Islandsbanki hf · OMXICE:ISB
Islandsbanki hf — Íslandsbanki — 9M 2012 Earnings Presentation
26 slides from Islandsbanki hf's earnings presentation, Nov 29, 2012
Slide 1: 9M Financial Results
29 N ovem ber 2012 9M 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 9M12
Highlights during 9M12 Many significant milestones reached in the nine months of 2012 1 STABLE RECURRING REVENUES Over 80% of the Bank’s net operating income is from 2 CREDIT QUALITY CONTINUES TO IMPROVE Several large restructuring projects finalised in the first core operations (net interest in
Slide 4: Overview: Key figures & ratios
Overview Key figures & ratios ISK m 9M12 9M11 FY11 ROE (annualised, after tax), % 16.3% 11.9% 1.5% ROE from regular operations (annualised, after tax), % 10.9% 12.0% 11.0% Net interest margin (of total assets), % 3.9% 4.8% 4.5% Profitability Cost to income ratio, % 51.0% 50.2% 51.5%* After tax profi
Slide 5: I. Income Statement
~wy istandsbanki I. Income Statement
Slide 6: Income statement
Income statement Quarterly and 9M comparison ISK m Q312 Q311 9M12 9M11 FY11 Net interest income 7,601 7,848 23,285 24,151 31,225 Net valuation changes on loans and receivables 713 -576 2,782 -831 -1,296 Provision for latent impairment -309 167 -579 12 76 Net interest income after valuation changes 8
Slide 7: Core operations continue to improve
Core operations continue to improve Development of P&L line items 9M11 – 9M12 Change in profit after tax by line items ISK m 1.136 153 2.320 2.436 2.700 1.488 16.221 1.930 3.613 11.346 2.339 866 9M11 Net interest Net fee & Net valuation Net financial Net foreign Other Salaries Other Profit from Tax
Slide 8: Earnings from regular operations
Earnings from regular operations Regular operations continue to generate good profitability in 2012 ISK m Q312 Q311 9M12 9M11 FY11 Reported after tax profit 4,597 3,284 16,221 11,346 1,866 Net valuation changes on loans and receivables -713 576 -2,782 831 1,296 Icelandair fair value change -3,050 Re
Slide 9: Income split
Income split Focus on long-term stable cash flows, core operations continue to generate vast majority of income TOTAL OPERATING INCOME SPLIT TOTAL OPERATING INCOME SPLIT By income type, ISK m By income type, % 40.451 36.650 8% 1% 3.260 15% 18% 5.966 28.737 6.661 15% 220 18% 4.366 6.704 77% 84% 31.22
Slide 10: Temporary increase in expenses
Temporary increase in expenses Objective to build effective and sound infrastructure for future operations TOTAL EXPENSES FTEs By type of expense, ISK m Parent vs Consolidated, Yearly average, # Higher number of FTEs 38,708 ‐ Merger with Byr in 4Q11 and Kreditkort in 2Q12 1,344 1,372 1,379 17.873
Slide 11: Tax and levies paid to government institutions
Tax and levies paid to government institutions Taxation has increased considerably in recent years ISK m 9M12 9M11 FY11 Income tax* 4,463 3,097 75 ** Bank tax 631 509 682 *** Financial activities tax 425 0 0 FME and The Debtors´ Ombudsman 347 227 303 Contribution to The Depositors´ and Investors´ Gu
Slide 12: II. Assets & Restructuring
II. Assets & Restructuring 12
Slide 13: Assets
Assets Consolidated – 30 September 2012 ISK m 30.09.12 30.06.12 31.12.11 Bonds and debt instruments Mainly G5 government bonds in the liquidity portfolio Cash and balances with CB 87,059 72,072 57,992 No exposure to GIPSIs Derivatives 257 306 339 Shares and equity instruments Bonds and debt inst
Slide 14: Well diversified loan portfolio
Well diversified loan portfolio Acquisition of Byr diversified the portfolio further in terms of industry sectors and facility types CONSOLIDATED LOAN PORTFOLIO Industry sector concentration within set limits By sector Real estate Increased activity in asset based financing, both Individuals 13%
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 By status of restructuring By level of completion credit institutions 17.4% (30.06.12: 19.6%) 6.0% (30.06.
Slide 16: Restructuring progress
Restructuring progress Ambitious targets for the next two years LOAN PORTFOLIO ANALYSIS (LPA*) LOANS IN RESTRUCTURING** TRANSFERRED TO WORKOUT Excluding fully performing loans to By status of restructuring By level of completion credit institutions 24.8% 100% 23.5% 11.4% 22.6% 17,4% 0.4% % 90% 24,8%
Slide 17: III. Liabilities, Liquidity & Capitalisation
III. Liabilities, Liquidity & Capitalisation 17
Slide 18: Liabilities
Liabilities Consolidated – 30 September 2012 Deposits ISK m 30.09.12 30.06.12 31.12.11 Normal fluctuations in deposit base Financial liabilities 10,493 11,154 9,346 Debt issued and other borrowings Derivatives 5,005 5,377 4,027 ISK 49bn bond issued to the Central Bank secured on Deposits from CB
Slide 19: Deposits are stable
Deposits are stable DEPOSIT DEVELOPMENT DEPOSIT COMPOSITION Total exposure, parent company, ISKbn As of 30.09.12, parent company, by customer type 534 535 19% 509 12% 14% Foreign financial 13% Domestic institutions Individuals, financial 8,93% 19% 21% 19% stable institutions 26,17% FX 3,46% Fiduciar
Slide 20: Structurally sound balance sheet
Structurally sound balance sheet Solid funding base where deposits are the largest source of funding BALANCE SHEET COMPOSITION 30.09.12, % Funding diversification 100% Other Prudent asset and liability Other Deposits from ST funding management 90% ST Cash & balances CIs & CBs assets with CB 80% Bo
Slide 21: 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 Yield and turnover as of November 2012 Íslandsbanki plans to issue around ISK 10bn of CBs annually 4,
Slide 22: Sound management of liquidity
Sound management of liquidity Liquid assets of ISK 167bn exceed regulatory targets LIQUIDITY BACK-UP* / DEPOSIT COVERAGE RATIO Regulatory liquidity requirements 30.09.12, parent company, ISKbn FME requires cash or cash-like assets against demand Asset type ISK FX Total deposits of 5% ‐ Íslandsbank
Slide 23: Imbalances strictly monitored
Imbalances strictly monitored Gross foreign currency gap converges to the net gap IMBALANCES FX assets 30.09.12 FX Gross foreign currency gap converges to the net gap as FX/ISK ISKbn denominated CPI-linked assets are converted to ISK assets through recalculation and restructuring Assets 211 196
Slide 24: Sound capital position
Sound capital position Well above legal and regulatory requirements CAPITAL RATIOS, STANDARDISED APPROACH* Development, % Increase in capital ratios on the back of retained earnings and increase in 32% risk weighted assets 27.9% 28% 26.6% The dip in Q411 was 23.8% 22.6% 23.3% 23.5% 24.3% mainly
Slide 25: 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 26: Thank you
Thank you 26