Reasonably solid. On balance results are marginally credit positive on NPLs decreasing and a CoR c.40bps.
NII of ISK11,246 is 5.2% lower than Q3 and -0.7% lower than Q4 24.
Fee income increases to ISK4,136, up 6.6% on Q3. The insurance service result this quarter is ISK 327m. This has been volatile over recent quarters, but offsets NII weakness this time.
Expenses were flat on Q3, coming in at ISK6,876m but this is up 12.7% on Q4 23.
OpInc end up 2.8% lower vs Q3 at ISK 9,730
Net income is 5.3% higher than Q3 on lower tax expense and no one offs, vs 339m in Q3
CET1 falls 0.6% this quarter to 18.2%. Capital generation added 0.6% which was offset buy share buy backs and dividends subtracting 1%. RWA increases subtracted another 0.1%. Requirement is 15.3% - 2.9% buffer.
NPL's declined from 2.4% to 2.3%. Cost of risk was 42bps. This is comforting because NPL's have been rising since Q4 2022, when it reached a low of 1.2%.
01/14 $Benchmark Blackstone Private Cr Fund 7Y +190a
01/14 $Benchmark LifePoint Health 7NC3
01/14 $Benchmark Adobe 3Y +50a, 5Y +60a, 10Y +80a
01/14 $Benchmark British Colombia 3Y SOFR+45
01/14 $Benchmark BFCM 5Y +120a, 5Y SOFR
01/14 $Benchmark Hyundai 3Y +100a
US DATA: Sequential Producer Prices On The Low Side, Core Momentum Soft
Jan-14 14:50
December's PPI report showed softer sequential price pressures than had been expected: headline final demand PPI came in at 0.2% M/M (0.4% expected, 0.4% prior), with the "core" ex-food/energy/trade category printing 0.1% (0.3% expected, 0.1% prior). From a broader perspective for this volatile series, pipeline inflation remains uncomfortably elevated. But this was not a particularly worrisome report in its own right and core PPI - while still elevated - does not appear to be accelerating.
This left the Y/Y figures higher vs November but lower than expected: headline at a 22-month high 3.3% (3.5% expected, 3.0% prior), with ex-food/energy/trade actually decelerating to 3.3% (no consensus, 3.5% prior).
So on the one hand, headline PPI has been steadily accelerating Y/Y since bottoming at 0.8% in Nov 2023 and is now at a 22-month high, but Core PPI prices have settling in at above 3.0% Y/Y, where it has been for 9 consecutive months. That lends further credence to the idea that the prolonged period of Y/Y core goods deflation is over - but likewise there are no obvious signs of a pronounced resurgence in pipeline inflation outside of food and energy.
Indeed, as the headline figures suggest, food (+6.4% Y/Y after +6.7%) and energy (-2.0% Y/Y after -6.1%) prices have been more inflationary/less deflationary, respectively, on an annual basis.
But we interpret the "core" reading to imply that pipeline price momentum has continued to slow: at 1.9%, the 3-month annualized moving average fell to 1.9% from 2.1% prior, well down from over 5% earlier in 2024 for the lowest since December 2023. The 6-month m.a. likewise pulled back to the softest since November 2023.
For the two major subcategories of final demand PPI, services inflation was flat, vs 0.3% M/M prior for the weakest since July, while goods inflation came in at 0.6% (after 0.7%).
As we noted separately following the release, the PCE-relevant categories were mixed, with a jump in airfares the standout but fairly benign readings in other areas.
EU-BOND SYNDICATION: New 3-year / 30-year tap: Priced
Jan-14 14:46
New 3-year:
Reoffer: 99.999 to yield 2.628%
Spread set earlier at MS+17bps (guidance was MS + 19 bps area)
HR 105% vs 2.20% Apr-28 Bobl +32.4bp (ref 99.675 / 2.304%)
Tranche size set earlier at E6bln (guidance was E5bln, MNI expected E5-7bln)
Books closed in excess of E82bln (inc E5.75bln JLM interest)
Maturity: 4 July 2028
Coupon: 2.625%, short first coupon
ISIN: EU000A4D5QM6
3.375% Oct-54 Tap:
Reoffer: 94.8089 to yield 3.664%
Spread set earlier at MS+127bps (guidance was MS + 130 bps area)