Growing activity and strong performance

The year was marked, as often before, by considerable market fluctuations, this time due to seismic activity, elections and political uncertainty both domestically and abroad, along with high interest rates and inflation in Iceland. Additionally, it has been an eventful year in the domestic market, including merger discussions between JBT and Marel, the US FDA's approval of Alvotech’s biosimilar drug, and both new stock market listings and cases where planned listings were cancelled. 

One could say that a turning point occurred in the Icelandic stock market when central banks both domestically and abroad began rate cutting cycles. As annual inflation started to decline, the market rose by nearly 26% from its lowest point in mid-September and by approximately 16% since the previous year end. The Bank's stock market turnover increased by 32%, while bond market turnover saw a slight year-over-year decline after having grown by 33% the year before. Indices in the US rose by around or over 20%, while index gains in European and Asian markets were closer to 5%. 

Significant growth in asset management 

The Bank's asset management operations have grown significantly over the year and performed well. Assets under management within the group increased considerably, which is a strong achievement given the high volatility in the external environment. Foreign exchange flows and consequently income from foreign exchange transactions have remained strong. The expansion of asset management and brokerage services has led to higher commission income, with the Group's fee and commission revenues increasing by 8% over the year.  

Great results from savings campaigns  

This year, we launched several savings campaigns. In one of them, the Bank's customers were offered a 100% discount on purchase fees for Landsbréf funds if purchased through the app or online banking. Other campaigns focused on educating younger generations about savings, introducing savings concepts to children at confirmation age, and promoting financial awareness among young people in summer jobs. Funds are an effective way to grow savings, as they help diversify risk and increase potential returns.  

Significant emphasis was placed on advertising and marketing pension savings, which resulted in a 14% increase in pension savings among young people aged 18 to 24. Pension savings can have a significant impact on financial flexibility at retirement, creating opportunities to enjoy life after work and even retire earlier. 

Customers’ response to these campaigns have been pleasantly positive and savings have increased subsequently over the year.  

Pension agreements and other solutions in the app 

This year, new functionality was introduced in the app, allowing customers to apply for both supplemental and mandatory pension savings, easily change their investment plan and access detailed overviews of payments and entitlements, all in one place. This new feature has been well received by customers, leading to a record number of new pension agreements within a single year. Alongside these new functionalities, we also introduced a pension savings calculator and updated the pension savings interface. 

During the year we have been working on developing solutions that help customers monitor market events and respond accordingly. This work will continue in 2025, with new solutions expected to be launched soon. 

First to show real-time prices 

At the beginning of 2024, Landsbankinn began publishing real-time stock prices on its website, in addition to displaying them in the securities section of its app and online banking. Landsbankinn is the first bank in Iceland to provide this information on its website and since the change, visits to the page have increased by 21%. Another exciting feature on the website and the Bank's self-service platform is how easy it is to compare the performance of different financial instruments. This can be particularly useful for customers when selecting investments in specific funds or stocks. The comparison also shows how different funds have performed over time, helping investors understand market fluctuations across asset classes.  

Good results at Landsbréf 

Landsbréf hf., the Bank’s subsidiary, performed well in 2024 despite challenging market conditions in the first half of the year, especially in the domestic market. Inflation decreased more slowly over the year than expected, market conditions were challenging and interest rates remained high for much of the year in Iceland. A turning point came in fall when the US FED began its interest rate reduction cycle, which subsequently led to a recovery in the Icelandic stock market. The market received an additional boost when central banks both domestically and abroad initiated rate-cutting cycles in fall. As a result, returns from mid-September to the end of the year were exceptionally strong, making the year as a whole a profitable one, especially for those with a well-diversified stock portfolio.  

Leading in the domestic fund market 

In broad terms, Landsbréf’s operation is twofold, i.e. fund management on the one hand and asset management on the other. As regards fund management, Landsbréf’s results were very good having regard for market conditions and competitors. Overall, the year was unremarkable for the bond market, but Landsbréf bond funds generally delivered strong returns compared to competitors. Landsbréf's actively managed international equity funds performed very well throughout the year. In general, Landsbréf equity funds achieved strong results and it was particularly gratifying to see Landsbréf - Hekla deliver a return of well over 20%. This equity fund, which Landsbréf has managed for over a decade, became available to retail investors for the first time in November 2024, having previously been limited to professional investors.  

The specialised investment sector performed very well. It was particularly gratifying to complete the dissolution of Landsbréf - Hvatning slhf., one of the largest investors in Bláa Lónið hf. (the Blue Lagoon). As part of the dissolution, shareholders received shares in Bláa Lónið hf., and the fund had delivered very strong returns for its investors. Additionally, major assets were sold from the private equity fund Horn III slhf., resulting in over ISK 2 billion being distributed to shareholders in the form of dividends and share capital reduction. In December, the share capital of the innovation fund Brunnur vaxtarsjóður was reduced, and shareholders received the fund’s entire stake in Oculis, an investment that has proven to be highly successful for both the fund and its investors.  

Ambitious and committed to being worthy of trust 

Landsbréf managed 41 funds at year-end 2024, both UCITS and AIFs. Landsbréf offers a varied selection of funds and most investors can find options and opportunities that meet their needs. One private equity fund, Landsbréf - Hvatning slhf., was dissolved during the year. A new private equity fund, Horn V slhf., was established at the end of the year, with the goal of completing the subscription commitment process in the first quarter.   

Investment returns on asset management portfolios were generally very strong and Landsbréf exclusively manages investment portfolios for Landsbankinn’s customers, including pension funds operated by the Bank. Active and responsible management coupled with good asset diversification has repeatedly proven its worth. Landsbréf is leading in this regard and the company’s employees take pride in being worthy of the trust thousands of fund members place in Landsbréf when they invest in the company’s funds. Landsbréf offers a varied selection of funds and most investors can find options and opportunities that meet their needs.