MP Bank Interim Financial Statements

12.10.2011

1 January to 30 June 2011

MP bank acquired the Icelandic and Lithuanian assets and operations of EA fjárfestingarfélag hf. (formerly MP banki hf.) on 12 April 2011. The bank's share capital was increased to ISK 5.4 billion by the subscription of over 40 domestic and foreign investors.  A new board was appointed to lead the bank. The shareholders include insurance companies, pension funds and individuals. One shareholder, Titan Investments, holds over 10% of the share capital.

MP bank is the only Icelandic bank which has been restructured and refunded independently and without any government assistance.

At the end of June 2011, MP Bank had total assets of ISK 49.5 billion. Total liabilities were ISK 44.7 billion, of which ISK 32.8 billion are deposits. The capital adequacy ratio (CAD) stood at 20.3%, considerably above the minimum regulatory requirement of 8%.

Losses for the period 1 January to 30 June 2011 amounted to ISK 560 million after taxes. Net interest income was negative at ISK 45 million. Net fee and commission income was ISK 72 million and net operating income was ISK 215 million. The financial results of ALFA Securities are not included with the bank´s financial statements until fourth quarter.

The loss simply reflects the fact that the bank was not able to operate to its full capacity during the preparation of the share capital increase and acquisition process.

Improved Results for Third Quarter and Positive Outlook for 4th Quarter

The bank's operations have been strengthened considerably since its share capital increase.

On 1 July MP bank announced the recruitment of Mr. Sigurður Atli Jónsson as the bank's new CEO.

The bank's management team is working from financial targets set in July that will improve operational income during the coming months such that the bank should be profitable by the first quarter of 2012.

Results of third quarter are over target and with positive results in September. Operations are improving faster than estimated.

  • The bank´s loan portfolio has increased by 31% in the third quarter.
  • Deposits have increased by 12%.
  • Revenues have increased considerably and were ISK 165 million in the third quarter.
  • The bank has a very robust capital base and stable funding through its deposits. It is highly liquid with 30% of its assets in cash or cash equivalents.

The bank has strengthened its position in various areas in the third quarter:

  • In asset management by the acquisition of ALFA Securities in June.
  • In corporate finance by the acquisition of the corporate finance division of Saga Investment bank.
  • In FX trading and lending with the recruitment of new employees.

Furthermore, the bank has recently announced its strategic decision to focus on pension funds management in Lithuania and withdraw from other operations.

4th quarter results are expected to be positive.

“The circumstances are certainly demanding. It takes a certain amount of time to activate all business areas after the share capital increase. The external circumstances are no less demanding since the economy and financial markets are still moving quite slowly up from the lowest point. We are however delighted that we are managing to build our momentum rather quickly. We are welcoming new clients every day, both from the business segment and also individuals. Our loan portfolio is growing according to plans and we have a leading position in capital markets, - says Sigurður Atli Jónsson, CEO of MP bank.