Support Icelandic industry and provide top-notch service 

Alongside the continuous development of online banking and Landsbankinn’s app, businesses increasingly took our self-service solutions into use. During the year, the Bank’s corporate lending grew by 13.4%, Corporate Finance had a full order book and an increasing number of businesses chose Landsbankinn’s merchant acquiring service. 

Kona að versla

One of the Bank’s key roles is to support investment in domestic industries. At the end of 2024, the Bank’s corporate loans totalled ISK 921 billion, reflecting an increase of ISK 109 billion over the year. This lending growth spanned multiple industries and equated to a 13.4% increase in corporate loans.   

In the past year, 2,049 companies and 430 sole proprietors started banking with Landsbankinn. 

SMEs an important customer group 

Around 18,000 small and medium-sized enterprises (SMEs) currently bank with Landsbankinn and the Bank has recently focused on improving services for this important customer group. Our aim is to simplify life for our customers through accessible service and sound advice. Over the course of the year, we focused on service calls with both new and existing customers, in addition to numerous visits and other daily interactions.  

In general, payment defaults among SMEs banking with us remain very low. 

Gratifying to help businesses grow 

“One of the most rewarding aspects of my job is helping businesses grow and develop. When a company reaches a turning point in its operations, it is crucial to have a strong foundation of trust between the Bank and the business, as well as well-prepared and credible business plans.

Emphasis on digital solutions - also on personal service 

The new digital solutions introduced by the Bank this year have been particularly beneficial for SMEs. We are committed to helping our customers adopt these new solutions and ensuring they are well-informed about their benefits. At the same time, personal service remains just as important. Every one of our customers has direct access to a dedicated account manager or corporate advisor who handles their banking needs. We have an outstanding team of experts with years of experience and deep knowledge, dedicated to supporting and serving our customers. 

We place great emphasis on developing technological solutions for businesses and, in 2024, we introduced a range of innovations designed to simplify business operations and financial management. Businesses are making extensive use of the Bank’s technological solutions, as they help save both time and money. The use of electronic signatures continued to grow, with nearly 86% of businesses signing their transactions with the Bank electronically in 2024. 

In Landsbankinn’s B2B service, interactive communication is established between accounting systems and online banking. The number of businesses utilising B2B services continues to rise, with usage increasing by approximately 13% in 2024. 

Companies are also increasingly choosing to use Landsbankinn's app. The adoption of corporate solutions within the app grew throughout the year and, by year end, the number of businesses using both the app and online banking had increased by approximately 24%. 

More details on digital services and other technological advancements can be found in the section on Continuous development

Maintain strong market share in vehicle & equipment financing 

There was a significant decline in new passenger car sales in 2024, with approximately 46% fewer new car registrations compared to 2023, though it should be mentioned that 2023 was a record year for car sales. The decline was much more pronounced in passenger car sales to individuals than to businesses. Despite the sharp drop in new car sales, corporate lending for vehicle and equipment financing increased by 7.5%, reaching approximately ISK 47 billion by the end of 2024.  

Numerous new customers in the retail and service sector  

In recent years, the number of retail and service companies banking with us has steadily increased, strengthening our position in this sector. In 2024, many new customers joined and lending to these businesses grew by nearly 10%. The retail and service sector includes a wide range of customers in retail, transport, IT and other services. Despite significant challenges, including changing purchasing and consumption habits as well as rising raw material costs abroad, businesses banking with us generally performed well. 

Flexibility and familiarity vital to fisheries and seafood 

At the end of 2024, Landsbankinn’s loans to fisheries and seafood companies, including aquaculture firms, totalled approximately ISK 190 billion, remaining largely unchanged from the previous year. Loans to the fisheries and seafood industry account for about 23% of the Bank’s total corporate lending. The Bank maintains a strong market share in this sector, though competition from foreign financial institutions has slightly reduced this share. Foreign financial institutions can offer significantly better terms due to their larger scale and lower tax burdens. However, Landsbankinn’s competitive advantage lies in its flexibility, responsiveness and deep industry knowledge. 

Our strategy is to remain a leader in financing the Icelandic fisheries and seafood industry and to increase lending to the sector in line with growing investments.

The industry's profitability in 2024 was weaker than the previous year, mainly due to a capelin catch failure and lower fish prices. Due to the declining supply of fish from the Barent Sea, demand has increased, and fish prices have started to rise again. Overall, the outlook is positive. Since fish stocks are a limited resource, there are few opportunities for growth in the traditional seafood industry. As a result, fisheries and seafood companies have used their strong financial performance to invest in related industries, such as marine biotechnology and aquaculture. 

Ferðafólk á hálendi
Tourist numbers from 2019 and forecast development leading up to 2027
2019 2,013,200
2020 486,308
2021 687,789
2022 1,696,785
2023 2,224,036
2024 2,287,341
2025 2,300,000*
2026 2,350,000*
2027 2,400,000*
*Forecast by Landsbankinn Economic Research

Return to positive outlook in tourism  

Seismic and volcanic activity on the Reykjanes Peninsula coupled with negative media coverage abroad had a significant impact on bookings and demand in the early months of the year. Additionally, Iceland’s high real exchange rate - compared to Norway’s lower rate - affected travel to Iceland. Iceland and Norway offer similar attractions and compete for the same tourists, but Norway has had a much stronger competitive position in the past 1-2 years. 

As the year progressed, the impact of the seismic activity largely faded and demand began to recover. The summer season was decent, though slightly weaker than the previous year. Autumn was very strong and the outlook for winter 2025 remains positive,  largely due to a significant increase in tourists from Asia, who have resumed travelling after the pandemic. The total number of tourists in 2024 was just under 2.3 million, similar to the previous year.   

Landsbankinn plays a significant role in lending to the tourism sector, with loans to the industry increasing by 3% over the year. We aim to continue to support the growth of the sectors as before yet keeping in mind that steps to expansion must by slow and steady as the sector is subject to fluctuations.   

Strong support for the construction sector  

The real estate and construction markets performed very well last year, with lending to the construction sector increasing by 8%. As in previous years, Landsbankinn’s largest projects in the construction industry involve financing major residential developments in the capital region. The sharp rise in lending is primarily due to new large-scale projects, slower sales, and the high-interest rate environment. 

Construction companies have continued their operations despite high interest rates, though a shortage of available building plots has posed some limitations. We anticipate that lower interest rates will further stimulate the market by increasing sales and reducing the production costs of residential properties. 

Large construction projects
37
Smaller construction projects
70
Financed residential housing
3,700
apartments

Real estate companies continued to grow, driven mainly by good access to financing and their strategy of achieving cost efficiencies through expansion. These companies have primarily been financed through the bond market, with buyers of their bonds mainly consisting of pension funds and specialised bond funds.   

The high interest rates of recent quarters have led real estate companies to avoid seeking long-term financing in the bond market. Instead, they have increasingly turned to banks, including Landsbankinn, for funding. Lending to real estate companies grew significantly during the year, or by 32%, with lending to Fasteignafélagið Thórkatla accounting for part of the increase. Lending can be expected to remain fairly stable in the coming 1-2 years and then to decrease alongside falling interest rates. 

Hectic year for Corporate Finance 

Corporate Finance oversaw two share capital increases for the resource company Amaroq Minerals in 2024. The company is listed on the stock exchanges in London, Toronto and Reykjavík. At the beginning of the year, Amaroq Minerals raised ISK 7.5 billion through a new share issuance, followed by an additional ISK 4.9 billion at the end of the year. Corporate Finance also managed a share capital increase for the Icelandic pharmaceutical company Coripharma, raising over EUR 12 million through the issuance and sale of new shares. 

Other notable projects completed by Corporate Finance in 2024 include the sale of whale-watching company Special Tours to the tourism group Arctic Adventures, the acquisition of all shares in Securitas Iceland by the investment firm Stekkur and co-ordination of the issuance of a green bond framework and a base prospectus for the real estate company Kaldalón. 

Additionally, Corporate Finance played a key role in various bond and commercial paper issuances, as well as listings for companies such as Kaldalón, Kvika Asset Management, Alma rental company, the City of Reykjavík, Landsbréf and Landsbankinn. Corporate Finance also played a vital role in structuring Landsbankinn’s acquisition offer for TM tryggingar. The Ministry of Finance and Economic Affairs retained Landsbankinn Corporate Finance as independent financial advisor in the marketed offering of the State’s remaining shareholding in Íslandsbanki hf. 

The order book of Corporate Finance is strong and every outlook for a positive 2025. 

Færsluhirðing

Acquiring swipes the market 

Landsbankinn’s merchant acquiring service has grown rapidly since it was launched in February 2023. In 2024, 757 new businesses joined our acquiring services, including several of the country’s largest retail companies. The transaction volume of acquiring grew more than 16-fold between 2023 and 2024. At the same time, the number of transactions increased 32-fold. 

Payment processing has outperformed expectations, firmly establishing the Bank in the market with strong technological solutions and outstanding service. This innovation further strengthens the Bank and demonstrates its ability to attract new business for new products and services. Payment processing has opened up new growth opportunities, with 38% of merchants using the service being new customers to the Bank. 

We continued to develop and enhance the service throughout 2024. More integrations with point-of-sale and sale systems were introduced, expanding capabilities and strengthening the Bank’s market position. Technological innovations developed in collaboration with Verifone are currently being reviewed by selected merchants and will be introduced in more detail soon.  

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