Investor Presentaiton
13
Net interest income
10 bps improvement in NIM despite challenging environment
°
Net interest income decreased by 2%
from Q1 2019 whilst interest bearing
assets decreased by 5%
Net interest income
Credit risk
7.8
7.7
7.4
7.4
7.3
683
669
649
Strong net interest margin in light of:
2.7%
2.8%
3.0%
2.8%
2.6%
Policy rate lowered to historic low
during the period
Lower inflation during the quarter
(1.1% vs 2.1% in Q1 2019)
614
611
4.3%
4.6%
4.9%
4.7%
4.5%
Issuance of Tier 2 subordinated
bonds in 2019 and AT1 in Q1
Reduction of wholesale funding in ISK
and FX have positive effect on NIM as
well as increased proportion of ISK in
liquidity buffer
Lower interest income from loans to
customers and lower effect from inflation
on Net interest income is largely offset
by lower funding cost in deposits and
borrowings
Prepayment of expensive funding
and strong liquidity management
supports NIM
Q1 2019
Q2 2019
Q3 2019
Net interest margin
Q4 2019 Q1 2020
Q1 2019
Q2 2019 Q3 2019
Q4 2019
Q1 2020
- Net interest income / Average credit risk
Net interest income Q1 2019 vs Q1 2019 (ISK million)
7,434
(253)
(1,613)
1,058
295
(272)
877
(274)
7,252
NII Q1 2019
Loans to
credit
institutions
Loans to
customers
Securities
Deposits
Borrowings Subordinated Net inflation
and other
effect
NII Q1 2020
and CB
All amounts in ISK billion
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