9 Month 2004 Performance Presentation of Landsbanki slands hf. - - PowerPoint PPT Presentation

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9 Month 2004 Performance Presentation of Landsbanki slands hf. - - PowerPoint PPT Presentation

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9 Month 2004 Performance Presentation of Landsbanki slands hf. Reykjavik, 28 October 2004 Sigurjn . rnason GMD & CEO Landsbanki 9 Month Interim Accounts The presentation compares 9 month results of the years 2004 and 2003 of

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SLIDE 1

9 Month 2004 Performance Presentation of Landsbanki Íslands hf.

Reykjavik, 28 October 2004

Sigurjón Þ. Árnason GMD & CEO

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SLIDE 2

Landsbanki 9 Month Interim Accounts

  • The presentation compares 9 month results of the years 2004 and 2003 of

Landsbanki Group.

  • Landsbanki acquired a 100% stake in Landsbanki Luxembourg S.A. in Q2

2003 and therefore previous years results are not fully comparable.

  • Earnings of Landsbanki Group amounted to ISK 14,458 million before

taxes and minority interests and to ISK 11,696 mkr. after taxes

  • Total assets grew to ISK 638 billion, which is an increase of 42% for the

first nine months of 2004.

  • Total lending amounted to ISK 489 billion – an increase of ISK 161 billion in 2004
  • Total deposits amounted to ISK 225 billion – an increase of ISK 73 billion in 2004
  • Return on equity before taxes and minority interests was 82% in the first

nine months of 2004 and return on equity after taxes was 66% for the period.

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SLIDE 3

Growth of Icelandic Banks

268 239 193 278 448 638 1522 558 140 199 281 434 347 296 312 444 565 285 189 137 164 227 238 275 100 200 300 400 500 600 700 800 1999 2000 2001 2002 2003 30.9.2004 Landsbanki Kaupthing Bunadarbanki Islandsbanki FBA Savings banks

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SLIDE 4

Market Share in Iceland

Foreign lending operations have grown from about 9% to 26% of the Bank’s total lending from year-end 2002 to date.

30.9.2004 31.12.02 Change Deposits* 31% 27% +4% Lending** 32% 26% +6% Equity Trading 35% 19% +16% Bond Trading 23% 19% +4% * Source: Central Bank of Iceland ** Source: Iceland Stock Exchange

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SLIDE 5

Profit and Loss Account

ISK million

30 Sep 30 Sep 2004 2003 2004 2003 Diff % Q3 Q2 Q1 Q4 Interest revenues 23,709 15,418 8,290 54% 8,186 8,772 6,751 6,453 Interest expenses 13,527 8,819 4,708 53% 4,385 5,306 3,836 3,721 Net interest revenues 10,182 6,600 3,582 54% 3,801 3,466 2,915 2,732 Net profit from shareholdings 100 138

  • 38
  • 28%

55 26 18 6 Commissions and fees 6,849 5,140 1,709 33% 2,389 2,054 2,406 1,818 Commission expenses

  • 962
  • 544
  • 418

77%

  • 365
  • 301
  • 296
  • 299

Trading gains 11,974 1,866 10,108 542% 6,592 1,161 4,221 807 Other revenues 194 608

  • 414
  • 68%

120 26 48 110 Operating revenues 18,155 7,208 10,946 152% 8,791 2,966 6,397 2,443 Net operating revenues 28,337 13,808 14,529 105% 12,592 6,432 9,313 5,175

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SLIDE 6

Interest Spread as a Ratio of Average Capital Position

3.25% 2.99% 2.86% 3.45% 2.83% 2.62% 2.55%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 1998 1999 2000 2001 2002 2003 09 2004

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SLIDE 7

Net Profit from Shareholdings

ISK million

Book Total Owner- Profit value profit ship share VISA - Iceland Ltd 535 196 38% 75 Eurocard - Iceland Ltd 210 196 20% 39 Intrum Justitia hf 94 102 25% 22 Other partially owned companies 83

  • 36

100 The Bank's Data Center 464 1,386

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SLIDE 8

Commissions and Fees

ISK million

30 Sep 30 Sep 2004 2003 2004 2003 Diff % Q3 Q2 Q1 Q4 Securities 2,384 1,886 498 26% 708 613 1,064 434 Asset management 742 404 338 84% 261 258 223 273 Foreign trade 267 230 37 16% 110 89 68 67 Lending 665 489 177 36% 254 202 209 206 Cards 641 595 46 8% 218 210 213 205 Interbank revenues 846 533 313 59% 339 256 251 227 Collection and payment services 391 363 28 8% 188 113 90 119 Other commissions and fees 115 113 2 1% 45 36 34 33 Subsidiaries 798 527 271 51% 265 277 256 255 6,849 5,140 1,709 33% 2,389 2,054 2,406 1,818 Commission expenses 962 544 418 77% 365 301 296 299 Net commissions and fees 5,887 4,596 1,291 28% 2,024 1,753 2,110 1,520

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SLIDE 9

Net Operating Revenues *

* not including profit from shareholdings

4,335 2,358 50 6,227 2,978

  • 1

,354 4,743 1 0,1 82 6,081 1 1 ,974 5,488 3,51 3 686 6,600 2,326

  • 2,000

2,000 4,000 6,000 8,000 10,000 12,000 14,000 Net interest revenues Commissions and fees Trading gains 30.9.2000 30.9.2001 30.9.2002 30.9.2003 30.9.2004

ISK million

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SLIDE 10

Commissions and Fees 2000-2004

1,039 290 1,155 1,438 384 2,978 3,541 1,025 1,029 1,225 1,894 394 1,333 432 1,514 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Retail Corporate and investment banking Asset management 30.9.2000 30.9.2001 30.9.2002 30.9.2003 30.9.2004

ISK million

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SLIDE 11

Trading Gains

ISK million

30 Sep 30 Sep 2004 2003 2004 2003 Diff % Q3 Q2 Q1 Q4 Foreign exchange 246 60 186 308% 107 64 75 93 Bond trading 964 101 864 859% 295 66 604

  • 67

Stock trading 10,763 1,705 9,058 531% 6,191 1,031 3,542 781 11,974 1,866 10,108 542% 6,592 1,161 4,221 807

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SLIDE 12

Profit and Loss Account

ISK million

30 Sep 30 Sep 2004 2003 2004 2003 Diff % Q3 Q2 Q1 Q4 Net operating revenues 28,337 13,808 14,529 105% 12,592 6,432 9,313 5,175 Payroll expenses 5,587 3,915 1,672 43% 2,266 1,701 1,620 1,741 Administrative expenses 3,426 2,477 949 38% 1,286 1,124 1,015 1,079 Depreciation of fixed assets 1,400 919 480 52% 684 235 480 388 Other expenses 203 292

  • 89
  • 30%

30 20 153 4 Operating expenses 10,616 7,603 3,013 40% 4,267 3,080 3,269 3,212 Net provision for credit losses 3,262 3,238 24 1% 1,293 978 991 1,418 Profit before taxes 14,458 2,967 11,492 387% 7,032 2,374 5,053 545 Taxes 2,666 381 2,285 599% 1,330 405 931 75 before minority interests 11,792 2,585 9,207 356% 5,702 1,968 4,121 470 Minority interests 96 72 25 35% 42 27 27 28 Net profit 11,696 2,514 9,182 365% 5,660 1,941 4,094 442

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SLIDE 13

Cost-Income Ratio

75% 70% 71 % 66% 61 % 57% 37%

20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 1998 1999 2000 2001 2002 2003 09 2004

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SLIDE 14

Ratio of Provision to Lending Position at Period-end

0.88% 0.87% 0.83% 1.17% 1.33% 1.47% 0.91%

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1998 1999 2000 2001 2002 2003 09 2004

Allowance account for credit losses 30 Sept 2004 Special 6,018 General 2,548 Alls 8,567 The allowance account is 1.8% of total lending

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SLIDE 15

Overdue Loans

3.6% 4.9% 3.4% 2.2% 1 .8% 1 .2% 1 .3% 3.2% 1 .0% 1 .9% 3.5% 3.4% 5.1 % 2.3% 2.1 % 4.0% 2.4% 2.3% 3.4% 1 .5% 1 .0% 1 .8% 1 .1 % 2.5%

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 31.12.1998 31.3.1999 30.6.1999 30.9.1999 31.12.1999 31.3.2000 30.6.2000 30.9.2000 31.12.2000 31.3.2001 30.6.2001 30.9.2001 31.12.2001 31.3.2002 30.6.2002 30.9.2002 31.12.2002 31.3.2003 30.6.2003 30.9.2003 31.12.2003 31.3.2004 30.6.2004 30.9.2004 Total overdue > 30 days > 90 days

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SLIDE 16

Profit and Equity

1,504 1,846 2,549 3,512 14,458 955 1,749 2,028 2,956 11,696 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 2000 2001 2002 2003 09 2004 Profit before taxes and minority interests Profit after taxes 13,639 15,505 16,309 22,382 37,916 2000 2001 2002 2003 09 2004 Equity

ISK million

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SLIDE 17

Return on Equity

1 2.6% 1 7.5% 1 2.7% 1 3.9% 1 7.0% 20.9% 82.2% 1 2.4% 1 1 .5% 8.1 % 1 3.1 % 1 3.5% 1 7.6% 65.6%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 1998 1999 2000 2001 2002 2003 09 2004 Return on equity before taxes and minority interests Return on equity after taxes

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SLIDE 18

Profit by Business Segments – 9 month 2004

ISK Million Commercial Banking Securities Trading Asset Management & Private Banking Other Total

Net interest revenues 9,512

  • 97

767 10,182 Operating revenues 2,908 2,365 909 6,181 Trading gains

  • 36

11,949 61 11,974 Net operating revenues 12,384 14,216 1,736 28,337 Operating expenses 6,318 1,379 1,128 1,791 10,616 Provisions for credit losses 3,072 7 183 3,262 Pre tax profit 2,994 12,830 425

  • 1,791

14,458

ISK million

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SLIDE 19

Revenue Breakdown by Countries

Iceland Britain Luxembourg Total Net interest revenues

7,994 662 1,527 10,182

Net profit from shareholdings

100 100

Net commissions

5,186 381 320 5,887

Trading gains

11,913 61 11,974

Other revenues

194 194 25,387 1,042 1,908 28,337

ISK million

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SLIDE 20

Total Assets

1 93 239 269 278 448 638

50 100 150 200 250 300 350 400 450 500 550 600 650 700 1999 2000 2001 2002 2003 09 2004

ISK billion

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SLIDE 21

Balance Sheet

30 Sep 31 Dec 2004 2003 Change % Cash and interbank operations 84,977 48,772 36,205 74% Loans 487,076 326,400 160,677 49% Securities and shareholding 56,311 63,744

  • 7,433
  • 12%

Fixed assets 4,398 4,707

  • 309
  • 7%

Other assets 5,651 4,616 1,035 22% Total assets 638,413 448,239 190,175 42% Financial institutions 52,323 43,840 8,484 19% Customer accounts 224,848 152,320 72,528 48% Funding 287,944 209,357 78,587 38% Other items 11,027 6,389 4,638 73% Subordinated loans 23,416 13,090 10,326 79% Minority interests 939 862 77 9% Equity 37,916 22,382 15,534 69% Total liabilities and equity 638,413 448,239 190,175 42%

ISK million

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SLIDE 22

Foreign Lending Operations

22,425 36,596 58,908 1 4,565 1 6,658 1 9,266 38,607 4,446 4,551 1 5,496 31 ,31 5 9% 1 7% 22% 26%

20,000 40,000 60,000 80,000 100,000 120,000 140,000 31.12.2002 30.6.2003 31.12.2003 30.9.2004 0% 5% 10% 15% 20% 25% 30% Landsbanki Luxembourg Heritable Bank Parent Foreign lending operations/total lending

ISK million 19.011 43.635 71.358 128.830

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SLIDE 23

Securities and Shareholdings

30 Sep 31 Dec 2004 2003 Change % Bonds and other fixed-income securities 11,656 38,696

  • 27,040
  • 70%

Equity and other variable-income securities 43,269 23,708 19,560 83% Shares in subsidiaries and partially owned companies 1,386 1,340 46 3% Total securities and shareholdings 56,311 63,744

  • 7,433
  • 12%

Bonds and other fixed-income securities 6,996 15,674

  • 8,678
  • 55%

Equity and other variable-income securities 11,548 5,499 6,049 110% Forward and option contracts 18,544 21,173

  • 2,629
  • 12%

Bonds and other fixed-income securities 4,660 23,022

  • 18,362
  • 80%

Equity and other variable-income securities 31,721 18,209 13,511 74% Shares in subsidiaries and partially owned companies 1,386 1,340 46 3% Net securities and shareholdings 37,767 42,571

  • 4,804
  • 11%

ISK million

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SLIDE 24

Equity Ratio - CAD

8,1 % 8,2% 7,5% 7,7% 8,7% 0,6% 1 ,4% 1 ,5% 2,9% 2,9% 3,0% 3,0% 7,2% 6,9%

0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% 1998 1999 2000 2001 2002 2003 09 2004 Tier I Tier II and III

8,7% 9,9% 10,6% 10,4% 9,6% 8,7% 11,7%

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SLIDE 25

Prognosis

  • Market conditions for financial enterprises have been highly favourable so far

this year. Landsbanki has strengthened its position on financial markets both in Iceland and abroad.

  • In the past year or two Landsbanki has expanded very rapidly, with domestic

growth the prime component in the Group’s operations. Activities outside of Iceland have, however, been increasing rapidly.

  • Total assets have more than doubled since Q1 2003 and commissions from

investment banking activities increased greatly, resulting in a substantial increase in the Bank’s net operating income, excluding trading gains.

  • The development of equities and bonds was favourable in Q1-Q3 2003 and the

Bank’s capital gains from equities and bonds was substantially above budget.

  • In recent days there has been a reversal of the upward trend on the domestic

equity market and the ICEX-15 index has declined somewhat in the 4th quarter. Despite this decline, Landsbanki’s profitability can be expected to significantly surpass its stated objective.

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SLIDE 26

Targets

30 Sep Key figures % 2004 Targets Return on equity before taxes 82.2 18-20 Return on equity after taxes 65.6 15-17 Cost-income ratio 37 < 55 Tier I 8.7 6,5 - 7 - 8 CAD ratio 11.7 9 - 10 - 11 Provisions / average lending position 0.91 <1,0

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SLIDE 27

Current State of the Bank

  • Total issued nominal capital

ISK 8,100 million

  • Stock price today 12.7
  • Landsbanki market value ISK

102.9 billion

  • Total equity ISK 37.9 billion –

Q ratio 2.71

12,7 0,00 2,00 4,00 6,00 8,00 10,00 12,00 14,00 16,00 2.12.98 2.3.99 2.6.99 2.9.99 2.12.99 2.3.00 2.6.00 2.9.00 2.12.00 2.3.01 2.6.01 2.9.01 2.12.01 2.3.02 2.6.02 2.9.02 2.12.02 2.3.03 2.6.03 2.9.03 2.12.03 2.3.04 2.6.04 2.9.04

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SLIDE 28

9 Month 2004 Performance Presentation of Landsbanki Íslands hf.

Reykjavik, 28 October 2004

Sigurjón Þ. Árnason GMD & CEO