LANDSBANKI
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'Landsbanki', officially 'Landsbanki Ãslands' (OMXI: LAIS), also commonly known as 'Landsbankinn' in Iceland, is a growing European bank with total assets of ISK 2,317 billion (EUR 26.4 bn) at 31 March 2007 and a market capitalisation of ISK 383 billion (EUR 4.4 bn) at 3 May 2007. Landsbanki is rated by Moody's (Aa3 / P-1 / C / Stable) and Fitch (A / F1 / B/C / Stable).
Since its establishment in 1885 (commenced operations in 1886) Landsbanki has been instrumental in the economic development of business and industry in Iceland. Landsbanki served as the central bank of Iceland from 1927 until 1961. At the time, this interest was primarily directed towards note issuance rather than monetary policy. It was later replaced in this capacity by the Central Bank of Iceland at the behest of the Althing. While still publicly owned it went through a state-directed merger with Samvinnubanki (Cooperative Bank). Landsbanki Ãslands was converted to a public limited company on January 1, 1998. The firm was subsequently privatized in stages between 1998 and 2003.
Landsbanki has positioned itself as Iceland's primary provider of general and specialised financial services to individuals, corporate entities and institutions. The bank holds a market share of over 30% in all major business segments and has the country's most extensive branch network. At year-end 2006, Landsbanki provided close to 40% of corporate lending in Iceland, and for around 60% of companies listed on the OMX Iceland Stock Exchange, Landsbanki was their principal bank or one of two banks with whom they did business. The leading provider of M&A, derivatives, equity and fixed income services, Landsbanki also has a more than 40% market share in FX. In addition, Landsbanki provides a full range of asset management services, with a 34% market share in domestic funds.
Building on its strong foundation in Iceland, Landsbanki has successfully extended its financial operations into new markets, focusing on serving mid-cap corporates in Europe in a transactional setting. The bank's product line includes access to both debt and equity markets; its research department includes some 90 analysts covering more than 800 European stocks locally.
Landsbanki currently has 40 branches and sub-branches throughout Iceland, plus a wide-ranging network of international correspondent banks. Landsbanki and its subsidiaries have offices operating in 15 different countries, including the major financial centres of Europe, and North American representation in New York, Winnipeg and Halifax.
Main articles: History of Landsbanki
In establishing Landsbanki, the Icelandic parliament hoped to boost monetary transactions and encourage the country’s nascent industries. Following its opening on 1 July 1886, the bank's first decades of operation were restricted by its limited financial capacity; it was little more than a savings and loan society. Following the turn of the 20th century, however, Icelandic society progressed and prospered as industrialisation finally made inroads, and the bank grew and developed in parallel to the nation. In the 1920s Landsbanki became Iceland's largest bank, and was made responsible for issuing its bank notes. After the issuing of bank notes was transferred to the newly established Central Bank of Iceland in 1961, Landsbanki continued to develop as a commercial bank, expanding its branch network in the ensuing decades.
Liberalisation of financial services, beginning in 1986, opened up new opportunities, which the bank managed to take advantage of despite some economic adversity. In 1997, Landsbanki was incorporated as a limited-liability company, and the ensuing privatisation finally concluded in 2003. Landsbanki now operates as a privately owned bank, competing in a free market, with substantial international activities added to its traditional Icelandic operations.
★ The bank’s after-tax profit in Q1 2007 was ISK 13.8bn (€ 154m), as compared with ISK 14.3bn in Q1 2006. Profit in Q4 2006 was ISK 14.1 billion (bn).
★ After-tax return on equity (ROE) in Q1 was 45.2% as compared with a ROE of 36.3% for 2006 as a whole.
★ The group’s core income (interest margin plus commission income) was ISK 20.6bn (€ 230m), a YoY quarterly increase of ISK 4.8bn (€ 54m) or 31%, and an increase of ISK 3.1bn (€ 35m) or 17% from Q4 2006.
★ Revenue from operations abroad was ISK 12.3bn (€ 137m), or 42% of total operating revenue.
★ Core income from operations abroad was ISK 10.7bn (€ 119m) or 52% of the Group’s core income in Q1 2007.
★ The cost-income ratio for the period was 42.2%.
★ Trading gains and investment income amounted to ISK 8.8bn (€ 98m), as compared to ISK 11.2bn in Q1 2006.
★ Landsbanki’s total assets amounted to ISK 2,317bn as of the end of March 2007. Converted to €, the bank’s total assets amounted to € 26.4bn at the end of March, up from € 23.2bn at the beginning of the year.
★ Customer deposits grew by 34% in Q1 2007 to total ISK 913bn (€ 10.4bn) at the end of March. They represent 62% of total customer lending as compared to 48% at the beginning of this year.
★ The bank's capital adequacy ratio (CAD) was 13.4% at the end of March. Tier 1 capital was 11.7%.
The Bank’s after-tax profit in 2005 was ISK 25 billion. This is an increase of 97% over 2004, when its net profit was ISK 12.7 billion.
After tax return on equity (ROE) was 45.8%. The Bank’s equity rose from ISK 38 billion at the beginning of the year to ISK 110 billion at year-end. Total assets at year-end amounted to ISK 1,405 billion.
According to a survey by IMG Gallup in December 2005, Landsbanki has a leading share of the domestic individual market, as 30% of individuals surveyed bank with Landsbanki.
At the end of 2005, Landsbanki provided close to 40% of corporate lending in Iceland and for around 60% of companies listed on the Iceland Stock Exchange, Landsbanki was their principal bank or one of two banks with whom they did business. Landsbanki’s share of equity brokerage in 2005 was 32% and for bonds 24%.[1]
The relatively limited size of the Icelandic market prompted Landsbanki, first among Icelandic commercial banks, to expand and diversify outside of Iceland when it acquired the London-based Heritable Bank in 2000. In 2005, Landsbanki acquired three European securities houses: Teather & Greenwood, located in London and Edinburgh; Kepler Equities, headquartered in Paris; and Merrion Capital Group in Dublin. Currently these subsidiaries deal in securities and prepare equity research in London, Paris, Frankfurt, Zurich, Geneva, Milan, Madrid and Amsterdam. Landsbanki's own branches in London and Amsterdam specialise in structured finance and commercial finance (asset-based lending), while Landsbanki Luxembourg handles private banking and wealth management, as well as corporate services.
The bank’s major subsidiaries are:
★ 'Heritable Bank' [1] (London) - Residential Development Finance, Mortages, Specialty Finance
★ 'Teather & Greenwood' [2] (London) - Corporate and Institutional Broking, Corporate Finance, Equity Research
★ 'Kepler Equities' [3] (Paris, Frankfurt, Amsterdam, Milan, Zürich, Geneva and Madrid) - Institutional Broking, Asset Management, Corporate Finance, Research
★ 'Landsbanki Luxembourg'[4] (Luxembourg) – Private Banking, Asset Management
★ 'Merrion Capital' [5] (Dublin) - Corporate and Institutional Broking, Corporate Finance, Research
Landsbanki operates branches in London, Amsterdam and Oslo and representative offices in Halifax, Canada; and Thorshavn, Faroe Islands. Since 2006, it has offered online savings to United Kingdom customers, trading as Icesave [6].
A deposit programme for the UK market, Icesave [7], was launched in October 2006. An easy-access, on-line savings account, Icesave became an instant success, transforming Landsbanki’s balance sheet and funding profile. Since launched, Icesave has grown rapidly and at 31 March 2007 Icesave deposits totalled £2.8 bn with over 80,000 accounts opened.
A key factor in Icesave’s appeal to savers is its interest rate guarantee: The gross Annual Equivalent Rate of Interest (AER) paid on balances over £250 is guaranteed to exceed the Bank of England Base Rate by at least 0.25% until 1 October 2009 and thereafter not to be lower than the Bank of England Base Rate until 1 October 2011. As a result, Icesave quickly became the market leader in internet deposit savings accounts in UK in terms of interest rates.
Landsbanki’s support for Icelandic football is an important aspect of the Bank’s marketing and image policy. In September 2005, an agreement was concluded with the Football Association of Iceland, under which the Icelandic premier league for both men and women will be called the Landsbanki Premier League (Landsbankadeildin) for the next four seasons. The financial backing for football is, however, primarily directed towards supporting sports for children and youth divisions.
★ Glitnir
★ Kaupthing Bank
★ Seðlabanki Ãslands
★ Official web site (Icelandic)
★ Official web site (English)
★ Landsbanki Investor Relations
★ Icesave
Since its establishment in 1885 (commenced operations in 1886) Landsbanki has been instrumental in the economic development of business and industry in Iceland. Landsbanki served as the central bank of Iceland from 1927 until 1961. At the time, this interest was primarily directed towards note issuance rather than monetary policy. It was later replaced in this capacity by the Central Bank of Iceland at the behest of the Althing. While still publicly owned it went through a state-directed merger with Samvinnubanki (Cooperative Bank). Landsbanki Ãslands was converted to a public limited company on January 1, 1998. The firm was subsequently privatized in stages between 1998 and 2003.
Landsbanki has positioned itself as Iceland's primary provider of general and specialised financial services to individuals, corporate entities and institutions. The bank holds a market share of over 30% in all major business segments and has the country's most extensive branch network. At year-end 2006, Landsbanki provided close to 40% of corporate lending in Iceland, and for around 60% of companies listed on the OMX Iceland Stock Exchange, Landsbanki was their principal bank or one of two banks with whom they did business. The leading provider of M&A, derivatives, equity and fixed income services, Landsbanki also has a more than 40% market share in FX. In addition, Landsbanki provides a full range of asset management services, with a 34% market share in domestic funds.
Building on its strong foundation in Iceland, Landsbanki has successfully extended its financial operations into new markets, focusing on serving mid-cap corporates in Europe in a transactional setting. The bank's product line includes access to both debt and equity markets; its research department includes some 90 analysts covering more than 800 European stocks locally.
Landsbanki currently has 40 branches and sub-branches throughout Iceland, plus a wide-ranging network of international correspondent banks. Landsbanki and its subsidiaries have offices operating in 15 different countries, including the major financial centres of Europe, and North American representation in New York, Winnipeg and Halifax.
| Contents |
| History |
| 2006 operations and profit |
| 2005 operations and profit |
| International operations |
| Icesave |
| Sponsorship of sports: Landsbankadeildin |
| See also |
| External links |
History
Main articles: History of Landsbanki
In establishing Landsbanki, the Icelandic parliament hoped to boost monetary transactions and encourage the country’s nascent industries. Following its opening on 1 July 1886, the bank's first decades of operation were restricted by its limited financial capacity; it was little more than a savings and loan society. Following the turn of the 20th century, however, Icelandic society progressed and prospered as industrialisation finally made inroads, and the bank grew and developed in parallel to the nation. In the 1920s Landsbanki became Iceland's largest bank, and was made responsible for issuing its bank notes. After the issuing of bank notes was transferred to the newly established Central Bank of Iceland in 1961, Landsbanki continued to develop as a commercial bank, expanding its branch network in the ensuing decades.
Liberalisation of financial services, beginning in 1986, opened up new opportunities, which the bank managed to take advantage of despite some economic adversity. In 1997, Landsbanki was incorporated as a limited-liability company, and the ensuing privatisation finally concluded in 2003. Landsbanki now operates as a privately owned bank, competing in a free market, with substantial international activities added to its traditional Icelandic operations.
2006 operations and profit
★ The bank’s after-tax profit in Q1 2007 was ISK 13.8bn (€ 154m), as compared with ISK 14.3bn in Q1 2006. Profit in Q4 2006 was ISK 14.1 billion (bn).
★ After-tax return on equity (ROE) in Q1 was 45.2% as compared with a ROE of 36.3% for 2006 as a whole.
★ The group’s core income (interest margin plus commission income) was ISK 20.6bn (€ 230m), a YoY quarterly increase of ISK 4.8bn (€ 54m) or 31%, and an increase of ISK 3.1bn (€ 35m) or 17% from Q4 2006.
★ Revenue from operations abroad was ISK 12.3bn (€ 137m), or 42% of total operating revenue.
★ Core income from operations abroad was ISK 10.7bn (€ 119m) or 52% of the Group’s core income in Q1 2007.
★ The cost-income ratio for the period was 42.2%.
★ Trading gains and investment income amounted to ISK 8.8bn (€ 98m), as compared to ISK 11.2bn in Q1 2006.
★ Landsbanki’s total assets amounted to ISK 2,317bn as of the end of March 2007. Converted to €, the bank’s total assets amounted to € 26.4bn at the end of March, up from € 23.2bn at the beginning of the year.
★ Customer deposits grew by 34% in Q1 2007 to total ISK 913bn (€ 10.4bn) at the end of March. They represent 62% of total customer lending as compared to 48% at the beginning of this year.
★ The bank's capital adequacy ratio (CAD) was 13.4% at the end of March. Tier 1 capital was 11.7%.
2005 operations and profit
The Bank’s after-tax profit in 2005 was ISK 25 billion. This is an increase of 97% over 2004, when its net profit was ISK 12.7 billion.
After tax return on equity (ROE) was 45.8%. The Bank’s equity rose from ISK 38 billion at the beginning of the year to ISK 110 billion at year-end. Total assets at year-end amounted to ISK 1,405 billion.
According to a survey by IMG Gallup in December 2005, Landsbanki has a leading share of the domestic individual market, as 30% of individuals surveyed bank with Landsbanki.
At the end of 2005, Landsbanki provided close to 40% of corporate lending in Iceland and for around 60% of companies listed on the Iceland Stock Exchange, Landsbanki was their principal bank or one of two banks with whom they did business. Landsbanki’s share of equity brokerage in 2005 was 32% and for bonds 24%.[1]
International operations
The relatively limited size of the Icelandic market prompted Landsbanki, first among Icelandic commercial banks, to expand and diversify outside of Iceland when it acquired the London-based Heritable Bank in 2000. In 2005, Landsbanki acquired three European securities houses: Teather & Greenwood, located in London and Edinburgh; Kepler Equities, headquartered in Paris; and Merrion Capital Group in Dublin. Currently these subsidiaries deal in securities and prepare equity research in London, Paris, Frankfurt, Zurich, Geneva, Milan, Madrid and Amsterdam. Landsbanki's own branches in London and Amsterdam specialise in structured finance and commercial finance (asset-based lending), while Landsbanki Luxembourg handles private banking and wealth management, as well as corporate services.
The bank’s major subsidiaries are:
★ 'Heritable Bank' [1] (London) - Residential Development Finance, Mortages, Specialty Finance
★ 'Teather & Greenwood' [2] (London) - Corporate and Institutional Broking, Corporate Finance, Equity Research
★ 'Kepler Equities' [3] (Paris, Frankfurt, Amsterdam, Milan, Zürich, Geneva and Madrid) - Institutional Broking, Asset Management, Corporate Finance, Research
★ 'Landsbanki Luxembourg'[4] (Luxembourg) – Private Banking, Asset Management
★ 'Merrion Capital' [5] (Dublin) - Corporate and Institutional Broking, Corporate Finance, Research
Landsbanki operates branches in London, Amsterdam and Oslo and representative offices in Halifax, Canada; and Thorshavn, Faroe Islands. Since 2006, it has offered online savings to United Kingdom customers, trading as Icesave [6].
Icesave
A deposit programme for the UK market, Icesave [7], was launched in October 2006. An easy-access, on-line savings account, Icesave became an instant success, transforming Landsbanki’s balance sheet and funding profile. Since launched, Icesave has grown rapidly and at 31 March 2007 Icesave deposits totalled £2.8 bn with over 80,000 accounts opened.
A key factor in Icesave’s appeal to savers is its interest rate guarantee: The gross Annual Equivalent Rate of Interest (AER) paid on balances over £250 is guaranteed to exceed the Bank of England Base Rate by at least 0.25% until 1 October 2009 and thereafter not to be lower than the Bank of England Base Rate until 1 October 2011. As a result, Icesave quickly became the market leader in internet deposit savings accounts in UK in terms of interest rates.
Sponsorship of sports: Landsbankadeildin
Landsbanki’s support for Icelandic football is an important aspect of the Bank’s marketing and image policy. In September 2005, an agreement was concluded with the Football Association of Iceland, under which the Icelandic premier league for both men and women will be called the Landsbanki Premier League (Landsbankadeildin) for the next four seasons. The financial backing for football is, however, primarily directed towards supporting sports for children and youth divisions.
See also
★ Glitnir
★ Kaupthing Bank
★ Seðlabanki Ãslands
External links
★ Official web site (Icelandic)
★ Official web site (English)
★ Landsbanki Investor Relations
★ Icesave
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