Kaupthing Bank Earned Most in First Quarter Skip to content

Kaupthing Bank Earned Most in First Quarter

Iceland-based Kaupthing Bank issued the highest profits in the first quarter of 2008—ISK 18.7 billion (USD 243 million, EUR 157 million)—compared to Iceland’s other largest commercial banks, Glitnir Bank and Landsbanki Bank.

Glitnir Bank issued ISK 5.9 billion (USD 77 million, EUR 49 million) in profits for the first quarter and Landsbanki Bank ISK 17.4 billion (USD 226 million, EUR 146 million), ruv.is reports.

Despite many Icelandic companies and the general public having financial difficulties in light of the current economic situation, the banks seem to be staying afloat.

The combined profits of Kaupthing, Glitnir and Landsbanki banks in the first three months of this year amounted to ISK 42 billion (USD 545 million, EUR 352 million), ISK 1 billion (USD 13 million, EUR 8 million) higher than during the same period last year.

“It can mainly be attributed to the fact that we have a strong collection of loans that are delivering a good interest margin. We have invested in remuneration-related operations which continue to deliver good profits. This is based on our market situation in the Nordic countries and especially on the good work of our people in Iceland who are doing exceptionally well considering the [economic] situation,” said CEO of Glitnir Bank Lárus Welding.

SPRON savings bank was not as successful as the only bank to report a loss in the first quarter of this year, almost ISK 8.5 billion (USD 110 million, EUR 71 million). SPRON recently entered merger talks with Kaupthing Bank.

The three largest commercial banks have been criticized for including exchange rate gain because of the depreciation of the ISK in their settlement of accounts and thus exaggerating their profits. The aforementioned sums of profit would have been much lower if the exchange rate gain had not been included, Fréttabladid reports.

The combined exchange rate gain of Kaupthing, Glitnir and Landsbanki banks in the first quarter of 2008 amounts to ISK 132 billion (USD 1.7 billion, EUR 1.1 billion), mainly because the executives of the banks have for the past few months been purchasing currency to defend their capital position from the fluctuation of the ISK.

Click here to read about what the Icelandic banks earned in 2007.

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