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Landsbankinn hf. : Landsbankinn reports profit of ISK 3.3 billion in Q1

Landsbankinn's operations returned an after-tax profit of ISK 3.3 billion in
the first three months of 2016, while profitfor the same period of 2015
amounted to ISK 6.4 billion.

Operating income in Q1 amounted to ISK 11.5 billion, compared to ISK 14.7
billion in Q1 2015. Higher salary costs arising from new collective
bargaining agreements were offset by a decrease in other operating expenses,
with the result that the bank's total operating expenses in Q1 decreased by
0.5% YoY.

Net interest margin in Q1 2016 was 1.9% compared to 2.0% in Q1 of 2015.

Despite stiff and increasing competition in credit markets, Landsbankinn's
lending has increased from that of Q1 the previous year. Fees and commissions
also increased due to a higher business volume.

The default ratio continues to fall, and averaged 1.7% in Q1 this year
compared to 2.3% during the same period last year.

A rise in the cost-income ratio is due in particular to lower income from
securities. During the first three months of this year Landsbankinn's
cost-income ratio was 55.8% compared to 48% in Q1 of the previous year.

As of 31 March this year Landsbankinn's equity amounted to ISK 267.8 billion
and its capital adequacy ratio was 31.2%. In 2016 the bank will pay dividends
of ISK 28.5 billion in two payments, firstly on 20 April and then on 21
September; as a result the dividend payment does not affect these results.

Landsbankinn's CEO Steinþór Pálsson:
"Landsbankinn has delivered an acceptable performance in Q1. The bank has for
some time pointed out that the impact of one-off items, such as positive
revaluations of loans, would decrease and such effects cannot be expected in
the longer term. This has proven to be the case and this quarter's results
reflect the bank's normal operations, without significant effects from
irregular items.

While Landsbankinn needs to deliver an acceptable return, it must at the same
time keep risk within limits, ensuring both sound and efficient operations.
In accordance with its strategy, Landsbankinn directs continuous efforts
towards reducing risk and increasing efficacy. In some instances these
cost-containment measures call for expenditures and investment in the near
term but eventually result in major savings. This applies, for example, to
the renewal of the bank's core IT systems, which is now under way in
collaboration with the Icelandic Banks' Data Centre (RB).

Landsbankinn's position is strong, as witnessed by its large and growing
market share, solid financial basis and dividends. Implementing the bank's
strategy has progressed well, with its key focus on having customers feel
that by working with Landsbankinn they achieve their goals and benefit from
doing business with the bank."

Investor call:
On 13 May at 10:00 local time, the bank will host an investor call in English
covering the main Q1 results. Please register to the call by emailing

For further information contact:

Rúnar Pálmason, Public Relations,, tel: +354 410 6263 / 899

Hanna Kristín Thoroddsen, Investor Relations,
, tel: +354 410 7272



This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Landsbankinn hf. via Globenewswire


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