Q1 2024 Arion banki hf Earnings Call Transcript
Good morning, all, and a warm welcome to our webcast presentation of Arion Group's first-quarter results for 2024. My name is Benedikt GÃslason. I'm the CEO of Arion. And with me here today are Erna Björg, our Chief Economist; and Ãlafur Höskuldsson, our CFO, who will go in more detail into the economic situation in Iceland and our financials.
But let me start by going through the quarter which were -- where the net earnings in the first quarter were below our target. Lower earnings during the quarter are mainly due to two things: weaker fee income and the 12%age points higher effective tax rate than what could normally be expected.
Now starting with the tax rate, the high tax rate is a result of a sharp market value change towards the end of the quarter on equity forward contracts, when share prices of some Icelandic listed stocks dropped materially. Our clients holding these derivative contracts had mark-to-market losses at quarter-end and Arion mark-to-market gains.
The mark-to-market gains are taxable for us,
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