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Landsbankinn and Landsbréf, the Bank’s subsidiary, offer universal services in capital market transactions, corporate finance, asset management and brokerage services, both here in Iceland and abroad. Our aim is to provide first-rate and reliable service, guided by the tenets of responsible investment.

Increased interest in equity trading

The interest in equities or funds to secure a good return on investment is growing across the board. Increased public interest in equities is reflected in a doubling of securities transaction contracts customers concluded with the Bank in 2020 as compared with 2019, with the public offering of Icelandair Group hf. in September 2020 contributing greatly to that interest. We have responded to this increased interest in various ways, such as by making it possible for customers to sign contracts on securities transactions electronically. Customers can monitor their asset portfolios in Landsbankinn’s app, follow market developments and review information on the returns of Landsbréf’s funds.

Important to receive solid advice

“The ways and means of achieving good returns have changed drastically in a short time. Interest rates are at an historic low and it is clear that private persons are increasingly looking to invest their savings in securities. In our advice to customers, we emphasise diversification in the asset portfolio and investment in actively managed funds rather than individual equities. We provide first-rate advice tailored to the needs of each customer, having regard for risk appetite in each case.

Over-demand in Icelandair stock offering

Landsbankinn was one of two managers of Icelandair’s stock offering in September of 2020. Preparation for the stock offering was a 6-month process and we worked closely with the company’s management in both the lead-up and during the offering. Both general and institutional investors showed great interest and the offering was a success. New share capital in the amount of ISK 30 billion was accrued and around 11,000 new shareholders joined the company’s group of owners.

We also managed the successful first green bond offering of Municipality Credit Iceland. The proceeds from the bond offering will go towards financing environmentally-friendly municipality undertakings thatminimise climate change.

Good returns at Landsbréf

Interest in funds has also increased, both among the general public and institutional investors. The Bank’s subsidiary Landsbréf, which is specialised in fund and asset management, has achieved good results. Landsbréf manages around 40 funds, all of which have yielded good returns. Assets in the funds amount to around ISK 200 billion, with another ISK 200 billion managed according to asset management contracts with a diverse group of investors.

Our aim is to lead

“Landsbréf aims to be a leader in asset management and offer at all times diverse fund options suited to all types of investors. We emphasise secure management guided by responsible investment for the benefit of customers and the entire community.

Turnover in foreign equities increased dramatically

Landsbankinn has long offered comprehensive services in overseas securities markets. The scope of this activity increased considerably in 2020. Turnover in foreign equities exploded, especially in US equities, but also with shares in companies listed in other Nordic countries and we have direct access to stock exchanges in Stockholm, Copenhagen and Helsinki.

Pension savings with Landsbankinn in 2020

The pension fund Íslenski lífeyrissjóðurinn is operated by Landsbankinn based on a management contract, and we also offer the Lífeyrisbók pension savings account and pension savings with foreign securities. Returns were good across the spectrum of pension savings plans in 2020.

The nominal returns of Íslenski lífeyrissjóðurinn ranged between 6.7-14.1%, according to unaudited results. The nominal return of the mutual insurance division was 12.4% and the nominal return of Líf I, the fund’s largest private pension scheme, was 14.1% in 2020. The assets of Íslenski lífeyrissjóðurinn amounted to ISK 117 billion at year-end 2020, up by ISK 17 billion year-over-year.

We enabled access to information about pension savings through a new pensions portal accessible through the Bank’s website. This new self-service solutions enables users to create contracts for mandatory and/or private pension savings, alter contracts, apply for disbursement of pension savings and maintain an overview of all things pension, such as contributions, benefits rights and pension payments.

When the authorities granted temporary dispensation to withdraw private pension savings, we were quick to respond by making the application process completely electronic. Around 4000 individuals who own rights in Íslenski lífeyrissjóðurinn, save with Lífeyrisbók pension savings account or foreign pension programmes took advantage of this option and the average amount of withdrawal was one million króna.

Clear policy on responsible investment

We continued the implementation of Landsbankinn’s and Landsbréf’s strategy on responsible investment. We have been actively engaged in this process for several years now and consider it of high importance to fully integrate sustainability concerns in core operations. Landsbankinn's policy on responsible investment is set having regard for the United Nations' Principles on Responsible Investment, of which Landsbankinn has been a member since 2013. We are also a member of UN PRB, the UN Global Compact and a founding member of IcelandSIF. Our policy reflects work practices that have been shaped in recent years, as well as the challenges the future holds. The next step is to include ESG issues in the process of investment decisions in a structured manner, both as relates to listed and unlisted equities and bonds. As regards responsible investment, our practices build on active communication whereby exclusion is a rare exception.

Responsible decision-taking

We continued to work in accordance with the service agreement Landsbankinn and Landsbréf concluded with Reitun ehf., providing for ESG ratings of domestic issuers of equities and bonds in portfolios under management by Landsbankinn and Landsbréf. This is the next step in the implementation of responsible investment, continuing along the path which we have set ourselves. Reitun’s reports are currently used in domestic investment decisions at Landsbréf and Íslenski lífeyrissjóðurinn while investment in foreign issuers has regard for ESG reports from Morningstar.

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