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    Arion Bank's 9 months 2014 financial results
    18.11.2014

    Arion Bank's 9 months 2014 financial results

    Arion Bank's 9 months 2014 financial results - mynd

    Arion Bank reported net earnings of ISK 22.6 billion for the first nine months of 2014, compared with ISK 10.1 billion for the same period of 2013. Return on equity was 19.9%, compared with 10.0% in the same period of 2013. Total assets amounted to ISK 942.2 billion, compared with ISK 938.9 billion at the end of 2013. 

    The Bank’s capital ratio at the end of the period was 24.6%, compared with 23.6% at the end of 2013. 

    Highlights of the interim financial statement: 
    • Net earnings of ISK 22.6 billion, compared with ISK 10.1 billion during the same period of 2013. 
    • Earnings during the third quarter of 2014 of ISK 5.2 billion, compared with ISK 4.2 billion during the third quarter of 2013.

    • Operating income increased between years to ISK 38.3 billion, compared with ISK 31.6 billion in the same period of 2013. The largest increase was in net financial income.
    • Net interest income of ISK 18.3 billion, the same amount as for the first nine months of 2013. 
    • Net commission income of ISK 10.1 billion, compared with ISK 8.3 billion during the same period of 2013. The increase is largely attributable to higher commission income on cards and to activities in Investment Banking. 
    • Income tax and the bank levy amounted to ISK 6.5 billion, compared with ISK 3.1 billion during the same period of 2013. 
    • Earnings from discontinued operations of ISK 6.6 billion, compared with a loss of ISK 3 million in the same period of 2013. These earnings relate almost entirely to the sale of the Bank’s 18.8% shareholding in HB Grandi hf. in the second quarter of 2014.
    • Operating expenses of ISK 18.6 billion, compared with ISK 18.2 billion during the same period of 2013.
    • The net valuation change during the period is positive, amounting to ISK 2.9 billion, compared with a negative figure of ISK 119 million in the same period last year. The net valuation change on loans to companies totalled ISK 2.2 billion during the first nine months and retail loan write-downs amounted to ISK 0.2 billion. The valuation increase of other assets totalled ISK 0.7 billion.
    • Return on equity was 19.9%, compared with 10.0% in the same period of 2013. 
    • The net interest margin as a percentage of the average interest-bearing assets was 2.9%, the same as for the first nine months of 2013.
    • The cost-to-income ratio was 48.7%, compared with 57.6% in the same period of 2013, mainly because of an increase in operating income compared with last year. 
    • Total assets of ISK 942.2 billion, compared with ISK 938.9 billion at the end of 2013. 
    • Total equity amounted to ISK 159.8 billion, compared with ISK 144.9 billion at the end of 2013. The Bank paid a dividend of ISK 7.8 billion to its shareholders during the period.
    • The capital ratio was 24.6% at the end of the period, compared with 23.6% at the end of 2013. 

    Höskuldur H. Ólafsson, CEO of Arion Bank: 

    “The Bank’s financial results for the first nine months of 2014 are strong, and return on equity is around 20%. Irregular items have had a positive influence on these results, particularly the Bank’s sale of some of its shareholding in HB Grandi and the subsequent stock market flotation of the company in April. We are pleased to see continued stability in the Bank’s core operations and all income generating business segments have yielded satisfactory results. We particularly welcome the growth in commission income, up 22% from last year and moving closer to our target. Looking ahead we still have challenges on the cost side. 

    The Bank’s capital ratio remains robust, something we consider important when our operating environment is still subject to uncertainty. 

    We have been successful in reducing the ratio of non-performing loans and expect this to continue further during the year. Problem loans have been increasing in many areas of the world, while the trend in Iceland in recent years has been the reverse, as household and corporate debt decreases. In fact corporate debt as a percentage of GDP is at its lowest level since late 2004.”

    Press release Arion Bank 9 M 2014

    Arion Bank Interim Consolidated Financial Statements 30 September 2014

    Investor Presentation Arion Bank's 9M 2014 Financial Results