H1 2004 Performance Presentation of Landsbanki slands hf Reykjavk, - - PowerPoint PPT Presentation

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H1 2004 Performance Presentation of Landsbanki slands hf Reykjavk, - - PowerPoint PPT Presentation

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H1 2004 Performance Presentation of Landsbanki slands hf Reykjavk, 29 July 2004 Sigurjn T. rnason Halldr J. Kristjnsson GMDs & CEOs Landsbanki H1 interim accounts The presentation compares H1 results of the years

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SLIDE 1

H1 2004 Performance Presentation of Landsbanki Íslands hf

Reykjavík, 29 July 2004

Sigurjón T. Árnason Halldór J. Kristjánsson GMD’s & CEO’s

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SLIDE 2

Landsbanki H1 interim accounts

  • The presentation compares H1 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 7,426 million before taxes.
  • Earnings after taxes amounted to ISK 6,035 million, increasing by 394%

from previous year.

  • Total assets grew to ISK 558 billion, which is an increase of 25% for the first

six months of the year 2004.

  • Return on equity before taxes and minority interests was 68% in H1 2004

and return on equity after taxes was 54% for the period.

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SLIDE 3

Profit and loss account

ISK million

2004 2003 30.6.2004 30.6.2003 Diff % Q2 Q1 Q4 Q3 Interest revenues.......................... 15,523 10,025 5,498 55% 8,772 6,751 6,453 5,393 Interest expenses......................... 9,142 5,848 3,294 56% 5,306 3,836 3,721 2,971 Net interest revenues 6,381 4,177 2,204 53% 3,466 2,915 2,732 2,422 Net profit from shareholdings....... 44 67

  • 23
  • 34%

26 18 6 71 Commissions and fees................. 4,460 3,366 1,095 33% 2,054 2,406 1,818 1,774 Commission expenses.................

  • 597
  • 314
  • 284

90%

  • 301
  • 296
  • 299
  • 230

Trading gains................................ 5,382 752 4,630 616% 1,161 4,221 807 1,114 Other revenues............................. 74 548

  • 474
  • 86%

26 48 110 60 Operating revenues 9,363 4,420 4,944 112% 2,966 6,397 2,443 2,789 Net operating revenues 15,744 8,597 7,147 83% 6,432 9,313 5,175 5,211

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SLIDE 4

Interest spread as a ratio of average capital position

3.25% 2.99% 2.86% 3.45% 2.83% 2.62% 2.58%

2.0% 2.5% 3.0% 3.5% 4.0% 1998 1999 2000 2001 2002 2003 06 2004

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SLIDE 5

Net profit from shareholdings

Book Total Owner- Profit value profit ship share

VISA - Iceland Ltd........................... 504 93 38% 35 Eurocard - Iceland Ltd.................... 191 87 20% 17 Intrum Justitia hf............................. 86 54 25% 11 The Bank's Data Center................. 465 35% Other partially owned companies... 99

  • 19

1,345 44

ISK million

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SLIDE 6

Commissions and fees

2004 2003 30.6.2004 30.6.2003 Diff % Q2 Q1 Q4 Q3 Securities..................................... 1,090 841 249 30% 359 732 396 396 Asset management...................... 481 318 162 51% 258 223 273 85 Foreign trade............................... 743 542 201 37% 343 400 106 338 Lending........................................ 412 324 87 27% 202 209 206 164 Cards........................................... 423 393 30 8% 210 213 205 202 Interbank revenues...................... 507 333 174 52% 256 251 227 200 Collection and payment services. 203 236

  • 33
  • 14%

113 90 119 128 Other commissions and fees....... 69 78

  • 8
  • 11%

36 34 33 35 Subsidiaries................................. 533 302 231 77% 277 256 255 226 4,460 3,366 1,095 33% 2,054 2,406 1,818 1,774 Commission expenses................. 597 314 284 90% 301 296 299 230 Net commissions and fees........ 3,863 3,052 811 27% 1,753 2,110 1,520 1,544

ISK million

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SLIDE 7

Trading gains

2004 2003 30.6.2004 30.6.2003 Diff % Q2 Q1 Q4 Q3 Foreign exchange............. 139 95 44 46% 64 75 93

  • 35

Bond trading..................... 670 280 390 140% 66 604

  • 67
  • 179

Stock trading..................... 4,572 377 4,196 1114% 1,031 3,542 781 1,328 5,382 752 4,630 616% 1,161 4,221 807 1,114

ISK million

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SLIDE 8

Profit and loss account

2004 2003 30.6.2004 30.6.2003 Diff % Q2 Q1 Q4 Q3 Net operating revenues.................. 15,744 8,597 7,147 83% 6,432 9,313 5,175 5,211 Payroll expenses............................ 3,321 2,431 891 37% 1,701 1,620 1,741 1,485 Administrative expenses................ 2,140 1,641 499 30% 1,124 1,015 1,079 842 Depreciation of fixed assets........... 715 460 255 55% 235 480 388 459 Other expenses.............................. 173 197

  • 24
  • 12%

20 153 4 89 Operating expenses 6,349 4,728 1,621 34% 3,080 3,269 3,212 2,874 Net provision for credit losses........ 1,969 2,430

  • 461
  • 19%

978 991 1,418 809 Profit before taxes 7,426 1,439 5,988 416% 2,374 5,053 545 1,528 Taxes............................................. 1,337 165 1,172 710% 405 931 75 216 Profit before minority interests 6,090 1,274 4,816 378% 1,968 4,121 470 1,312 Minority interests............................ 54 53 2 3% 27 27 28 19 Net profit 6,035 1,221 4,814 394% 1,941 4,094 442 1,293

ISK million

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SLIDE 9

Cost-income ratio

75% 70% 71 % 66% 61 % 57% 40%

20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 1998 1999 2000 2001 2002 2003 06 2004

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SLIDE 10

Ratio of provision to lending position at period- end

0.88% 0.87% 0.83% 1.17% 1.33% 1.47% 0.92%

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1998 1999 2000 2001 2002 2003 06 2004

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SLIDE 11

Overdue loans

3.6% 4.9% 3.4% 2.2% 1.9% 1.2% 3.2% 1.0% 5.1% 3.4% 3.5% 1.5% 3.4% 2.3% 2.4% 4.0% 2.1% 2.3% 2.5% 1.1% 1.8% 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 Total overdue > 30 days > 90 days

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SLIDE 12

Provisions for credit losses

06 2004 2003 2002 2001 2000 1999 1998 Provisions made............................................. 1,995 4,787 2,893 2,322 1,402 1,145 1,000 Write-offs........................................................ 1,643 3,709 1,571 1,191 742 768 1,202 Collected previously written-off loans............. 26 131 30 24 62 39 58 Addition from partially owned subsidiary........ 471 20 157 Reserves at period-end.................................. 8,051 7,700 6,622 4,829 3,678 2,863 2,486 thereof - general.......................................... 2,508 2,201 1,864 1,412 1,350 1,069 842

  • special...........................................

5,543 5,498 4,757 3,417 2,329 1,794 1,644 Provision account as a % of lending.............. 1.9% 2.4% 3.1% 2.4% 2.2% 2.2% 2.2% Provision as a % of lending............................ 0.9% 1.5% 1.3% 1.2% 0.8% 0.9% 0.9% General provisions as a % of lending............. 0.6% 0.7% 0.9% 0.7% 0.8% 0.8% 0.7%

ISK million

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SLIDE 13

Profit

920 1,668 1,504 1,846 2,549 3,512 7,426 911 1,093 955 1,749 2,028 2,956 6,035

1 ,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 1 998 1 999 2000 2001 2002 2003 06 2004

Profit before taxes and minority interests Profit after taxes

ISK million

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SLIDE 14

Return on equity before taxes and minority interest

12.6% 17.5% 12.7% 13.9% 17.0% 20.9% 68.1%

0% 1 0% 20% 30% 40% 50% 60% 70% 1 998 1 999 2000 2001 2002 2003 06 2004

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SLIDE 15

Return on equity after taxes

12.4% 11.5% 8.1% 13.1% 13.5% 17.6% 54.0%

0% 1 0% 20% 30% 40% 50% 60% 1 998 1 999 2000 2001 2002 2003 06 2004

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SLIDE 16

Profit by Business Segments – H1 2004

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

Net interest revenues........... 6,081

  • 189

488 6,381 Operating revenues.............. 1,724 1,667 591 3,982 Trading gains........................

  • 28

5,384 26 5,382 Net operating revenues..... 7,777 6,862 1,105 15,744 Operating expenses........... 3,879 851 654 965 * 6,349 Provisions for credit losses... 1,812 5 152 1,969 Pre tax profit....................... 2,087 6,005 299

  • 965

7,426 * ISK 596 Million expenses from Q1

ISK million

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SLIDE 17

Revenue breakdown by countries

Iceland Britain Luxembourg Total Net interest revenues..................

4,990 416 974 6,381

Net profit from shareholdings.....

44 44

Net commissions........................

3,405 251 207 3,863

Trading gains..............................

5,356 26 5,382

Other revenues...........................

74 74 13,869 667 1,208 15,744

ISK million

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SLIDE 18

Total assets

1 58 1 93 239 269 278 448 558

50 100 150 200 250 300 350 400 450 500 550 600 1998 1999 2000 2001 2002 2003 06 2004

Loans have increased by 100% in the last 15 months

ISK billion

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SLIDE 19

Balance sheet

30.6.2004 31.12.2003 Change %

Cash and interbank operations......... 53,260 48,772 4,488 9% Loans................................................ 431,822 326,400 105,423 32% Securities and shareholding.............. 62,406 63,744

  • 1,339
  • 2%

Fixed assets...................................... 4,740 4,707 33 1% Other assets...................................... 6,265 4,616 1,649 36% Total assets 558,493 448,239 110,254 25% Financial institutions.......................... 51,516 43,840 7,676 18% Customer accounts........................... 188,579 152,320 36,259 24% Funding............................................. 262,663 209,357 53,306 25% Other items........................................ 7,685 6,389 1,296 20% Subordinated loans........................... 14,897 13,090 1,808 14% Minority interests............................... 897 862 35 4% Equity................................................ 32,256 22,382 9,874 44% Total liabilities and equity 558,493 448,239 110,254 25%

ISK million

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SLIDE 20

Securities and shareholdings

30.6.2004 31.12.2003 Change %

Bonds and other fixed-income securities............................ 19,600 38,696

  • 19,096
  • 49%

Equity and other variable-income securities....................... 41,461 23,708 17,752 75% Shares in subsidiaries and partially owned companies...... 1,345 1,340 5 0% Total securities and shareholdings 62,406 63,744

  • 1,339
  • 2%

Bonds and other fixed-income securities............................ 8,567 15,674

  • 7,107
  • 45%

Equity and other variable-income securities....................... 16,645 5,499 11,146 203% Forward and option contracts 25,212 21,173 4,039 19% Bonds and other fixed-income securities............................ 11,033 23,022

  • 11,989
  • 52%

Equity and other variable-income securities....................... 24,816 18,209 6,606 36% Shares in subsidiaries and partially owned companies...... 1,345 1,340 5 0% Net securities and shareholdings 37,194 42,571

  • 5,378
  • 13%

ISK million

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SLIDE 21

Equity

9,741 11,436 13,639 15,505 16,309 22,382 32,256

5,000 10,000 15,000 20,000 25,000 30,000 35,000 1998 1999 2000 2001 2002 2003 06 2004

ISK million

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SLIDE 22

Equity ratio - CAD

8.1 % 8.2% 7.5% 7.7% 7.7% 0.6% 1 .4% 1 .5% 2.9% 2.9% 3.0% 2.4% 7.2% 6.9%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 1998 1999 2000 2001 2002 2003 06 2004 Tier I Tier II and III

8.7% 10.1% 9.9% 10.6% 10.4% 8.7% 9.6%

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SLIDE 23

Prognosis

  • The conditions in the operating environment of financial institutions have

been favourable in Q1 2004.

  • The development of the Bank over the past months has been characterised

by high organic growth. Parallel to major growth in total assets and strengthened position in corporate lending Landsbanki has also strengthened its position in securities trading, asset management and private banking.

  • The development of equities and bonds was favourable and the Bank’s

capital gains from equities and bonds was substantially above budget.

  • If equity and bond prices remain stable throughout the year, the Bank’s

performance is likely to outperform set goals for return on equity after taxes is 15-17%.

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SLIDE 24

Targets

Key figures (%) 30.6.2004 Targets Return on equity before taxes....................................... 68.1 18-20 Return on equity after taxes.......................................... 54.0 15-17 Cost-income ratio.......................................................... 40 < 55 Tier I.............................................................................. 7.7 6,5 - 7 - 8 CAD ratio....................................................................... 10.1 9 - 10 - 11 Ratio of provisions to lending position at period-end..... 0.92 <1,0

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SLIDE 25

Current state of the Bank

  • Total issued nominal capital ISK 8,100 million
  • Stock price today 9,05
  • Landsbanki market value ISK 73.3 billion
  • Total equity ISK 32.3 billion – Q ratio 2,27

1 2 3 4 5 6 7 8 9 10 2.12.1998 2.3.1999 2.6.1999 2.9.1999 2.12.1999 2.3.2000 2.6.2000 2.9.2000 2.12.2000 2.3.2001 2.6.2001 2.9.2001 2.12.2001 2.3.2002 2.6.2002 2.9.2002 2.12.2002 2.3.2003 2.6.2003 2.9.2003 2.12.2003 2.3.2004 2.6.2004

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SLIDE 26

H1 2004 Performance Presentation of Landsbanki Íslands hf

Reykjavík, 29 July 2004

Sigurjón T. Árnason Halldór J. Kristjánsson GMD’s & CEO’s