Q3 2024 Arion banki hf Earnings Call Transcript
Key Points
- Arion banki hf (FRA:AB7A) reported a strong return on equity of 16.1% for the third quarter.
- The insurance business delivered a standalone profit of ISK1.7 billion, marking the highest in its history.
- The bank successfully paid a dividend of ISK13 billion and conducted share buybacks worth ISK12.5 billion.
- Assets under management continue to grow, with enhancements in premier services merging private banking and asset management.
- The bank upgraded its financing framework to focus on sustainable projects, including affordable housing and healthcare.
- The bank remains overcapitalized despite efforts to normalize capital through dividends and buybacks.
- There is potential for more volatility in net interest income due to shifts in inflation and interest rate environments.
- Economic activity in Iceland has slowed, with GDP growth revised down to 0.5% for the year.
- The tourism industry faces challenges with visitors spending less and staying for shorter periods.
- The bank anticipates a cost of risk of 31 basis points, reflecting a cautious stance amid high interest rates.
Good morning all and a warm welcome to the presentation of our third quarter results.
We are very pleased to present solid financial results for the third quarter with a return on equity of 16.1% and particularly pleased to see how well our insurance business were performed in the period, delivering one of the strongest quarters in the company's history and all the segments of our core operations also performed strongly and produced excellent results and we delivered on all our financial targets in the quarter except on capital where we continue to be over capitalized despite our efforts in recent quarters to normalize the capital stock through dividends and buybacks.
So further substantial normalization is to be expected going into next year as we continue to move closer to our financial target there through dividends, additional dividends and share buybacks.
This year, we paid a dividend of ISK13 billion and have conducted buybacks of shares worth ISK12.5 billion. And the pace for next year could be somewhat higher
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