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Record growth at Landsbanki

The weekly business section of Morgunbladid reports on its front page that Landsbanki showed the most rapid growth of Icelandic banks in a recent survey of the British magazine, The Banker.

Globally, Landsbanki ranked third in a list over the fastest growing banks in the years 2003-2004; its equity increased by 85 per cent during that period, assets grew by 63 per cent and profit before taxes by 320 per cent. Only the First Gulf Bank in the United Arab Emirates and the Andhra Bank in India grew faster during that period.

At the end of 2003-2004, Landsbanki ranked number 471 in a list of the world’s largest banks, ascending 253 places since the last survey.

Of the three large Icelandic banks, Kaupthing-Bank ranks highest at 211th place. It the last survey, it ranked first as the world’s fastest growing banki. It is now the fourth fastest growing bank.

Íslandsbanki is number 441 in terms of size and placed number 13 in terms of growth.

Sevaral reports in the foreign media have covered the rapid growth of the Icelandic banks, and some have warned against the possible dangers resulting from such rapid growth rates.

(See Iceland Review, Daily News, June 15, “Icelandic banks are vulnerable”)

But Sigurjón Th. Árnason, co-CEO of Landsbanki, said to Morgunbladid that Landsbanki’s growth had been well managed and the bank had been very “selective” in its lending. “Instead of increasing risk, we therefore consider that the risk profile of the bank has decreased,” he said, “and by expanding abroad we have diversified our risks more than we could have by remaining local.”

Hreidar Már Sigurdsson, CEO of Kaupthing, echos this sentiment. “We have always emphasized risk management and we have terrific processes and personnel in that department. Growing banks do not have to be riskier than stagnant or shrinking ones. Our risk profile has never been better,” he said.

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