MP Bank Delivers a ISK 251 Million Profit in 2012

Compared to 484 Million Loss in 2011

26.3.2013

MP Bank delivered a profit of ISK 251 million in 2012 after-tax compared to ISK 484 million after-tax loss in 2011. The profit before income tax and special banking tax is ISK 184 million.

The net operating income has more than doubled in 2012 amounting to ISK 3,995 million in 2012 compared to ISK 1,830 million in 2011. The net interest income was ISK 1,716 million in 2012 compared to ISK 459 million in 2011, an increase of 274%. 

The net fee and commission income was ISK 1,395 million compared to ISK 776 million the year before. The net financial income was ISK 637 million and shares in associates returned ISK 217 million.  

Growth in total assets was 39% and were ISK 69 billion at year end 2012. The loan portfolio more than doubled in 2012 and amounted to 28 billion at year end. The bank has expanded its deposit base by 34% in 2012 amounting to ISK 49 billion, including money market borrowings. 

The bank continues to be highly liquid with ISK 20.3 billion in cash and cash equivalents by end of year 2012, up by 76% from 2011. 

The bank´s tier 1 capital ratio was 10.8% remaining well above the 8% required minimum. This level reflects increased lending to businesses as the number of enterprises banking customers at MP bank has grown by 26% in 2012.

Profit before specific impairments and taxes was ISK 742 million in 2012. Specific impairment charges in 2012 are related to  loans granted before the restructuring of the bank in April 2011. 

Effective and Ambitious Plans Reached

“The bank is performing very well overall and in accordance with our ambitious plans with profit before specific impairments and taxes of 742 million. At the same time as we have been growing our operations we have had to take corrective measures relating to certain legacy assets, and the bottom-line results for 2012 are tainted by specific latent impairment charges related to those assets. We introduced our tagline “the bank for businesses” in 2012 and have been honing our expertise in banking for SME´s. We have been enthusiastically received by businesses who welcome the competition we bring to banking services for SME´s. We have maintained our strong marketshare in fixed income trading at 22,75%. We have a strong position in equity trading and are growing rapidly FX trading. Assets under management have increased to ISK 61 billion by the end of year 2012. Our leasing operation, Lykill, delivered results beyond our expectations. Lykill was launched in late March but gained a 12% marketshare of the overall leasing market in 2012. All business segments are therefore doing well and delivering income according to plan,” - says MP Bank´s CEO Sigurður Atli Jónsson.

Share Capital Increase Concluded Mid-Year

“The Board of Directors has authorization to increase share capital to further support the bank's growth. The formal process was due to commence in January but was then put on hold due to large investment projects. We expect the process to commence in the spring and be concluded by mid-year as originally planned. Some of the largest shareholders of the bank have already confirmed their  participation in the share capital increase,” - says MP Bank´s CEO Sigurður Atli Jónsson.

Summary Financials – in ISK Million

Income statement 1.1.2012 – 31.12.2012

Net interest income
1,716.1
Net fee income
1,395.1
Net financial income
637.0
Share in associates
217.5
Other income
28.9
Net operating income
3,994.6




Administrative expenses -3,128.2
Impairment
-671.0
Loss from assets held for sale

-11.0
Pre-tax income
184.5




Income tax
148.4
Special tax on financial institutions -81.5
Profit

251.3

Balance sheet 31.12.2012

Cash and cash equivalents 20,290
Loan to Central Bank 3,288
Securities 13,272
Loans to customers 27,789
Investment in associates 561
Other assets 4,193
Total assets 69,393


Deposits and borrowings 48,978
Short positions 7,986
Other liabilities 7,179
Total liabilities 64,143


Share capital 5,550
Other equity -300
Total equity 5,250

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

   '12  '11 Change % change
Net interest income 1,716.1 458.7 1,257.4 274%
Net fee income 1,395.1 776.0 619.0 80%
Net financial income 637.0 492.7 144.3 29%
Share in associates 217.5 66.1 151.4 229%
Other income 28.9 36.4 -7.5 -21%
Net Operating Income 3,994.6 1,830.0 2,164.6 118%
         
Administrative expenses -3,128.2 -2,127.0 -1,001.2 47%
Impairment -671.0 -244.2 -426.8 175%
Loss from assets held for sale -11.0 0.0 -11.0 -
Pre-tax income 184.5 -541.2 725.7 134%
         
Total assets 69,392.9 50,109.1 19,283.8 38%
Loan book 27,789.3 13,294.3 14,495.0 109%
Total deposits 48,977.6 36,645.2 12,332.4 34%
         
NIM 2.6% 0.9%    
MP Bank's Consolidated Financial Statements 2012