Arion Bank’s 2013 Profit Slides as Funding Costs, Taxes Increase

Arion Bank hf, the state-created successor to failed Icelandic lender Kaupthing Bank hf, said profit declined last year as its funding costs and taxes rose and the krona’s appreciation caused exchange-rate losses.

Net income fell to 12.7 billion kronur ($112 million) from 17.1 billion kronur a year earlier, the Reykjavik-based lender said in a statement today. Net interest income declined 12 percent to 23.8 billion kronur.

Net impairments were 680 million kronur in 2013, compared with 4.69 billion kronur in 2012, Arion said.

Arion was created after Kaupthing, 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 87 percent of shares. The Icelandic government retains a 13 percent stake.

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