Annual General Meeting of Arion Bank 2011
The Annual General Meeting of Arion Bank was held yesterday, Thursday 24 March, at the Bank's headquarters in Borgartún, Reykjavík. The agenda of the meeting contained normal AGM business.
A new board of directors was elected at the meeting. The following people were elected as members of the board: Agnar Kofoed-Hanse, Gudrún Johnsen, Jón G. Briem, Måns Höglund, Monica Caneman and Theodór S. Sigurbergsson. Agnar represents the Icelandic State Banking Agency on the board.
Elected as alternates on the board were Gudjón Ólafur Jónsson, Gudrún Björnsdóttir, Jóhannes Rúnar Jóhannsson, Sigurbjörn Gunnarsson, Thóra Hallgrímsdóttir and Una Eythórsdóttir.
The meeting agreed, subject to approval by the Icelandic Financial Supervisory Authority, to pay the Icelandic state a dividend of ISK 6.5 billion in the form of a subordinated loan or a subordinated bond. It was also agreed that the relevant parties could negotiate a different form of the payment. The dividend payment is in accordance with an agreement made when Kaupskil acquired 87% of the state’s share in Arion Bank. No dividend will be paid out in other respects due to the year 2010.
Report of the Board of Directors 2010
Monica Caneman, Chairwoman of the board of Arion Bank, read out the report of the board of directors. In her speech she referred to the important rebuilding process that is currently taking place in Iceland and the promising signs of recovery widely apparent, such as the results achieved in tackling the fiscal deficit, unemployment and the debt burden of households and corporations. She also mentioned that Iceland had in many ways come further along the path of economic recovery than many other nations which are still dealing with troubled financial sectors, fiscal deficits and unemployment. She further pointed out that Iceland now had a banking system with no pressing external funding needs and and a cleansed asset side.
In the opinion of Monica, the Bank´s core banking performance was strong. Corporate banking and retail banking continued to focus on the restructuring of household and corporate debt which progressed well during the year, although much remains to be done. Her speech indicated that Arion Bank intends to complete recovery work related to its customers this year.
Monica also discussed the focus placed on strengthening the Bank’s capital base in 2010 and the results that have been achieved. In the second half of the year, the Bank’s capital ratio increased by 2.6 percentage points, from 16.4% to 19%. The main reason why a strong capital ratio is important, in Monica’s opinion, is the uncertainty that still remains within the Icelandic financial system – uncertainty that must be eliminated as soon as possible.
The outlook for 2011 is positive in Monica’s opinion and Arion Bank is well positioned to meet the challenges of 2011. Financial strength is a priority in the short term, even at the expense of profitability.
Increased financial strength
Höskuldur H. Ólafsson, CEO of Arion Bank, went through the annual financial statements for the last operating year. He said that the performance in 2010 was good and in line with projections. Höskuldur emphasised that the core operations of Arion Bank had strengthened during the year and that the Bank was well prepared to rise up to the challenges ahead.
Höskuldur reviewed the highlights of the year 2010. He mentioned that strong emphasis had been placed on restructuring the Bank’s loan book and the sale of acquired companies. In 2010, the future strategic direction of Arion Bank was set and the new strategy implemented.
Arion Bank returned an after-tax profit of ISK 12.6 billion and return on equity was 13.4%. The Bank’s total assets amounted to ISK 813 billion at year-end 2010 and it fulfils all conditions set by the Icelandic FSA on equity and liquidity ratios.