Arion Bank’s financial results for Q2 2020

  • Arion Bank's earnings improved significantly
  • ISK 4,958 million net profit from continuing operations, 76% improvement over the second quarter of 2019
  • Return on equity of 10.5% compared to 4.3% in the second quarter of 2019
  • Net interest margin 2.9% and improves between years despite the falling interest rate environment
  • Core revenue increases 1.8% between years
  • Operating expenses decrease 3.5%, mainly due to organizational changes in 2019
  • Loan impairments decrease from the first quarter, but uncertainty persists due to the pandemic
  • Valitor's operations are improving, but volatility is likely to occur in discontinued operations at a lower level

Arion Bank generated net income of ISK 4,958 million from continuing operations and ISK 3,676 million from continuing operations in the first six months of the year in the second quarter. Net profit was 4,913 million ISK in the quarter and 2,742 million ISK in the first half of the year. The return on equity was 10.5% in the quarter and 2.9% in the first six months of the year.

The balance sheet total amounted to ISK 1,182 billion at the end of June 2020 compared to ISK 1,082 billion at the end of 2019. Cash and cash equivalents increased because the proposed dividend payment of ISK 10 billion did not materialize, the bank issued AT1 in February and deposits increased. Loans to customers increased slightly compared to the end of 2019, mainly due to mortgage loans. Deposits increased by 12.8% compared to the end of 2019. Equity stood at ISK 189 billion at the end of June, compared to ISK 190 billion at the end of 2019.

The bank's capital ratio was 28.1% at the end of June 2020 compared to 24.0% at the end of 2019. The CET 1 ratio was 22.9% at the end of June 2020 compared to 21.2% at the end of 2019. The Group's equity increased compared to the end of 2019 by ISK 28.1 billion, mainly due to the successful issuance of an additional $ 1 million Tier 1 capital instrument in February 2020 and the decision by the Board of Directors not to propose dividends related to operations in 2019 given Covid -19 pandemic paid.

The bank is committed to its medium-term goals, provided the economy recovers in the medium term.

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Benedikt Gíslason, CEO of Arion Bank"data-reactid =" 26 ">Benedikt Gíslason, CEO of Arion Bank

“Arion Bank's financial results for the second quarter are extremely satisfactory and we have achieved our goal of a 10% return on equity. This is particularly gratifying as the bank's capital ratio is exceptionally high and far above the requirements of the regulatory authorities. Regular business developed positively in the quarter, and unusually high financial income from both shares and fixed-income investments had a very positive impact on earnings. Improving regular operations remains a key priority. The subsidiaries Vörður and Stefnir are doing well and the Valitor for sale has reduced its losses following a restructuring at the beginning of the year. The aim is to strengthen Valitor's core business and the company's activities in Denmark were sold in the quarter. Although there is still a long way to go before the restructuring goals are fully achieved, excellent results have already been achieved.

Despite the positive second quarter results, the Covid 19 pandemic is still causing significant uncertainty in the bank's operating environment. The impact of the pandemic on the national and international economy will continue to leave its mark on business. The main area of ​​uncertainty is the performance of the bank's asset portfolio. Loan impairments decreased significantly in the second quarter compared to the first quarter, taking into account that further impairments may be required in the current economic climate. However, due to the bank's robust capital and liquidity positions, it is well positioned to cope with current conditions.

There was strong demand for mortgages during the quarter, both for new loans and for refinancing existing loans. Lower interest rates have undoubtedly helped, and the bank lent ISK 17 billion in new mortgages in the second quarter. In addition, corporate support loans, which were part of a series of government measures and are partially or fully supported by the government, are proving popular and easy to process for our customers.

Arion Bank recently launched green deposits aimed at anyone who wants to contribute to a greener future. First, green deposits are used to finance customers' investments in vehicles that run on green energy. Green vehicles are a good starting point since almost all of Iceland's electricity comes from sustainable sources. Offering our customers the opportunity to make green deposits is an innovative step in Iceland and is in line with the bank's environmental and climate policies, according to which we want to focus more on funding projects related to sustainable development and green infrastructure.

In May, we combined our business services in the Reykjavík region into a single unit at the bank's headquarters. It brings together a dedicated team of experienced specialists from our offices in the Reykjavik region, who focus on SMEs. The aim of creating the Corporate Business Hub is to improve our services for companies in the Reykjavík region and to make our specialized services and expert advice more accessible to our customers. It is also part of the ongoing trend at the bank to adapt our services to the new and changing needs of our customers, with a focus on digital solutions and personal financial advice. "

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Investor meeting in English on July 30th at 10:30 a.m.CET (8:30 a.m.GMT)"data-reactid =" 37 ">Investor meeting in English on July 30th at 10:30 a.m.CET (8:30 a.m.GMT)

Arion Bank will host a meeting / webcast on Thursday, July 30 at 10:30 a.m.CET (8:30 GMT), with CEO Benedikt Gíslason, CFO Stefán Pétursson, Deputy CFO Eggert Teitsson and Head of Investor Relations Theodór Fridbertsson the results and answers present questions from participants. The meeting will be held in English at the bank's headquarters, Borgartún 19, Reykjavík, and will be broadcast live.

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The participants of Borgartún 19 have to register & nbsp;Here. The webcast will be available live Financialhearings.com& nbsp; and a link will also be made available on the bank's website at investor Relationships. "data-reactid =" 39 "> Those participating in Borgartún 19 must register Here. The webcast will be available live Financialhearings.com A link will also be made available on the bank's website at investor Relationships.

To join the webcast over the phone and ask questions, please call the webcast below at the number below:

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "SE: +46 850 558 369 & nbsp;
Great Britain: +44 333 300 9261
Iceland: +354 800 7520
United States: +1 833 823 0586
"data-reactid =" 41 ">SE: +46 850 558 369
Great Britain: +44 333 300 9261
Iceland: +354 800 7520
United States: +1 833 823 0586

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For more information, please contact Theodór Fridbertsson, Head of Investor Relations at Arion Bank, at ir@arionbanki.is or by phone at + 354 856 6760."data-reactid =" 42 ">For more information, please contact Theodór Fridbertsson, Head of Investor Relations at Arion Bank, at ir@arionbanki.is or by phone at + 354 856 6760.

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For media inquiries, please contact Haraldur Gudni Eidsson, Head of Corporate Communications, at haraldur.eidsson@arionbanki.is or tel. +354 856 7108."data-reactid =" 43 ">For media inquiries, please contact Haraldur Gudni Eidsson, Head of Corporate Communications, at haraldur.eidsson@arionbanki.is or tel. +354 856 7108.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The financial calendar of Arion Bank is available on the website Bank website. "data-reactid =" 44 "> Arion Bank's financial calendar is available on the website Bank website.

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This is information that Arion Bank hf. is required to publish according to the EU Market Abuse Regulation. The information has been submitted for publication by the agency of the above contacts."data-reactid =" 45 ">This is information that Arion Bank hf. is required to publish according to the EU Market Abuse Regulation. The information has been submitted for publication by the agency of the above contacts.

<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Attachments"data-reactid =" 48 ">Attachments



Source link

Be the first to comment

Leave a Reply

Your email address will not be published.


*