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Iceland’s Islandsbanki Reports Profit as Loan Valuations Improve

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Feb. 28 (Bloomberg) -- 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 valdimarsson@bloomberg.net

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

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