Arion Banki Hf · OMXICE:ARION
Arion Banki Hf — Shareholder Meeting (March 2023)
18 slides from Arion Banki Hf's shareholder meeting presentation, Mar 15, 2023
Slide 1: Arion Bank AGM 2023
Aðalfundur Arion banka 2023 Arion Bank AGM 2023 CEO Benedikt Gíslason
Slide 2: Competition in the Icelandic financial market is increasing
Competition in the Icelandic financial market is Cards, payments and short term loans Insurance increasing - Arion Bank and Vördur face increasing competition for customers - Our competition is both Icelandic and foreign, both large and small companies, Foreign banks and some operate in a different
Slide 3: Arion Bank at a glance
Arion Bank at a glance Diversified financial institution in Iceland with strong market position Retail Banking Operating income 2022 (ISKbn) Corporate & Investment Banking (including insurance) (including insurance) Net interest income ‣ Comprehensive financial services to individuals ‣ Corporate ba
Slide 4: Key results in 2022
Updated medium term Key results Medium term targets 2022 targets Key results in 2022 Return on equity Exceed 13% ✔ 13.7% Unchanged Strong year for the group >6.7% Operating income / REA Exceed 7.3% • 6.7% on Core Income ‒ 13.7% ROE for the year Premium growth (net of ‒ Driven by ongoing positive mom
Slide 5: Net fee and commission income
Net fee and Net fee and commission income (ISK m) Net fee and commission income (ISK m) commission income 4,539 Diversified fee generating operations 343 16,065 4,079 14,673 support continued momentum 4,002 3,972 10,349 11,642 364 9,950 346 3,552 787 840 392 - ISK 4bn in fees for the quarter results
Slide 6: Total operating expense
Total operating Cost-to-Core income ratio (%) Total operating expenses expense 26.3 26.8 1.1 24.4 25.8 1.5 27.0 1.6 62.2 62.3 Stable YoY total OPEX despite high inflation 12.0 12.2 11.2 11.1 12.1 53.3 51.6 - Ongoing focus on OPEX and efficiency 45.6 - Cost-to income ratio for the year 2022 was 47.0%
Slide 7: Key milestones of the year
Key milestones of the year Arion Bank and Vordur joined The sale of Valitor New rating from Moody’s and operations completed updated rating from S&P The operations of Vordur insurance moved to the Bank with the goal of escalating the bancassurance strategy which greatly shortens the lending process
Slide 8: Valitor was sold in 2022 – a great milestone for the Bank
Valitor was sold in 2022 – a great milestone for the Bank Total proceeds ISK 14.6bn (USD 112.5m) Net profit from sale ISK 5.6bn Capital release ISK 13.8bn 8
Slide 9: Vordur growing market share, supported by bancassurance momentum
Vordur growing market share, supported by bancassurance momentum Total number of customers (in thousands) Bancassurance ratio* - individuals Market share (premiums earned) 65.5 4Q 2021 4Q 2022 64.5 32.2% 33.7% 62.0 60.1 18.2% 17.7% 17.0% 16.2% Bancassurance ratio* - corporates and SMEs 4Q 2021 4Q 20
Slide 10: Opening of new Arctic shipping lanes
Opening of new Arctic shipping lanes The emergence of new possible trans-Arctic shipping lanes, including the Northern Sea Route (NSR) and the Northwest Passage (NWP), would considerably shorten transit times and could bring new opportunities for the Arctic region in terms of strategic resource extr
Slide 11: Iceland is a strategic hub in the area
Iceland is a strategic hub in the area Areas of competitiveness Reputation Financial sector Business environment Human capital Infrastructure ▪ High level of innovation ▪ High education levels – top ▪ Strategic location for ▪ Strongly capitalized, ▪ Member of the EEA since despite being a small 15 i
Slide 12: The Bank received strong ESG ratings and the green asset pool grew by 16%
The Bank received strong ESG ratings and the green Diversified pool of eligible green assets (total ISK 151bn) at YE 2022 asset pool grew by 16% in 2022 36% Sustainable fishery The Bank will continue to focus on sustainability in its operations and measure its impact. We aim to raise the ratio of gr
Slide 13: Tax breakdown for banks in the Nordics in 2022
Tax breakdown for banks in the Nordics in 2022 Iceland Sweden Norway Denmark Finland Corporate tax 20% 20.6% 22% 22%5 20% FAT – on profits 6%1 - 3%4 - - FAT – on 5.5% - 5%4 15.3%6 - remunerations Bank levy 0.145%2 0.05%3 - - - Total tax for Arion Bank in 2022 (ISK m) 1.Financial undertakings pay 6%
Slide 14: Capital requirements and tax
Capital requirements Leverage ratio & Net interest margin (% of all assets) and tax 2022 16,0% 8,0% 14,4% 14,0% 7,0% 11,8% 12,1% 12,0% 6,0% 10,0% 5,0% Net interest margins are higher in Iceland largely due to high capital requirements, 8,0% 6,8% 4,0% much higher bank levy and income taxes. 6,0% 5,2%
Slide 15: Number of shareholders increased by around 6.8% in 2022
Number of shareholders increased by around 6.8% in 2022 14.000 12,059 12.000 11,279 10.000 7453 8.000 7,391 7134 6,399 5,860 6.000 4457 2666 3500 4.000 4.606 2.000 4.145 3.194 2.899 2.934 0 2018 2019 2020 2021 2022 Iceland Foreign 15
Slide 16: Going forward
Going forward Building on a strong year and robust foundations 2022 was another strong year for the group. Ongoing volatility can be expected in the funding Underlying operations are robust with numerous, markets, but the Bank is in a good position diversified pillars of business supporting each oth
Slide 17: Disclaimer
Disclaimer - This document has been prepared for information purposes only and should not be relied upon, or form the basis of any action or decision, by any person. Nothing in this document is, nor shall be relied on as, a promise or representation as to the future. In supplying this document, Ario
Slide 18: Slide 18