Heritable Asset Finance, a unit of Heritable Bank and Iceland’s
Landsbanki financial group, is expected to report an almost
fivefold increase in profit after tax for the financial year ended
December 31 2007.
Heritable AF, which has a business focus on cars of up to
three-years old and light commercial vehicles of up to
one-year-old, said new business was up by 50 per cent, to £75m,
during the period.
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As a result, it is expected to report pretax profits of
£442,000 and net profit of £261,000. Net interest income is
expected to be £2.35m for the period. In 2006, Heritable turned
around from a loss to report £53,741 in net profit and net interest
income of £1.3m.
Heritable said it would continue to rely on its broker network
to clinch deals. This year,
Heritable expects to report a similar growth trend in new business,
although it said it was “cautious about certain sectors of the
economy and debt serviceability” in general.
It says it has not tightened lending policies in the wake of the
credit crunch, nor has it yet observed an adverse effect on the
business in general.
Recently, debt ratings agency Fitch affirmed Landsbanki
Heritable Bank’s long-term Issuer Default Rating at ‘A’, but with a
negative outlook. Heritable AF insists, however, that this has not
affected the cost of funding its business.
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By GlobalDataLandsbanki is the oldest and second biggest of the three major
commercial banks in Iceland. The jittery world financial markets
have sparked a crisis in the tiny Nordic island as speculators
continue to bet against the Krona. Iceland’s central bank has had
to raise interest rates to fend off the speculative attacks. With
the economy’s high level of external debt, however, ratings
agencies have placed three of the largest Icelandic banks on credit
watch.
