Best bank
Íslandsbanki Best debt house
Barclays Capital
Best equities house
Kaupthing Bunadarbanki
Best M&A house
Kaupthing Bunadarbanki
Last year, Icelandic banks Kaupthing and Bunadarbanki merged to create the country?s largest bank. It has pursued an aggressive expansion policy, while managing to keep costs down. Kaupthing also managed to increase its year-on-year profit by 40% to reach IKr7.9 billion ($109 million). Landsbanki also managed to increase its net profit by 46% to reach IKr2.96 billion at the end of 2003.
However, Íslandsbanki wins best bank again, having managed to increase profits by 71% to Ikr5.8 billion. It also has the lowest cost/income ratio of the three banks.
The bank has the highest return on equity and is the top rated of the three by Moody?s. Íslandsbanki decreased its non-performing loans from Ikr5.3 billion in 2002 to Ikr4.8 billion in 2003. Landsbanki also decreased its NPLs while Kaupthing?s rose. Íslandsbanki has 19% market share of total lending and 21% of total deposits. The bank has a 32% market share in lending to corporates and 42% of leasing.
There was an increase in primary bond market activity and BarCap wins best debt house for having the largest primary bond market share, including some impressive deals. BarCap was joint bookrunner on Kaupthing Bunadarbanki?s inaugural benchmark bond. At the time, this e500 million deal was the largest issued by an Icelandic financial institution. BarCap also managed a $400 million loan for Lansvirjkun followed by an MTN in January.
CSFB?s efforts were also notable. It had the second-largest market share in the primary bond market and was also involved in some important deals such as the first ever euro-denominated five-year deal by an Icelandic financial institution. However, all of CSFB?s deals were completed for financial institutions and it was not as strong as BarCap in the loan market.
Strongest local player was Landsbanki. It advised on 23 bond issues with a volume of IKr16 billion. Íslandsbanki says it advised on 10 primary market deals for corporates and municipalities with a volume of IKr6.2 billion and Kaupthing Bunadarbanki says it advised on 13 deals worth Ikr12.1 billion. Kaupthing Bunadarbanki also had the highest market share in debt securities on the local exchange.
There was only one IPO in Iceland, for sleep diagnostics company Medcare Flaga for Ikr1.2 billion. Kaupthing arranged it and takes best equities house. Kaupthing also had the highest share of total turnover on Iceland?s stock exchange in 2003.
The biggest M&A deal, the merger of Bunadarbanki and Kaupthing, while completed during this year, was taken into consideration for last year?s awards. Kaupthing advised on 13 deals including four for the bank itself and takes the best M&A house award. Total value of these transactions was e1.89 billion.
Last year, Kaupthing led a group of investors in acquiring Ker, followed by a delisting of the company, in a deal worth $200 million. The bank advised Jón Ásgeir Jóhannesson, then the largest shareholder in Baugur, on the 100% acquisition of the company and the subsequent delisting from the local stock exchange. The deal was worth $133 million.
Landsbanki was also strong in M&A advisory, after bulking up its corporate advisory team in 2003 and participating in notable deals. The total size of deals for 2003 and the first quarter of 2004 was e737 million.
Landsbanki advised fishing company Grandi on acquiring Haraldur Bodvarsson from Eimskipafelag Islands for $110 million. It also advised Kristjan Gudmundsson on acquiring Utgerdarfelag Akurey-ringa from Eimskipafelag for $128 million.
