Islandsbanki hf
ICEX:ISB
Islandsbanki hf
Islandsbanki hf., deeply rooted in Iceland's financial landscape, emerged from a complex history of restructuring following the country's banking collapse in 2008. Originally established as part of Glitnir Bank's restructuring, Islandsbanki has since navigated through Iceland's unique economic terrain to become a stalwart in the local banking sector. With a firm grasp on the intricacies of Icelandic financial markets, the bank has carved out a distinct niche by focusing predominantly on providing services to the commercial, corporate, and retail sectors. This renewed focus has positioned Islandsbanki as a crucial partner for individuals and businesses alike, facilitating their access to essential financial products such as loans, credit facilities, and investment options that support both domestic and international transactions.
The bank's income is primarily derived from the traditional banking activities of interest income from loans and credit products, as well as fees and commissions from the wide range of services it offers. Furthermore, Islandsbanki has been adept at leveraging its comprehensive understanding of the Icelandic economy to offer tailor-made financial solutions that meet the unique needs of its customer base. By concentrating on sectors such as fisheries, geothermal energy, and tourism—industries that are intrinsic to Iceland's economy—the bank not only propels its profitability but also contributes significantly to the nation’s economic advancement. This strategic alignment with Iceland’s economic pillars ensures that Islandsbanki remains at the heart of both community growth and the broader financial system.
Islandsbanki hf., deeply rooted in Iceland's financial landscape, emerged from a complex history of restructuring following the country's banking collapse in 2008. Originally established as part of Glitnir Bank's restructuring, Islandsbanki has since navigated through Iceland's unique economic terrain to become a stalwart in the local banking sector. With a firm grasp on the intricacies of Icelandic financial markets, the bank has carved out a distinct niche by focusing predominantly on providing services to the commercial, corporate, and retail sectors. This renewed focus has positioned Islandsbanki as a crucial partner for individuals and businesses alike, facilitating their access to essential financial products such as loans, credit facilities, and investment options that support both domestic and international transactions.
The bank's income is primarily derived from the traditional banking activities of interest income from loans and credit products, as well as fees and commissions from the wide range of services it offers. Furthermore, Islandsbanki has been adept at leveraging its comprehensive understanding of the Icelandic economy to offer tailor-made financial solutions that meet the unique needs of its customer base. By concentrating on sectors such as fisheries, geothermal energy, and tourism—industries that are intrinsic to Iceland's economy—the bank not only propels its profitability but also contributes significantly to the nation’s economic advancement. This strategic alignment with Iceland’s economic pillars ensures that Islandsbanki remains at the heart of both community growth and the broader financial system.
Strong Results: Islandsbanki delivered a strong year in 2025, with return on equity (ROE) of 11.2%, above its targets, and solid performance across business lines.
Profitability Targets Raised: The bank increased its medium-term ROE target from 10% to 13%, with management expecting around 12% ROE for 2026.
Robust Capital Position: Capital ratios remain well above regulatory requirements, enabling continued high distributions, including a proposed ISK 12.6 billion dividend and ISK 15 billion buyback.
Solid Loan and Deposit Growth: Loan book grew 5.5% in 2025, with personal banking deposits up 8% and retail deposits up 7.9%.
Fee Income Surge: Fee and commission income was exceptionally strong, up 16% in Q4 and 7.4% for the year, driven by capital markets, cards, and payments.
Cost Control: Cost-to-income ratio improved to 42.4% for the year, despite one-off early retirement scheme costs.
Impairments and Credit Quality: Q4 impairments rose to ISK 1.1 billion, mostly from a single foreclosure case, but overall credit quality and collateral buffers remain strong.
Skagi Merger Progress: Merger discussions with Skagi are ongoing, with no synergies included in current financial targets.
