Iceland's Krona Rises Most in Month as Bank Increases Revenue

By Emma O'Brien

July 29 (Bloomberg) -- Iceland's krona rose the most against the dollar in more than a month and advanced versus the euro after the country's second-largest bank reported a 27 percent jump in revenue.

The currency advanced for the first time in six days versus the dollar, increasing as much as 3 percent to 80.09 at 11:34 a.m. in Reykjavik, from 82.57 yesterday. It was the biggest gain since June 25. The krona appreciated 3.1 percent to 127.93 per euro, from 129.97, after weakening the past three days.

Revenue at Reykjavik-based Landsbanki Islands HF, the largest bank after Kaupthing Bank HF, rose to 36.97 billion kronur ($454 million) in the three months to June 30, while net income fell 3 percent to 11.88 billion kronur.

The krona tumbled 24 percent against the dollar and 34 percent versus the euro over the past year as the reduction in available credit worldwide made it difficult for Iceland's banks to refinance debt, deterring investors.

Sedlabanki, Iceland's central bank, said today it still plans to sell 75 billion kronur of short-term debt this year. It sold 3.7 billion kronur of Treasury notes in an auction July 24, compared with the 10 billion kronur on offer.

In other trading, Sweden's krona advanced against the euro after retail sales growth accelerated for a second month in June. The Riksbank has raised interest rates twice this year to 4.5 percent to contain the fastest inflation in 15 years.

The krona increased 0.2 percent to 9.4485 per euro, from 9.4627 yesterday, and rose 0.1 percent to 6.0035 per dollar, from 6.0111.

Norway's krone was little changed versus the euro for a second day, trading at 8.0721, compared with 8.0780. It was at 5.1300 per dollar, compared with 5.1316.

The yield on Sweden's 5.25 percent note maturing in March 2011 held at 4.62 percent. The yield on Norway's 6 percent note due in May 2011 fell 3 basis points to 5.05 percent, the lowest since May 21. Bond yields move inversely to prices.

To contact the reporter on this story: Emma O'Brien in Moscow at eobrien6@bloomberg.net