Iceland’s Kaupthing Bank Profits ISK 70 Billion Skip to content

Iceland’s Kaupthing Bank Profits ISK 70 Billion

The last of Iceland’s three largest commercial banks, Kaupthing, announced its 2007 results yesterday and reported net earnings of ISK 70 billion (USD 1.1 billion, EUR 720 million), down from ISK 85.3 billion (USD 1.3 billion, EUR 880 million) in 2006. Return on equity was 23.5 percent.

Earnings per share were ISK 95.2 (USD 1.47, EUR 0.98) in 2007 but ISK 127.1 (USD 2.0, EUR 1.3) in 2006. Kaupthing Bank’s total assets amounted to ISK 5,347.3 billion (USD 82.4 billion, EUR 55.3 billion) at the end of the year 2007, a 35.8 percent year-over-year increase at a fixed exchange rate.

The three large Icelandic commercial banks combined profited by nearly ISK 140 billion (USD 2.2 billion, EUR 1.5 billion) in 2007. “The banks’ earnings last year must be considered satisfactory in light of the turbulence in international financial markets and plummets in stock markets in the latter part of the year,” Jónas Fr. Jónsson, director of the Icelandic Financial Supervisory Authority (FME) told Fréttabladid.

“Kaupthing enjoyed a good 2007; the year started particularly strong but the downturn on the international financial markets left its mark on the second half of 2007. Return on equity was 23.5 percent, a most satisfactory figure,” said CEO Hreidar Már Sigurdsson, according to a press release.

“The adverse operating environment has led to a shift in focus in operations, and the growth of the Bank’s balance sheet is set to slow down this year. Management’s prime focus is now on generating commission income and maximizing efficiency,” Sigurdsson added.

In regards to Kaupthing’s decision to call off the takeover of Dutch bank NIBC, the CEO said “While this development is disappointing for the Bank’s shareholders, the decision nevertheless significantly reinforces Kaupthing’s liquidity position, which is now very robust.”

Kaupthing Bank is currently having discussions with representatives from a Qatar-based investment fund about the fund’s potential purchase of a stake in the bank. “It would be very interesting for us to obtain investors from that area,” Sigurdsson told Fréttabladid. “Time will have to tell what the conclusion will be.”

Click here to read about the 2007 results of Glitnir Bank and here to read about Landsbanki Bank.

Sign up for our weekly newsletter

Get news from Iceland, photos, and in-depth stories delivered to your inbox every week!

* indicates required

Subscribe to Iceland Review

In-depth stories and high-quality photography showcasing life in Iceland!

Share article