Islandsbanki hf · OMXICE:ISB
Islandsbanki hf — FY2012 Earnings Presentation
25 slides from Islandsbanki hf's earnings presentation, Feb 27, 2013
Slide 1: FY 2012 Financial Results
28 Febru ary 2013 FY 2012 Financial Resu lts 1
Slide 2: Table of Contents
Table of Contents I. Income Statement II. Assets & Restructuring III. Liabilities, Liquidity & Capitalisation 2
Slide 3: Highlights during 2012
Highlights during 2012 Many significant milestones reached during the year 1 STABLE RECURRING REVENUES Over 75% of the Bank’s net operating income is from 2 CREDIT QUALITY CONTINUES TO IMPROVE Several large corporate restructuring projects finalised core operations (net interest income and net f
Slide 4: Overview
Overview Key figures & ratios ISK m FY12 FY11 FY10 ROE (after tax), % 17.2% 1.5% 28.5% ROE from regular operations (after tax), % 11.6% 11.0% 17.2% Net interest margin (of total assets), % 3.9% 4.5% 5.0% Profitability Cost to income ratio, % 48.1% 51.5%* 33.2% After tax profit, ISK m 23,418 1,866 29
Slide 5: I. Income Statement
~wy Istandsbanki I. Income Statement
Slide 6: Income statement
Income statement Full year and quarterly comparison ISK m Q4 12 Q4 11 Q4 10 FY12 FY11 FY10 Net interest income 7,950 7,074 9,128 31,235 31,225 34,874 Net valuation changes on loans and receivables 3,704 (465) 12,267 6,486 (1,296) 14,507 Provision for latent impairment (197) 64 (41) (776) 76 (514) Ne
Slide 7: Earnings from regular operations
Earnings from regular operations Regular operations continue to generate good profitability in 2012 ISK m FY12 FY11 FY10 Reported after tax profit 23,418 1,866 29,369 Net valuation changes on loans and receivables (6,486) 1,296 (14,507) Fair value change 0 (3,050) 0 Redundancy payments 0 496 0 Profe
Slide 8: Income split
Income split Focus on long-term stable cash flows, core operations continue to generate majority of total income NET OPERATING INCOME SPLIT NET OPERATING INCOME SPLIT By income type, ISK m By income type, % 55,560 53,358 8% 24% 15% 24% 13,306 40,451 12,664 13% 18% 7,380 3,260 5,966 9,459 77% 34,874
Slide 9: Focus on reigning in costs
Focus on reigning in costs Higher costs attributed to continued restructuring, mergers, regulation and investment in infrastructure TOTAL EXPENSES FTEs By type of expense, ISK m Parent vs Consolidated*** Yearly average, # Restructuring taking longer 1,244 38,708 1,098 1,119 than expected, number o
Slide 10: Tax & levies paid to Government institutions
Tax & levies paid to Government institutions Taxation has increased considerably in recent years ISK m FY12 FY11 FY10 Income tax* 6,253 75 7,214 ** Bank tax 858 682 221 *** Financial activities tax 623 0 0 FME and The Debtors´ Ombudsman 462 303 217 Contribution to The Depositors´ and Investors´ Guar
Slide 11: II. Assets & Restructuring
II. Assets & Restructuring 11
Slide 12: Assets
Assets Consolidated – 31 December 2012 ISK m 31.12.12 31.12.11 31.12.10 Bonds and debt instruments Mainly G5 government bonds in the Bank’s liquidity portfolio Cash and balances with CB 85,500 57,992 30,799 No exposure to GIPSIs Derivatives 127 339 70 Shares and equity instruments Bonds and debt
Slide 13: Loan portfolio
Loan portfolio Good sector diversification CONSOLIDATED LOAN PORTFOLIO Slight decrease in the loan book during 2012 By sector, as of 31.12.2012 Excluding the government secured customer loan that was paid Other up, the loan portfolio increased by 6.3% YoY Industrials sectors and 9% Loans to indi
Slide 14: Improving credit quality
Improving credit quality Both conventional ratios and Iceland specific ratios are improving Loan Portfolio Analysis (LPA) ratio measurement DEVELOPMENT OF LPA AND NON-PERFORMING LOANS Percentage of the loan portfolio (book value) The LPA ratio has decreased sharply over the last 18 months The LP
Slide 15: Loan portfolio performance
Loan portfolio performance Carrying amount reflects expected recovery of loans LOAN PORTFOLIO ANALYSIS (LPA*) LOANS IN RESTRUCTURING** TRANSFERRED TO WORKOUT Excluding fully performing loans to credit By status of restructuring By level of completion institutions 13.7% (FY11: 22.6%) 4.3% (FY11: 6.5%
Slide 16: III. Liabilities, Liquidity & Capitalisation
III. Liabilities, Liquidity & Capitalisation 16
Slide 17: Liabilities
Liabilities Consolidated – 31 December 2012 Deposits ISK m 31.12.12 31.12.11 31.12.10 Normal fluctuations in deposit base Derivatives and short positions 18,435 13,373 9,519 Debt issued and other borrowings Deposits from CB and credit inst. 38,272 62,845 96,238 ISK 49bn bond issued to the Centra
Slide 18: Deposits remain a stable source of funding
Deposits remain a stable source of funding New term deposit products successfully introduced with objective to lower liquidity risk DEPOSIT DEVELOPMENT DEPOSIT COMPOSITION Total exposure, parent company, ISK bn As of 31.12.12, parent company, by LCR category Individual and small 534 522 business, st
Slide 19: Structurally sound balance sheet
Structurally sound balance sheet Solid funding base where deposits are the largest source of funding BALANCE SHEET COMPOSITION 31.12.12, % Prudent asset and liability management 100% Other Other Short- The Bank has short term 90% Cash & balances Deposits from Short- with CB CIs & CBs term assets
Slide 20: Diversification of funding continues
Diversification of funding continues Íslandsbanki was the first bank to list securities on the NASDAQ OMX Iceland since 2008 ÍSLANDSBANKI COVERED BONDS An ISK 100bn covered bond programme in place Spread on top of HFF bonds (Government guaranteed) Íslandsbanki plans to issue around ISK 10bn of CBs
Slide 21: Sound management of liquidity
Sound management of liquidity Liquid assets of ISK 170bn exceed regulatory requirements and internal targets LIQUIDITY BACK-UP* / DEPOSIT COVERAGE RATIO FME LIQUIDITY RATIOS 31.12.2012, parent company, ISK bn % 40% Asset type ISK FX Total 30% 20% Cash and balances with CB 80.5 0.9 81.5 10% Balances
Slide 22: Imbalances strictly monitored
Imbalances strictly monitored Gross foreign currency gap converges to the net gap IMBALANCES 31.12.12 The gross foreign currency imbalance converges to the net imbalance as FX/ISK assets are converted to ISK assets through FX recalculation and restructuring ISKbn denominated CPI-linked FX/ISK as
Slide 23: Sound capital position
Sound capital position Capital ratios steadily increasing despite higher risk weighted assets (RWA) CAPITAL RATIOS and RWA YoY increase in RWA mainly due to: Development 25.5% 22.6% 23.3% 23.5% 24.3% Increase in Credit risk RWA mainly due to a larger loan portfolio, both due to new lending and val
Slide 24: Disclaimer
Disclaimer Important information All information contained in this presentation should be regarded as The forward-looking statements made represent Íslandsbanki’s preliminary and based on company data available at the time of the current expectations, plans or forecasts of its future results and pre
Slide 25: Thank you
Thank you 25