In our reports at previous AGMs the Board of Directors has stated clearly that despite good profit the performance of the bank's core operations needed to be improved. At the most recent AGM a new strategy was presented, the objective of which was to achieve long-term profitability of over 10% in four years time.
The bank prioritises its customers' needs and avails itself of opportunities arising, for instance, from a more cost-effective balance sheet structure, growing business, efficiency and cost restraint. Work is in progress on a large number of projects which are systematically followed up on. The bank's excellent employees ensure that the planned success will be achieved, and will continue.
From its establishment in 2008 and right up until the past year Landsbankinn hf. had limited access to foreign credit markets. At the end of 2009 an agreement was reached with the insolvent estate of the old bank (LBI) for loans in the form of bonds which, together with a contingent bond subsequently issued, totalled ISK 352 billion.
This debt has now been reduced to the equivalent of ISK 125 though agreements with LBI and the bank's new foreign funding. Full repayment of the debt to LBI is expected to be completed over the next two years. Landsbankinn's customers, both corporates and individuals, will benefit from this success.
In 2015 the savings banks Sparisjóður Vestmannaeyja and Sparisjóður Norðurlands turned to the bank to resolve their pressing financial difficulties.
The Icelandic Financial Supervisory Authority, FME, issued a decision on the merger of the former savings bank with Landsbankinn at the end of March 2015, and the latter merger was subsequently approved by supervisory authorities in September.
Landsbankinn saw opportunities in these mergers, while at the same time desiring to prevent the long and for the most part positive record of these savings banks from ending in disappointment for their customers, employees and owners.
The mergers increased the number of Landsbankinn's shareholders who are now close to two thousand.
Ahead are exciting times. The conclusion of precedent-setting court actions has reduced uncertainty and the relaxation of capital controls is planned. There is nothing to prevent the bank from being listed on the equity market and the state from selling its holding, if the government so desires.
Before these steps are taken that portion of the bank's equity in excess of the criteria set by the Board of Directors and supervisory authorities can be distributed. The Treasury can then reduce its debt, improving Iceland's sovereign credit rating and thereby that of all Icelandic borrowers.
Landsbankinn is well situated for market listing, with sound finances. Rapid growth is not the goal but rather reinforcing the bank's position and performance still further, to enable it to pay a steady and healthy dividend in coming years.
|National Treasury of Iceland||98.20%|
|Current and former employees of the bank*||0.78%|
|Former guarantee capital owners of the savings banks Sparisjóður Vestmannaeyja and Sparisjóður Norðurlands (other than the state)||0.11%|