The Board of Saga Capital Investment Bank has approved the company's accounts for 2009. The accounts show that the bank’s assets at the end of the year amounted to ISK 12.6bn. Regulatory required capital was ISK 3.9bn, while the equity ratio was 36%, which is considerably more than the 16% minimum imposed by the Financial Supervisory Authority on commercial banks and savings banks in Iceland. The bank's core operations returned a profit, while income from commissions was almost ISK 400m, five times more than the year before.
However, the bank's performance was mainly characterised by precautionary contributions to the depreciation account that reflect the consequences of the economic collapse and the difficult circumstances that currently pervade the Icelandic business sector. More than ISK 1bn was transferred into the contingency fund and the bank’s operational yield was negative by ISK 1,054m. Active tax ratio and discontinued operations expenses totalled ISK 1,777m. At the end of the year, provisions for credit losses amounted to 48% of all loans, and the bank's directors believe that this will meet all the depreciation needs resulting from the economic collapse. Experience shows that write-offs in the banking system generally reach a maximum one or two years after economic difficulties have reached their peak.
Saga Capital returned an operating profit during the first months of 2010. This has boosted optimism for the future and shows that the bank is on the right path after last year's restructuring. The restructuring process aimed at eliminating all uncertainty regarding the bank's operability and strength after the tempestuous period the bank has had to withstand since its foundation. In the wake of those difficulties, banking operations were isolated and the operational emphasis was shifted so that more weight is now attached to generating income that is not based on using the bank's balance sheet.
The bank has established itself as an independent investment bank concentrating on servicing the entire commercial sector, large and small companies, institutional investors and funds.The recent good results reflect Saga Capital's dominant position in initial bond issues and the fact that Corporate Finance is one of the most effective departments of its kind in Iceland.
Saga Capital's parent company, Saga Eignarhaldsfelag hf., held its AGM on 28 May in the Akureyri Art Museum. Information about the AGM is available on this website.
