Annual General Meeting of Arion Bank
The 2012 Annual General Meeting of Arion Bank was held yesterday, Thursday 22 March, at the Bank's headquarters in Borgartún, Reykjavík. The agenda contained standard AGM business.
A new Board of Directors was elected at the meeting. The following people were elected as full members of the Board of Directors: Agnar Kofoed-Hansen, Freyr Thórdarson, Gudrún Johnsen, Jón G. Briem, Måns Höglund and Monica Caneman. Agnar is the representative of Icelandic State Financial Investments on the Board.
The following people were elected as Alternates: Björg Arnardóttir, Gudjón Ólafur Jónsson, Gudrún Björnsdóttir, Hrönn Ingólfsdóttir, Kirstín Þ. Flygenring and Thóra Hallgrímsdóttir.
It was agreed at the meeting that no dividend would be paid out for 2011 and the salary of Board Directors would remain the same as the previous year. A new remuneration policy for the Bank was also adopted.
The report of the Board of Directors for 2011
Monica Caneman, Chairman of the Board of Directors of Arion Bank, read out the report of the Board of Directors. She discussed the progress that has been made in Iceland in recent years, with its falling treasury deficit, increased economic growth and the progress made in resolving corporate and household debt.
Monica stressed that uncertainties in Iceland sould be eliminated as quickly as possible, as this was one of the key prerequisites for increased investment, which the Icelandic economy so badly needed.
Monica also mentioned the important role that financial institutions have for the economies of all countries and the strong focus at Arion Bank on developing a financially robust bank so that Arion Bank can best serve its customers. She said that the Bank had managed to strengthen its capital ratio and increase the quality of the loan portfolio since it was acquired from the bankruptcy estate of Kaupthing.
Monica spoke of the risk that the Icelandic authorities could impose too many Iceland-specific rules on Icelandic financial companies or could impose taxes which were out of step with the taxes paid in other sectors or in Iceland’s neighbouring countries. This would undermine the competiveness of Icelandic financial companies and their ability to provide services to the business sector and personal customers.
In her report Monica mentioned the debate which had been taking place about separating investment and retail banking activities. She pointed out that she was not aware that any such debate was taking place in Sweden or elsewhere in the Nordic region.
Monica believes that the outlook for 2012 is bright. The Bank has successfully managed to reinforce the Bank’s infrastructure and foundations, creating a platform for further development.
Important milestones reached
Höskuldur H. Ólafsson, CEO of Arion Bank, discussed the annual financial statements for the last operating year. He said that the 2011 financial results were satisfactory in light of circumstances and last February's ruling by the Supreme Court.
Höskuldur underlined the fact that the quality of the Bank’s loan portfolio had improved during the year, primarily as a result of the progress made in corporate and personal debt recovery and also because of the acquisition of the mortgage portfolio from Kaupthing’s bankruptcy estate. He also said that the acquisition of the mortgage portfolio had resulted in greater diversity in the Bank's long-term funding.
Höskuldur discussed the highlights of 2011, mentioning the new products introduced during the year, including indexed and non-indexed mortgages at more competitive than ever interest rates. The Bank had also made advances in numerous other markets to great success, e.g. in asset management and corporate banking, adding new clients to the Bank.
Höskuldur went on to say that the listing of Hagar on the Icelandic stock exchange represented not only an important milestone for the Bank but also the entire Icelandic financial market. The huge demand in the Hagar offering and for the company’s shares on the market shows both Hagar's strength as a company and the need for more investment options in Iceland.
During the year Arion Bank undertook substantial streamlining measures. The Bank’s total workforce was reduced by 80 and the number of branches was reduced by merging three Reykjavík branches into a single state-of-the-art branch at Höfdi. Arion Bank has now reduced the number of branches by a third since the Bank was founded. Höskuldur made it clear that this stage of Arion Bank’s development was now over and the Bank would now be focusing on the future and stepping up and improving its services to customers.
Arion Bank reported net earnings of ISK 11.1 billion for 2011. The Bank’s total assets amounted to ISK 892 billion at the end of the year. Return on equity was 10.5% and the capital ratio was 21.2% at the end of 2011