Landsbankinn hf.: Financial results of Landsbankinn for the first three months of 2021
The Bank’s profit in the first three months of 2021 amounted to ISK 7.6 billion.
Return on equity (ROE) was 11.7%.
Net fee and commission income grew alongside increased capital market activity while net interest margin decreased, mostly because of the Bank’s emphasis on offering very competitive terms on housing mortgages.
The cost/income ratio was 45.8% and operational efficiency continues to grow.
Forecasts for economic revival and a detailed assessment of the Bank’s loan book lead to an ISK 2.5 billion impairment reversals.
Market share in the retail market is around 38%.
Market share in mortgage lending has never been higher and has grown to 26.8% from 22.0% since the beginning of 2020.
Around 500 companies have become new Landsbankinn customers in the first three months of the year.
During the first three months of the year, customers booked a total of 15,000 consultation calls and appointments.
Around 1,900 accounts have been created through Save in the App function, launched towards the end of March.
Important milestones in the journey towards sustainability were reached during the period.
Landsbankinn’s after-tax profit during the first three months of 2021 was ISK 7.6 bn, compared with ISK 3.6 billion loss for the same period of 2020. Return on equity (ROE) for the period was 11.7% on an annualised basis, compared with -5.9% during the same period of 2020.
Net interest income amounted to ISK 8.6 billion, compared with ISK 9.4 billion in the same period the previous year, which is an 8.5% decrease between periods. Net fee and commission income amounted to ISK 2.1 billion, compared with ISK 1.9 billion for the same period the previous year. Other operating income was positive by ISK 5.1 billion; negative by ISK 8 billion in 2020. The year-over-year change is explained by an ISK 2.5 billion impairment reversals, compared with ISK 5.2 billion impairment in 2020 caused by uncertainty about the impact of the then nascent Covid-19 pandemic. Impairment reversals in the quarter are attributable to a less serious economic contraction in 2020 than expected and expectations for a turnaround in 2021.
Net interest margin as a ratio of total assets was 2.2% in the first three months of 2021, compared with 2.6% in the same period the previous year.
Other operating expenses were ISK 6.6 billion, compared with ISK 6.7 billion for the same period last year. Salaries and related expenses were ISK 3.8 billion thereof, remaining unchanged between periods. Other operating expenses were ISK 2.8 billion, compared with ISK 2.9 billion for the same period last year.
The cost/income ratio for the first three months of the year was 45.8%, compared with 72.6% for the same time last year.
Landsbankinn's total assets increased by ISK 36.8 billion during the period, amounting to ISK 1,601 billion at the end of the first quarter. Loans to customers grew by ISK 14 billion during the first quarter, mainly due to increased lending to individuals. Deposits from customers amounted to ISK 794 billion at the end of the quarter, compared with ISK 793 billion at year-end 2020.
As at 31 March this year, Landsbankinn's equity amounted to ISK 261.4 billion and its total capital ratio was 24.9%. The Bank’s AGM, held on 24 March 2021, approved a motion from the Board of Directors to pay a dividend in the amount of ISK 4,489 million for the 2020 operating year. The dividend has been paid out to shareholders.
Teleconference to present results
On Friday 7 May, at 10:00, the Bank will host a teleconference on its Q1 2021 results in English. Please register by email to ir@landsbankinn.is.
For further information contact:
Rúnar Pálmason, Public Relations, pr@landsbankinn.is
Hanna Kristín Thoroddsen, Investor Relations, ir@landsbankinn.is
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