Iceland’s Islandsbanki Reports Profit as Loan Valuations Improve

Islandsbanki hf, the state-created successor to failed Icelandic lender Glitnir Bank hf, reported fourth-quarter profit after revaluing its loans and receivables.

The bank had net income of 7.2 billion kronur ($57 million), compared with a loss of 9.5 billion kronur a year earlier, the Reykjavik-based bank said today in a statement. Net interest income rose 12 percent to about 8 billion kronur.

Islandsbanki increased the net valuation on loans and receivables to 5.7 billion kronur for the full year, including a provision made for latent impairments, up from a loss of 1.2 billion kronur in 2011, the bank said.

Islandsbanki was created after Glitnir, unable to secure short-term funding, collapsed in October 2008. A year later, the unit was taken over by a resolution committee representing the bank’s creditors, which now holds 95 percent of shares. The Icelandic government retains a 5 percent stake.

“Important milestones were reached in the reconstruction of the Icelandic financial market in 2012,” Birna Einarsdottir, the bank’s chief executive officer, said in a statement. “Remarkable progress was made in financial restructuring during the year with several large projects being completed.”

To contact the reporter on this story: Omar Valdimarsson in Reykjavik

To contact the editor responsible for this story: Jonas Bergman at

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.