Record profits by MP Investment Bank in 2007
MP Investment Bank turned a
profit of ISK 2,250 million before tax in 2007.
Profits after tax amounted to
ISK 1,780 million, equivalent to a return on
capital of 35% on a yearly basis.
According to the annual accounts for 2007 the
Bank's equity amounts to more
than ISK 6,187 million and the Bank's CAD ratio
stands at 27.95%.
is financially strong and therefore well capable of further growth.
• The Bank's profit before tax in 2007 amounted to ISK 2,250
increase of 35% from the previous year.
• Profit after tax
amounted to ISK 1,780 million, an increase of 40% from
from operations increased by 45% and amounted to ISK 3.16 million.
interest income in 2007 amounted to ISK 779 million, which is a
increase from the years before.
• Net fee income receivable increased by
50% between years and amounted to ISK
• Return of
equity after tax amounted to 35%.
• Equity increased by 26% during the
year, from ISK 4,927 million in 2006 to
ISK 6.187 million in 2007.
Equity ratio (CAD) amounted to 28.1% at the end of 2007.
• The Bank's
balance sheet decreased by 22% from the previous year and now
stands at ISK
• MP Investment Bank holds no assets linked to collateralised
or so called sub-prime loans.
• The Board of
Directors will propose that the Company pay a dividend of 30%,
ISK 320 million. This is equivalent to 18% of the profits of the
The Board of Directors will request the permission of the annual general
meeting to apply for a commercial banking licence to the Financial
MP Investment Bank's annual general meeting will be
held on 13 March.
MP Investment Bank's performance in 2007 was
excellent, despite the instability
on the world's financial markets, most
notably during the latter part of the
year. The Bank's commissions receivable
continued to rise from the previous
year. Net interest income increased
significantly between years; a very
pleasing development since great emphasis
was laid on increasing this income
The Bank's share in BYR Savings
Bank was redeemed during the year and following
that sale MP Investment Bank's
holding of domestic securities with
variable-income (i.e. shares in savings
banks and other shares) decreased
considerably. Parallel to the Bank's
substantial growth during the past few
years the Bank's risk management and
internal control has been greatly
improved, ensuring that the bank suffered no
major difficulties due to
extensive deflation of stock markets in the autumn
The Bank's funding was improved during the year. In the spring MP
Bank finalised its first foreign long-term syndicated loan. At the
end of the
year domestic and foreign binding loan commitments were finalised.
At the start of 2007 the Bank opened its first branch in the Baltic states
Vilnius, Lithuania. The Vilnius branch was successful during the year
currently returns around 15% of the Bank's total income and around 15% of
Bank's balance sheet represents the activities of the branch. Today
Investment Bank has 13 employees in Lithuania. In February 2008 the
moved to an impressive new office building. The office space is much
than the first one and offers the potential of further growth in the
months, as the Bank has targeted further expansion of its activities
Lithuania in 2008.
During 2007, MP Investment Bank's management company
received authorisation as
a fund management company for mutual and investment
funds and has already
started a money market fund and a corporate bond fund.
More funds are planned.
The Bank's subsidiary in Lithuania received
authorisation to operate pension
funds in 2007 and started such operations in
the autumn under the name MP
Pension Fund Baltic.
Prospects for 2008
spite of the instability of financial markets at the beginning of 2008
Bank's operation is off to a bright start. Risk management and credit
will be enhanced further.
In 2008 the Bank will focus on the
ongoing expansion of its operations in the
Baltic states as well as increasing
the activities of the Bank's asset
management in Iceland and abroad.
Bank's Board of Directors has decided to propose an application for
commercial banking licence to the Financial Supervisory Authority at
upcoming general meeting. A commercial banking licence allows the Bank
expand its activities further, especially through the Lithuanian branch.
For further information contact:
Styrmir Þór Bragason,CEO of MP
Investment Bank, tel. +354 858 3240