Solid support and new solutions for companies

A record number of corporate customers joined Landsbankinn in 2023. We continued to support a vital economy with secure funding and new digital solutions. The Bank’s corporate loan portfolio grew by 7.7% in 2023.


In 2023, 3,500 legal entities became Landsbankinn customers, both new and established businesses. Sole proprietors make up 1,400 of that number.

Our service platform for corporate customers has grown and we aim to offer simple and accessible financial service, all in one place. Our customers opened more bank accounts than ever before, 38% more than the previous year, and 83% of new corporate bank accounts were created through self-service solutions.

In 2023, Landsbankinn’s lending to businesses grew by ISK 63 billion but having regard for an ISK 5.5 billion exchange rate impact, the total increase is ISK 58 billion, or 7,7% growth.

Growth was highest in real estate financing where we remain active in the financing of residential housing, continuing to contribute to the supply of new housing in a growing community. 

The year was our largest yet in vehicle and equipment financing and eco-friendly cars were prominent.

The Bank’s market share in corporates who submit annual financial statements was 32.8% and our share in total lending to corporates is around 40.0%.


Merchant acquiring

Landsbankinn launched its own merchant acquiring service in February. This was a considerable broadening of our service platform to corporates and diversification of own activities.

Landsbankinn’s acquiring service accepts payments in point-of-sale devices and ecommerce platforms, supports Apple Pay and Google Pay, offers securer settlement windows and more practical settlement periods. The system allows for the integration of POS equipment and payment gateways for online service which creates opportunities to link in benefit systems, increase loyalty and improve the overall customer experience.

A robust and secure payment transaction opens various new avenues to both streamline and simplify operations. Merchants who bank with us can now have all their payment service in one place, resulting in increased efficiency and a better overview of operations.

Flying start to merchant acquiring

“Since Landsbankinn began offering acquiring services, more customers from around the country have joined us and we now have active customers in all parts of Iceland. We have emphasised service to small and medium-sized enterprises to begin with and reception has exceeded our expectations.

In merchant acquiring much as with other services, Landsbankinn focuses on offering a technically robust solution that boosts automation and makes it easy for companies and their service providers to link payment solutions to systems or other tech solutions.

Positive outlook in fisheries and seafood

The year 2023 was challenging in fisheries and seafood. Difficult conditions on international markets and a contraction in capelin fishing led to poorer performance across the entire sector when compared with the record year 2022.

The outlook in fisheries and seafood is rather good despite difficult economic conditions and dwindling purchasing power in main trading partner countries, which will impact both prices and demand. Main fishing stocks are in good shape and both fishing and processing is going strong.

Salmon aquaculture has been a growing industry in recent years. Aquaculture companies experienced some growing pains associated with development, such as disease, escape of farmed stock and weather-related damage. This has caused fluctuations in performance and some reputational damage. Going forward, there is more development work to be done and the outcome important.

In response to these challenges, land-based salmon farming has received a boost and there are large plans to build the industry, especially on the Reykjanes peninsula and in Ölfus. Land-based fish farming comes with a set of its own challenges and very limited experience.

Landsbankinn aims to remain a leader in funding to Icelandic fisheries and seafood. Loans to the sector are around 23% of the Bank’s credit portfolio to corporates and the market share in lending is around 35%. The Bank’s share has grown in recent years, driven by improved competitiveness. The aim is to increase the weight of fisheries and seafood in the Bank’s corporate credit portfolio so that lending to the sector aligns with new investments.

Ferðamenn við Geysi
Tourist numbers from 2019 and forecast development leading up to 2026
2019 2,013,200
2020 486,308
2021 687,789
2022 1,696,785
2023 2,224,000
2025 2,300,000*
2026 2,500,000*
*Forecast by Landsbankinn Economic Research

Fantastic year in the hospitality sector

The year 2023 will be remembered as one of the better years in the travel industry. Around 2.2 million tourists visited Iceland, the second-highest number ever, and overnight stays were the highest ever recorded. Capacity utilisation was at its best for both airlines, hotels and car rentals, and many were sold out in the summer months. The fall season began strong but seismic and volcanic activity on the Reykjanes peninsula caused uncertainty.

There was a turnaround in performance - a positive change from the difficult post-pandemic years. Most companies have yet to publish annual financial statements but the results of the travel sector can be expected to very good in 2023 and the outlook is positive. Continued growth requires more investment and Landsbankinn intends to continue to be an active participant in these undertakings.

The outlook is bright, yet all growth comes with a set of challenges. It is important to take measured and considered steps and not move too fast. History has shown that conditions can change quickly.

At year-end 2023, Landsbankinn’s total lending to the travel sector amounts to ISK 107.9 billion, was ISK 111.1 billion at year-end 2022. Landsbankinn’s estimated market share is 35% and the aim is to increase that share.

Focus on residential housing

Following years of high activity in the construction market, 2023 saw a slight slowdown. Much higher interest rate levels reduce demand. Sales times are more protracted which makes it difficult for contractors to begin new projects. A limited supply of building lots also has an effect on new construction. Demand still exists and the construction market can be expected to pick up once interest rates decrease again.

According to the Housing and Construction Authority, annual need for new residential housing is 4,000-4,500 apartments over the next five years. The Authority assumes that just over 3,000 new apartments entered the market in 2023 and that the number will be lower in 2024. Clearly, more production is needed in order to meet demand.

Landsbankinn has been a leader in construction financing and intends to remain so. Emphasis is placed on financing of residential housing for the general market and rental market, but also on office, commercial and service housing, such as hotels. While the majority of projects is naturally concentrated in the capital city area, there has also been high activity in neighbouring municipalities.

Large construction projects
Smaller construction projects
Financed residential housing

Leading in retail and services

The Bank continued to be a lead bank for the retail and service sector in 2023, firmly supporting its customers under demanding conditions. As in previous years, the Bank gained numerous new customers and continued to work on exciting projects with current customers.

The trade and service sector includes a wide range of customers in retail, transport, IT and other services. In recent years, the sector has faced significant challenges, such as altered procurement and consumption patterns, in addition to rising import prices on commodities. These companies generally had a good year and the Bank’s diversified loan portfolio to the retail and service sector strengthens the overall corporate credit portfolio.

Corporate vehicle and equipment financing

Lending by Landsbankinn’s Vehicle & Equipment Financing to fund eco-friendly vehicles is going strong and such loans now make up just over half of the total portfolio. New sold vehicles that are powered solely be electricity are now at 47% and, including other eco-friendly vehicles (hybrids), the ratio was over 75% of all newly registered passenger cars in 2023. The loan portfolio will continue to reflect these developments.

Lending growth to the travel sector continued at a strong pace at the beginning of the year driven by accumulated investment need in a post-pandemic era. Tourist arrivals increased significantly from the previous year, alongside growth in the sector. Around the middle of the year, rising interest rate levels began having a significant impact on investment in cars and equipment, which reduced lending to this sector.

Overall, 2023 was the strongest showing in vehicle and equipment financing and lending growth was considerable. Customers appear well positioned and defaults are at historically low levels.

New loans for vehicle and equipment financing to corporates amounted to ISK 36.6 billion in 2023, which is an 11.1% increase from the previous year. The credit portfolio of Landsbankinn Vehicle & Equipment Financing grew by around 17%, from ISK 37.4 billion to ISK 43.7 billion.

Favourable winds in Corporate Finance

Corporate Finance has had a good year that saw the completion of many successful projects.

In early 2023, Landsbankinn Corporate Finance coordinated the private placement of shares in Icelandic biotech company Alvotech in the amount of USD 137 million. Around mid-year, Alvotech concluded a successful auction of convertible bonds in the amount of USD 100 million in a private placement where Corporate Finance also acted as advisor. Finally, Corporate Finance acted as advisor on the listing of Alvotech's convertible bonds on First North Iceland.

Landsbankinn Corporate Finance coordinated the ISK 13.7 billion share capital increase of First Water hf., which was concluded in September. The share capital increase was one the larger increases of an unlisted company in Iceland in recent years. First Water, previously Landeldi hf., operates a hatchery near Hveragerði and a fish farm in Thorlákshöfn, where development of sustainable land farming of salmon is under way. The share capital increase secured funding for development of the first phase of First Water’s land-based fish farm and there are exciting times ahead for the company.

Corporate Finance coordinated the listing of Amaroq Minerals on the Main Market of Nasdaq Iceland in September. Amaroq is a mining company focused on the identification of gold properties and other strategic mineral assets and the company aims to develop sustainable mining operations in collaboration with the local community in Greenland. We hosted the well-attended and successful Amaroq Minerals Capital Markets Day at our new headquarters at Reykjastræti 6 in spring.   

Samherji and Síldarvinnslan concluded the purchase by Síldarvinnslan of half of shares in sales company Ice Fresh Seafood. Landsbankinn Corporate Finance acted as advisor to Samherji in the transaction.

Corporate Finance coordinated preparation of the base prospectus and issuance programme for real estate company Kaldalón and then the sale of the company’s initial bill issuance under its new ISK 30 billion programme. Publication of a base prospectus provides Kaldalón with access to market funding and the company intends to be a regular issuer on the bond market in the next 1-2 years.

In December, the public offering of Ísfélag hf., the oldest operating public limited liability company in Iceland, was concluded and Landsbankinn Corporate Finance was co-manager of the issuance. The PO was a resounding success, with subscriptions from investors amounting to ISK 58 billion, or fourfold over subscription. Ísfélag is the third listed seafood and fisheries company on the market. With its listing, around a third of catch quotas in Icelandic waters are owned by companies listed on the Main Market of Nasdaq Iceland.

In addition to the above, we concluded various other projects successfully. The outlook is bright for Corporate Finance and current projects include the sale of Landsbankinn’s 35% shareholding in Keahótel ehf.


Fólk úti í náttúru

Good year for SMEs

In 2023, Landsbankinn’s Corporate Banking Service Centre moved from Borgartún 33 to Reykjastræti 6. The name of the unit was changed to SMEs at the same time. Today, the entire Corporate Banking division of Landsbankinn is gathered under one roof though three corporate account managers continue to receive customers in Borgartún 33.

As in previous years, most new loans to SMEs were to construction companies, real estate development and to the travel sector.

SMEs in the construction sector have performed well in recent years, much as the larger companies. Increased demand for residential housing and rising real estate prices drove lending growth to these companies. As 2023 progressed, rising interest rates began putting a damper on developments and sales started to contract. Sales picked up again when the criteria for participation loans was widened.

Rising interest rates have also caused problems for some smaller real estate companies, as rental income no longer covers wage cost. This can generally be solved by changing non-indexed loans to inflation-indexed - most customers had non-indexed loans. Luckily, most customers had inflation-indexed rental agreements to balance the situation.

A great number of tourists have visited Iceland in 2023 and smaller hospitality companies are generally performing well.

Our goal is to offer SMEs first-rate service. We are focused on ensuring that our customers continue to receive personal service while also proliferating the availability of fantastic self-service solutions.

All new corporate customers receive an email welcoming them to the Bank and containing some basic information about the Bank's services. In 2023, we started a new initiative where we call new customers, welcome then and provide holistic advice about the Bank’s services. These phone conversations have been successful and customers who receive the calls are quicker to become active customers and utilise more products.

Sustainable Financing Label has run its course

Landsbankinn will not issue any more Sustainable Financing Labels. The Bank's Sustainable Financing Label was created in 2021 as a vehicle to enable companies who received funding under the Bank’s Sustainable Finance Framework to announce this in a verified manner.

The Label is unique in that Landsbankinn’s Sustainable Finance Framework is issued with a second-party opinion and aligns with ICMA’s guidelines and market practice.

Since then, the European Union has created its Taxonomy that sets out a common classification system for sustainable economic activity. The Label was based on a wider set of criteria than set out in the Taxonomy. Landsbankinn has been an active participant in creating common criteria and metrics for sustainability. To prevent any misunderstanding, we have decided not to issue any more Sustainable Financing Labels. 

Maður í síma

Corporates respond positively to new digital solutions

One of the new features in Landsbankinn’s app in 2023 was the option to close bank accounts. To dispose of any funds on the account, the customer simply selects another account to deposit to. The same applies to a negative balance that can be settled from another account. All services that are linked to the bank account cease to function when it is closed, including debit cards scheduled payments and regular transfers.

This solution was immediately well received as it really simplifies matters. Of all bank accounts that are closed, customers now take care of 60% themselves. We are the first bank to make this available in self-service and it is a logical extension to allowing customers to create bank accounts through self-service solutions, which we began offering in 2020.

Companies can now set up regular transfers in Landsbankinn’s app. The payor determines the period in which the transfers are to occur, whether temporary or continuous. Regular transfers come in handy in treasury activity, transfers between own accounts or within a group of companies.

Corporate use of Landsbankinn’s app increased by just over a third among larger companies in 2023 and by around 43% among smaller companies. Use of the B2B service grew by 12% as compared with 2022, having regard for number of actions. Landsbankinn’s B2B service is a robust electronic business solution that shortens work processes and streamlines accounting. B2B provides real-time insight in bookkeeping and helps users take informed decisions based on the newest data at each time.

Advantages of B2B

Reduces manual data entry and reduces risk of error
Shorter processing time and work processes
Increased automation and speedier reconciliation
Simpler entry and confirmation process
Improved use of human resources, efficient time management and increased performance
Full utilisation of automation can improve cash flow

Corporates can execute international payments in Landsbankinn’s app 

We are the first bank to offer corporates cross-border payments in an app. We also improved the view of recipients and the user experience in carrying out foreign transfers. This is the first taste of many planned changes to the app and corporate online banking in 2024.  

Even more effective control in international payments 

We implemented a new payment control system from SWIFT based on real-time monitoring of actions, blocking payment actions and daily reports to the Bank’s employees. The system helps us prevent fraud. It uses variance analysis based on the comparison of historic and real-time date. We also took into use a new sanction screening system that verifies payment instructions against international regulations and standards. Both these systems are additions to the Bank’s other systems in this field. The new process reduces error risk and increases the efficacy of control. 

International payments up by 7% between years 

Companies that use international payments are up by 4% between years, mainly among new and smaller companies. International payments increased by 7% between years. 

Trade sanctions still apply to Russian banks because of the suffering caused by the war on Ukraine. These sanctions impact Icelandic business transactions but little as their transactions with the banks in questions are generally limited. 


By clicking "Allow All", you agree to the use of cookies to enhance website functionality, analyse website usage and assist with marketing.

More on cookies