Glitnir Second Quarter 2008 results

Glitnir has released its financial results for the second quarter of 2008.

• Net profit ISK 7.6 bn. up 29,3% from Q1 08
• Record quarter for net operating income, ISK 26.9 bn., a 5% increase from ISK 25.6 bn. in Q1 08
• Return on equity 17,0% compared 15,0% in Q1 08
• Net Interest income ISK 17.8 bn. growing 28.9% QoQ
• Fees and commissions remain strong at ISK 9.3 bn. despite a slight drop from Q1 08
• Net operating expenses were ISK 14.8 bn. rising by 7.2% from Q1 08.
• Real growth of the loan portfolio negative by ISK 45 bn. from the previous quarter
• Liquidity position remains strong at 8.1 bn. euro
• CAD ratio rises to 11.2%. Tier 1 capital ratio stands at 8,0% up from 7.7% in Q1 08.

• Core earnings have increased by 10% on average each quarter (CQGR) from Q2 07
• Core profit before tax[1] grew 19.9% QoQ and 25.9% YoY.
• Cost / Income ratio is stable at 55%
• Continued strong performance by Capital Markets, Corporate Banking and Investment Banking units in the first half of 08
• 40% of advisory fees YTD originated through niche related activities. Solid pipeline going forward.
• Launch of a new international deposit product, Save&Save, in Norway and Iceland. This product will be introduced in other markets in the coming quarters.
• Successful issue of EUR 900m covered bond in Norway during the quarter

Larus Welding, Glitnir CEO: “We are very content with the results for the second quarter, where our core profits have risen by nearly 20% for the second consecutive quarter. As a result of our strategy and the initiatives we have adopted since Q4 2007, the bank has shown great resilience in a challenging market environment. We have continued to successfully increase our core income and profits while at the same time focusing on several cost cutting initiatives. We estimate that these co-ordinated efforts will start to bear real fruit in the second half of the year.

During the first half, we have successfully raised EUR 2.4 bn in funding while paying outstanding maturities of EUR 2.1 bn. At the same time we have maintained a strong CAD ratio of 11.2% despite a severe weakening of the ISK. We have also been successful in deleveraging our balance sheet. The bank’s liquidity position remains strong at EUR 8.1 bn.

At the end of the quarter, the bank launched a new international deposit product, Save&Save, in Norway and Iceland which will be expanded into other markets in due course.

Looking forward, we will continue to focus on our core operations leveraging on the bank’s niche strategy and the positive outlook for the global food and energy sectors where we have a strong market presence.

In our immediate plans we do not expect the wholesale funding markets to improve in the near future. With our strong asset quality intact we will continue to manage our balance sheet, further diversifying our funding sources and deleveraging non-core assets.”

Glitnir’s condensed consolidated interim accounts can be found on

Bjørn Richard Johansen
Managing Director, Corporate Communications, Glitnir
Tel: +47 47 800 100