...Icelandic banks have enjoyed several years of rapid growth and international expansion. Until the end of the first half of ####, banks were reporting very strong profitability. However, conditions in t he global credit markets have since changed radically. Listed Icelandic companies have experienced significant declines in share prices and some of the largest investment companies have been forced to restructure their operations. The chang ed market conditions have also been reflected in the Q# and Q# #### results of the three major commercial banks (Kaupthing, Glitnir and Landsbanki), which un surprisingly all reported significant decreases in results. This largely reflec ts their business model, which relies on investment banking and capital markets-re lated earnings, both of which Moody's expects to prove challenging over the coming year. ...

Report Type: Banking System Outlook
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 Moody's Global Credit Research
Moody's Investors Service, a leading global credit rating, research and risk analysis firm, publishes credit opinions, research, and ratings on fixed-income securities, issuers of securities and other credit obligations. Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Ratings also create efficiencies in fixed-income markets and similar obligations, such as insurance and derivatives, by providing reliable, credible, and independent assessments of credit risk. For issuers, Moody's services increase market liquidity and may reduce transaction costs.