MP Bank Profitable 1H 2012

28.8.2012

MP Bank returned a pre-tax profit of ISK 200 million in first half of 2012 compared to ISK 681 million pre-tax loss for 1H 2011. Profit after income tax and special banking tax is ISK 119 million. All main business areas of the bank are growing considerably.

Total assets increased by 43% during 1H to ISK 71.9 billion. Loans to customers have grown by 56% and amount to 20.7 billion at the end of June. The bank has expanded its deposit base by 39% during the first 6 months of this year to a total amount of ISK 51.1 billion, inclusive of money market borrowings.

Net operating income in 1H was ISK 2,007 million. Net interest income in 1H is ISK 851 million. Net fee and commission income is 623 million and net financial income is ISK 324 million. Shares in associates returned ISK 217 million.  

The bank is highly liquid with ISK 28.6 billion in cash and cash equivalents, up by 147% from beginning of the year.

Overall net operating income is above our projected budget, the excess performance supported by stronger than projected financial income and share in profits of associates.

The bank was recapitalized by new shareholders in April 2011. Financial return of the bank is not comparable until after that time.

Key Financial Information

  • Loans to customers have increased from ISK 7.6 billion in Q2 2011 to ISK 20.7 billion by Q2 2012.
  • Deposits and money market borrowings have expanded by 39% to ISK 51.1 billion.
  • Net operating income in Q2 2012 was ISK 1,189 million compared with ISK 215 million in Q2 2011.
  • Pre-tax profit in Q2 2012 is ISK 151 million compared to a loss of 681 million in Q2 2011.
  • The bank´s tier 1 capital ratio was 14,2% remaining well above the 8% required minimum.
  • Liquidity cover ratio (LCR) is 250%.
  • The bank´s 90 day delinquency ratio after impairment was 0.4% at the end of June.
  • Share in associates improved significantly in 1H of 2012, mainly contributed by share in return of Teris.
  • Impairments are higher than anticipated. Impairment charges of ISK 254 million of which ISK 192 million specific allowances mostly attributed by one single legacy exposure. The bank  would have been more profitable by ISK 170 million excluding this one impairment.

Summary Financials – in ISK Million

Income statement 1.1.2012 – 30.6.2012

Net interest income
851.0
Net fee income
623.1
Net financial income
323.6
Share in associates
217.5
Other income
-7.2
Net operating income
2,008.0




Administrative expenses -1,554.2
Impairment
-253.8




Pre-tax income
200.0




Income tax
-38.6
Special tax on financial institutions -42.8




Profit

118.5

Balance sheet 30.6.2012

Cash and cash equivalents 28,569
Loan to Central Bank 4,118
Securities 15,246
Loans to customers 20,697
Investment in associates 559
Other assets 2,681
Total assets 71,869


Deposits and borrowings 51,064
Short positions 10,600
Other liabilities 4,985
Total liabilities 66,649


Share capital 5,550
Other equity -330
Total equity 5,220

Year on Year Comparison: Q2 ´11 vs. Q2 ´12 – in ISK million

  Q2 '12 Q2 '11 Change % change
Net interest income 473.8 -45.2 518.9 1,149%
Net fee income 291.7 72.2 219.5 304%
Net financial income 241.5 191.8 49.7 26%
Share in associates 164.3 -16.4 180.6 1,104%
Other income 18.2 12.9 5.3 41%
Net Operating Income 1,189.4 215.4 974.1 452%
         
Administrative expenses -821.3 -737.4 -83.9 11%
Impairment -217.3 -158.5 -58.8 37%
Pre-tax income 150.8 -680.6 831.4 122%
         
Total assets 71,868.5 49,456.3 22,412.3 45%
Loan book 20,696.7 7,559.7 13,137.0 174%
Total deposits 51,064.3 32,980.2 18,084.1 55%
         
NIM 2,8% -0,4%    

MP bank´s Developments During 1H 2012

MP bank is growing substantially and we are delighted to report that the bank has been profitable for 3 consecutive quarters. Our investment banking operation is performing well and maintains a leading position in the market. Our commercial banking division has expanded greatly and our lending to businesses has increased by 174% in a single year. Asset management within the bank and in our associates Júpiter and MP Pension is prospering, with assets under management amounting to ISK 60 billion. The latest addition to our operation, Lykill – leasing, is off to a strong start, already beyond projected results. We are certain that we will reach our goal of increased market share in the business areas we have chosen to focus on and develop the bank as an interesting investment opportunity for the stock market in the future“, says Sigurður Atli Jónsson, CEO of MP bank.