 10.3%, which is in line with set targets.

The Bank's credit ratings were upgraded, and we took even further steps towards
a more economical funding structure, with the first foreign subordinated bond
issue by an Icelandic financial institution since 2008.

The Bank retained its position as Iceland's leader in customer service during
the year, leading the Icelandic Customer Satisfaction Index for fifth
consecutive year, topping the rankings in most categories of service surveys
carried out among individuals and companies, and was selected Bank of the Year
in Iceland by The Banker.

We look forward to rolling out a number of innovative services in 2018, which
will be beneficial for our customers and help us maintain our position as a
leading service provider in the banking market.

INVESTOR RELATIONS

Investor call in English

Today, 14 February, the Bank will host an investor call in English to present
the results at 9:30 am, Icelandic time. The call will start with a short macro
update on the Icelandic economy, followed by a review of the financial results
and Q&A.

Please register by replying to: ir@islandsbanki.is. Dial-in details and
presentation 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

Financial calendar and silent periods

Information on Íslandsbanki's financial calendar and silent periods can be found
here

For further information

 * Investor Relations - Gunnar Sveinn Magnússon,
 gunnar.sveinn.magnusson@islandsbanki.is, tel: +354 440 4665
 * Public Relations - Edda Hermannsdóttir,
 edda.hermannsdottir@islandsbanki.is, tel: +354 440 4005

Attachments


Investor Presentation: 
http://hugin.info/150077/R/2168678/835057.pdf

Fact Sheet: 
http://hugin.info/150077/R/2168678/835059.pdf

Press Release: 
http://hugin.info/150077/R/2168678/835063.pdf

2017 Consolidated Annual Financial Statements: 
http://hugin.info/150077/R/2168678/835056.pdf

Fact Book Excel: 
http://hugin.info/150077/R/2168678/835061.xlsx

Fact Book: 
http://hugin.info/150077/R/2168678/835058.pdf



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Source: Islandsbanki hf. via GlobeNewswire