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Islandsbanki Quarterly Profit Increases 35% on Valuation Gains

Nov. 29 (Bloomberg) -- Islandsbanki hf, the state-created successor to failed Glitnir Bank hf, said third-quarter profit surged 35 percent as impairments on financial assets declined.

Net income rose to 4.49 billion kronur ($36 million) from 3.33 billion kronur a year earlier, the Reykjavik-based bank said in a statement today. Net valuation changes on loans and receivables jumped to a 713 million-krona profit, from a 576 million-krona loss a year earlier.

Glitnir collapsed in October 2008 after it was unable to secure short-term funding. The Icelandic government then established Islandsbanki out of Glitnir’s domestic assets. A year later, 95 percent of Islandsbanki’s shares were taken over by a resolution committee representing Glitnir’s creditors. The Icelandic government owns 5 percent.

“There are clear signs that the financial markets are more active than in recent years,” Chief Executive Officer Birna Einarsdottir said in the statement. The bank has managed a bond sale by Eik, a real-estate company, the largest private sector bond offering since late 2008, and oversaw the listing of Eimskip shares and is working on the planned listing of Vodafone shares, she said.

Islandsbanki’s capital-adequacy ratio was 24.3 percent, compared with 22.6 percent in the end of 2011, it said.

To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net.

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net.

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