Funding

Deposits from customers

The largest part of Landsbankinn’s funding is in the form of deposits from customers which amounted to ISK 1,228 billion at year-end 2024, mostly non-indexed and on demand. Deposits from customers grew by ISK 180 billion during the year. Inflation-linked deposits amounted to ISK 182 billion at year-end 2024, increasing by ISK 3 billion from the previous year. 

Market funding

EMTN issuance

Senior bond issuance in foreign currencies is the most important pillar in the Bank’s market funding. The size of the Bank’s EMTN programme is EUR 2 billion and was increased in size from EUR 1.5 billion in 2017. Inaugural issuance under the programme was in 2015, with continued issuance on a regular basis to date. In 2021, the Bank published a Sustainable Finance Framework with a second-party opinion from Sustainalytics. 

In March 2024, the Bank issued a long 4-year senior preferred green bond in the amount of EUR 300 million. Concurrent with the bond issuance, the Bank offered to tender outstanding bonds in euros maturing in May 2024 and May 2025 resulting in a buyback of EUR 84 million and EUR 100 million, respectively. 

In September, the Bank was the first Icelandic bank to issue senior non-preferred bonds. The Bank issued bonds in the amount of SEK 1,000 million and NOK 250 million with a 4-year tenor and an issuer call option after 3 years, a 4NC3 structure. 

The Bank issued green 5-year senior preferred bonds for EUR 300 million in October, the fifth green bond issuance in euros. In conjunction with the issuance the bank offered to tender outstanding bonds maturing in May 2025 resulting in a buyback of EUR 125 million. 

At year-end 2024, senior unsecured issuance in foreign currency amounted to ISK 257 billion, increasing by ISK 16 billion during the year.   

Covered bonds

The size of the programme for covered bond issuance is EUR 3.5 billion and was increased from EUR 2.5 billion in 2024. The programme is listed on the Irish stock exchange, Euronext Dublin.  

Regular auctions of covered bonds were held in 2024 where previously issued series were tapped in addition to issuance of a new inflation-linked series, LBANK CBI 30. The inflation-linked series LBANK CBI 24 matured in 2024. Agreements with market makers in the secondary market for covered bonds were renewed in the year.  

At year-end 2024, outstanding covered bonds amounted to ISK 267 billion, decreasing by ISK 1 billion during the year.  

Commercial paper

No commercial paper auctions were held in 2024 under the Bank’s ISK 50 billion debt issuance programme. No series matured in 2024 and there was no outstanding issuance of commercial paper at year-end 2024. 

Subordinated bond issuance

In February, the Bank issued subordinated bonds for 11 years, callable in 6 years. The Bank issued inflation-linked bonds in the amount of ISK 12 billion and non-indexed for ISK 3 billion. The issuance counts as Tier 2 capital.  

In December, the Bank offered to buy back Tier 2 bonds maturing in 2029 resulting in a buyback of ISK 3.820 million.  

The Bank issued subordinated bonds that count toward Tier 2 capital in December, inflation-linked bonds for 11.5 years, callable in 6.5 years in the amount of ISK 7,640 million. 

Subordinated bond issuance under the Bank’s debt issuance programme amounted to ISK 40 billion at year-end, increasing by ISK 20 billion from the previous year. 

Equity

The Bank’s equity amounted to ISK 325 billion at year-end 2024, increasing by ISK 19 billion during the year.  

Landsbankinn paid ISK 16,535 million in dividends to shareholders in 2024. 

Landsbankinn’s total capital ratio was 24,3% at year-end 2024. 

Credit rating for covered bonds

In January 2021, covered bonds issued by Landsbankinn were rated by S&P Global Ratings. In November 2023, the credit rating of the covered bonds was raised to A+ with stable outlook.