Landsbanki

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Landsbanki Íslands
Type	Public
Founded	Reykjavík, Iceland, 1885 (commenced operations on 1 July 1886))
Headquarters	Reykjavík, Iceland
Key people	Bjorgolfur Gudmundsson, Chairman Halldor J. Kristjansson, CEO Sigurjon Th. Arnason, CEO
Industry	Banking
Employees	2,000
Website	www.landsbanki.is www.landsbanki.com

Landsbanki, officially Landsbanki Íslands (ICEX: LAIS), also commonly known as Landsbankinn in Iceland, is the oldest and second biggest of the three major commercial banks in Iceland. It was founded in 1885 (commenced operations in 1886) and served as the central bank of Iceland from 1927 until 1961. At the time, this interest was primarily directed towards note issuance rather than monetary policy. It was later replaced in this capacity by the Central Bank of Iceland at the behest of the Althing. While still publicly owned it went through a state-directed merger with Samvinnubanki (Cooperative Bank). Landsbanki Íslands was converted to a public limited company on January 1, 1998. The firm was subsequently privatized in stages between 1998 and 2003.

Landsbanki currently has 40 branches and sub-branches throughout Iceland, plus a wide-ranging network of international correspondent banks. Landsbanki and its subsidiaries have offices operating in 15 different countries, including the major financial centres of Europe, as well as North American representation in New York and Halifax. As of 2005, it held a leading share in the domestic individual market, slightly ahead of Glitnir and Kaupthing.

1 History
2 2005 Operations and profit
3 International Operations
4 Sponsorship of sports: Landsbankadeildin
5 External links

[edit] History

Main article: History of Landsbanki

In establishing Landsbanki, the Icelandic parliament hoped to boost monetary transactions and encourage the country’s nascent industries. Following its opening on 1 July 1886, the bank's first decades of operation were restricted by its limited financial capacity; it was little more than a savings and loan society. Following the turn of the 20th century, however, Icelandic society progressed and prospered as industrialisation finally made inroads, and the bank grew and developed in parallel to the nation. In the 1920s Landsbanki became Iceland's largest bank, and was made responsible for issuing its bank notes. After the issuing of bank notes was transferred to the newly established Central Bank of Iceland in 1961, Landsbanki continued to develop as a commercial bank, expanding its branch network in the ensuing decades.

Liberalisation of financial services, beginning in 1986, opened up new opportunities, which the bank managed to take advantage of despite some economic adversity. In 1997, Landsbanki was incorporated as a limited-liability company, and the ensuing privatisation finally concluded in 2003. Landsbanki now operates as a privately owned bank, competing in a free market, with substantial international activities added to its traditional Icelandic operations.

[edit] 2005 Operations and profit

The Bank’s after-tax profit in 2005 was ISK 25 billion. This is an increase of 97% over 2004, when its net profit was ISK 12.7 billion.

After tax return on equity (ROE) was 45.8%. The Bank’s equity rose from ISK 38 billion at the beginning of the year to ISK 110 billion at year-end. Total assets at year-end amounted to ISK 1,405 billion.

According to a survey by IMG Gallup in December 2005, Landsbanki has a leading share of the domestic individual market, as 30% of individuals surveyed bank with Landsbanki.

At the end of 2005, Landsbanki provided close to 40% of corporate lending in Iceland and for around 60% of companies listed on the Iceland Stock Exchange, Landsbanki was their principal bank or one of two banks with whom they did business. Landsbanki’s share of equity brokerage in 2005 was 32% and for bonds 24%.^[1]

[edit] International Operations

The relatively limited size of the Icelandic market prompted Landsbanki, first among Icelandic commercial banks, to expand and diversify outside of Iceland when it acquired the London-based Heritable Bank in 2000. In 2005, Landsbanki acquired three European securities houses: Teather & Greenwood, located in London and Edinburgh; Kepler Equities, headquartered in Paris; and Merrion Capital Group in Dublin. Currently these subsidiaries deal in securities and prepare equity research in London, Paris, Frankfurt, Zurich, Geneva, Milan, Madrid and Amsterdam. Landsbanki's own branches in London and Amsterdam specialise in structured finance and commercial finance (asset-based lending), while Landsbanki Luxembourg handles private banking and wealth management, as well as corporate services. The bank’s major subsidiaries are:

Heritable Bank [1] (London) - Residential Development Finance, Mortages, Specialty Finance
Teather & Greenwood [2] (London) - Corporate and Institutional Broking, Corporate Finance, Equity Research
Kepler Equities [3] (Paris, Frankfurt, Amsterdam, Milan, Zürich, Geneva and Madrid) - Institutional Broking, Asset Management, Corporate Finance, Research
Landsbanki Luxembourg[4] (Luxembourg) – Private Banking, Asset Management
Merrion Capital [5] (Dublin) - Corporate and Institutional Broking, Corporate Finance, Research

In addition Landsbanki operates branches in London and Amsterdam, plus representative offices in Halifax, Canada; Oslo, Norway; and Thorshavn, Faroe Islands. Since 2006, it has offered online savings to UK customers, trading as Icesave [6].

[edit] Sponsorship of sports: Landsbankadeildin

Landsbanki’s support for Icelandic football is an important aspect of the Bank’s marketing and image policy. In September 2005, an agreement was concluded with the Football Association of Iceland, under which the Icelandic premier league for both men and women will be called the Landsbanki Premier League (Landsbankadeildin) for the next four seasons. The financial backing for football is, however, primarily directed towards supporting sports for children and youth divisions.