Islandsbanki hf · OMXICE:ISB
Islandsbanki hf — Q1 2010 Earnings Presentation
22 slides from Islandsbanki hf's earnings presentation, July 2010
Slide 1: Q1 2010 Consolidated Results (unaudited)
ÍSLANDSBANKI Q1 2010 Consolidated Results (unaudited) July 2010
Slide 2: Disclaimer
Disclaimer This material has been prepared for professional investors. Íslandsbanki hf. (ÍSB) when preparing this report has not taken into account any one customer’s particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations herein are
Slide 3: Overview
Overview 01. Financial Results 02. Loan Portfolio Overview 03. Funding, Liquidity & Capital 04. Appendices 3
Slide 4: 01. Financial results
01. Financial results
Slide 5: Q1 2010 results highlights
Q1 2010 results highlights Solid results in line with budget • Satisfying results in a challenging market • Íslandsbanki is currently in a restructuring and a – Return on equity 15.3% build-up phase which skews ratios – Net interest margin 5.9% – Costs are higher than in a normal scenario – Core cos
Slide 6: Income Statement
Income Statement 1 January – 31 March 2010 ISK m Q1 2010 2009 • Net interest income: Net interest income 10,479 31,984 – Higher in Q1 2010 mainly due to lower cost of funding Net fee & commission income 1,624 7,061 Other net operating income 87 2,760 • Net financial income: Net financial income (los
Slide 7: Income split
Income split Retail banking the largest contributor in Q1 • ISK 10.5bn of net interest income • ISK 1.6bn of net fee and commission • ISK 1.9bn loss in other income – 39% from Retail banking income – Mainly due to foreign exchange loss – 25% from Treasury – 57% from Retail banking • Mainly fees from
Slide 8: Administrative Expenses
Administrative Expenses Core cost to income ratio of 36% • Salaries higher by ISK 127m in Q1 2010 • Substantial costs due to restructuring and – FTE´s yearly average (consolidated): 1.026 strengthening the bank´s infrastructure – FTE´s yearly average (parent): 889 Administrative Expenses By business
Slide 9: 02. Loan portfolio overview
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Slide 10: Balance Sheet
Balance Sheet Consolidated – 31 March 2010 (ISK m) 31/03/2010 31/12/2009 Asset split – 31st March 2010 Cash and balances with Central Bank 26,737 38,743 Bonds and debt instruments 70,706 66,701 Other 5% Cash and Shares and equity instruments 2,033 2,250 Bonds and debt balances with CB Loans to Credi
Slide 11: Loan portfolio overview
Loan portfolio overview Diversified portfolio of ISK 568bn • The bank’s consolidated loan portfolio amounts to ISK • Approximately 8% (ISK 50bn) of the loan portfolio is a 568bn (book value) government guaranteed asset – Large difference in book value and claim value – Issued by a credit institution
Slide 12: Loans to individuals
Loans to individuals Book value ISK 168bn • Conventional retail products to households in • Retail mortgages are approximately 2/3 of the Iceland exposure • 1/5 of loans to individuals in FX • Non CPI-linked mortgages are now 8% of the mortgage portfolio (NPV swap) Loans to individuals Loan type Cur
Slide 13: Loans to companies
Loans to companies Book value ISK 304bn • Over half of the bank’s portfolio • 2/3 denominated in foreign currencies – Thereof 43% to customers marked FX borrowers • Includes loans to holding companies, income producing real estate, operating companies Loans to companies Loan type Currency split Repo
Slide 14: Loans to banks and public sector
Loans to banks and public sector Book value ISK 96bn • Exposure to banks ISK 89bn is in large part due to • Exposure to public sector ISK 7bn includes Treasury activities sovereign, local government and public sector entities Loans to banks & sovereigns By bank unit Currency split CPI linked Subsidi
Slide 15: 03. Funding, Liquidity & Capital
03. Funding, Liquidity & Capital
Slide 16: Deposits largest funding source
Deposits largest funding source Stable source of funding • The bank´s deposit base has been fairly stable • In the short-term deposits are assumed to remain fairly stable • High deposit rates and implicit state guarantee – Íslandsbanki is well prepared to meet unexpected outflow of deposits attracti
Slide 17: Prudent internal liquidity measures
Prudent internal liquidity measures Conservative classification of liquid assets Internal liquidity measures Liquid assets A • Liquidation time 0-3 days • Collateral that can be used for secure borrowing at central banks • Should cover all liabilities maturing within the next 3 months Liquid assets
Slide 18: Strong focus on liquidity management
Strong focus on liquidity management Liquid assets predominantly in the A category • Internal liquidity ratios well above targets • Well in excess of regulatory requirements – FME: Cash or cash like assets amount to 5% of demand deposits • Liquid assets cover 41% of retail deposits – FME: The Bank m
Slide 19: Acceptable imbalances
Acceptable imbalances Actively being reduced • The Bank’s foreign currency denominated loan book of ISK Foreign 267 billion as of April 2010 is split into two: currency Inflation (ISK bn) denominated indexed – Gross FX gap of ISK 201bn Assets 314 144 – Net FX gap of ISK 43bn Liabilities 113 121 Gros
Slide 20: Capitalisation higher than requirements
Capitalisation higher than requirements Regulatory requirements have become more stringent • Core Tier 1 ratio of 16.6% and Solvency ratio of 20.8% at • FME now requires Icelandic banks to hold: 31 of March 2010 – 12% of RWA in the form of core Tier 1 capital allowing for Pillar 2 – After adjustment
Slide 21: 04. Appendix I – Key Figures
04. Appendix I – Key Figures
Slide 22: Key figures
Key figures Total assets Loan book Equity 120.0 760.0 741 700.0 96 598 577 100.0 92 740.0 717 568 600.0 513 720.0 700 493 76 500.0 80.0 68 700.0 65 ISK bn ISK bn 680.0 ISK bn 658 400.0 60.0 660.0 631 300.0 640.0 40.0 620.0 200.0 600.0 100.0 20.0 580.0 560.0 0 0 15.10.2008 31.12.2008 30.06.2009 31.12