Consolidated
Financial
Statements
2024
Íslandsbanki
Íslandsbanki hf.
•
Hagasmári 3
•
201 Kópavogur
•
Iceland
•
Reg.no. 491008-0160
Contents
2
3 - 9
10 - 13
14
15
16
17 - 18
19 - 20
21 - 87
88 - 98
99 - 128
Appendices - unaudited
Green Asset Ratio ......................................................................................................................................
Notes to the Consolidated Financial Statements ........................................................................................
Factsheet - unaudited .................................................................................................................................
Directors' Report .........................................................................................................................................
Consolidated Income Statement ................................................................................................................
Consolidated Statement of Comprehensive Income ..................................................................................
Consolidated Statement of Cash Flows .....................................................................................................
Consolidated Statement of Changes in Equity ...........................................................................................
Consolidated Statement of Financial Position ............................................................................................
Independent Auditor's Report .....................................................................................................................
Íslandsbanki's Corporate Governance Statement 2024 .............................................................................
Profit after tax
(ISKm)
Loans to customers
(
Sector split as of 31.12.24)
Cost-to-income ratio
2
Loans to customers
(ISKbn)
Factsheet
Total assets
(ISKbn)
Totalliquidity coverageratio Leverageratio
3
Total capital ratio
3
The information above has not been reviewed or audited by the Group's auditor.
1. Individuals and small enterprises are out of scope. The Bank's goal is to assess with regards to ESG risk all large customers and counterparties.
2. Expenses of ISK 279m for 4Q23, ISK 286m for 1Q24, ISK 210m for 2Q24, and ISK 269m for 3Q24 recognised in the line item "Other operating expenses" in the Group's Financial Statements
have been restated in the line item "Fee and commission expense", C/I ratio has been restated accordingly. C/I ratio for 2Q24 excludes a charge of ISK 470m due to an administrative fine. C/I
ratio for 4Q23 included a provision of ISK 100m made in connection with an administrative fine, the C/I ratio has been restated so it excludes the provision.
3. Including 1Q24 profit for 31.3.24.
Key figures 2024
Sustainability
Digital milestones
Return on equity
Net profit
ISK 24.2bn
23% growth in sustainable lending
in 2024
Íslandsbanki's Entrepreneurship
Fund awarded ISK 50 million in total
to 14 sustainability-related projects in
2024
93% of the Bank's credit risk
exposure in scope
1
assessed with
regards to ESG risk by year-end
ROE 10.9%
Cost-to-income
ratio 43.9%
NIM 2.9%
Ratings and certifications
A3
Stable outlook
BBB+/A-2
Positive outlook
Implementation of a new anti-money
laundering/know your customer
model
Biometric authentication within
the app launched for domestic
payments
Employees started communicating
with the internal chatbot SAM with
the Bank's Quality Manual
integration to follow soon
ISK
1,295bn
11.2%
9.8%
9.7%
13.2%
11.2%
4Q23 1Q24 2Q24 3Q24 4Q24
6,228
5,417
5,266
7,280
6,283
4Q23 1Q24 2Q24 3Q24 4Q24
41.1%
43.9%
45.7%
40.4%
45.7%
4Q23 1Q24 2Q24 3Q24 4Q24
1,583
1,644
1,596
1,622
1,608
61.7%
61.8%
63.9%
62.9%
64.7%
31.12.23 31.3.24 30.6.24 30.9.24 31.12.24
REA / total assets
1,223
1,248
1,277
1,274
1,295
144%
142%
139%
137%
140%
31.12.23 31.3.24 30.6.24 30.9.24 31.12.24
Customer loans / customer deposits ratio
Mortgages to
individuals 44%
Other loans to
individuals 5%
Seafood
6%
Commerce
and services
14%
Real estate
12%
Industrial and
transportation
6%
Construction 7%
Other
6%
13.4%
12.6%
13.0% 13.0%
13.2%
31.12.23 31.3.24 30.6.24 30.9.24 31.12.24
195%
190% 190%
223%
168%
124%
127%
123%
126%
125%
31.12.23 31.3.24 30.6.24 30.9.24 31.12.24
Net stable funding ratio (NSFR)
25.3%
23.6%
23.1%
23.4%
23.2%
21.4%
19.9% 19.9%
20.2%
20.1%
31.12.23 31.3.24 30.6.24 30.9.24 31.12.24
CET1 ratio
Íslandsbanki hf. Consolidated Financial Statements 2024
2
T
he Board of Directors and the CEO of Íslandsbanki hf. ("the Bank" or "Íslandsbanki") present this report together with the audited
Consolidated Financial Statements of Íslandsbanki hf. and its subsidiaries (together referred to as "the Group") for the year 2024.
Íslandsbanki is a universal bank offering comprehensive financial services to households, corporations, and institutional investors in
Iceland. The Group is one of Iceland's largest banking and financial services groups, with a strong domestic market share.
Operations in 2024
The Group's operations were in line with expectations in 2024, during an eventful year. At the beginning of the year, the Board and the
Bank set out to expand the Bank's operations and risk appetite. This has resulted in increased, yet cautious, focus towards additional
lending abroad, with special emphasis on infrastructure projects. Further, many milestones have been achieved in the development of
additional products and services. This includes the introduction of new lending products, the launch of new online channels, and emphasis
on improving service experience for customers with added automation and digital channels. In January 2025, the Bank introduced its steps
into the insurance market with a cooperation agreement between Íslandsbanki and VÍS tryggingar hf., an Icelandic insurance company,
which will allow the Bank's customers to access comprehensive banking and insurance services on a single platform. This cooperation is
founded on the Bank's vision to promote financial health for its customers. Considerable success has also been achieved within investment
banking services, where the Bank has taken a dominant role, generating the highest turnover in the markets for 10 out of 12 months,
despite weak capital markets throughout the year.
Changes have also been implemented within the Bank to streamline operations, and the results have started to materialise. At the
beginning of 2025, a revised strategy was introduced, paving the way for further growth based on the foundation to empower our customers
to succeed and promoting their financial health. Additionally, the Bank's values were revised and emphasis placed on progressive thinking,
in addition to collaboration and professionalism.
In the year 2024, the Group's profit amounted to ISK 24,246 million and the return on equity was 10.9%, compared to a target of over 10%.
At year-end the Group employed 772 full-time equivalents, 733 in the Bank, 54% female and 46% male (50% female and 50% male within
the executive board), and 39 in subsidiaries. The Group operates 12 branches.
Inflation subsided throughout the year, moving from 6.7% in January to 4.8% at the end of December, over a period of 12 months. Policy
rate cuts by the Central Bank commenced in the latter half of the year, where rates were cut from a previous level of 9.25% to 8.5% at
year-end 2024. This high inflation and interest rate environment has resulted in considerable changes in the composition of the Bank's
loan book where customers have been refinancing from non-indexed to CPI-linked loans. As a result, the CPI imbalance has increased
from ISK 129 billion at year-end 2023 to ISK 193 billion at year-end 2024. Reducing inflation, while policy rates remained high, has put
pressure on net interest margins as the lending yield contracted at a faster pace than deposit costs. Conversely, the fixed rate imbalance,
primarily related to the lending of fixed-rate mortgages in a lower interest rate environment, continued to decrease at a steady pace. The
net interest margin contracted by 0.2 percentage points to 2.9% for the year 2024 as a whole, while fluctuating month-by-month throughout
the year. Macroeconomic forecasts suggest that inflation will continue to subside, leading to further rate cuts, which should alleviate this
pressure.
Net fee and commission income decreased by 1.2% year-on-year. This is mainly attributable to increasing costs related to cards and
payment processing, both related to scheme fees. While investment banking and asset management revenues were adversely affected
by soft capital markets in the first three quarters of the year, markets recovered considerably in the fourth quarter. Further reductions in
inflation and policy rates are expected to continue to boost capital markets, paving the way for net fee and commission growth. Other
operating income amounted to ISK 2,282 million in 2024, mainly related to fair value adjustments of Kirkjusandur 2, a plot which contained
the Bank's former headquarters, as well as a share in the profit of Norðurturninn hf., an associate of the Bank, due to fair value adjustments
of investment property.
The cost-to-inc
ome ratio, adjusted for administrative fines, was 43.9% in the year 2024, compared to 40.6% in 2023, which is primarily
due to higher operating expenses. Salaries and related expenses grew by 8.8% between years and amounted to ISK 16,329 million, mainly
owing to an increase in average FTEs between years, from 770 in 2023 to 799 in 2024, as well as general wage increases. Other operating
expenses increased by 5.7% between years, which translates to 0.9% real growth year-on-year, mainly owing to increase in costs related
to IT and software. During the year, the Bank placed increased emphasis on efficiency and automation, resulting in a reduction in FTEs
towards the end of the year.
The Group updated the classification of expenses during the year. Certain expenses that would have been recognised as other operating
expenses are now recognised as fee and commission expense, see Note 8. Year-on-year comparisons factor in the updated classification
of expenses for both years.
Net impairment reversals on financial assets amounted to ISK 645 million compared to a net impairment charge of ISK 1,015 million in the
previous year. Recalibration of models and revised macroeconomic forecast were the main drivers of impairment reversals. Despite the
high inflationary and interest rate environment, asset quality remains both stable and strong where Stage 3 loans closed in at 1.6%,
compared to a level of 1.8% at year-end 2023. Loans to customers grew by 5.9% year-on-year. As before, mortgages remain the largest
part of the loan book or 44%. LTVs for both the mortgage book and other parts of the loan book remain both healthy and stable. Deposits
increased by 8.9% over the year, reaching one of the highest levels recorded. The Group continues to maintain limited exposure to market
risk, as in previous years.
Íslandsbanki hf. Consolidated Financial Statements 2024
3
Settlement Agreement with the Financial Supervisory Authority of the Central Bank of Iceland
In the autumn of 2022, the Financial Supervisory Authority of the Central Bank of Iceland (FSA) carried out an onsite inspection of the
Bank's AML control framework pursuant to Act no. 140/2018 on Measures Against Money Laundering and Terrorist Financing (AML),
following which the FSA identified certain shortcomings in relation to the Bank's AML measures. On 31 May 2024, the Bank announced
that the Board of Directors had decided to accept the FSA's offer to conclude the matter with a settlement agreement (the Settlement
Agreement). The Settlement Agreement provides that the Bank accepts the FSA's conclusion that the Bank's shortcomings were many
and related to various fundamentals in the Bank's AML control framework. Further, the breaches were deemed significant and to some
extent a reiteration from previous FSA observations in 2021. By entering into the Settlement Agreement, the Bank committed to carrying
out appropriate remedial actions and pay a fine in the amount of ISK 570 million. In its 2023 Consolidated Financial Statements, the Bank
had made an ISK 100 million provision and in the second quarter of 2024 recorded a charge of ISK 470 million in relation to the Settlement
Agreement.
At the beginning of October, the Bank submitted a report on its remedies related to the settlement with the FSA. The Bank has carried out
remedies pursuant to the Settlement Agreement. The Bank acknowledges that AML is a continuous iterative process and is committed to
continue to strengthen its infrastructure on this front.
Funding
Deposits continue to remain the Bank's largest source of funding. Deposits from customers amounted to ISK 927 billion at year-end 2024
and increased by 8.9% from year-end 2023, with retail deposits and those from SMEs being the largest contributors. The customer loans
to customer deposits ratio closed at 140% compared to 144% at year-end 2023.
During 2024, the Bank issued senior preferred bonds several times across four currencies. In January, the Bank issued 3-year green-
labelled notes amounting to NOK 500 million and SEK 500 million, followed by a EUR 300 million 4-year issue in March, which was four
times oversubscribed. In June, the Bank issued NOK 200 million and SEK 300 million in 3-year transactions, both at considerably tighter
spreads than the January issuances. The Bank issued a total of ISK 16 billion of senior preferred bonds in the domestic senior market in
2024 in three transactions, doubling the total outstanding volume to ISK 32 billion. At the end of the year, ISK-denominated senior preferred
bonds accounted for 22% of the total senior preferred bonds outstanding. The continued development of the domestic ISK bond market is
of substantial benefit to the Bank in that it reduces reliance on foreign capital markets, increases diversification and reduces the overall
cost of funding.
Liability management was at the forefront across the whole year. During the fourth quarter, the Bank tendered to buy back outstanding
bonds of its EUR 300 million senior preferred issue due March 2025, the second tender for that issue during the year. Leaving
approximately EUR 149 million of the bond outstanding at year-end 2024. In late June 2024, the Bank launched a tender for its EUR 300
million senior issue maturing in May 2026. In total, 91% of the notes were tendered and the balance was “cleaned-up” in full. These liability
management operations were executed without direct refinancing, enabled as they were by the Bank's strong capital and liquidity ratios
and an ample MREL buffer, all of which remain well above regulatory requirements.
The Bank holds an A3 (stable outlook) issuer rating from Moody's Ratings and a BBB+/A-2 (stable outlook) from S&P Global Ratings.
Capital
The Group's total capital ratio was 23.2% at the end of the year and remains solid and in excess of regulatory requirements, which
according to the latest Supervisory Review and Evaluation Process (SREP) concluded in June 2024 are 19.7%, including all capital buffer
requirements on the Bank. The latest SREP process resulted in a capital requirement reduction of 0.6 percentage points from the previous
assessment. The Group's CET1 target range is currently 16.4-18.4%, including a management CET1 buffer of 100-300 basis points on
top of regulatory CET1 requirements. The current CET1 ratio is 20.1% which is 270 basis points in excess of the CET1 target, assuming
the midpoint of the management buffer.
There are foreseeable changes to the Capital Requirements Regulation (CRR) regarding the calculation of the Risk Exposure Amount
(REA) due to amendments to the CRR. These changes are expected to be implemented in Iceland in 2025. The modifications to CRR will
affect how REA is calculated across credit risk, market risk and operational risk. The Group has closely monitored the anticipated changes
and prepared an updated product offering, taking these changes into account. As a result, the Group expects a considerable reduction in
REA when the changes to the CRR come into effect. At the reporting date, those changes are expected to reduce REA by approximately
4.5%, from ISK 1,041 billion to ISK 994 billion. As such, this is expected to positively impact capital ratios whereas the year-end CET1
ratio would have been 21.1% at year-end 2024 and total capital ratio would have been 24.3%, should the foreseen changes to CRR have
been in place.
Íslandsbanki hf. Consolidated Financial Statements 2024
4
Directors' Report
At the beginning of October 2024, the Resolution Authority of the Central Bank of Iceland approved the Bank's resolution plan and set a
minimum requirement of own funds and eligible liabilities (MREL) requirement. According to the decision, the Bank must maintain an MREL
ratio of 29.5%, including the combined capital buffer requirement, a reduction from the previous decision by 1.2 percentage points. The
Group's current MREL ratio is 33.4%. Further, the Resolution Authority of the Central Bank also decided on a subordination requirement
for the first time. In parallel, the Bank's subordination part is set at 23.4%, which will come into effect three years following the decision.
The Bank's Annual General Meeting (AGM) held on 21 March 2024 approved a dividend payment of ISK 12.3 billion which was paid on 2
April 2024. Additionally, the AGM approved repurchasing of own shares up to 10% of outstanding share capital, in addition to a conventional
dividend in line with the Bank's dividend policy. During 2024, the Bank purchased a total of 84,985,026 shares, or 4.25% of the share
capital for a total of ISK 9,053 million. At the end of the year, the Bank owned a total of 105,375,857 shares, or 5.27% of its own share
capital.
The Bank plans to continue its efforts to optimise its capital structure, subject to market conditions. At the 2025 AGM, the Bank will seek a
renewed approval for a share buyback up to 10% of outstanding share capital. In addition, the Bank will seek approval to reduce the share
capital for all treasury shares at the date of the AGM. Further yet, the Board of Directors will propose a dividend payment amounting to
ISK 12.1 billion, in line with its dividend policy, and reserves the right to propose extraordinary dividend and/or additional share buybacks
later in the year, subject to market conditions.
Economic Outlook
The year 2024 was a year of adjustment for the Icelandic economy. Real gross domestic product (GDP) contracted by 1% year-on-year
during the first three quarters, primarily driven by a decline in service exports, with reduced tourism revenues weighing heavily. However,
in the final quarter, indications emerged that economic growth had resumed, supported by modest growth in tourism and resilience in
domestic demand. The total number of foreign tourists increased by 2% year-on-year, despite a decline in the first half of the year.
Íslandsbanki Research estimates an overall contraction of 0.5% for 2024. While mild in most respects, the contraction marks a turning
point in the economic cycle. Domestic demand saw modest growth, but unfavourable contributions from foreign trade and negative
inventory changes related to the failed capelin season weighed on performance. Despite the slight contraction, the Icelandic economy
remains robust, with low unemployment and generally strong financial positions for households and businesses.
Inflation eased significantly during the year, falling from 6.7% at the start of 2024 to 4.8% by year-end. The decline can be attributed to
reduced demand pressures, improved housing market balance, slower wage growth, a stronger króna, and more stable prices for
consumer goods and inputs globally. This trend, alongside lower inflation expectations and reduced economic pressures, allowed the
Central Bank to begin a policy rate reduction cycle in the fourth quarter. Policy rates, which had been unchanged at 9.25% since spring
2023, were lowered to 8.5% in the final months of 2024. The Central Bank cut policy rates on 5 February 2025 to 8.0%.
Looking ahead, Íslandsbanki forecasts 2.2% GDP growth for 2025, driven by moderate growth in consumption and exports, while
investment is expected to remain largely flat. Although tourism has been a key driver of export growth over the past 15 years, the focus in
export growth is expected to shift toward sectors such as intellectual property industries and land-based aquaculture. Inflation is projected
to decline further in the first half of the year, and the Central Bank is expected to continue its rate-cutting cycle throughout 2025.
Íslandsbanki Research expects inflation to average 3.6% for the year, with policy rates anticipated to decline to 6.5% by year-end.
Outlook for the Group
As the economic environment continues to improve, the Bank expects overall operations to grow across the board. In particular, the recent
reduction in policy rates has positively impacted capital markets, which are expected to respond positively to further rate cuts. Additionally,
the lower rate environment is anticipated to provide positive momentum for corporate investments. However, as inflation subsides further,
pressure on interest rate margins can be experienced, especially if policy rates are not cut at the same pace. Such effects are, however,
expected to pass through in the near term. The Bank's equity and liquidity positions remain strong and well in excess of both regulatory
and internal requirements. Capital optimisation continues to be a priority for the Bank, subject to market conditions. Capital optimisation
may include organic and/or external growth, as well as disposals to shareholders via ordinary buyback programs, reverse auctions, or
extraordinary dividends.
Íslandsbanki hf. Consolidated Financial Statements 2024
5
Risk management
The Bank is exposed to various risks. The management of these risks is an integral part of the Bank's operations, and the Bank has
focused on building up a responsible internal risk culture among the Bank's employees. The Board of Directors is the Bank's supreme
governing body and has the final word on risk management within the Bank. The Board of Directors shall determine the outlines of the
Bank's risk management and internal control framework, set the risk appetite, and decide on the principles and limits according to which
risk shall be managed within the Bank. The CEO is responsible for ensuring that risks are managed within those limits.
The Board and the CEO hereby declare that Íslandsbanki has an overall satisfactory risk management in relation to the Bank's profile and
strategy.
The Bank's risk management framework and policies are discussed under Notes 46-63 to the Consolidated Financial Statements and in
the unaudited Pillar 3 Report.
Ownership
The shares of Íslandsbanki are listed on the Nasdaq Iceland stock exchange and the Bank has one of the largest shareholder bases of a
listed company in Iceland. At year-end the Bank had 9,961 shareholders (year-end 2023: 11,551), where 90.1% of the Bank's shares were
owned by domestic parties and 9.9% by international investors. The Icelandic Government is the largest shareholder with 44.9% of
outstanding shares, taking into consideration treasury shares. Apart from the Government, pension funds are the largest investor group,
owning 34.7% of the outstanding shares. For further information on the Bank's shareholders see Note 42.
We empower our customers to be a force for good
Íslandsbanki aims to be a leader in the area of sustainable development and a catalyst for positive social action. We are aware that
sustainability is a long-term commitment and builds the foundation for a profitable value creation. Therefore, sustainability is now specified
as a part of the Bank's purpose whilst it has been a strategic focus since 2019. The Bank's purpose is to empower our customers to be a
force for good in the Icelandic community and create value for the future in a sustainable way for our customers, shareholders, employees
and the whole community. The Bank focuses on integrating sustainability considerations into its activities, in addition to its profit objectives.
The Bank takes account of ESG (environment, social and governance) criteria in its risk management and actively explores business
opportunities related to sustainability. Íslandsbanki aims to increase the general public's financial knowledge and interest in the subject
and, to this end, offers interesting and accessible seminars on finance and economics.
The Board of Directors approves the Sustainability Policy and sets the Bank's strategy and risk appetite in terms of sustainability risk. The
Board is regularly updated on corporate sustainability matters and the usage of the Bank's Sustainable Funding Framework. The Corporate
Governance and Human Resource sub-committee of the Board assists the Board in fulfilling its oversight responsibilities concerning
sustainability.
The CEO is responsible for executing the strategy and has appointed a Sustainability Committee as a main building block of the governance
structure. The Sustainability Committee is a formal forum for reviewing and discussing matters related to the Bank's sustainability strategy
formulation and the Bank's commitments regarding sustainability. The Committee is independent from credit committees and needs to
approve proposals for credit cases before they are included in the Sustainable Financing Framework. The CEO is a member of the
committee, and it has senior representatives from the business units, Risk Management, and Strategy & Sustainability.
The Sustainability Policy creates a comprehensive framework for its activities in the area of sustainability and maps out the Bank's policy
for operations, responsible lending, investments, purchasing, and grants, as well as integrating with and supporting the Bank's other
policies. In line with the Sustainability Policy, the Board of Directors has approved seven sustainability goals for its operations, to be
completed by 2025. The goals are based on ESG criteria and supported by annual targets set by the business units as part of their five-
year planning process.
The Sustainability Report for the year 2024 includes key information on the environmental, social and governance criteria for Íslandsbanki,
partly in accordance with the European Commission's ESRS (European Sustainability Reporting Standards) standards. The Bank
emphasises increased flow of transparent information on sustainability. Auditing firm KPMG ehf. reviewed and confirmed with limited
assurance the selected sustainability disclosure in the Annual and Sustainability Report for 2024.
In accordance with local regulation, Íslandsbanki publishes in an unaudited appendix to the Consolidated Financial Statements information
regarding the EU taxonomy, Green Asset Ratio (GAR). In 2023, the regulation entered into force for financial institutions and other non-
financial institutions within its scope, and by that made it mandatory to publish information on the Group's assets which meet the regulation's
requirements, and can according to the taxonomy be considered as environmentally sustainable. At year-end 2024 the GAR was 0.20%
based on turnover and 0.26% based on capex. The Bank gathers information on green assets through external data vendors.
Íslandsbanki hf. Consolidated Financial Statements 2024
6
S
ustainability risk has been more effectively integrated into key processes relating to lending, investments, and product development
during the year. At year-end, 93% of all credit risk exposure equal to or exceeding ISK 150 million in loan commitments has been assessed
with respect to ESG risk-related factors. More detailed coverage can be found in the Bank's Pillar 3 Report for 2024 which contains a
separate chapter on sustainability risk and climate risk in compliance with TCFD (Task Force on Climate-related Financial Disclosures)
criteria.
Collaboration with international and local partners with regards to sustainability is highly important. Over the years, Íslandsbanki has
participated in international commitments and supported domestic cooperative efforts on sustainability. Being a part of international
collaborations such as the UN Principles for Responsible Banking (UN PRB) and being a founding member of the Net-Zero Banking
Alliance (NZBA) is particularly valuable and informative for a relatively small bank. On the other hand, being one of the largest companies
in Iceland means that the Bank can contribute significantly towards domestic partnerships such as Festa - Center for Sustainability and
IcelandSif, to name a few.
Environment
Íslandsbanki is committed to supporting Iceland's ambitious Climate Action Plan and the Paris Agreement Goals. To that end, the Bank
announced in April 2021 its commitment to become net zero on financed emissions by 2040. The Bank's own operations have been carbon
neutral for the past four years, and with this decision, its commitment will also extend to financed emissions which includes the carbon
footprint of Íslandsbanki's entire loan and asset portfolio.
Íslandsbanki publishes information on financed emissions (in accordance with the Partnership for Carbon Accounting Financials (PCAF)
standard) for 2024 in the Bank's Annual and Sustainability Report, and a more detailed disclosure within the Bank's Pillar 3 Report. The
Bank publishes its objectives and performance in connection with climate issues. This includes a new target on emission reduction within
the seafood sector. With that the Bank has published targets which account for 64% of total lending and 78% of total emissions from the
loan portfolio in 2019. The Bank expects its financed emissions to shrink by 60% by 2030 and by 85% by 2040. The Bank's objective of
having a net-zero loan portfolio by 2040 is an ambitious but achievable goal in most sectors, although it is clear that transitioning to clean
energy in air transport and cargo shipping by sea will probably take longer.
Social
Íslandsbanki strongly emphasises creating a constructive and healthy work environment. The Bank's values are progressive thinking,
collaboration, and professionalism.
Equal rights remain important, and we want Íslandsbanki to be a desirable workplace for people from wide-ranging backgrounds. One of
Íslandsbanki's most important sustainability targets is to ensure that no single gender accounts for more than 60% of the Bank's
management team. This ratio is considered in the hiring of management-level employees. As in previous years, the Bank received equal
pay certification and was awarded professional certification under the ÍST 85:2012 standard for 2024. According to the most recent equal
pay appraisal, the unexplained pay gap for jobs of equal value is 0.2%.
Governance
The regulatory framework for corporate governance practices within Íslandsbanki consists of the law applicable to its operations, including
those imposed by the Central Bank of Iceland and Nasdaq Iceland. The Bank's governance practices derive, inter alia, from the laws and
regulations applicable to financial institutions and the financial market. The Bank complies with the Guidelines on Corporate Governance
in accordance with paragraph 7 of article 54 of the Act on Financial Undertakings no. 161/2002. Each year the Bank conducts an appraisal
to ensure that it remains consistent with the Guidelines. The Board of Directors follows the Corporate Governance Guidelines (6th ed.)
issued by the Iceland Chamber of Commerce, Nasdaq Iceland, and SA Confederation of Icelandic Enterprise, available on
www.leidbeiningar.is. Moreover, the Bank's governance practices are based on the European Banking Authority's Guidelines on Internal
Governance for Financial Undertakings (EBA/GL/2021/05), cf. article 16 of regulation (EC) no. 1093/2010, transposed into Icelandic law
with Act no. 24/2017, on European Control Systems in the Financial Market.
Íslandsbanki has a Code of Conduct in place for employees and the Board of Directors, which is available on the Bank's website. In
addition, the Bank's Sustainability Policy emphasises these matters. The aim of the Code is to promote good operational practices,
reporting of misconduct and actions to prevent conflict of interest. Employees confirm annually that they have read and understood the
rules and commit their adherence to the rules. At the end of 2024, more than 99% of employees had confirmed the rules. The Bank
emphasises respect for human rights and avoids business transactions where human rights are violated, including discrimination on the
basis of gender, religion, or race according to the Sustainability Policy and the Suppliers' Code of Conduct. The Bank is committed to
continue its active dialogue with suppliers on sustainability issues.
The Bank makes every effort to combat bribery and corruption. For that purpose, the Bank has e.g. implemented a policy on conflict of
interest and rules on measures against conflict of interest in which there is a chapter on gifts and complimentary trips. The rules are
intended to ensure that the impartiality and credibility of employees cannot be brought into question with respect to the treatment and
handling of individual matters. Moreover, the Bank has a policy in place on actions against money laundering and terrorist financing, in
which the Bank takes a clear stance against payments on bribery and corruption. In practice, the Bank emphasises on being compliant
with Act no. 140/2018 on measures against Money Laundering and Terrorist Financing which involves combating bribery and corruption.
Íslandsbanki hf. Consolidated Financial Statements 2024
7
T
he Board of Directors of Íslandsbanki is committed to excellence in its governance framework so that it complies with the best corporate
governance practices in the financial market at all times. The Bank's internal regulatory framework is regularly reviewed with respect to
relevant changes in the Bank's internal and external environment. The Board also emphasises the follow-up on the effective implementation
of changes to the internal regulatory framework and the development of a strong risk culture. The Board makes sure that issues related to
governance, risk management and internal control receive appropriate consideration in the Board.
At each AGM seven non-executive directors, and two alternate members, are elected to the Board for a term of one year. The Board
undertakes the Bank's affairs and is responsible for setting the Bank's general strategy as well as instructing the CEO on its further
implementation and execution. The Board has a supervisory role overseeing that the Bank's organisation and activities are at all times in
accordance with relevant laws, regulations and good business practices. Furthermore, the Board shall monitor the execution of its policies,
the sound control of accounting and financial management, and ensure that group internal audit, compliance, risk management and internal
controls are effective at all times.
In accordance with the Bank's Articles of Association the Bank operates a Nomination Committee whose role is to nominate individuals to
the Bank's Board of Directors at the AGM, or as the case may be at a shareholders' meeting where Board elections are on the agenda.
The members of the Nomination Committee shall be three, along with two alternates. Two members of the Nomination Committee, along
with one alternate, shall be elected at the AGM or other shareholders' meeting where the election of nomination committee members is on
the agenda, for a term of one year. The third member of the Nomination Committee and their alternate shall be Board members of the
Bank and are appointed by the Board for a term of one year. The composition and work of the Board shall be in accordance with article
53 of the Act on Financial Undertakings no. 161/2002.
The Board has approved a policy on the suitability of the Board of Directors, the CEO and key function holders. The objective of the policy
is that the Bank's Board of Directors, CEO, and key employees meet the relevant suitability requirements at all times and the framework
for their appointment and/or employment is in accordance with the applicable legal requirements for the Bank's operation. The policy
states, among other things, that the composition of the Board and the Executive Committee shall at any time be diverse, with regard to
educational and professional background, gender and age. Human Resources reports annually to the Board on the Bank's actions in
implementing the policy. Currently the Board consists of seven members, three women and four men. Board members are of various ages,
born in the years 1963-1979. Board members have a broad range of education, e.g. in the fields of engineering, law, finance, management,
business administration, and securities trading. Board members also have extensive industry experience in the areas of operations,
finance, information technology management, and consulting.
The Board appoints three sub-committees, each one comprising Board members along with one external committee member in the Board
Audit Committee. These sub-committees operate under the terms of a mandate letter from the Board as well as the Rules of Procedure of
the Board. The mandate letters of Board sub-committees are available on the Bank's website.
The CEO is responsible for the day-to-day operations of the Bank and that the Bank's business is, at all times, in accordance with the
Bank's Articles of Association, policies of the Board and the relevant law. The CEO engages the Bank's Chief Compliance Officer and
appoints members of the Executive Committee and other Senior Management Committees.
The Executive Committee, comprising eight members, including the CEO, is composed of four women and four men. Members of the
Executive Committee were born in the years 1966-1982 and possess diverse education and extensive experience. The role of the
Executive Committee is to maintain an overall view of the Bank's operations and to coordinate key aspects of its activities. The CEO
ensures that the Board is regularly provided with accurate information on the Bank's finances, development, and operations.
The Bank's Finance division is responsible for the preparation of the Group's Consolidated Financial Statements in line with the
International Financial Reporting Standards (IFRS) as adopted by the European Union and additional requirements in the Act on Annual
Accounts no. 3/2006, the Act on Financial Undertakings no. 161/2002, and rules on accounting for credit institutions, where applicable.
The Board's Audit Committee reviews the Group's annual and interim Consolidated Financial Statements before their submission for Board
approval and endorsement. The Board's Audit Committee regularly discusses the Bank's financial statements and evaluates its internal
control processes. Management reporting is generally presented to the Board at least 10 times a year. The external auditors review the
half year Condensed Consolidated Interim Financial Statements and audit the annual Consolidated Financial Statements. The external
auditors also reviewed the Bank's third quarter 2024 Condensed Consolidated Interim Financial Statements.
A more detailed description of Íslandsbanki's governance framework and associated practices can be found in the Bank's Corporate
Governance Statement enclosed in an unaudited appendix to the Consolidated Financial Statements and on the Bank's website,
www.islandsbanki.is.
Íslandsbanki hf. Consolidated Financial Statements 2024
8
Statement by the Board of Directors and the CEO
The audited Consolidated Financial Statements for the year ended 31 December 2024 have been prepared on a going concern basis in
accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union and additional requirements
in the Act on Annual Accounts, no. 3/2006; the Act on Financial Undertakings, no. 161/2002; and rules on accounting for credit institutions,
where applicable.
To the best of our knowledge, these Consolidated Financial Statements provide a true and fair view of the Group's operating profits and
cash flows in 2024 and its financial position as of 31 December 2024. Furthermore, in our opinion the financial statements and the Directors'
Report give fair view of the main operational developments and achievements and describe the principal risks and uncertainties that the
Group faces in its operations.
In our opinion, the Consolidated Financial Statements of Íslandsbanki hf. for the year 2024 identified as "549300PZMFIQR79Q0T97-2024-
12-31-en.zip" are prepared in all material respects, in compliance with the European Single Electronic Format Regulation (ESEF).
The Board of Directors and the CEO have today discussed and approved the 2024 Consolidated Financial Statements of Íslandsbanki.
K
ópavogur, 13 February 2025
Board of Directors:
Linda Jónsdóttir, Chairman
Stefán Pétursson, Vice-Chairman
Agnar Tómas Möller
Helga Hlín Hákonardóttir
Páll Grétar Steingrímsson
Stefán Sigurðsson
Valgerður Hrund Skúladóttir
Chief Executive Officer:
Jón Guðni Ómarsson
Íslandsbanki hf. Consolidated Financial Statements 2024
9
To the Board of Directors and Shareholders of Íslandsbanki hf.
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Íslandsbanki hf. ("the Group"), which comprise the consolidated statement of
financial position as at 31 December 2024, the consolidated statements of profit or loss and other comprehensive income, changes in equity
and cash flows for the year then ended, and notes, comprising material accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the
Group as at 31 December 2024, and of its consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and additional requirements in the
Icelandic Act on Annual Accounts, Act on Financial Undertakings and rules on accounting for credit institutions, where applicable.
Our opinion is consistent with the additional report submitted to the Audit Committee and the Board of Directors.
Other Matter
The consolidated financial statements of the Group as at and for the year ended 31 December 2023 were audited by another auditor who
expressed an unmodified opinion on those statements on 8 February 2024.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further
described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent
of the Group in accordance with the ethical requirements that are relevant to our audit of financial statements in Iceland and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
We declare, to the best of our knowledge and belief, that we have not provided any prohibited non-audit services, as referred to in Article
5(1) of the Regulation (EU) 537/2014 and that we remained independent in conducting the audit.
We were first appointed as auditors by the Annual General Meeting on 21 March 2024.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial
statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Íslandsbanki hf. Consolidated Financial Statements 2024
10
Key Audit Matters How the matter was addressed in the audit
Impairment charges for loans to customers
Loans to customers represent ISK 1,295,388 million or 81% of total
assets at 31 December 2024. Expected credit losses (ECL) at year
end is ISK 7,820 million.
The ECL provisions in the Group's l
oan portfolio represents
management's best estimate of potential losses in the loan
portfolio as at 31 December 2024.
T
he determination of the ECL provision is based on estimates and
judgement by management. Key areas of judgement include:
• A
ssumptions used in the ECL model to assess the credit risk
related to the exposure and the expected future cash flows
of the customer.
• The identification of loans with significant increase in credit
risk.
• Valuation of collateral and assumptions regarding future
cash flows on credit impaired loans to customers and off-
balance sheet exposures.
• Effects of macroeconomic uncertainties on assumptions and
judgements used by management.
Due to the use of judgement and estimates and the relative size of
loans to customers, we consider the provision for expected credit
losses (ECL) a Key Audit Matter.
M
anagement has provided information regarding loan impairment
charges and the ECL provision in notes 3, 15, 25, 26, 47-50 and
64.3.
O
ur procedures focused on the following to respond to the Key
Audit Matter, among others:
• Testing of key controls in the lending process including credit
decisions, credit review and rating classification.
• Tested controls consist of manual and automatic controls in
application systems.
• Tested the key controls regarding the process of loan loss
provisions.
• Reviewed the Group's principles based on IFRS 9 to assess
whether the Group's application is reasonable.
• Reviewed managements calculations for previous years of
loan loss provision and compared it to realised losses.
•
Validated the input data in the models, including
macroeconomic factors, and the accuracy of the calculations
and evaluated management
's assessments. In our audit, we
have used our credit risk modelling specialists.
We
have assessed the circumstances presented in the notes to the
financial statements, if the information is sufficiently comprehensive
as a description of management's assessment.
IT Systems
Due to the significant number of transactions that are processed,
the Group's financial reporting is highly dependent on IT systems
supporting automated accounting and reconciliation procedures.
To ensure complete and accurate financial records, it is important
that controls over appropriate access rights, program development
and changes are designed properly and operate effectively.
Because of the importance of the data from the IT systems
supporting the financial reporting we consider their reliability a Key
Audit Matter.
Our procedures focused on the following to respond to the Key
Audit Matter, among others:
• Obtained understanding of the Group's IT environment.
• Tested IT general controls over access rights management,
change management and IT operations.
• Tested automated controls in the IT environment supporting
financial reporting.
I
n performing the audit procedures over the IT systems, we used
our IT specialists.
Íslandsbanki hf. Consolidated Financial Statements 2024
11
Other information
The Board of Directors and CEO are responsible for the other information. The other information comprises the information included in the
unaudited factsheet accompanying these consolidated financial statements and the Annual and Sustainability Report.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the consolidated financial statements, or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
R
esponsibilities of the Board of Directors and CEO for the Consolidated Financial Statements
The Board of Directors and CEO are responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with IFRSs as adopted by the European Union and additional disclosure requirements for listed companies in Iceland, and for
such internal control as they determine is necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors and CEO are responsible for assessing the Company's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
T
he Board of Directors and CEO are responsible for overseeing the Company's financial reporting process.
A
uditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level
of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design
and per
form audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in t
he
c
ircumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's
report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions
may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether
the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group t
o
ex
press an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of t
he
gr
oup audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors and Audit Committee regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Board of Directors and Audit Committee, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters
in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Íslandsbanki hf. Consolidated Financial Statements 2024
12
Report on Other Legal and Regulatory Requirements
Report on European Single Electronic Format (ESEF Regulation)
As part of our audit of the consolidated financial statements of Íslandsbanki hf. we performed procedures to be able to issue an opinion on
whether the consolidated financial statements of Íslandsbanki hf. for the year 2024 with the file name "549300PZMFIQR79Q0T97-2024-12-
31-en.zip" is prepared, in all material respects, in compliance with the Act on disclosure obligation of issuers of securities and the obligation
to flag no. 20/2021 relating to requirements regarding European single electronic format Regulation EU 2019/815 which include requirements
related to the preparation of the consolidated financial statements in XHTML format and iXBRL markup.
The Board of Directors and CEO are responsible for preparing the consolidated financial statements in compliance with the Act on disclosure
obligation of issuers of securities and the obligation to flag no. 20/2021. This includes preparing the consolidated financial statements in an
XHTML format in accordance with EU Regulation 2019/815 on the European single electronic format (ESEF Regulation).
Our responsibility is to obtain reasonable assurance, based on evidence that we have obtained, on whether the consolidated financial
statements is prepared in all material respects, in compliance with the ESEF Regulation, and to issue a report that includes our opinion. The
nature, timing and extent of procedures selected depend on the auditor's judgement, including the assessment of the risks of material
departures from the requirement set out in the ESEF Regulation, whether due to fraud or error.
In our opinion, the consolidated financial statements of Íslandsbanki hf. for the year 2024 with the file name"549300PZMFIQR79Q0T97-
2024-12-31-en.zip" is prepared, in all material respects, in compliance with the ESEF Regulation.
R
eport on the Report of the Board of Directors and CEO
Pursuant to the legal requirement under Article 104, Paragraph 2 of the Icelandic Financial Statements Act No. 3/2006, we confirm that, to
the best of our knowledge, the report of the Board of Directors and CEO accompanying the consolidated financial statements includes the
information required by the Financial Statements Act if not disclosed elsewhere in the consolidated financial statements.
The engagement partner on the audit resulting in this independent auditor's report is Hrafnhildur Helgadóttir.
R
eykjavík, 13 February 2025
KPMG ehf.
H
rafnhildur Helgadóttir
Sigurjón Örn Arnarson
Íslandsbanki hf. Consolidated Financial Statements 2024
13
Notes 2024 2023
135,278 126,095
6,064 11,047
( 94,077) ( 88,531)
7 47,265 48,611
18,944 18,591
( 5,822) ( 5,308)
8 13,122 13,283
9 ( 338) 241
10 607 581
11
2,282 570
2,551 1,392
62,938 63,286
12 ( 16,329) ( 15,003)
13 ( 11,299) ( 10,689)
14 ( 470) ( 960)
( 1,900) ( 1,871)
( 29,998) ( 28,523)
32,940 34,763
15 645 ( 1,015)
33,585 33,748
16 ( 9,426) ( 9,198)
24,159 24,550
87 35
24,246 24,585
Earnings per share
17 12.53 12.34
The notes on pages 21 to 87 are an integral part of these Consolidated Financial Statements.
*Comparative figures have been changed. Expenses of ISK 951 million recognised in the line item "Other operating expenses" in the
2023 Consolidated Financial Statements were restated in the line item "Fee and commission expense". Additionally, a provision of ISK
100 million recognised in the line item "Other operating expenses" in the 2023 Consolidated Financial Statements was restated in the
line item "Administrative fines".
Basic and diluted earnings per share attributable to shareholders of Íslandsbanki hf. (ISK) ..................
Income tax expense ..............................................................................................................................
Profit for the year
Profit for the year before profit from non-current assets
Profit from non-current assets held for sale, net of tax ...........................................................................
Profit before net impairment on financial assets
Net financial income (expense) .............................................................................................................
Net foreign exchange gain .....................................................................................................................
Other operating income .........................................................................................................................
Salaries and related expenses ..............................................................................................................
Other operating expenses* ....................................................................................................................
Administrative fines* ..............................................................................................................................
Total operating income
Profit before tax
Net impairment on financial assets ........................................................................................................
Other interest income ............................................................................................................................
Fee and commission expense* ..............................................................................................................
Net fee and commission income
Bank tax ................................................................................................................................................
Interest expense ....................................................................................................................................
Net interest income
Total operating expenses
Consolidated Income Statement
Other net operating income
Fee and commission income .................................................................................................................
Interest income calculated using the effective interest rate method .......................................................
Íslandsbanki hf. Consolidated Financial Statements 2024
14
Amounts are in ISK million
2024 2023
24,246 24,585
( 746) ( 5,280)
328 1,077
( 418) ( 4,203)
( 2) 1
240 -
1 -
22 -
( 71) -
190 1
( 228) ( 4,202)
24,018 20,383
The notes on pages 21 to 87 are an integral part of these Consolidated Financial Statements.
Profit for the year ...................................................................................................................................
Items that will not be reclassified to the income statement
Consolidated Statement of Comprehensive Income
Items that may subsequently be reclassified to the income statement
Tax related to net changes in FV of fin. liab. attrib. to changes in credit risk ..........................................
Net changes in FV of fin. liab. attributable to changes in credit risk .......................................................
Other comprehensive expense for the year, net of tax
Total comprehensive income for the year
Foreign currency translation ..................................................................................................................
Reclassification to the income statement of debt instruments at FVOCI ................................................
Changes in allowance for ECL of debt instruments at FVOCI ................................................................
Net changes in fair value of debt instruments at FVOCI ........................................................................
Tax related to debt instruments at FVOCI .............................................................................................
Íslandsbanki hf. Consolidated Financial Statements 2024
15
Amounts are in ISK million
Notes 31.12.2024 31.12.2023
22 65,716 87,504
23 50,486 73,475
18 142,618 161,342
24 5,324 5,776
25 1,295,388 1,223,426
18 24,330 13,241
27 4,701 4,051
28 2,600 -
29 5,039 6,562
30 2,684 2,930
31 7,304 3,638
1,617 749
1,607,807 1,582,694
32 12,535 16,149
33 926,846 850,709
24 7,306 5,090
35 367,586 417,573
36 31,695 38,155
38 12,916 13,107
39 21,568 17,218
1,380,452 1,358,001
9,473 9,898
55,000 55,000
7,102 5,083
155,780 154,712
227,355 224,693
1,607,807 1,582,694
The notes on pages 21 to 87 are an integral part of these Consolidated Financial Statements.
Other liabilities ................................................................................................
Debt issued and other borrowed funds ............................................................
Total Liabilities
Liabilities
Investments in associates ...............................................................................
Property and equipment ..................................................................................
Intangible assets .............................................................................................
Shares and equity instruments ........................................................................
Investment property ........................................................................................
Equity
Tax liabilities ...................................................................................................
Subordinated loans .........................................................................................
Other assets ...................................................................................................
Non-current assets held for sale .....................................................................
Derivative instruments and short positions ......................................................
Deposits from customers ................................................................................
Total Assets
Deposits from Central Bank and credit institutions ..........................................
Total Liabilities and Equity
Total Equity
Share capital ...................................................................................................
Share premium ...............................................................................................
Reserves .........................................................................................................
Retained earnings ...........................................................................................
Consolidated Statement of Financial Position
Cash and balances with Central Bank .............................................................
Assets
Bonds and debt instruments ...........................................................................
Loans to customers .........................................................................................
Derivatives ......................................................................................................
Loans to credit institutions ...............................................................................
Íslandsbanki hf. Consolidated Financial Statements 2024
16
Amounts are in ISK million
Liability Foreign
credit currency
Share Share Statutory Restricted risk translation Retained
Total
capital premium reserve reserves reserve reserve earnings
equity
Equity as at 1 January 2023 10,000 55,000 2,500 4,870 1,786 2 144,716 218,874
Profit for the year ............................................................................................................................... 24,585 24,585
Net changes in fair value of financial liabilities attributable to changes in credit risk ........................... ( 4,516) ( 764) ( 5,280)
Tax related to net changes in fair value of financial liabilities attributable to changes in credit risk ..... 903 174 1,077
Foreign currency translation ............................................................................................................... 1 1
Total comprehensive income (expense) for the year - - - - ( 3,613) 1 23,995 20,383
Dividends ........................................................................................................................................... ( 12,254) ( 12,254)
Purchase of treasury shares .............................................................................................................. ( 102) ( 2,208) ( 2,310)
Restricted due to capitalised development costs ................................................................................ ( 290) 290 -
Restricted due to fair value changes .................................................................................................. ( 309) 309 -
Restricted due to associates .............................................................................................................. 136 ( 136) -
Equity as at 31 December 2023 9,898 55,000 2,500 4,407 ( 1,827) 3 154,712 224,693
The notes on pages 21 to 87 are an integral part of these Consolidated Financial Statements.
Consolidated Statement of Changes in Equity
Reserves
Íslandsbanki hf. Consolidated Financial Statements 2024
17
Amounts are in ISK million
Consolidated Statement of Changes in Equity
Liability Foreign
credit currency
Share Share Statutory Restricted risk translation Retained
Total
capital premium reserve reserves reserve reserve earnings
equity
Equity as at 1 January 2024 9,898 55,000 2,500 4,407 ( 1,827) 3 154,712 224,693
Profit for the year ............................................................................................................................... 24,246 24,246
Net changes in fair value of financial liabilities attributable to changes in credit risk ........................... 2,115 ( 2,861) ( 746)
Tax related to net changes in fair value of financial liabilities attributable to changes in credit risk ..... ( 423) 751 328
Foreign currency translation ............................................................................................................... ( 2) ( 2)
Net changes in fair value of debt instruments at FVOCI ..................................................................... 240 240
Reclassification to the income statement of debt instruments at FVOCI ............................................ 1 1
Changes in allowance for expected credit losses of debt instruments at FVOCI ................................ 22 22
Tax related to debt instruments at FVOCI .......................................................................................... (71) ( 71)
Total comprehensive income (expense) for the year
-
-
-
192 1,692
22,136
24,018
Divid
ends ........................................................................................................................................... ( 12,303) ( 12,303)
Purchase of treasury shares .............................................................................................................. ( 425) ( 8,628) ( 9,053)
Restricted due to capitalised development costs ................................................................................ ( 291) 291 -
Restricted due to fair value changes .................................................................................................. 302 ( 302) -
Restricted due to associates .............................................................................................................. 126 ( 126) -
Equity as at 31 December 2024 9,473 55,000 2,500 4,736 ( 135) 1 155,780 227,355
Reserves
The Bank's authorised and issued share capital consists of 2,000 million ordinary shares with a par value of ISK 5 each. Íslandsbanki bought back approximately 85.0 million own shares for ISK 9,053
million during 2024 (2023: 20.4 million own shares for ISK 2,310 million). At year-end the Bank owned 105.4 million own shares (year-end 2023: 20.4 million). The Annual General Meeting (AGM) for
the 2023 operating year took place on 21 March 2024. During the AGM, shareholders approved the Board's proposal to distribute dividends of ISK 12,300 million, equivalent to ISK 6.26 per share
(2023: ISK 6.15 per share). The dividends were paid on 2 April 2024.
Upon derecognition (mainly repurchases) of financial liabilities designated at FVTPL the amount accumulated in liability credit risk reserve is transferred to retained earnings. In 2024 negative ISK
2,110 million (2023: negative ISK 590 million) were transferred to retained earnings at derecognition of financial liabilities designated at FVTPL.
The notes on pages 21 to 87 are an integral part of these Consolidated Financial Statements.
Íslandsbanki hf. Consolidated Financial Statements 2024
18
Amounts are in ISK million
( 2)
2024 2023
24,246 24,585
( 37,278) ( 33,442)
26,936 11,199
123,681 108,689
( 94,687) ( 76,073)
431 286
( 1,871) ( 1,861)
( 9,414) ( 7,165)
Net cash provided by operating activities 32,044 26,218
( 96) -
101 374
( 426) ( 311)
( 501) ( 385)
Net cash used in investing activities ( 922) ( 322)
103,756 117,497
( 150,752) ( 180,813)
( 566) ( 528)
( 12,303) ( 12,254)
( 9,053) ( 2,310)
Net cash used in financing activities ( 68,918) ( 78,408)
( 37,796) ( 52,512)
( 92) ( 51)
86,472 139,035
Cash and cash equivalents at year-end 48,584 86,472
Reconciliation of cash and cash equivalents
Notes
22 3,621 3,653
22 31,163 64,025
23 13,800 18,794
Cash and cash equivalents at year-end 48,584 86,472
The notes on pages 21 to 87 are an integral part of these Consolidated Financial Statements.
*For further breakdown see the following page.
**Interest is defined as having been paid when it has been deposited into the customer's account.
The Group has prepared its Consolidated Statement of Cash Flows using the indirect method. The statement is based on the net profit
after tax for the year and shows the cash flows from operating, investing and financing activities and the increase or decrease in cash
and cash equivalents during the year.
Dividends paid ........................................................................................................................................
Net decrease in cash and cash equivalents ............................................................................................
Effects of foreign exchange rate changes ...............................................................................................
Purchase of treasury shares ...................................................................................................................
Cash and cash equivalents at the beginning of the year .........................................................................
Cash on hand ......................................................................................................................
Unrestricted balances with Central Bank .............................................................................
Bank accounts .....................................................................................................................
Purchase of investment property ............................................................................................................
Repayment of lease liabilities .................................................................................................................
Proceeds from sales of property and equipment .....................................................................................
Purchase of property and equipment ......................................................................................................
Additions of intangible assets .................................................................................................................
Proceeds from borrowings ......................................................................................................................
Repayment and repurchases of borrowings ............................................................................................
Consolidated Statement of Cash Flows
Dividends received .................................................................................................................................
Paid bank tax ..........................................................................................................................................
Paid income tax and special financial activities tax .................................................................................
Profit for the year ....................................................................................................................................
Non-cash items included in profit for the year* .......................................................................................
Changes in operating assets and liabilities* ............................................................................................
Interest received .....................................................................................................................................
Interest paid** .........................................................................................................................................
Íslandsbanki hf. Consolidated Financial Statements 2024
19
Amounts are in ISK million
Consolidated Statement of Cash Flows
The notes on pages 21 to 87 are an integral part of these Consolidated Financial Statements.
Changes in operating assets and liabilities2024 2023 Mandatory reserve and pledged balances with Central Bank ..................................................................( 11,106) ( 9,831)Loans to credit institutions ......................................................................................................................15,854 1,397 Bonds and debt instruments ...................................................................................................................24,319 ( 21,426)Loans to customers ................................................................................................................................( 68,563) ( 23,058)Shares and equity instruments ...............................................................................................................( 10,528) 2,540 Other assets ...........................................................................................................................................( 3,580) 2,442 Non-current assets held for sale .............................................................................................................695 23 Deposits from Central Bank and credit institutions .................................................................................( 3,563) 888 Deposits from customers ........................................................................................................................78,098 63,077 Derivative instruments and short positions .............................................................................................426 ( 5,590)Other liabilities ........................................................................................................................................4,884 737 Total 26,936 11,199
Non-cash items included in profit for the year2024 2023 Net interest income ................................................................................................................................( 47,265) ( 48,611)Unrealised fair value loss recognised in the income statement ...............................................................190 2,322 Foreign exchange gain ...........................................................................................................................( 607) ( 581)Fair value gain on investment property ...................................................................................................( 1,310) -Share of profit from associates and net gain from dissolution of subsidiary ............................................( 688) ( 207)Net gain from sales of property and equipment ......................................................................................( 24) ( 219)Depreciation, amortisation, and write-offs ...............................................................................................1,662 1,620Bank tax .................................................................................................................................................1,900 1,871Net impairment on financial assets .........................................................................................................( 578) 1,190Income tax expense ...............................................................................................................................9,426 9,198Profit from non-current assets held for sale, net of tax ............................................................................( 87) ( 35)Other changes ........................................................................................................................................103 10Total ( 37,278) ( 33,442)
Íslandsbanki hf. Consolidated Financial Statements 2024
20
Amounts are in ISK million
Notes to the Consolidated Financial Statements
Notes
Page
Notes
Page
General information
1 Corporate information ................................................. 22 28 Investment property .................................................... 43
2 Basis of preparation .................................................... 22 29 Property and equipment .............................................. 44
3 Significant accounting estimates and judgements ....... 22 30 Intangible assets ......................................................... 45
4 Changes to accounting policies ................................... 23 31 Other assets ............................................................... 45
5 Operating segments .................................................... 24 32 Deposits from Central Bank and credit institutions ...... 46
33 Deposits from customers ............................................ 46
Notes to the Consolidated Income Statement 34 Pledged assets ........................................................... 46
6 Quarterly statements (unaudited) ................................ 28 35 Debt issued and other borrowed funds ........................ 47
7 Net interest income ..................................................... 29 36 Subordinated loans ..................................................... 48
8 Net fee and commission income ................................. 29 37 Changes in liabilities arising from financing activities .. 48
9 Net financial income (expense) ................................... 30 38 Tax assets and tax liabilities ....................................... 49
10 Net foreign exchange gain .......................................... 30 39 Other liabilities ............................................................ 50
11 Other operating income ............................................... 31
12 Personnel and salaries ................................................ 31 Other Notes
13 Other operating expenses ........................................... 33 40 Custody assets ........................................................... 50
14 Administrative fines ..................................................... 33 41 Leases ........................................................................ 50
15 Net impairment on financial assets ............................. 33 42 Íslandsbanki's shareholders ........................................ 51
16 Income tax expense .................................................... 34 43 Related party .............................................................. 52
17 Earnings per share ...................................................... 34 44 Contingencies ............................................................. 53
45 Events after the reporting period ................................. 54
Notes to the Consolidated Statement of Financial Position
18 Classification of financial assets and Risk Management
financial liabilities ........................................................ 35 46 Risk management ....................................................... 55
19-20
Fair value information for financial instruments ........... 36
47-51
Credit risk ................................................................... 56
21 Offsetting financial assets and financial liabilities ........ 39
52-54
Liquidity risk ................................................................ 63
22 Cash and balances with Central Bank ......................... 39
55-59
Market risk .................................................................. 67
23 Loans to credit institutions .......................................... 39
60-62
Capital management ................................................... 72
24 Derivative instruments and short positions .................. 40 63 Operational risk ........................................................... 74
25 Loans to customers .................................................... 41
26 Expected credit losses ................................................ 41 Accounting policies
27 Investments in associates ........................................... 43 64 Material accounting policies ........................................ 75
Íslandsbanki hf. Consolidated Financial Statements 2024
21
Notes to the Consolidated Financial Statements
1.
Corporate information
Íslandsbanki hf., the parent company, was incorporated on 8 October 2008 and is a limited liability company domiciled in Iceland. The
r
egistered office is at Hagasmári 3, 201 Kópavogur, Iceland.
The Consolidated Financial Statements for the year ended 2024 comprise the financial statements of Íslandsbanki hf. ("the Bank" or
"Íslandsbanki") and its subsidiaries together referred to as "the Group". The Bank's main subsidiaries are Íslandssjóðir hf. (Iceland Funds)
and Allianz Ísland hf., additionally Íslandsbanki has control over six other non-significant subsidiaries. All of the Bank's subsidiaries are
wholly owned.
The Group provides a wide range of financial services such as retail banking, corporate banking, investment banking, wealth
management and asset financing. The Group operates mainly in the Icelandic market.
T
he Consolidated Financial Statements were written in English and approved and authorised for issue by the Board of Directors and the
CEO of Íslandsbanki hf. on 13 February 2025. In case of discrepancy between the English version and the Icelandic translation, t
he
English original will prevail.
2.
Basis of preparation
The Consolidated Financial Statements have been prepared in accordance with the International Financial Reporting Standards (IFRS)
as adopted by the European Union and additional requirements in the Act on Annual Accounts no. 3/2006, the Act on Financial
Undertakings no. 161/2002 and rules on accounting for credit institutions, where applicable.
The Consolidated Financial Statements are presented in Icelandic króna (ISK), which is the functional currency of Íslandsbanki hf. All
amounts presented in ISK have been rounded to the nearest million, except where otherwise indicated. At 31 December 2024 the
exchange rate of the ISK against the USD was 138.20 and for the EUR 143.90 (at year-end 2023: USD 136.20 and EUR 150.50).
T
he Group's management has made an assessment of the Group's ability to continue as a going concern and is satisfied that the Group
has the resources to continue in business for the foreseeable future. Therefore, the Consolidated Financial Statements have been
prepared on a going concern basis.
Basis of measurement
The Consolidated Financial Statements are prepared on a historical cost basis with the following exemptions:
• Assets and liabilities measured at fair value: bonds and debt instruments, shares and equity instruments, investment property,
short positions in listed bonds, derivative financial instruments, and certain debt issued by the Group.
• Recognised financial liabilities designated as hedged items in qualifying fair value hedge relationships are measured at
amortised cost adjusted for changes in fair value attributable to the risk being hedged.
• Investments in associates are accounted for using the equity method.
3.
Significant accounting estimates and judgements
In preparing these Consolidated Financial Statements management has made judgements, estimates, and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Management bases its
judgements on previous experience and other factors that are considered reasonable under the circumstances, but actual results may
differ from those estimates. Management continuously evaluates these judgements, estimates, and assumptions. Changes in accounting
estimates are recognised when they occur. Key source of estimation uncertainty is the allowance for credit losses.
Íslandsbanki hf. Consolidated Financial Statements 2024
22
Notes to the Consolidated Financial Statements
3.
Significant accounting estimates and judgements (continued)
Impairment of financial assets
The main assumptions used for calculating the allowance for credit losses include the following:
• Probability of default (PD), loss given default (LGD) and exposure at default (EAD)
• Macroeconomic variables for multiple scenarios built on available information
• Assessment of significant increase in credit risk (SICR)
The PD, LGD and EAD inputs used to estimate expected credit losses are modelled based on variables that are most closely related
with credit losses in the relevant portfolio. This includes macroeconomic variables, demographic variables, variables related to past
payment history among other variables. These variables are sourced both internally and externally. Significant judgements required for
measuring expected credit loss (ECL) include the following:
• Determining criteria for assessing what constitutes a significant increase in credit risk
• Establishing the forward-looking scenarios and their relative weightings
• Choosing appropriate models and assumptions for the measurement of ECL
The All Risk Committee decides which weights of forward-looking scenarios best reflect uncertainty in economic conditions for the
Group's borrowers and the ongoing uncertainty in global markets. The scenarios are usually weighted 25%-50%-25% (optimistic, base,
pessimistic). However, it was determined appropriate to keep the weights at 20%-50%-30% at year-end 2024, as it had been throughout
the year, as this would best represent the probability-weighted average over all possible scenarios. Management used sensitivity analysis
to determine the appropriate weights for the three scenarios. According to the analysis, a shift of 5% weight from the baseline to the
pessimistic scenario would increase the impairment allowance by ISK 310 million, while a 5% shift from the baseline to the optimistic
scenario would decrease the allowance by ISK 130 million.
The impairment process is designed to be systematic so that it can be consistently applied. For the largest part of the loan portfolio, the
Group employs an automatic process to assign facilities to stages and to estimate the ECL. For large or complex credit cases where the
automatic process may not be appropriate, alternative ECL calculations, referred to as "manual impairment", can be proposed by experts.
Each manual impairment is subsequently reviewed and approved or rejected by the Impairment Council. As of year-end 2024, exposure
to a few counterparties amounting to ISK 7.5 billion was subject to manual impairment, with the associated ECL totalling ISK 1.5 billion
(year-end 2023: ISK 19.8 billion and ISK 3.0 billion, respectively).
In addition, the Group continues to make temporary changes to the impairment model due to seismic activity on the Reykjanes peninsula.
The adjustments include classifying exposures amounting to ISK 1.2 billion (year-end 2023: ISK 5.2 billion) as Stage 2 and applying
higher haircuts to the values of collateral for these exposures. The Group also continues to apply a management overlay to the modelled
ECL. Additional impairment allowance due to the seismic activity amounted to ISK 0.6 billion at year-end 2024 (year-end 2023: ISK 1.7
billion). Exposure and additional impairment due to the seismic activity decreased during year 2024 due to the purchase of the property
company Þórkatla of residential housing within the urban area in Grindavík in accordance with Act no.16/2024 on the Purchase of
Residential Property in Grindavík. In parallel, the Group derecognised the loans and recognised a claim on Þórkatla instead. The Group's
claim on Þórkatla is classified as bonds and debt instruments measured at fair value through profit and loss and is therefore not subject
to impairment. For further information see Note 19.
The allowance for credit losses is further discussed in Notes 25-26, in Notes 47-51 on risk management and in Note 64.3.
4.
Changes to accounting policies
Amendments to IFRS standards that became effective from 1 January 2024 did not have a material impact on the Consolidated Financial
Statements.
Changes to IFRS standards issued but not effective at the reporting date
Two new IFRS standards and amendments to several IFRS standards have been issued but are not yet effective. The Group did not
early adopt any of them and intends to adopt them when they become effective. The Group expects only the new IFRS standard, IFRS
18 - Presentation and Disclosures in Financial statements, to have a material impact on its future Consolidated Financial Statements as
a result of these changes.
IFRS 18 - Presentation and Disclosures in Financial statements will be effective from 1 January 2027 and introduces new requirements
to the following:
• Presentation of specified categories and defined subtotals in the statement of profit or loss
• Provide disclosures on management-defined performance measures (MPMs) in the notes to the financial statements
• Improve aggregation and disaggeration
Íslandsbanki hf. Consolidated Financial Statements 2024
23
Notes to the Consolidated Financial Statements
5. Operating segments
Segment information is presented in accordance with the Group's management and internal reporting structure. The segments' operating
results are reported to the Board of Directors and the CEO, who are responsible for allocating resources to the reportable segments and
assessing their financial performance.
An operating segment is a distinguishable component of the Group, for which discrete financial information is available, that engages in
business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions
with any of the Group's other components. Each operating segment is engaged in providing products or services which are subject to
risk and return that are different from those of other operating segments. The accounting policies for the reportable segments are in line
with the Group's accounting policies. The Group operates mainly in the Icelandic market.
The Bank has three main business segments: Personal Banking, Business Banking, and Corporate & Investment Banking. Operating
segments pay and receive interest to and from Treasury to reflect the allocation of capital, funding costs, and the relevant risk premium.
Capital allocation to the business units is based on the Pillar 1 regulatory capital requirement, the Pillar 2-R capital requirement calculated
according to the Bank's Internal Capital Adequacy Assessment Process (ICAAP), and the combined buffer requirement as stipulated in
the Act on Financial Undertakings no. 161/2002. Income tax and bank tax with breakdown for each segment is according to the current
tax rates.
The Group comprises the following operating segments:
Personal Banking
Personal Banking provides comprehensive financial services to individuals, including lending, savings, and payments. Íslandsbanki's
customers are increasingly managing their day-to-day banking via digital solutions such as apps, the online bank, and the secure web
chat. Customers can also visit the Bank's efficient branch network for comprehensive consultancy services and contact the contact
centre.
Business Banking
Business Banking provides small and medium-sized enterprises (SMEs) with comprehensive financial services, including Ergo, the
Bank's asset financing service. Business Banking serves customers in business centres and branches close to their businesses. Via
online banking and the app, customers have a full overview of their business, making day-to-day operations easy to manage.
Corporate & Investment Banking
Corporate & Investment Banking provides universal banking services to large companies, municipalities, institutional investors, and
affluent individuals. Services include customised products and services such as lending and advisory, risk management, brokerage, and
private banking services. The division services all sectors of the Icelandic economy with specialised expertise in the seafood,
infrastructure, and tourism sectors. Outside of Iceland, Íslandsbanki has a special focus on the North Atlantic seafood industry, leveraging
its expertise in the domestic market and global contacts.
Treasury and Proprietary Trading
Treasury is responsible for funding the Bank's operations and managing the internal pricing framework. It is also responsible for the
Bank's balance sheet management and for relations with debt investors, financial institutions, stock exchanges, and rating agencies.
Equity that is not allocated to business units sits within Treasury. Proprietary Trading includes equity and debt investments in the trading
book and the banking book.
Cost centres
Cost centres comprise the CEO's office (Human Resources & Internal Services, Legal, Marketing & Communications, and Strategy &
Sustainability), Digital & Data, Risk Management, Compliance, and Finance excluding Treasury and Proprietary Trading. Group Internal
Audit is also included in cost centres; however, it is independent from the Bank, and the Chief Audit Executive reports directly to the
Bank's Board of Directors.
Subsidiaries, eliminations and adjustments
Subsidiaries include Íslandssjóðir hf. (Iceland Funds), Allianz Ísland hf. and other less significant subsidiaries. All inter-company
eliminations are included in the column "Eliminations & adjustments".
Following is an overview showing the Group's performance with a breakdown by operating segments.
Íslandsbanki hf. Consolidated Financial Statements 2024
24
Notes to the Consolidated Financial Statements
5.
Operating segments (continued)
Corporate & Treasury & Subsidiaries, 2024 Personal Business Investment Proprietary Cost The Bank eliminations & The GroupBanking Banking Banking Trading centres total adjustments total Net interest income (expense) ...................................................................... 15,849 18,736 13,661 ( 842) ( 413) 46,991 274 47,265 Net fee and commission income (expense) .................................................. 3,983 2,020 4,497 ( 21) ( 98) 10,381 2,741 13,122 Other net operating income ........................................................................... ( 19) 78 1,302 1,539 232 3,132 ( 581) 2,551 Total operating income19,813 20,834 19,460 676 ( 279) 60,504 2,434 62,938 Salaries and related expenses ...................................................................... ( 2,763) ( 2,349) ( 2,273) ( 324) ( 7,556) ( 15,265) ( 1,064) ( 16,329)Other operating expenses ............................................................................. ( 2,716) ( 1,304) ( 1,204) ( 454) ( 5,452) ( 11,130) ( 169) ( 11,299)Administrative fines ....................................................................................... - - - - ( 470) ( 470) - ( 470)Bank tax ........................................................................................................ ( 889) ( 471) ( 533) 6 ( 13) ( 1,900) - ( 1,900)Net impairment on financial assets ............................................................... 660 ( 984) 944 25 - 645 - 645 Cost allocation .............................................................................................. ( 5,450) ( 4,364) ( 3,840) 536 13,118 - - -Profit (loss) before tax ................................................................................... 8,655 11,362 12,554 465 ( 652) 32,384 1,201 33,585 Income tax .................................................................................................... ( 2,576) ( 3,195) ( 3,521) 61 160 ( 9,071) ( 355) ( 9,426)Profit (loss) for the year before profit from non-current assets 6,079 8,167 9,033 526 ( 492) 23,313 846 24,159 Net segment revenue from external customers ............................................. 20,450 23,874 30,022 ( 13,899) 57 60,504 2,434 62,938 Net segment revenue from other segments ..................................................( 637) ( 3,040) ( 10,562) 14,575 ( 336) - - -Fee and commission income ........................................................................ 8,307 2,244 4,741 281 ( 2) 15,571 3,373 18,944 Depreciation, amortisation, and write-offs ..................................................... ( 183) ( 59) ( 6) - ( 1,397) ( 1,645) ( 17) ( 1,662)At 31 December 2024Loans to customers ...................................................................................... 608,766 323,824 362,692 106 - 1,295,388 - 1,295,388 Other assets ................................................................................................. 3,654 1,618 4,784 291,344 9,180 310,580 1,839 312,419 Total segment assets 612,420 325,442 367,476 291,450 9,180 1,605,968 1,839 1,607,807 Deposits from customers .............................................................................. 486,235 277,186 147,394 18,820 - 929,635 ( 2,789) 926,846 Other liabilities .............................................................................................. 3,404 3,997 10,536 428,420 5,635 451,992 1,614 453,606 Total segment liabilities 489,639 281,183 157,930 447,240 5,635 1,381,627 ( 1,175) 1,380,452 Allocated equity ............................................................................................ 44,719 51,133 65,596 61,675 1,218 224,341 3,014 227,355 Risk exposure amount .................................................................................. 275,836 308,573 394,601 50,434 7,108 1,036,552 4,420 1,040,972 The individual segment balance sheet positions are with external customers and exclude internal transactions, thus explaining the differences in total assets, and total liabilities and equity.
Íslandsbanki hf. Consolidated Financial Statements 2024
25
Amounts are in ISK million
Notes to the Consolidated Financial Statements
5.
Operating segments (continued)
Corporate & Treasury & Subsidiaries, 2023 Personal Business Investment Proprietary Cost The Bank eliminations & The GroupBanking Banking Banking Trading centres total adjustments total Net interest income (expense) ...................................................................... 17,410 17,980 13,854 ( 475) ( 365) 48,404 207 48,611 Net fee and commission income (expense)* ................................................. 4,206 2,075 4,492 ( 8) ( 36) 10,729 2,554 13,283 Other net operating income ........................................................................... 70 90 1,284 565 374 2,383 ( 991) 1,392 Total operating income21,686 20,145 19,630 82 ( 27) 61,516 1,770 63,286 Salaries and related expenses ...................................................................... ( 2,473) ( 2,161) ( 2,132) ( 272) ( 6,959) ( 13,997) ( 1,006) ( 15,003)Other operating expenses* ........................................................................... ( 2,462) ( 1,063) ( 978) ( 505) ( 5,479) ( 10,487) ( 202) ( 10,689)Administrative fines* ..................................................................................... - - - - ( 960) ( 960) - ( 960)Bank tax ........................................................................................................ ( 838) ( 454) ( 489) ( 77) ( 13) ( 1,871) - ( 1,871)Net impairment on financial assets ............................................................... ( 1,589) ( 669) 1,163 80 - ( 1,015) - ( 1,015)Cost allocation .............................................................................................. ( 5,225) ( 4,058) ( 3,569) 581 12,271 - - -Profit (loss) before tax ................................................................................... 9,099 11,740 13,625 ( 111) ( 1,167) 33,186 562 33,748 Income tax .................................................................................................... ( 2,584) ( 3,170) ( 3,660) 203 291 ( 8,920) ( 278) ( 9,198)Profit (loss) for the year before profit from non-current assets 6,515 8,570 9,965 92 ( 876) 24,266 284 24,550 Net segment revenue from external customers* ........................................... 29,136 22,696 29,365 ( 19,989) 308 61,516 1,770 63,286 Net segment revenue from other segments ..................................................( 7,450) ( 2,551) ( 9,735) 20,071 ( 335) - - -Fee and commission income ........................................................................ 8,116 2,262 4,648 401 - 15,427 3,164 18,591 Depreciation, amortisation, and write-offs ..................................................... ( 179) ( 57) ( 2) - ( 1,368) ( 1,606) ( 14) ( 1,620)At 31 December 2023Loans to customers ...................................................................................... 574,653 311,689 336,161 923 - 1,223,426 - 1,223,426 Other assets ................................................................................................. 3,176 2,210 889 343,823 8,716 358,814 454 359,268 Total segment assets 577,829 313,899 337,050 344,746 8,716 1,582,240 454 1,582,694 Deposits from customers .............................................................................. 406,821 251,238 172,658 22,957 - 853,674 ( 2,965) 850,709 Other liabilities .............................................................................................. 3,720 3,828 5,370 487,357 5,768 506,043 1,249 507,292 Total segment liabilities 410,541 255,066 178,028 510,314 5,768 1,359,717 ( 1,716) 1,358,001 Allocated equity ............................................................................................ 41,160 47,210 63,033 69,975 1,145 222,523 2,170 224,693 Risk exposure amount .................................................................................. 260,760 291,509 366,761 48,148 6,930 974,108 2,924 977,032
*Expenses of ISK 951 million recognised in the line item "Other operating expenses" in the 2023 Consolidated Financial Statements were restated in the line item "Net fee and commission income
(expense)". Additionally, a provision of ISK 100 million recognised in the line item "Other operating expenses" in the 2023 Consolidated Financial Statements was restated in the line item
"Administrative fines".
Íslandsbanki hf. Consolidated Financial Statements 2024
26
Amounts are in ISK million
Notes to the Consolidated Financial Statements
5.
Subsidiaries, eliminations & adjustments
2024 Íslands- Allianz Other Eliminations sjóðir hf. Ísland hf. subsidiaries & adjustments Total Net interest income .................................................................... 16 163 91 4 274 Net fee and commission income (expense) ............................... 1,342 1,412 ( 45) 32 2,741 Other net operating income ....................................................... 177 35 473 ( 1,266) ( 581)Total operating income 1,535 1,610 519 ( 1,230) 2,434 Salaries and related expenses ................................................... ( 739) ( 247) ( 78) - ( 1,064)Other operating expenses .......................................................... ( 249) ( 204) ( 404) 688 ( 169)Profit (loss) before tax ................................................................ 547 1,159 37 ( 542) 1,201 Income tax ................................................................................. ( 115) ( 236) ( 4) - ( 355)Profit for the year before profit from non-current assets 432 923 33 ( 542) 846 Net segment revenue from external customers .......................... 1,906 1,463 11 ( 946) 2,434 Net segment revenue from other segments ............................... ( 371) 147 508 ( 284) -Fee and commission income ..................................................... 1,897 2,040 - ( 564) 3,373 Depreciation, amortisation, and write-offs .................................. - ( 2) ( 4) ( 11) ( 17)At 31 December 2024Total assets ............................................................................... 2,198 3,102 2,401 ( 5,862) 1,839 Total liabilities ............................................................................ 287 1,228 59 ( 2,749) ( 1,175)Total equity ................................................................................ 1,911 1,874 2,342 ( 3,113) 3,014 2023 Íslands- Allianz Other Eliminations sjóðir hf. Ísland hf.* subsidiaries & adjustments Total Net interest income .................................................................... 11 105 89 2 207 Net fee and commission income (expense) ............................... 1,465 1,046 ( 30) 73 2,554 Other net operating income ....................................................... 74 ( 2) 295 ( 1,358)( 991)Total operating income 1,550 1,149 354 ( 1,283) 1,770 Salaries and related expenses ................................................... ( 686) ( 249) ( 71) - ( 1,006)Other operating expenses .......................................................... ( 222) ( 223) ( 273) 516 ( 202)Profit (loss) before tax ................................................................ 642 677 10 ( 767) 562 Income tax ................................................................................. ( 128) ( 150) - - ( 278)Profit for the year before profit from non-current assets 514 527 10 ( 767) 284 Net segment revenue from external customers .......................... 1,860 1,116 7 ( 1,213) 1,770 Net segment revenue from other segments ............................... ( 310) 33 347 ( 70) -Fee and commission income ..................................................... 2,021 1,651 - ( 508) 3,164 Depreciation, amortisation, and write-offs .................................. - ( 2) ( 3) ( 9) ( 14)At 31 December 2023Total assets ............................................................................... 2,284 2,330 5,517 ( 9,677) 454 Total liabilities ............................................................................ 292 879 100 ( 2,987) ( 1,716)Total equity ................................................................................ 1,992 1,451 5,417 ( 6,690) 2,170
Operating segments (continued)
*Comparative figures have been changed. Expenses of ISK 605 million recognised in the line item "Other operating expenses" for Allianz
Ísland hf. in the 2023 Consolidated Financial Statements were restated in the line item "Net fee and commission income (expense)".
Íslandsbanki hf. Consolidated Financial Statements 2024
27
Amounts are in ISK million
Notes to the Consolidated Financial Statements
6. Quarterly statements (unaudited)
*Expenses of ISK 286 million for Q1, ISK 210 million for Q2, and ISK 269 million for Q3 recognised in the line item "Other operating
expenses" in the Group's Interim Financial Statements of 2024 were restated in the line item "Fee and commission expense".
*Expenses of ISK 273 million for Q1, ISK 182 million for Q2, ISK 217 million for Q3, and ISK 279 million for Q4 recognised in the line
item "Other operating expenses" in 2023 were restated in the line item "Fee and commission expense". Additionally, a provision of ISK
100 million recognised in the line item "Other operating expenses" in Q4 2023 was restated in the line item "Administrative fines".
2024Q1 Q2 Q3 Q4 TotalInterest income calculated using the effective interest rate method ..........34,162 37,619 34,093 29,404 135,278 Other interest income ...............................................................................2,461 1,391 1,113 1,099 6,064 Interest expense .......................................................................................(24,501) (26,519) (23,429) (19,628) ( 94,077)Fee and commission income ....................................................................4,469 4,664 4,649 5,162 18,944 Fee and commission expense* .................................................................(1,459) (1,455) (1,353) (1,555) ( 5,822)Net financial income (expense) .................................................................(236) (499) 228 169 ( 338)Net foreign exchange gain ........................................................................196 174 124 113 607 Other operating income ............................................................................1,098 45 357 782 2,282 Salaries and related expenses ..................................................................(4,168) (4,130) (3,787) (4,244) ( 16,329)Other operating expenses* .......................................................................(2,942) (2,916) (2,585) (2,856) ( 11,299)Administrative fines ...................................................................................- (470) - - ( 470)Bank tax ....................................................................................................(493) (459) (494) (454) ( 1,900)Net impairment on financial assets ...........................................................( 704) 137 860 352 645 Profit before tax ........................................................................................7,883 7,582 9,776 8,344 33,585 Income tax expense ..................................................................................( 2,468) ( 2,403) ( 2,497) ( 2,058) ( 9,426)Profit for the period before profit from non-current assets held for sale .....5,415 5,179 7,279 6,286 24,159 Profit (loss) from non-current assets held for sale, net of tax ....................2 87 1 ( 3) 87 Profit for the period 5,417 5,266 7,280 6,283 24,246
2023Q1 Q2 Q3 Q4 TotalInterest income calculated using the effective interest rate method ..........30,070 32,461 31,290 32,274 126,095 Other interest income ...............................................................................2,093 2,502 3,006 3,446 11,047 Interest expense .......................................................................................(19,740) (22,351) (22,450) (23,990) ( 88,531)Fee and commission income ....................................................................4,393 4,676 4,388 5,134 18,591 Fee and commission expense* .................................................................(1,197) (1,266) (1,205) (1,640) ( 5,308)Net financial income (expense) .................................................................538 (559) (193) 455 241 Net foreign exchange gain ........................................................................244 48 176 113 581 Other operating income ............................................................................43 21 248 258 570 Salaries and related expenses ..................................................................(3,960) (3,829) (3,353) (3,861) ( 15,003)Other operating expenses* .......................................................................(2,809) (2,680) (2,470) (2,730) ( 10,689)Administrative fines* ................................................................................. - (860) - (100) ( 960)Bank tax ....................................................................................................(462) (485) (522) (402) ( 1,871)Net impairment on financial assets ...........................................................( 675) 1,245 ( 583) ( 1,002) ( 1,015)Profit before tax ........................................................................................8,538 8,923 8,332 7,955 33,748 Income tax expense ..................................................................................( 2,335) ( 2,792) ( 2,334) ( 1,737) ( 9,198)Profit for the period before profit from non-current assets held for sale .....6,203 6,131 5,998 6,218 24,550 Profit from non-current assets held for sale, net of tax ..............................8 8 9 10 35 Profit for the period 6,211 6,139 6,007 6,228 24,585
Íslandsbanki hf. Consolidated Financial Statements 2024
28
Amounts are in ISK million
Notes to the Consolidated Financial Statements
7.
Net interest income
Fee and commission income by segment is disclosed in Note 5.
2024 2023 Cash and balances with Central Bank .............................................................................................................4,888 5,389 Loans to credit institutions ...............................................................................................................................3,042 3,236 Loans to customers .........................................................................................................................................121,730 117,470 Financial assets mandatorily at fair value through other comprehensive income .............................................5,618 -Interest income calculated using the effective interest rate method 135,278 126,095 Financial assets mandatorily at fair value through profit or loss .......................................................................6,020 11,035 Other assets ....................................................................................................................................................44 12 Other interest income 6,064 11,047 Deposits from Central Bank and credit institutions ..........................................................................................( 380) ( 243)Deposits from customers .................................................................................................................................( 60,587) ( 50,073)Debt issued and other borrowed funds designated as at fair value through profit or loss .................................( 1,912) ( 2,470)Debt issued and other borrowed funds at amortised cost ................................................................................( 21,767) ( 25,829)Subordinated loans .........................................................................................................................................( 3,357) ( 3,214)Lease liabilities ................................................................................................................................................( 76) ( 79)Other liabilities .................................................................................................................................................( 5,998) ( 6,623)Interest expense ( 94,077) ( 88,531)Net interest income 47,265 48,611
8. Net fee and commission income2024 2023 Asset management .........................................................................................................................................2,864 2,908 Investment banking and brokerage .................................................................................................................3,337 3,340 Payment processing ........................................................................................................................................8,390 8,072 Loans and guarantees .....................................................................................................................................2,009 2,251 Other fee and commission income ..................................................................................................................2,344 2,020 Fee and commission income 18,944 18,591 Brokerage ........................................................................................................................................................( 536) ( 496)Payment processing expenses* ......................................................................................................................( 4,564) ( 4,119)Other fee and commission expense* ...............................................................................................................( 722) ( 693)Fee and commission expense ( 5,822) ( 5,308)Net fee and commission income 13,122 13,283
*Comparative figures have been changed. Expenses of ISK 951 million recognised in the line item "Other operating expenses" in the
2023 Consolidated Financial Statements were restated in the line item "Fee and commission expense" (ISK 272 million as "Payment
processing expenses" and ISK 679 million as "Other fee and commission expense").
Íslandsbanki hf. Consolidated Financial Statements 2024
29
Amounts are in ISK million
Notes to the Consolidated Financial Statements
9.
Net financial income (expense)
10. Net foreign exchange gain
2024 2023 Cash and balances with Central Bank .............................................................................................................( 92) ( 51)Loans at amortised cost ..................................................................................................................................( 8,201) ( 5,524)Financial assets mandatorily at fair value through profit or loss .......................................................................( 3,673) ( 2,153)Financial assets mandatorily at fair value through other comprehensive income .............................................( 1,640) -Other assets ....................................................................................................................................................17 ( 1)Net foreign exchange loss for assets ( 13,589) ( 7,729)Deposits ..........................................................................................................................................................2,512 2,599 Debt issued and other borrowed funds designated as at fair value through profit or loss .................................1,943 375 Debt issued and other borrowed funds at amortised cost ................................................................................8,853 4,444 Subordinated loans .........................................................................................................................................888 892 Net foreign exchange gain for liabilities 14,196 8,310 Net foreign exchange gain 607 581
2024 2023 Net gain on financial assets and financial liabilities mandatorily at FVTPL ......................................................166 2,610 Net loss on financial liabilities designated as at FVTPL ...................................................................................( 580) ( 2,511)Net gain on fair value hedges ..........................................................................................................................63 42 Net gain on derecognition of financial liabilities measured at amortised cost ...................................................103 170 Net loss on derecognition of financial assets measured at amortised cost ......................................................( 89) ( 70)Net loss on sale of debt instruments measured at FVOCI ...............................................................................( 1) -Net financial income (expense) ( 338) 241 The following table shows the categorisation of the net gain on fair value hedges.2024 2023 Fair value changes of the hedged items attributable to the hedged risk ..........................................................( 1,175) ( 1,539)Fair value changes of the hedging derivatives .................................................................................................1,238 1,581 Net gain on fair value hedges 63 42 The following table shows the categorisation of the net financial income (expense) by type.2024 2023 Net loss on bonds and related derivatives .......................................................................................................( 304) ( 1,062)Net gain (loss) on shares and related derivatives ............................................................................................17 ( 537)Dividend income ..............................................................................................................................................431 286 Net gain (loss) on debt issued and related derivatives .....................................................................................( 88) 1,083 Net gain (loss) on economic hedging and other derivatives .............................................................................( 304) 541 Net loss on derecognition of financial assets measured at amortised cost ......................................................( 89) ( 70)Net loss on sale of debt instruments measured at FVOCI ...............................................................................( 1) -Net financial income (expense) ( 338) 241
Íslandsbanki hf. Consolidated Financial Statements 2024
30
Amounts are in ISK million
Notes to the Consolidated Financial Statements
*Financial activities tax calculated on salaries is 5.5% in 2024 (2023: 5.5%).
12. Personnel and salaries2024 2023 Salaries ...........................................................................................................................................................12,590 11,545 Contributions to pension funds ........................................................................................................................1,916 1,734 Social security charges and financial activities tax* .........................................................................................1,716 1,591 Other salary-related expenses .........................................................................................................................162 133 Capitalisation of salaries and related expenses in software development ........................................................( 55) -Salaries and related expenses 16,329 15,003
Total amount of paid compensation for the Board of Directors, the CEO, and the Executive Committee is specified as follows:
2024 2023 Linda Jónsdóttir, Chairman of the Board .........................................................................................................13.9 5.7 Stefán Pétursson, Vice-Chairman of the Board ...............................................................................................13.1 4.4 Agnar Tómas Möller, member of the Board .....................................................................................................9.3 6.8 Haukur Örn Birgisson, member of the Board ...................................................................................................10.0 3.8 Helga Hlín Hákonardóttir, member of the Board ..............................................................................................12.3 4.1 Stefán Sigurðsson, member of the Board ........................................................................................................7.0 -Valgerður Hrund Skúladóttir, member of the Board .........................................................................................7.5 3.4 Páll Grétar Steingrímsson, former member of the Board .................................................................................2.8 0.3 Anna Þórðardóttir, former member of the Board ..............................................................................................2.4 9.6 Frosti Ólafsson, former member of the Board .................................................................................................. - 9.6 Finnur Árnason, former Chairman of the Board ............................................................................................... - 8.3 Guðrún Þorgeirsdóttir, former Vice-Chairman of the Board ............................................................................. - 7.5 Ari Daníelsson, former member of the Board .................................................................................................. - 5.1 Herdís Gunnarsdóttir, former member of the Board .........................................................................................0.5 2.4 Tanya Sharov, former member of the Board ................................................................................................... - 2.1 Total salaries 78.8 73.1Contribution to pension funds for the Board of Directors amounted to ISK 10.9 million in 2024 (2023: ISK 9.8 million).
2024 2023 The Bank The Group The Bank The Group Average number of full-time equivalent positions during the year ...............................759 799 731 770 Number of full-time equivalent positions at year-end ..................................................733 772 725 764
11.Other operating income2024 2023 Fair value changes on investment property .....................................................................................................1,310 -Net gain from dissolution of subsidiary ............................................................................................................38 -Share of profit of associates, net of tax ...........................................................................................................650 207 Gain from sales of property and equipment .....................................................................................................24 219 Legal fees .......................................................................................................................................................68 54 Rental income .................................................................................................................................................41 63 Other net operating income .............................................................................................................................151 27 Other operating income 2,282 570
Íslandsbanki hf. Consolidated Financial Statements 2024
31
Amounts are in ISK million
Notes to the Consolidated Financial Statements
12. Personnel and salaries (continued)
**On 1 January 2024 Ellert Hlöðversson assumed the position of Chief Financial Officer. On 1 November 2023 Barbara Inga
Albertsdóttir was appointed Chief Compliance Officer. On 1 July 2023 Kristín Hrönn Guðmundsdóttir was appointed Managing Director
of Corporate & Investment Banking. On 1 February 2024 Ólöf Jónsdóttir assumed the position of Managing Director of Personal
Banking.
*Jón Guðni Ómarsson was appointed CEO by the Bank's Board of Directors on 28 June 2023. Jón Guðni served as CFO until year-
end 2023.
Included in total salaries are non-monetary benefits such as the use of cars owned by the Group.
As of 1 January 2017, the Bank has not had an active remuneration policy in place as stated in the Bank's compensation policy. In
2024 there were no paid performance-based salaries (2023: none) and there were no unpaid performance-based salaries at year-end
2024. There were no share-based payments in the years 2024 and 2023.
2024 2023 Pension Pension Total funds Total funds salariescontrib.salariescontrib.Jón Guðni Ómarsson, CEO* ......................................................................................58.0 8.4 50.5 7.2Ellert Hlöðversson, Chief Financial Officer** ..............................................................51.4 7.3 - -Barbara Inga Albertsdóttir, Chief Compliance Officer** ..............................................38.6 5.8 6.3 0.9Guðmundur Kristinn Birgisson, Chief Risk Officer ......................................................42.7 6.2 41.6 5.9Kristín Hrönn Guðmundsdóttir, Managing Director of C&I Banking** ..........................55.8 8.3 22.6 4.0Ólöf Jónsdóttir, Managing Director of Personal Banking** ..........................................44.6 6.5 - -Riaan Dreyer, Managing Director of Digital & Data .....................................................48.5 7.3 44.9 6.7Una Steinsdóttir, Managing Director of Business Banking ..........................................47.0 6.8 44.9 6.4Sigríður Hrefna Hrafnkelsdóttir, former Managing Director ......................................... - - 48.5 6.9Birna Einarsdóttir, former CEO ................................................................................... - - 29.7 6.4Ásmundur Tryggvason, former Managing Director ..................................................... - - 24.0 3.3Total 386.6 56.6 313.0 47.7
Íslandsbanki hf. Consolidated Financial Statements 2024
32
Amounts are in ISK million
Notes to the Consolidated Financial Statements
14.
Administrative fines
In 2023, a charge of ISK 860 million was recorded in relation to the Settlement Agreement with the FSA concerning the Bank's
execution of the offering by the Icelandic State of a 22.5% stake in the share capital of Íslandsbanki, which took place in March 2022.
In the autumn of 2022, the Financial Supervisory Authority of the Central Bank of Iceland (FSA) conducted an on-site inspection of the
Bank's anti-money laundering (AML) measures as part of its supervision of regulatory compliance in the banking sector. The FSA
identified certain shortcomings in relation to the Bank's AML measures. On 31 May 2024, the Bank announced that the Board of
Directors accepted the FSA's offer to conclude the matter with a settlement agreement (the Settlement Agreement).
Under the terms of the Settlement Agreement, the Bank agreed to pay a fine amounting to ISK 570 million. The Bank recognised a
provision of ISK 100 million in connection with the preliminary findings from the FSA's inspection of the Bank's AML measures in the
2023 Consolidated Financial Statements. In 2024, a charge of ISK 470 million was recorded in relation to this matter.
*Comparative figures have been changed. Expenses of ISK 605 million recoginsed in the line item "Professional services" and
expenses of ISK 346 million recognised in the line item "Software and IT expenses" in the 2023 Consolidated Financial Statements
were restated in the line item "Fee and commission expense". A provision of ISK 100 million recognised in the line item "Other
administrative expenses" in the 2023 Consolidated Financial Statements was restated in the line item "Administrative fines".
15. Net impairment on financial assets2024 2023 Net change in expected credit losses, on-balance sheet items ........................................................................371 ( 1,168)Net change in expected credit losses, off-balance sheet items ........................................................................274 153 Net impairment on financial assets 645 ( 1,015)
The Settlement Agreement provides that the Bank accepts the FSA's conclusion that the Bank's shortcomings were numerous and
related to various fundamentals in the Bank's AML control framework. Furthermore, the breaches were deemed significant and, to
some extent, a reiteration of previous FSA observations in 2021. By entering into the Settlement Agreement, the Bank committed to
carrying out appropriate remedial actions. The Bank has strengthened its regulatory infrastructure and overall governance.
Auditors' feesAudit of the financial statements ......................................................................................................................131 105 Review of interim financial statements ............................................................................................................25 22 Other services .................................................................................................................................................3 10 Auditors' fees 159 137
13.Other operating expenses2024 2023 Professional services* .....................................................................................................................................1,816 1,988 Software and IT expenses* ..............................................................................................................................4,839 4,387 Real estate and office equipment ....................................................................................................................678 654 Depreciation, amortisation, and write-offs ........................................................................................................1,662 1,620 Other administrative expenses* .......................................................................................................................2,304 2,040 Other operating expenses 11,299 10,689
Íslandsbanki hf. Consolidated Financial Statements 2024
33
Amounts are in ISK million
Notes to the Consolidated Financial Statements
16.
Income tax expense
17. Earnings per share
Recognised income tax is based on applicable tax laws. The income tax rate for legal entities in 2024 is 21% (2023: 20%). Special
financial activities tax is calculated as 6% of the Bank's taxable profit exceeding ISK 1 billion in accordance with the Act on Financial
Activities Tax no. 165/2011. The effective income tax rate in the Group's income statement for the year 2024 is 28.1% (2023: 27.3%).
The Group's basic and diluted earnings per share are equal as the Group has not issued any options, warrants, convertibles, or other
financial instruments that dilute earnings per share (2023: none).
2024 2023 Profit attributable to shareholders of the Bank .................................................................................................24,246 24,585 Weighted average number of outstanding shares ...........................................................................................1,934 1,992 Basic earnings per share (ISK) 12.53 12.34
2024 2023 Current tax expense excluding tax from non-current assets held for sale ........................................................8,128 7,548 Special financial activities tax ..........................................................................................................................2,164 2,083 Adjustments in prior years' calculated income tax ...........................................................................................270 ( 191)Changes in deferred tax assets and deferred tax liabilities ..............................................................................( 1,136) ( 242)Income tax recognised in the income statement9,426 9,198 Income tax recognised in other comprehensive income*( 257) ( 1,077)*Comparative figures have been changed.2024 2023 Profit before tax ..........................................................................................................33,585 33,748 Income tax calculated on the profit for the year ..........................................................7,053 21.0% 6,750 20.0% Special financial activities tax .....................................................................................2,164 6.4% 2,083 6.2% Adjustments in prior years' calculated income tax ......................................................270 0.8% ( 191) ( 0.6%)Income not subject to tax ...........................................................................................( 1,059) ( 3.2%) ( 98) ( 0.3%)Non-deductible expenses ...........................................................................................762 2.3% 666 2.0% Other differences .......................................................................................................236 0.7% ( 12) 0.0% Effective income tax expense 9,426 28.1% 9,198 27.3% The Bank is taxed jointly with its subsidiary Íslandssjóðir hf. (Iceland Funds).
Íslandsbanki hf. Consolidated Financial Statements 2024
34
Amounts are in ISK million
Notes to the Consolidated Financial Statements
18. Classification of financial assets and financial liabilities
Total financial liabilities 7,306 88,831 21,419 1,241,942 1,359,498
**Listed bonds and debt instruments in the Bank's liquidity portfolio purchased from 1 January 2024 are classified as financial assets at fair
*For further information on hedge accounting see Notes 24 and 35.
At 31 December 2024Mandatorily Hedge Mandatorily Amortised Carrying at FVTPL accounting* at FVOCI cost amount Cash and balances with Central Bank ......................................................... - - - 65,716 65,716 Loans to credit institutions ........................................................................... - - - 50,486 50,486 Listed bonds and debt instruments** ...........................................................24,293 - 111,908 - 136,201 Listed bonds and debt instruments used for economic hedging ..................4,397 - - - 4,397 Unlisted bonds and debt instruments ..........................................................2,020 - - - 2,020 Derivatives ..................................................................................................3,223 2,101 - - 5,324 Loans to customers ..................................................................................... - - - 1,295,388 1,295,388 Listed shares and equity instruments ..........................................................6,079 - - - 6,079 Listed shares and equity instruments used for economic hedging ...............15,834 - - - 15,834 Unlisted shares and equity instruments .......................................................2,417 - - - 2,417 Other financial assets ................................................................................. - - - 6,306 6,306 Total financial assets 58,263 2,101 111,908 1,417,896 1,590,168 Mandatorily Hedge Designated Amortised Carrying at FVTPL accounting* as at FVTPL cost amount Deposits from Central Bank and credit institutions ...................................... - - - 12,535 12,535 Deposits from customers ............................................................................ - - - 926,846 926,846 Derivative instruments and short positions ..................................................7,306 - - - 7,306 Debt issued and other borrowed funds ........................................................ - 88,831 21,419 257,336 367,586 Subordinated loans ..................................................................................... - - - 31,695 31,695 Other financial liabilities .............................................................................. - - - 13,530 13,530
value through other comprehensive income (FVOCI). Listed bonds and debt instruments in the Bank's liquidity portfolio purchased before 1January 2024 are classified as financial assets at fair value through profit or loss (FVTPL).At 31 December 2023 Mandatorily Hedge Designated Amortised Carrying at FVTPL accounting as at FVTPL cost amount Cash and balances with Central Bank ......................................................... - - - 87,504 87,504 Loans to credit institutions ........................................................................... - - - 73,475 73,475 Listed bonds and debt instruments .............................................................157,592 - - - 157,592 Listed bonds and debt instruments used for economic hedging ..................3,750 - - - 3,750 Derivatives ..................................................................................................5,776 - - - 5,776 Loans to customers ..................................................................................... - - - 1,223,426 1,223,426 Listed shares and equity instruments ..........................................................2,342 - - - 2,342 Listed shares and equity instruments used for economic hedging ...............8,997 - - - 8,997 Unlisted shares and equity instruments .......................................................1,902 - - - 1,902 Other financial assets ................................................................................. - - - 2,846 2,846 Total financial assets 180,359 - - 1,387,251 1,567,610 Deposits from Central Bank and credit institutions ...................................... - - - 16,149 16,149 Deposits from customers ............................................................................ - - - 850,709 850,709 Derivative instruments and short positions ..................................................5,051 39 - - 5,090 Debt issued and other borrowed funds ........................................................ - 45,126 92,645 279,802 417,573 Subordinated loans ..................................................................................... - - - 38,155 38,155 Other financial liabilities .............................................................................. - - - 8,879 8,879 Total financial liabilities 5,051 45,165 92,645 1,193,694 1,336,555
Íslandsbanki hf. Consolidated Financial Statements 2024
35
Amounts are in ISK million
Notes to the Consolidated Financial Statements
19. Fair value information for financial instruments
Financial instruments carried at fair value
The fair value of a financial instrument is the transaction price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Where a market price is not readily available, the Group applies valuation
techniques based on estimates and assumptions that are consistent with that which market participants would use in setting a price for the
financial instrument.
The following table shows financial instruments carried at fair value at 31 December 2024 categorised into three levels of fair value hierarchy
that reflect the type of inputs used in making the fair value measurements. The different levels have been defined as follows:
Level 1: Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
Group can access at the measurement date.
Level 2: Valuation techniques based on observable inputs other than the quoted prices included in Level 1,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Valuation techniques based on significant unobservable inputs, e.g. internal assumptions.
At 31 December 2024 Level 1 Level 2 Level 3 Total Bonds and debt instruments ............................................................................................140,598 - 2,020 142,618 Derivatives ...................................................................................................................... - 5,324 - 5,324 Shares and equity instruments ........................................................................................21,913 - 2,417 24,330 Total financial assets162,511 5,324 4,437 172,272 Short positions ................................................................................................................130 - - 130 Derivative instruments ..................................................................................................... - 7,176 - 7,176 Debt issued and other borrowed funds designated as at FVTPL .....................................21,419 - - 21,419 Total financial liabilities21,549 7,176 - 28,725
At 31 December 2023 Level 1 Level 2 Level 3 TotalBonds and debt instruments ............................................................................................161,342 - - 161,342 Derivatives ...................................................................................................................... - 5,776 - 5,776 Shares and equity instruments ........................................................................................11,339 - 1,902 13,241 Total financial assets172,681 5,776 1,902 180,359 Short positions ................................................................................................................640 - - 640 Derivative instruments ..................................................................................................... - 4,450 - 4,450 Debt issued and other borrowed funds designated as at FVTPL .....................................92,645 - - 92,645 Total financial liabilities93,285 4,450 - 97,735
Íslandsbanki hf. Consolidated Financial Statements 2024
36
Amounts are in ISK million
Notes to the Consolidated Financial Statements
19.
31.12.2024 31.12.2023
2,958 904
1,648 217
( 794) ( 187)
( 1,700) ( 217)
Bonds and Shares and debt equity instrumentsinstrumentsTotalFair value at 1 January 2023 ...............................................................................................................2,032 2,245 4,277 Sales and share capital decrease ........................................................................................................( 2,188) ( 380) ( 2,568)Purchases and share capital increase ................................................................................................. - 52 52 Net gain (loss) on financial instruments recognised in profit or loss .....................................................156 ( 15) 141 Fair value at 31 December 2023 - 1,902 1,902
Very favourable .........................................................................................................................................................
Favourable ................................................................................................................................................................
Unfavourable ............................................................................................................................................................
Very unfavourable .....................................................................................................................................................
Fair value information for financial instruments (continued)
*Transfers from loans to customers are due to the Bank's claim on the property company Þórkatla. Þórkatla purchased residential housing
within the urban area in Grindavík in accordance with Act no. 16/2024 on the Purchase of Residential Property in Grindavík in 2024. In
parallel, the Bank derecognised the loans and recognised a claim on Þórkatla instead. Since there is significant uncertainty regarding the
recoverability of interest, earned interest is not recognised on the claim on Þórkatla. The nominal value, including accrued interest, of the
claim was ISK 3,422 million at 31 December 2024. The claim on Þórkatla is highly sensitive to changes in fair value measurement inputs and
is therefore included in the sensitivity analysis for Level 3 financial instruments.
The following table illustrates how profit before tax would have been affected if one or more of the inputs for the fair value measurement were
changed for Level 3 financial instruments that are highly sensitive to changes in fair value measurement inputs. Significant unobservable
inputs used in the valuation of Level 3 financial instruments include discount rates, the estimated value of Þórkatla's residential housing, the
estimated rental income of Þórkatla's residential housing, operating cost of Þórkatla's residential housing, and the expected price of certain
industrial materials.
Sensitivity analysis for Level 3 financial instruments
The valuations of Level 3 financial instruments are in general uncertain and subject to various factors. The favourable and unfavourable
scenarios can be considered as being likely movements in valuation within a year. The very favourable and very unfavourable scenarios are
considered less likely, but not impossible and are not worst-case scenarios for some of the financial instruments.
Bonds and Shares and Changes in Level 3 financial instruments measured at fair valuedebt equity instrumentsinstrumentsTotalFair value at 1 January 2024 ............................................................................................................... - 1,902 1,902 Purchases and share capital increase ................................................................................................. - 320 320 Transfers from loans to customers* .....................................................................................................2,189 - 2,189 Net gain (loss) on financial instruments recognised in the income statement ......................................( 169) 195 26 Fair value at 31 December 2024 2,020 2,417 4,437
Íslandsbanki hf. Consolidated Financial Statements 2024
37
Amounts are in ISK million
Notes to the Consolidated Financial Statements
20.
The fair value of a financial liability with a demand feature, such as a demand deposit, is not less than the amount payable on demand,
discounted from the first date that the amount could be required to be paid. Most deposits are on demand or carry floating interest rates and
as such their carrying amount is considered a good approximation of their fair value. The fair value for longer term fixed rate deposits is
calculated with a duration approach, using the difference in each liability's current interest rate from the rate that a similar deposit would carry
today. All deposits are classified as Level 2 based on the use of observable market interest rates to estimate the fair value.
The fair value of "Loans to customers" may differ from their net carrying amount because the interest rates they carry may not reflect the
interest rates that similar new loans would carry. The fair value is estimated by subtracting from or adding to the net carrying amount of the
loans the discounted interest rate difference calculated from the reporting date until the next interest reset or maturity, whichever comes first.
Since the interest rate difference is estimated using internal models these assets are classified as Level 3.
Financial instruments not carried at fair value
Assets
Observed market value is used for the fair value of "Debt issued and other borrowed funds" where it is available. Issued bonds and bills with
quoted market prices are classified as Level 1. If there is no quoted market price the fair value of the debt is valued in the same manner as
deposits if it carries a fixed rate. If the debt carries a floating rate its fair value is estimated by comparing the margin with the Group's current
funding premium on similar debt. These liabilities are classified as Level 2. The funding premium is based on the interest margin in the
Group's issued papers including covered bonds, commercial papers as well as foreign currency denominated bonds.
Other financial liabilities mainly include unsettled securities transactions and payments due to leasing contracts and they are classified as
Level 2 since their value is not observable from active market prices. Due to the short-term nature of these liabilities their carrying amount is
considered a good approximation of their fair value.
For "Cash and balances with Central Bank", "Loans to credit institutions" and "Other financial assets" the fair value is adequately
approximated by the carrying amount as they are short-term in nature. They are thus classified as Level 2.
Liabilities
The following table shows the fair value measurement and classification of the Group's assets and liabilities not carried at fair value. The
different levels are defined in Note 19.
Total fair CarryingAt 31 December 2024 Level 1 Level 2 Level 3 value amountCash and balances with Central Bank ......................................................... - 65,716 - 65,716 65,716 Loans to credit institutions ........................................................................... - 50,486 - 50,486 50,486 Loans to customers ..................................................................................... - - 1,284,043 1,284,043 1,295,388 Other financial assets ................................................................................. - 6,306 - 6,306 6,306 Total financial assets - 122,508 1,284,043 1,406,551 1,417,896 Deposits from Central Bank and credit institutions ...................................... - 12,535 - 12,535 12,535 Deposits from customers ............................................................................ - 926,805 - 926,805 926,846 Debt issued and other borrowed funds ........................................................240,465 11,918 - 252,383 257,336 Subordinated loans .....................................................................................31,391 - - 31,391 31,695 Other financial liabilities .............................................................................. - 13,530 - 13,530 13,530 Total financial liabilities 271,856 964,788 - 1,236,644 1,241,942 Total fair CarryingAt 31 December 2023 Level 1 Level 2 Level 3 value amountCash and balances with Central Bank ......................................................... - 87,504 - 87,504 87,504 Loans to credit institutions ........................................................................... - 73,475 - 73,475 73,475 Loans to customers ..................................................................................... - - 1,207,465 1,207,465 1,223,426 Other financial assets ................................................................................. - 2,846 - 2,846 2,846 Total financial assets - 163,825 1,207,465 1,371,290 1,387,251 Deposits from Central Bank and credit institutions ...................................... - 16,148 - 16,148 16,149 Deposits from customers ............................................................................ - 850,729 - 850,729 850,709 Debt issued and other borrowed funds ........................................................244,967 28,077 - 273,044 279,802 Subordinated loans .....................................................................................37,414 - - 37,414 38,155 Other financial liabilities .............................................................................. - 8,879 - 8,879 8,879 Total financial liabilities282,381 903,833 - 1,186,214 1,193,694
Íslandsbanki hf. Consolidated Financial Statements 2024
38
Amounts are in ISK million
Notes to the Consolidated Financial Statements
21. Offsetting financial assets and financial liabilities
22. Cash and balances with Central Bank
At 31 December 2024, and at year-end 2023, no netting occurred between financial assets and liabilities subject to enforceable master
netting agreements and comparable arrangements, resulting in no offsetting.
23. Loans to credit institutions31.12.2024 31.12.2023Money market loans ..................................................................................................................................................33,828 53,882 Bank accounts ..........................................................................................................................................................13,800 18,794 Other loans ...............................................................................................................................................................2,858 799 Loans to credit institutions 50,486 73,475
The following tables show reconciliation of financial assets and financial liabilities which are subject to offsetting, enforceable master netting
agreements and similar agreements.
Derivatives31.12.2024 31.12.2023Financial assets ........................................................................................................................................................5,324 5,776 Amounts not set off but subject to master netting arrangements and similar agreements .........................................( 4,701) ( 4,404) - Financial liabilities ..................................................................................................................................................( 1,763) ( 715) - Cash collateral received .........................................................................................................................................( 2,937) ( 3,589) - Financial instruments collateral received ...............................................................................................................( 1) ( 100)Net amount after consideration of potential effect of netting arrangements 623 1,372 Derivative instruments and short positions31.12.2024 31.12.2023Financial liabilities .....................................................................................................................................................7,306 5,090 Amounts not set off but subject to master netting arrangements and similar agreements .........................................( 3,485) ( 2,794) - Financial assets .....................................................................................................................................................( 1,763) ( 715) - Cash collateral pledged .........................................................................................................................................( 1,722) ( 2,079)Net amount after consideration of potential effect of netting arrangements 3,821 2,296
31.12.2024 31.12.2023Cash on hand ...........................................................................................................................................................3,621 3,653 Unrestricted balances with Central Bank ...................................................................................................................31,163 64,025 Cash and unrestricted balances with Central Bank 34,784 67,678 Balances pledged as collateral to Central Bank ........................................................................................................814 484 Mandatory reserve deposits with Central Bank .........................................................................................................30,118 19,342 Cash and balances with Central Bank 65,716 87,504
Íslandsbanki hf. Consolidated Financial Statements 2024
39
Amounts are in ISK million
Notes to the Consolidated Financial Statements
24. Derivative instruments and short positions
Liabilities
Liabilities
The Group applies hedge accounting only with respect to certain EUR denominated interest rate swaps, whereby the Group pays floating rate
interest and receives fixed rate interest. The interest rate swaps are hedging the exposure of changes in the fair value of certain fixed-rate
EUR denominated bonds (see Note 35) arising from changes in EURIBOR benchmark interest rates. The Group applies fair value hedge
accounting to the hedging relationships and for the purpose of evaluating whether the hedging relationship is expected to be highly effective,
the Group assumes that the benchmark interest rate is not altered as a result of IBOR reform. At 31 December 2024 the total fair value of the
interest rate swaps in the hedging relationship was positive and amounted to ISK 2,101 million (2023: negative ISK 39 million) and their total
notional amount was ISK 86,340 million (2023: ISK 45,150 million).
The Group uses derivatives to hedge currency exposure, interest rate risk in the banking book as well as inflation risk. The Group carries
relatively low indirect exposure due to margin trading with clients and the Group holds collaterals for possible losses. Other derivatives in the
Group held for trading or for other purposes are insignificant.
Short positions are in Icelandic Government bonds and bonds issued by municipalities, banks, and public companies. As a primary dealer the
Group has access to securities lending facilities provided by the Central Bank and other issuers. Majority of the securities lending facilities
have a maturity of less than a year.
Notional Notional values values At 31 December 2023related to related to Assets assets liabilities Interest rate swaps ..........................................................................................................3,028 79,824 2,587 106,045 Cross-currency interest rate swaps .................................................................................1,066 22,028 53 4,587 Equity forwards ...............................................................................................................350 1,463 494 7,507 Foreign exchange forwards .............................................................................................300 16,824 397 17,052 Foreign exchange swaps .................................................................................................888 32,776 891 42,192 Bond forwards .................................................................................................................144 2,273 28 2,208 Derivatives 5,776 155,188 4,450 179,591 Short positions in listed bonds ......................................................................................... - - 640 663 Total 5,776 155,188 5,090 180,254
Notional Notional values values At 31 December 2024related to related to Assets assets liabilities Interest rate swaps ..........................................................................................................4,013 155,075 1,663 108,054 Cross-currency interest rate swaps .................................................................................23 2,444 1,006 17,147 Equity forwards ...............................................................................................................594 3,327 1,525 11,530 Foreign exchange forwards .............................................................................................12 2,232 1,027 26,771 Foreign exchange swaps .................................................................................................494 47,351 1,948 40,530 Bond forwards .................................................................................................................188 5,423 7 1,075 Derivatives 5,324 215,852 7,176 205,107 Short positions in listed bonds ......................................................................................... - - 130 138 Total 5,324 215,852 7,306 205,245
Íslandsbanki hf. Consolidated Financial Statements 2024
40
Amounts are in ISK million
Notes to the Consolidated Financial Statements
25.
Loans to customers
carrying
26. Expected credit losses
Net At 31 December 2024 Gross carrying amount Expected credit losses Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 amount Individuals .................................................................611,882 7,811 7,187 ( 740) ( 224) ( 654) 625,262 Commerce and services ...........................................162,208 21,527 2,669 ( 735) ( 292) ( 710) 184,667 Construction .............................................................94,630 1,248 608 ( 801) ( 30) ( 97) 95,558 Energy ......................................................................11,852 7 - ( 59) - - 11,800 Financial services .....................................................733 - 1 ( 19) - - 715 Industrial and transportation .....................................77,087 1,438 5,219 ( 213) ( 37) ( 1,071) 82,423 Investment companies ..............................................38,526 4,584 369 ( 367) ( 58) ( 94) 42,960 Public sector and non-profit organisations ................20,115 345 6 ( 15) ( 1) ( 2) 20,448 Real estate ...............................................................148,981 1,978 5,422 ( 423) ( 328) ( 717) 154,913 Seafood ....................................................................74,656 2,113 6 ( 124) ( 5) ( 4) 76,642 Loans to customers 1,240,670 41,051 21,487 ( 3,496) ( 975) ( 3,349) 1,295,388
Net At 31 December 2023Gross carrying amount Expected credit losses carrying Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 amount Individuals .................................................................580,591 11,117 6,483 ( 1,407) ( 1,539) ( 614) 594,631 Commerce and services ...........................................167,219 14,416 3,335 ( 1,000) ( 538) ( 624) 182,808 Construction .............................................................77,720 2,986 402 ( 833) ( 118) ( 58) 80,099 Energy ......................................................................7,624 393 - ( 67) ( 12) - 7,938 Financial services .....................................................214 - 1 ( 1) - - 214 Industrial and transportation .....................................67,612 1,869 9,156 ( 225) ( 69) ( 2,541) 75,802 Investment companies ..............................................41,219 5,131 345 ( 639) ( 81) ( 44) 45,931 Public sector and non-profit organisations ................18,466 30 4 ( 16) ( 7) ( 1) 18,476 Real estate ...............................................................138,571 4,252 2,529 ( 496) ( 355) ( 328) 144,173 Seafood ....................................................................73,259 193 17 ( 104) ( 8) ( 3) 73,354 Loans to customers 1,172,495 40,387 22,272 ( 4,788) ( 2,727) ( 4,213) 1,223,426
Total allowances for expected credit lossesStage 1 Stage 2 Stage 3 Total Cash and balances with Central Bank .............................................................................17 - - 17 Loans to credit institutions ...............................................................................................47 - - 47 Loans to customers .........................................................................................................3,496 975 3,349 7,820 Other financial assets ......................................................................................................42 4 - 46 Off-balance sheet loan commitments and financial guarantees .......................................565 32 314 911 At 31 December 2024 4,167 1,011 3,663 8,841 Cash and balances with Central Bank .............................................................................18 - - 18 Loans to credit institutions ...............................................................................................90 - - 90 Loans to customers .........................................................................................................4,788 2,727 4,213 11,728 Other financial assets ......................................................................................................4 4 - 8 Off-balance sheet loan commitments and financial guarantees .......................................916 106 162 1,184 At 31 December 2023 5,816 2,837 4,375 13,028
Íslandsbanki hf. Consolidated Financial Statements 2024
41
Amounts are in ISK million
Notes to the Consolidated Financial Statements
26.
Expected credit losses (continued)
Loans to customers
Off-balance sheet loan commitments and financial guarantees
The following tables reconcile the opening and closing balances for accumulated expected credit losses for loans to customers, and off-
balance sheet loan commitments and financial guarantees.
*During the year financial assets amounting to ISK 888 million were written off but are still subject to enforcement activity.
*During the year financial assets amounting to ISK 560 million were written off but are still subject to enforcement activity.At 1 January 2023 ...........................................................................................................4,636 2,235 4,261 11,132 Transfer to Stage 1 .........................................................................................................1,747 ( 1,505) ( 242) -Transfer to Stage 2 .........................................................................................................( 893) 1,076 ( 183) -Transfer to Stage 3 .........................................................................................................( 173) ( 454) 627 -Net remeasurement of loss allowance .............................................................................( 2,998) 1,213 374 ( 1,411)New financial assets originated or purchased ..................................................................3,278 292 1,010 4,580 Derecognitions and maturities .........................................................................................( 809) ( 129) ( 1,031) ( 1,969)Write-offs* ....................................................................................................................... - ( 1) ( 1,014) ( 1,015)Recoveries of amounts previously written off ................................................................... - - 160 160 Foreign exchange ............................................................................................................ - - ( 62) ( 62)Unwinding of interest ....................................................................................................... - - 313 313 At 31 December 2023 4,788 2,727 4,213 11,728
Stage 1 Stage 2 Stage 3 Total At 1 January 2024 ...........................................................................................................916 106 162 1,184 Transfer to Stage 1 .........................................................................................................119 ( 94) ( 25) -Transfer to Stage 2 .........................................................................................................( 15) 24 ( 9) -Transfer to Stage 3 .........................................................................................................( 15) ( 14) 29 -Net remeasurement of loss allowance .............................................................................( 842) ( 6) ( 52) ( 900)New loan commitments and financial guarantees ............................................................565 35 467 1,067 Derecognitions and maturities .........................................................................................( 163) ( 19)( 258) ( 440)At 31 December 2024 565 32 314 911 At 1 January 2023 ...........................................................................................................869 242 227 1,338 Transfer to Stage 1 .........................................................................................................491 ( 373) ( 118) -Transfer to Stage 2 .........................................................................................................( 112) 146 ( 34) -Transfer to Stage 3 .........................................................................................................( 15) ( 13) 28 -Net remeasurement of loss allowance .............................................................................( 742) 124 353 ( 265)New loan commitments and financial guarantees ............................................................693 74 59 826 Derecognitions and maturities .........................................................................................( 268) ( 94) ( 353) ( 715)At 31 December 2023916 106 162 1,184
Stage 1 Stage 2 Stage 3 Total At 1 January 2024 ...........................................................................................................4,788 2,727 4,213 11,728 Transfer to Stage 1 .........................................................................................................1,537 ( 1,347) ( 190) -Transfer to Stage 2 .........................................................................................................( 616) 966 ( 350) -Transfer to Stage 3 .........................................................................................................( 161) ( 658) 819 -Net remeasurement of loss allowance .............................................................................( 4,021) 1,309 ( 19) ( 2,731)New financial assets originated or purchased ..................................................................3,100 419 1,229 4,748 Derecognitions and maturities .........................................................................................( 1,130) ( 2,440) ( 2,077) ( 5,647)Write-offs* .......................................................................................................................( 1) ( 1) ( 592) ( 594)Recoveries of amounts previously written off ................................................................... - - 68 68 Foreign exchange ............................................................................................................ - - ( 124) ( 124)Unwinding of interest ....................................................................................................... - - 372 372 At 31 December 2024 3,496 975 3,349 7,820
Íslandsbanki hf. Consolidated Financial Statements 2024
42
Amounts are in ISK million
Notes to the Consolidated Financial Statements
27. Investments in associates
28. Investment property
31.12.2024 31.12.2023Reiknistofa bankanna hf., an IT service centre company, Dalvegur 30, 201 Kópavogur ......................Iceland 30.1% 30.1% Norðurturninn hf., a rental company of commercial real estate, Borgartún 26, 105 Reykjavík ..............Iceland 43.3% 43.3%
Norðurturninn hf. shares are divided into two categories, Class A shares and Class B shares. Class B shares hold all the voting rights and
receive all dividends up to ISK 3,755 million (CPI-linked, based on the CPI in December 2024). After Class B shareholders have received that
amount the class is then suspended, and Class A shares receive all the voting rights and the rights to dividend payments. Íslandsbanki owns
43.3% of Class B shares and 65.0% of Class A shares. Norðurturninn owns the real estate Hagasmári 3, where the Bank is the principal
lessee and rents over half the building for its headquarters.
Kirkjusandur 2, the Bank's former headquarters, was reclassified from property and equipment to investment property during the first quarter
of 2024. The Group measures investment property at fair value. The fair value measurement of investment property uses significant
unobservable inputs and is thus classified as Level 3 in the fair value hierarchy. The fair value of investment property is based on external
valuations from an independent valuer in addition to internal assumptions. Significant unobservable inputs used in the valuation of investment
property are the estimated sale value per square metre of building rights, estimated demolition costs and a discount rate.
At 1 January 2024 .......................................................................................................................................................................... -Transfer from property and equipment ...........................................................................................................................................1,194 Additions during the year ...............................................................................................................................................................96 Fair value changes .........................................................................................................................................................................1,310 At 31 December 20242,600
2024 2023Investments in associates at the beginning of the year .............................................................................................4,051 3,844 Share of profit of associates .....................................................................................................................................650 207 Investments in associates at year-end 4,701 4,051 Summarised financial information in respect of the Group's associates is set out below:Revenue ...................................................................................................................................................................6,786 6,613 Profit .........................................................................................................................................................................1,175 439 Assets .......................................................................................................................................................................18,404 17,141 Liabilities ...................................................................................................................................................................( 9,028) ( 8,194)Net assets .................................................................................................................................................................9,376 8,947 Group's share of net assets of associates 4,701 4,051
Íslandsbanki hf. Consolidated Financial Statements 2024
43
Amounts are in ISK million
Notes to the Consolidated Financial Statements
29.
Property and equipment
Right-of-use Fixtures, At 31 December 2023 Land and assets: equipment buildings Buildings & vehicles Total Balance at the beginning of the year ...............................................................................3,213 5,263 3,112 11,588 Additions during the year .................................................................................................37 259 274 570 Disposals and write-offs during the year ..........................................................................( 172) - ( 174) ( 346)Remeasurement .............................................................................................................. - 281 - 281 Historical cost 3,078 5,803 3,212 12,093 Balance at the beginning of the year ...............................................................................( 1,378) ( 1,712) ( 1,746) ( 4,836)Depreciation during the year ............................................................................................( 16) ( 516) ( 354) ( 886)Disposals and write-offs during the year ..........................................................................29 - 162 191 Accumulated depreciation ( 1,365) ( 2,228) ( 1,938) ( 5,531)Carrying amount 1,713 3,575 1,274 6,562 Depreciation rates ...........................................................................................................0-2% 8-50% 8-33%Official real estate value of land and buildings .................................................................1,511 Insurance value of buildings ............................................................................................2,613 Insurance value of fixtures, equipment and vehicles ........................................................2,027
Right-of-use Fixtures, At 31 December 2024 Land and assets: equipment buildings Buildings & vehicles Total Balance at the beginning of the year ...............................................................................3,078 5,803 3,212 12,093 Additions during the year .................................................................................................119 72 307 498 Disposals and write-offs during the year ..........................................................................( 82) ( 32) ( 107) ( 221)Remeasurement .............................................................................................................. - 166 - 166 Transfer to investment property .......................................................................................( 2,412) - - ( 2,412)Historical cost 703 6,009 3,412 10,124 Balance at the beginning of the year ...............................................................................( 1,365) ( 2,228) ( 1,938) ( 5,531)Depreciation during the year ............................................................................................( 12) ( 569) ( 334) ( 915)Disposals and write-offs during the year ..........................................................................18 32 93 143 Transfer to investment property .......................................................................................1,218 - - 1,218 Accumulated depreciation ( 141) ( 2,765) ( 2,179) ( 5,085)Carrying amount 562 3,244 1,233 5,039 Depreciation rates ...........................................................................................................0-2% 8-50% 8-33%Official real estate value of land and buildings .................................................................954 Insurance value of buildings ............................................................................................1,894 Insurance value of fixtures, equipment and vehicles ........................................................2,132
Íslandsbanki hf. Consolidated Financial Statements 2024
44
Amounts are in ISK million
Notes to the Consolidated Financial Statements
30.
Intangible assets
31. Other assets
31.12.202431.12.2023Receivables ..............................................................................................................................................................2,250 1,698 Unsettled securities transactions ..............................................................................................................................4,116 1,195 Prepaid expenses .....................................................................................................................................................648 503 Deferred tax assets ...................................................................................................................................................164 122 Other assets .............................................................................................................................................................126 120 Other assets 7,304 3,638
Purchased Developed At 31 December 2024 software software Total Balance at the beginning of the year ....................................................................................................2,483 3,183 5,666 Additions during the year .....................................................................................................................446 55 501 Write-offs during the year ....................................................................................................................( 311) - ( 311)Historical cost 2,618 3,238 5,856 Balance at the beginning of the year ....................................................................................................( 1,039) ( 1,697) ( 2,736)Amortisation during the year ................................................................................................................( 398) ( 319) ( 717)Write-offs during the year ....................................................................................................................281 - 281 Accumulated amortisation ( 1,156) ( 2,016) ( 3,172)Carrying amount 1,462 1,222 2,684 Amortisation rates ...............................................................................................................................10-33% 10-25%Purchased Developed At 31 December 2023 software software Total Balance at the beginning of the year ....................................................................................................2,249 3,183 5,432 Additions during the year .....................................................................................................................385 - 385 Write-offs during the year ....................................................................................................................( 151) - ( 151)Historical cost 2,483 3,183 5,666 Balance at the beginning of the year ....................................................................................................( 774) ( 1,379) ( 2,153)Amortisation during the year ................................................................................................................( 416) ( 318) ( 734)Write-offs during the year ....................................................................................................................151 - 151 Accumulated amortisation ( 1,039) ( 1,697) ( 2,736)Carrying amount 1,444 1,486 2,930 Amortisation rates ...............................................................................................................................10-33% 10%
Íslandsbanki hf. Consolidated Financial Statements 2024
45
Amounts are in ISK million
Notes to the Consolidated Financial Statements
32. Deposits from Central Bank and credit institutions
33.
Deposits from customers
The Group has also pledged assets with the Central Bank to ensure the clearing of the Icelandic payment system as well as other contracts
with the Central Bank. Moreover, it has pledged cash in foreign banks and financial institutions, mainly as collateral for trades under ISDA
agreements to hedge market risk.
The Group has pledged assets against the issuance of Covered Bonds under Icelandic law, which are pledged on a pool of consumer
mortgage loans. The Group owns Covered Bonds for its own use which accounts for a portion of the pledged assets. The carrying amount of
these bonds at 31 December 2024 was ISK 133,643 million (year-end 2023: ISK 117,476 million).
31.12.2024 31.12.2023Demand deposits and deposits with maturity up to 3 months ....................................................................................809,009 752,146 Term deposits with maturity of more than 3 months ..................................................................................................117,837 98,563 Deposits from customers 926,846 850,709 31.12.202431.12.2023Deposits from customers specified by ownersAmount % of total Amount % of total Central government and state-owned enterprises ...........................................................12,825 1% 18,204 2%Municipalities ...................................................................................................................10,388 1% 9,514 1%Companies ......................................................................................................................408,994 44% 398,489 47%Individuals .......................................................................................................................494,639 54% 424,502 50%Deposits from customers 926,846 100% 850,709 100%
31.12.2024 31.12.2023Deposits from credit institutions ................................................................................................................................12,351 15,994 Repurchase agreements with Central Bank ..............................................................................................................184 155 Deposits from Central Bank and credit institutions 12,535 16,149
34. Pledged assets31.12.2024 31.12.2023Loans to customers pledged as collateral against Covered Bonds ............................................................................410,481 442,175 Cash and balances pledged as collateral against Covered Bonds ............................................................................15,213 20,222 Financial assets pledged as collateral with the Central Bank ....................................................................................8,484 6,775 Loans to credit institutions pledged as collateral against derivative instruments .......................................................1,947 2,795 Pledged assets against liabilities 436,125 471,967 Pledged assets against Covered Bonds held by the Bank ........................................................................................( 160,665) ( 171,350)Loans to customers pledged as collateral in repurchase agreements ....................................................................... - 23,656 Pledged assets against liabilities on balance 275,460 324,273
Íslandsbanki hf. Consolidated Financial Statements 2024
46
Amounts are in ISK million
Notes to the Consolidated Financial Statements
35.
Debt issued and other borrowed funds
31.12.2024 31.12.2023
- 17,051
36,710 35,093
18,911 27,363
9,024 7,461
43,563 45,126
24,122 31,564
37,758 19,596
33,541 32,093
4,110 -
- 1,940
- 134
- 2,005
- 1,628
- 1,980
- 1,591
- 7,289
1,238 1,233
151 6,105
481 9,884
21,419 42,868
17,277 18,916
6,344 6,887
- 49,777
6,330 6,843
4,689 3,000
6,950 6,937
6,336 -
6,177 -
2,477 -
3,807 -
15,039 5,031
45,268 -
3,904 -
The Group repurchased own bonds during the year amounting to ISK 89,348 million (2023: ISK 95,075 million).
*The Group applies hedge accounting to these bond issuances and uses certain EUR denominated interest rate swaps as hedging
instruments (see Note 24). The interest rate swaps are hedging the exposure of the Group's changes in the fair value of these fixed-rate EUR
denominated bonds arising from changes in EURIBOR benchmark interest rates. The Group applies fair value hedge accounting to the
hedging relationships and for the purpose of evaluating whether the hedging relationship is expected to be highly effective, the Group
assumes that the benchmark interest rate is not altered as a result of IBOR reform. At 31 December 2024 the total carrying amount of these
bond issuances amounted to ISK 88,831 million and included in the amount are negative fair value changes amounting to ISK 904 million.
The Group has issued additional bonds for its own use, e.g. for the purpose of securities lending and repurchase agreements. These bond
amounts are not included in the total.
**These bond issuances are classified as being designated at fair value through profit or loss to eliminate accounting mismatch. At 31
December 2024 the total carrying amount of the bonds amounted to ISK 21,419 million and included in the amount are fair value changes
amounting to ISK 73 million.
First Maturity Currency and outstanding nominal issued Maturity type Interest ISB CBI 24 - ISK 0 million .........................................2012 2024 Bullet Fixed CPI, 3.45%ISB CBI 26 - ISK 24,500 million ................................2015 2026 Bullet Fixed CPI, 3.37%ISB CB 27 - ISK 19,869 million .................................2020 2027 Amortising Fixed, 2.50%ISB CBF 27 - ISK 8,720 million .................................2022 2027 Bullet REIBOR 1M + 0.40%ISB CB - EUR 300 million* ........................................2022 2027 Bullet Fixed, 3.00%ISB CBI 28 - ISK 17,044 million ................................2019 2028 Amortising Fixed CPI, 2.20%ISB CBI 29 - ISK 29,880 million ................................2023 2029 Bullet Fixed CPI, 2.72%ISB CBI 30 - ISK 23,040 million ................................2017 2030 Bullet Fixed CPI, 3.00%ISB CBI 32 - ISK 4,100 million ..................................2024 2032 Bullet Fixed CPI, 3.44%Covered bonds 207,739 215,347 NOK 0 million ............................................................2019 2024 Bullet Fixed, 3.95%ISK 0 million .............................................................2019 2024 Amortising REIBOR 1M + 0.90%NOK 0 million ............................................................2021 2024 Bullet NIBOR 3M + 0.875%SEK 0 million ............................................................2021 2024 Bullet STIBOR 3M + 0.85%NOK 0 million ............................................................2021 2024 Bullet NIBOR 3M + 0.80%SEK 0 million ............................................................2021 2024 Bullet STIBOR 3M + 0.80%SEK 0 million ............................................................2022 2024 Bullet STIBOR 3M + 4.25%ISK 1,240 million .......................................................2020 2025 Bullet Fixed, 3.50%SEK 10 million ..........................................................2021 2025 Bullet STIBOR 3M + 1.075%NOK 40 million ..........................................................2021 2025 Bullet NIBOR 3M + 1.075%EUR 149 million** .....................................................2022 2025 Bullet Fixed, 0.75%NOK 1,400 million .....................................................2022 2025 Bullet NIBOR 3M + 4.75%SEK 500 million ........................................................2023 2026 Bullet STIBOR 3M + 3.65%EUR 0 million** .........................................................2023 2026 Bullet Fixed, 7.375%SEK 500 million ........................................................2023 2026 Bullet STIBOR 3M + 2.70%ISK 4,667 million .......................................................2022 2027 Amortising REIBOR 1M + 1.25%ISK 6,940 million .......................................................2022 2027 Bullet Fixed, 7.70%SEK 500 million ........................................................2024 2027 Bullet STIBOR 3M + 2.35%NOK 500 million ........................................................2024 2027 Bullet NIBOR 3M + 2.35%NOK 200 million ........................................................2024 2027 Bullet NIBOR 3M + 1.20%SEK 300 million ........................................................2024 2027 Bullet STIBOR 3M + 1.20%ISK 14,260 million .....................................................2023 2028 Bullet Fixed CPI, 4.48%EUR 300 million* ......................................................2024 2028 Bullet Fixed, 4.625%ISK 4,000 million .......................................................2024 2036 Bullet Fixed CPI, 3.5%Unsecured bonds 147,887 174,048 Other secured loans .................................................................................................................................................. - 16,459 Other unsecured loans ..............................................................................................................................................11,960 11,719 Other borrowed funds 11,960 28,178 Debt issued and other borrowed funds 367,586 417,573
Íslandsbanki hf. Consolidated Financial Statements 2024
47
Amounts are in ISK million
Notes to the Consolidated Financial Statements
36.
Subordinated loans
31.12.2024 31.12.2023
- 6,761
1,526 1,525
10,410 9,935
10,388 9,915
9,371 10,019
37.
Changes in liabilities arising from financing activities
Non-cash changes Interest Foreign Fair value 1.1.2024 Cash flowsexpenseexchangechanges31.12.2024Covered bonds in ISK .................................................................34,823 ( 8,210) 1,435 - ( 113) 27,935Covered bonds in ISK - CPI-linked ..............................................135,397 ( 8,595) 9,519 - ( 80) 136,241Senior unsecured bonds in ISK ...................................................11,304 547 1,026 - - 12,877Senior unsecured bonds in ISK - CPI-linked ...............................5,031 12,865 1,047 - - 18,943Senior unsecured bonds FX ........................................................65,068 ( 15,309) 4,601 ( 5,046) 66 49,380Senior unsecured bonds FX at fair value ....................................92,646 ( 72,465) 1,912 ( 1,943) 1,270 21,420Covered bonds in hedge accounting ...........................................45,126 ( 1,370) 1,379 ( 1,967) 395 43,563Senior unsecured bonds in hedge accounting ............................. - 44,834 1,622 ( 1,968) 780 45,268Other borrowed funds .................................................................28,178 ( 17,485) 1,138 128 - 11,959Subordinated loans .....................................................................38,155 ( 8,952) 3,357 ( 888) 23 31,695Total 455,728 ( 74,140) 27,036 ( 11,684) 2,341 399,281
Non-cash changes Interest Foreign Fair value 1.1.2023 Cash flowsexpenseexchangechanges31.12.2023Covered bonds in ISK .................................................................69,273 ( 36,896) 2,665 - ( 219) 34,823Covered bonds in ISK - CPI-linked ..............................................137,169 ( 16,816) 15,072 - ( 28) 135,397Senior unsecured bonds in ISK ...................................................10,575 ( 189) 918 - - 11,304Senior unsecured bonds in ISK - CPI-linked ............................... - 5,020 11 - - 5,031Senior unsecured bonds FX ........................................................69,360 ( 5,121) 4,447 ( 3,695) 77 65,068Senior unsecured bonds FX at fair value ....................................83,437 ( 677) 2,470 ( 375) 7,791 92,646Covered bonds in hedge accounting ...........................................43,875 ( 1,320) 1,373 ( 335) 1,533 45,126Senior unsecured bonds in hedge accounting .............................5,703 ( 5,831) 9 113 6 -Other borrowed funds .................................................................48,878 ( 21,507) 1,334 ( 527) - 28,178Subordinated loans .....................................................................34,392 1,441 3,214 ( 892) - 38,155Total 502,662 ( 81,896) 31,513 ( 5,711) 9,160 455,728
First Currency and outstanding nominal issued Maturity Callable Interest SEK 0 million ............................................................2019 2029 2024 STIBOR 3M + 3.90%ISK 1,500 million .......................................................2022 2033 2028 Fixed, 8.62%ISK 9,020 million .......................................................2022 2033 2028 Fixed CPI, 4.86%ISK 9,600 million .......................................................2023 2034 2029 Fixed CPI, 5.80%Tier 2 subordinated loans 22,324 28,136 SEK 750 million ........................................................2021 Perpetual 2026 STIBOR 3M + 4.75%Additional Tier 1 subordinated loans 9,371 10,019 Subordinated loans 31,695 38,155
Íslandsbanki hf. Consolidated Financial Statements 2024
48
Amounts are in ISK million
Notes to the Consolidated Financial Statements
38.
Tax assets and tax liabilities
31.12.202431.12.2023Assets Liabilities Assets Liabilities Current tax ...................................................................................................................... - 11,622 - 11,163 Deferred tax assets and tax liabilities ..............................................................................164 1,294 122 1,944 Tax in the balance sheet 164 12,916 122 13,107 Assets Liabilities Deferred tax assets and tax liabilities 1.1.2023 .........................................................................................................116 3,086 Calculated income tax for 2023 .................................................................................................................................6 7,184 Income tax payable in 2024 ...................................................................................................................................... - ( 7,423)- thereof income tax recognised in other comprehensive income .............................................................................. - 173 Changes in deferred tax assets and deferred tax liabilities due to equity ................................................................... - ( 903)Deferred tax assets and tax liabilities 31.12.2023 122 1,944 Calculated income tax for 2024 .................................................................................................................................42 7,287 Income tax payable in 2025 ...................................................................................................................................... - ( 8,381)- thereof income tax recognised in other comprehensive income .............................................................................. - 702 Changes in deferred tax assets and deferred tax liabilities due to equity ................................................................... - 444 Deferred tax assets and tax liabilities 31.12.2024 164 1,294 Balance at 31 DecemberNet Recognised2024 balance at in profit or Recognised Deferred Deferred1 January loss in equity Net tax assets tax liabilities Property and equipment ..............................................................( 855) 87 - ( 768) - ( 768)Intangible assets .........................................................................( 385) 88 - ( 297) - ( 297)Assets and liabilities in foreign currency .....................................( 424) 100 - ( 324) - ( 324)Deferred foreign exchange difference .........................................( 827) ( 117) - ( 944) - ( 944)Derivatives ..................................................................................( 235) 508 - 273 273 -Lease liabilities ...........................................................................741 ( 67) - 674 674 -Debt issued and other borrowed funds ........................................41 529 ( 444) 126 126 -Other items .................................................................................122 8 - 130 130 -( 1,822) 1,136 ( 444) ( 1,130) 1,203 ( 2,333)Set-off of deferred tax assets together with liabilities of the same taxable entities ...................................( 1,039) 1,039 Deferred tax assets and tax liabilities ( 1,822) 1,136 ( 444) ( 1,130) 164 ( 1,294)
Balance at 31 DecemberNet Recognised2023 balance at in profit or Recognised Deferred Deferred1 January loss in equity Net tax assets tax liabilities Property and equipment ..............................................................( 876) 21 - ( 855) - ( 855)Intangible assets .........................................................................( 456) 71 - ( 385) - ( 385)Assets and liabilities in foreign currency .....................................( 479) 55 - ( 424) - ( 424)Deferred foreign exchange difference .........................................( 837) 10 - ( 827) - ( 827)Derivatives ..................................................................................750 ( 985) - ( 235) - ( 235)Lease liabilities ...........................................................................733 8 - 741 741 -Debt issued and other borrowed funds ........................................( 1,921) 1,059 903 41 41 -Other items .................................................................................116 6 - 122 122 -( 2,970) 245 903 ( 1,822) 904 ( 2,726)Set-off of deferred tax assets together with liabilities of the same taxable entities ...................................( 782) 782 Deferred tax assets and tax liabilities ( 2,970) 245 903 ( 1,822) 122 ( 1,944)
Íslandsbanki hf. Consolidated Financial Statements 2024
49
Amounts are in ISK million
Notes to the Consolidated Financial Statements
39.
Other liabilities
41.
Leases
The Group as a lessee
The Group as a lessor
At year-end 2024 the Group recognised ISK 3,244 million in right-of-use assets which are presented in the line item "Property and equipment"
and lease liabilities amounting to ISK 3,391 million which are presented in the line item "Other liabilities".
31.12.2024 31.12.2023Accruals ....................................................................................................................................................................2,741 2,392 Lease liabilities .........................................................................................................................................................3,391 3,720 Expected credit losses for off-balance sheet loan commitments and financial guarantees ........................................910 1,184 Withholding tax .........................................................................................................................................................6,302 6,192 Unsettled securities transactions ..............................................................................................................................5,298 968 Sundry liabilities ........................................................................................................................................................2,926 2,762 Other liabilities 21,568 17,218
40.Custody assets31.12.2024 31.12.2023Custody assets - not managed by the Group ............................................................................................................3,873,964 3,565,465
The Group's significant leases are leases for offices, branches, and storage. Most leases are CPI-linked real estate leases with duration of 5-
10 years with extension options. Lease commitments are recognised on-balance sheet except for short-term leases and leases of low-value
assets. During the year 2024 the total expense for leases of low-value assets and short-term leases amounted to ISK 68 million (2023: ISK
61 million), the total cash outflow for leases amounted to ISK 709 million (2023: ISK 659 million) and total interest expense from lease
liabilities amounted to ISK 76 million (2023: ISK 79 million).
Net investment in finance lease receivables
31.12.2024 31.12.2023Due within 1 year ......................................................................................................................................................26,677 27,401 Due in 1-2 years ........................................................................................................................................................20,907 21,231 Due in 2-3 years ........................................................................................................................................................15,573 17,895 Due in 3-4 years ........................................................................................................................................................11,028 11,271 Due in 4-5 years ........................................................................................................................................................3,812 3,287 Due in more than 5 years ..........................................................................................................................................2,222 2,607 Total gross investment in the lease 80,219 83,692 Due within 1 year ......................................................................................................................................................20,339 20,385 Due in 1-2 years ........................................................................................................................................................16,687 16,402 Due in 2-3 years ........................................................................................................................................................13,054 15,035 Due in 3-4 years ........................................................................................................................................................9,866 10,018 Due in 4-5 years ........................................................................................................................................................3,397 2,841 Due in more than 5 years ..........................................................................................................................................1,937 2,260 Total present value of lease payments* 65,280 66,941 Unearned interest income 14,939 16,751 *The Group presents finance lease receivables in the line item "Loans to customers".Expected credit loss allowance .................................................................................................................................354 212 Interest income from finance lease receivables during the year ................................................................................7,912 6,898
Íslandsbanki hf. Consolidated Financial Statements 2024
50
Amounts are in ISK million
Notes to the Consolidated Financial Statements
42.
Íslandsbanki's shareholders
Beneficial owners
At 31 December 2024 the number of shareholders of the Bank was 9,961 (year-end 2023: 11,551) where 90.1% of the Bank's shares were
owned by domestic parties and 9.9% by international investors (year-end 2023: 89.8% domestic parties and 10.2% international investors).
The Bank's employees, board members and related parties of the employees and board members, held 0.13% of shares in the Bank (year-
end 2023: 0.14%). Treasury shares amounted to 105.4 million shares, representing 5.27% of the issued share capital (year-end 2023: 20.4
million shares, or 1.02% of the issued share capital).
For domestic pension funds, domestic fund management entities and foreign shareholders, the board of directors of the relevant entity is
considered as the beneficial owner. Information on the holdings of individual funds is published jointly under the name of their management
company.
The following information takes into consideration treasury shares in the ownership calculation.
31.12.2024 31.12.2023The Icelandic Government ...................................................................................................................Iceland 44.9% 42.9%LSR Pension Fund ..............................................................................................................................Iceland 8.0% 7.9%Gildi Pension Fund ..............................................................................................................................Iceland 7.2% 8.0%Live Pension Fund ...............................................................................................................................Iceland 5.8% 6.3%Capital Group ......................................................................................................................................USA 5.3% 5.6%Brú Pension Fund ................................................................................................................................Iceland 3.9% 3.3%Vanguard .............................................................................................................................................USA 2.4% 2.3%Birta Pension Fund ..............................................................................................................................Iceland 1.6% 1.6%Frjálsi Pension Fund ............................................................................................................................Iceland 1.5% 1.5%Lífsverk Pension Fund ........................................................................................................................Iceland 1.2% 1.2%Festa Pension Fund ............................................................................................................................Iceland 1.2% 1.0%Almenni Pension Fund ........................................................................................................................Iceland 1.1% 1.0%Stapi Pension Fund .............................................................................................................................Iceland 1.1% 2.1%RWC Asset Management LLP .............................................................................................................UK 0.8% 1.3%Other shareholders ..............................................................................................................................14.0% 14.0%Total 100.0% 100.0%
Íslandsbanki hf. Consolidated Financial Statements 2024
51
Amounts are in ISK million
Notes to the Consolidated Financial Statements
43.
Related party
At 31 December 2024 a total of ISK 1 million (year-end 2023: ISK 3 million) were recognised as Stage 1 expected credit losses of balances
with related parties. For related party remuneration see Note 12.
GuaranteesRight-of-use Loans to Net & loan com-At 31 December 2024asset customers Liabilities balance mitmentsBoard of Directors, key management personnel and other related parties .. - 840 640 200 73 Associated companies ................................................................................2,786 4,703 3,624 3,865 157 Balances with related parties 2,786 5,543 4,264 4,065 230 Interest Interest Other Other2024 income expense income expenseBoard of Directors, key management personnel and other related parties .......................93 45 2 41 Associated companies ....................................................................................................551 38 1 2,158 Transactions with related parties 644 83 3 2,199 GuaranteesRight-of-use Loans to Net & loan com-At 31 December 2023 asset customers Liabilities balance mitmentsBoard of Directors, key management personnel and other related parties .. - 738 544 194 77 Associated companies ................................................................................3,037 5,001 3,546 4,492 157 Balances with related parties 3,037 5,739 4,090 4,686 234 Interest Interest Other Other2023 income expense income expenseBoard of Directors, key management personnel and other related parties .......................76 34 7 36 Associated companies ....................................................................................................544 27 3 2,035 Transactions with related parties 620 61 10 2,071
The Group's products and services are offered to the Icelandic Government and government-related entities in competition with other vendors
and under generally accepted commercial terms. In a similar manner the Group entities purchase products and services from government-
related entities under generally accepted commercial terms. Transactions with related parties were made in the ordinary course of business
on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with third
party counterparties.
The following tables show the Group's balances and transactions with related parties.
The Board of Directors and key management personnel of the Bank, the Icelandic State Financial Investments (ISFI) and subsidiaries of the
Bank, close family members of individuals referred to herein and legal entities controlled by them, are defined as related parties. The Group's
associates are also defined as related parties.
Íslandsbanki has a related party relationship with the Icelandic Government as the largest shareholder with significant influence over the
Group. The shares were administered by the IFSI until it was dissolved on January 1 2025. The shares are now administered by the Ministry
of Finance and Economic Affairs. As a result, the Icelandic Government and the ISFI are defined as related parties. The Group has applied
the partial exemption for government-related entities, as described in IAS 24.
Íslandsbanki hf. Consolidated Financial Statements 2024
52
Amounts are in ISK million
Notes to the Consolidated Financial Statements
44.
Contingencies
Contingent liabilities
Borgun hf. – Landsbankinn hf.
105 Miðborg slhf. – ÍAV hf.
The Consumers' Association of Iceland
In December 2021 three customers, sponsored by the Consumers' Association of Iceland, commenced litigation against the Bank,
demanding that certain provisions of their residential mortgages, governing variable interest rates, be deemed illegal and unenforceable and
demand the repayment of any overpaid interest.
Firstly, two of the cases were brought by customers owing CPI-linked mortgages that contain a certain interest resetting provision that the
Supreme Court found in its ruling on case no. 623/2016 could not be used by the Bank to reset interest rates. Following that judgement, the
Bank repaid its customers any interest that the Bank had charged in excess of the originally agreed interest rate and returned the affected
loans to their original interest rates. In the suits now filed the customers maintain that instead of the originally agreed interest rates, their
loans should incur interest rates pursuant to article 4 of Act no. 38/2001 on Interest and Price Indexation. An unfavourable finding by the
courts may have an influence on the Bank's portfolio of loans and fully paid loans that contained the resetting provision, disputed in case no.
623/2016. The Bank estimates that the financial impact of an unfavourable ruling in an adverse scenario could amount to around ISK 2
billion. On 25 May 2023, the District Court of Reykjanes rendered a judgement in one of these cases and dismissed all claims that were
made against the Bank. The plaintiff appealed the judgement to the Court of Appeal. On 17 January 2025, the case was heard before the
Court of Appeal and is currently awaiting judgement.
In February 2021 the alternative investor fund 105 Miðborg slhf., operated by Íslandssjóðir hf. (Iceland Funds hf.), a wholly owned subsidiary
of the Bank, terminated its contractor agreement with ÍAV hf., a contractor that had been retained for a real estate project at Kirkjusandur in
the centre of Reykjavík. The main reason for the termination was the alleged non-performance and delays in the construction of one building
on the premises. The contractor, ÍAV, has claimed approximately ISK 3,829 million in damages plus late payment interest and legal costs
from 105 Miðborg and Iceland Funds for the alleged unlawful termination. The suit was filed on 11 May 2021 at the District Court of
Reykjavík. Additionally, 105 Miðborg has filed a case against ÍAV claiming approximately ISK 3,878 million in damages plus late payment
interest and legal costs due to alleged delays and significant breaches of contract. The Group owns an 8.25% stake in 105 Miðborg. The
Group has not recognised a provision in relation to this matter.
The Bank and its subsidiaries are parties to legal proceedings and regulatory matters that arise out of its normal business operations. Apart
from the matters described below, the Group considers that none of these matters are material.
Borgun hf. (currently Teya Iceland hf.), a former subsidiary of Íslandsbanki, is a payment acquirer and issuing processor. Landsbankinn hf.
sold its 31.2% stake in Borgun hf. in late 2014. Landsbankinn claims that Borgun's management did not disclose all available information that
might have affected the value of Borgun during the sales process, namely the value of its stake in Visa Europe which was sold to Visa
International shortly after the Borgun sale. In order to reclaim the alleged loss, Landsbankinn filed a lawsuit against Borgun and others on 12
January 2017, claiming the right to damages for having been deprived of the true value of the stake involved in the sale. Landsbankinn does
not quantify the claim, but its estimate of the lost profit from having sold its shares in Borgun is approximately ISK 1,930 million.
On 11 March 2020, the Bank signed an agreement to sell its 63.47% stake in Borgun hf. to SaltPay Co Ltd. and concluded the sale on 7 July
2020. In the agreement the Bank undertook to reimburse 63.47% of losses incurred by Borgun or the buyer as a result of an unfavourable
outcome in the Landsbankinn case, however such reimbursement was never to exceed the Bank's share in the purchase price.
On 27 April 2023 a panel of three judges of the District Court of Reykjavík rendered a judgement and dismissed the claims made by
Landsbankinn against all defendants. Landsbankinn has appealed the judgement to the Court of Appeal. The Bank has not recognised a
provision in relation to this matter.
Íslandsbanki hf. Consolidated Financial Statements 2024
53
Amounts are in ISK million
Notes to the Consolidated Financial Statements
44.
Contingencies (continued)
The Consumers' Association of Iceland (continued)
EC Clear ehf.
45. Events after the reporting period
In August 2021 EC Clear ehf., a former owner of a payment processing company, filed a suit jointly against the Bank and four other financial
institutions claiming damages in the amount of ISK 923 million plus interest from June 2013, resulting from a breach of competition law that
allegedly took place during the period from 2003 to 2013. This was the sixth time the case had been brought before the courts for this
purpose, after previous cases had been dismissed. On 30 September 2022 the District Court of Reykjavík dismissed the case. On 10
January 2023 the Court of Appeal partly reversed the dismissal and ordered the District Court to hear the case in substance. The hearing of
the case has not been decided. The Bank has not recognised a provision in relation to this matter.
Should the judgement be overturned on appeal, it is the Bank's preliminary assessment of the potential impact of an adverse ruling on the
Bank's loan portfolio with the same interest rate provision that the Bank's financial loss, taking different scenarios into account, could amount
to around ISK 17 billion. The preliminary assessment does not include an assessment of the impact on the Bank's interest rate risk should an
adverse final court ruling be that the initial contractual interest rates should be applied throughout the duration of the respective loans. Such a
ruling, which the Bank regards as unlikely, would significantly increase the Bank's interest rate risk and could have a considerable negative
financial impact on the Bank.
It is disputed in all three cases whether the terms of the Bank's mortgages, and the method used by the Bank to set variable interest rates, is
in compliance with the Act on Mortgage Lending to Consumers no. 118/2016. That act is in this respect similar to the terms of Act no.
33/2013 on Consumer Credit. An unfavourable ruling in this case may affect all indexed and non-index linked mortgages bearing variable
interest rates, as well as any loans bearing fixed interest rates to be reset on a predefined date.
Secondly, a case has been brought against the Bank by a customer owing a non-index linked mortgage bearing variable interest rates. The
plaintiff maintains that the terms governing the variable interest rates are invalid and may not be used by the Bank as basis for setting interest
rates, and that therefore the originally agreed interest rate should remain fixed during the term of the loan. During the proceedings, the District
Court decided to seek an advisory opinion from the EFTA Court. On 23 May 2024, the EFTA Court gave its advisory opinion, providing the
Court's interpretation of certain provisions of the Mortgage Credit Directive no. 2014/17/EU (the Mortgage Credit Directive) and Directive
93/13/EEC on unfair terms in consumer contracts (the Unfair Terms Directive). The Court offered guidance on requirements under the
directives for the clarity, accessibility, objectivity, and verifiability of contract terms and information provided to consumers. The EFTA Court
concluded that it is up to Icelandic courts to determine whether these requirements are met and to assess the impact on the underlying
contracts if they are not met. The Bank believes that the terms of its mortgages and other loan contracts comply with these requirements, as
well as with Icelandic legislation. Furthermore, the increases in the variable interest rates set by the Bank on the disputed mortgage have
been less than changes on policy rates during the same period. On 12 November 2024, the District Court of Reykjanes rendered a judgement
in the case where all claims made by the plaintiffs against the Bank were dismissed. The plaintiffs have appealed the judgement and were
granted permission to appeal directly to the Supreme Court without first going to the Court of Appeal.
No events have arisen after the reporting period that require amendments or additional disclosures in the Consolidated Financial Statements
for 2024.
The Bank believes that the claims of the plaintiffs are unfounded and has not recognised a provision in relation to this matter.
Íslandsbanki hf. Consolidated Financial Statements 2024
54
Amounts are in ISK million
Notes to the Consolidated Financial Statements
46.
Risk management
Risk governance
The Group is exposed to various risk factors, and managing these risks is an integral part of its operations. The Bank emphasises sound
governance principles. The risk management and internal control framework of the Group is based on a three lines of defence model, as
referred to in the European Banking Authority Guidelines on Internal Governance. This model aims for informed decision-making and strong
risk awareness. The framework is intended to ensure effective and efficient operations, adequate control of risks, prudent conduct of
business, reliability of financial and non-financial information reported internally and externally, and compliance with laws, regulations,
supervisory requirements, and the Group's internal rules.
The first line of defence consists of the Bank's business and support units. The second line of defence comprises the Bank's internal control
units, Risk management and Compliance. The third line of defence is Group Internal Audit, which provides the Board of Directors with an
independent assessment of the quality of corporate governance, risk management and internal controls.
The CEO is responsible for the day-to-day operations of the Bank, in accordance with set policies and resolutions of the Board. The CEO
must also ensure that the Group's operations comply with applicable legislation and the Group's Articles of Association, including maintaining
adequate and effective risk management and internal control functions. The CEO appoints the Chief Risk Officer, the Chief Compliance
Officer, and other members of the Executive Committee. The CEO also engages the members of the senior management committees.
The Bank's senior management committee structure is twofold. Firstly, there are two executive committees, the Executive Committee and the
All Risk Committee, which are responsible for implementing the Board-approved business strategy, risk appetite, and policies. Secondly there
are six business committees: the Asset and Liability Committee (ALCO), the Senior Credit Committee (SCC), the Investment Committee (IC),
the Operational and Security Committee (OSC), the Sustainability Committee (SC), and the Digital Product Committee (DPC), which are
responsible for approving business or operational proposals subject to internal rules and guidelines issued by the executive committees and
the Board. The members of the senior management committees are appointed by the CEO, and their mandate and rules of procedure are
documented in a charter issued by the CEO.
The General Counsel is appointed by and reports directly to the CEO. The General Counsel provides legal advice to the Bank's senior
management, including the Board of Directors, and manages the Bank's legal department, which provides comprehensive legal advice to the
Bank's business segments and support units.
The CRO heads the Risk Management function and is responsible for defining the daily tasks of the department and assessing the adequacy
of its professional skills. Additionally, the CRO is responsible for monitoring the risk management framework at the Group and verifying that
the Bank has the appropriate resources and organisation to manage its risks efficiently. The CRO is selected and appointed by the CEO,
subject to Board confirmation, and reports directly to the Board and the Board Risk Committee on the overall risk profile of the Group. The
CRO cannot be removed without the Board's prior approval and is independent from the business units, being a member of the Executive
Committee and reporting directly to the CEO. The CRO provides an independent view on the Group's exposure to risk and has the right, but
not the responsibility, to veto certain risk-taking decisions of the senior management committees if an internal control unit considers the
proposal inconsistent with the Bank's risk appetite, policies, or procedures.
Risk Management is mandated to identify, understand, measure, and monitor the risks that the Group is exposed to. It provides independent
information, analyses, and expert judgement on risk exposures and advice on proposals and risk decisions made by the management and
business or support units to ensure they are consistent with the risk appetite and risk policies set by the Board. Where necessary, Risk
management makes recommendations to senior management and the Board to improve or clarify risk policies, procedures, and limits. Risk
Management provides a holistic view of risk and compliance with limits to internal and external stakeholders and ensures appropriate
escalation in the event of limit breaches. Business and support units are responsible for maintaining their independent view on the risks
inherent in their operations and reporting to senior management any foreseeable breaches of limits, policies, or strategic direction. Risk
management provides the senior management and the Board with all relevant risk-related information to enable them to define the Bank's
risk appetite.
The Chief Compliance Officer (CCO) is responsible for the Compliance function of the Bank, which sits within the second line of defence and
acts independently within the Bank. The CCO is appointed by the CEO, subject to Board confirmation, and cannot be removed from the post
without the Board's prior approval. The Central Bank must be notified of the dismissal or departure of the CCO.
The Chief Audit Executive (CAE) is appointed by the Board, reports directly to Board, and directs Group Internal Audit with a mandate from
the Board. The CAE is responsible for internal audit matters within the Group, including internal audit tasks that have been outsourced.
Íslandsbanki hf. Consolidated Financial Statements 2024
55
Amounts are in ISK million
Notes to the Consolidated Financial Statements
46. Risk management (continued)
47. Credit risk
Credit risk is defined as current or prospective risk to earnings and capital arising from an obligor's potential failure to meet the terms of any
financial contract with the Group.
The Group's management body has a dual structure. The Board of Directors of the Bank has a supervisory role in setting and monitoring the
execution of policies, ensuring sound control of accounting and financial management, and ensuring that Group Internal Audit, Compliance
and Risk Management are effective. The CEO, the Chief Risk Officer (CRO), other members of senior management, and the senior
management committees are responsible for implementing risk management practices and internal monitoring in accordance with Board
authorisation.
More information about the Group's risk management and risk assessment processes is available in the unaudited Pillar 3 2024 Report,
which is available on the Bank's website: www.islandsbanki.is.
The Board defines and communicates the risk governance framework and the acceptable level of risk through risk management policies and
the Risk Appetite Statement. To assist the Board in fulfilling its oversight responsibilities, the Board has appointed three board sub-
committees.
Each employee is responsible for understanding the risk related to their day-to-day work, for knowing and understanding the respective
internal and external rules and procedures, for using the alert procedures in the event of possible fraudulent activities, and for conducting
business in accordance with the Bank's code of conduct.
Credit concentration risk is the significantly increased risk that is driven by common underlying factors, e.g. industrial sector, economy,
geographical location, type of financial instrument, or due to connections or relations among counterparties. This includes exposures to
parties under common control and significant exposures to groups of counterparties whose likelihood of default is driven by common
underlying factors. Credit risk arises principally from loans and advances to customers and other banks but also from balances with the
Central Bank and off-balance sheet items such as financial guarantees, loan commitments and derivatives.
The Group has policies and procedures dedicated to accepting, measuring, and managing credit risk. The objective of the Group's credit risk
management is to achieve an appropriate balance between risk and return and to minimise potential adverse effects of credit risk on the
Group's financial performance.
A thorough analysis of the counterparty's financial standing, analysis of past and estimated future cash flows as well as the borrower's
general ability to repay its obligations forms the basis for all credit decisions. The Group structures the levels of credit risk it undertakes by
placing limits on the amount of risk accepted in relation to one borrower, groups of borrowers, countries and industry segments. The Group
measures and consolidates its credit risk for each counterparty or group of connected clients in accordance with internal and external criteria
of connection between parties.
The Group employs a range of policies and practices to mitigate credit risk. The most traditional of these is the taking of security in borrower's
assets. The principal collateral types for loans are properties, vehicles, equipment, vessels and securities. When applicable, other credit risk
mitigants are employed.
Íslandsbanki hf. Consolidated Financial Statements 2024
56
Amounts are in ISK million
Notes to the Consolidated Financial Statements
48. Maximum credit exposure and collateral
The following table shows the maximum exposure to credit risk by collateral held against those exposures that are subject to IFRS 9
impairment requirements.
The industry breakdown under loans to customers shows the credit exposure by industry classification. The breakdown follows an internal
industry classification which is based on the Icelandic ISAT2008 that derives from the European NACE Rev. 2 classification standard.
Valuation of collateral is based on market price, official valuation for tax purposes or expert opinion of the Group's employees, depending on
availability. In the case of fishing vessels the associated fishing quota is included in the valuation. The total value of pledged assets can be
higher than the cover indicates. For finance leases the Group remains the owner of the leased object.
In some cases the Group uses guarantees as a credit enhancement but since guarantees effectively transfer credit risk from one
counterparty to another they do not represent a reduction in maximum exposure to credit risk. Exempt from this are Government guarantees
issued in response to the COVID-19 pandemic which are shown under other collateral. Of these, ISK 284 million are subject to 100%
Government guarantee and ISK 385 million to 85% Government guarantee. Covenants in loan agreements are also an important credit
enhancement but do not reduce maximum credit exposure.
Collateral and other credit mitigants vary between types of obligors and credit facilities. For loans to individuals the principal collateral taken is
residential property against mortgages. In the case of corporate entities the Group takes a charge over assets such as real estate, vessels,
cash, and securities as well as other collateral including accounts receivables, inventory, vehicles, and equipment. Loans to government
entities and to municipalities are more often than not unsecured.
The Group's credit risk exposure comprises both on-balance sheet and off-balance sheet items. Maximum exposure to credit risk for on-
balance sheet assets is the net carrying amount as reported in the Consolidated Statement of Financial Position. The maximum exposure for
off-balance sheet items is the amount that the Group might have to pay out against financial guarantees and credit commitments, less
provisions that have been made because of these items.
Íslandsbanki hf. Consolidated Financial Statements 2024
57
Amounts are in ISK million
48.
Maximum credit exposure for off-balance sheet items reflect the maximum amount, not taking into account the Group's ability to reduce its loan commitments before the current undrawn amount is fully utilised
by the customer.
Notes to the Consolidated Financial Statements
Maximum credit exposure and collateral (continued)
Total credit Total credit At 31 December 2024Maximum exposure exposure exposure to Residential Commercial Cash & Vehicles & Other covered by not covered by Associated Collateral held against credit exposure credit risk real estate real estate Vessels securities equipment collateral collateral collateral ECL Cash and balances with Central Bank .........................................65,716 - - - - - - - 65,716 17 Loans to credit institutions ...........................................................50,486 - - - - - - - 50,486 47 Bonds and debt instruments ........................................................111,908 - - - - - - - 111,908 -Loans to customers: 1,295,388 673,318 317,510 55,546 23,775 74,330 67,944 1,212,423 82,965 7,820 Individuals ................................................................................625,262 567,776 5,322 2 336 14,998 153 588,587 36,675 1,618 - Thereof mortgages .............................................................563,753 562,998 - - 330 - - 563,328 425 328 Commerce and services ..........................................................184,667 12,168 74,153 793 4,615 46,322 31,424 169,475 15,192 1,737 Construction ............................................................................95,558 48,395 39,081 59 115 3,331 2,065 93,046 2,512 928 Energy .....................................................................................11,800 39 9,955 - - 156 7 10,157 1,643 59 Financial services ....................................................................715 154 - - 540 - - 694 21 19 Industrial and transportation .....................................................82,423 1,131 54,465 5 107 8,858 14,062 78,628 3,795 1,321 Investment companies .............................................................42,960 2,087 12,066 - 17,620 183 10,266 42,222 738 519 Public sector and non-profit organisations ...............................20,448 60 815 - - 14 7 896 19,552 18 Real estate ..............................................................................154,913 41,108 110,569 - 241 314 947 153,179 1,734 1,468 Seafood ...................................................................................76,642 400 11,084 54,687 201 154 9,013 75,539 1,103 133 Other financial assets ..................................................................6,306 - - - - - - - 6,306 46 Off-balance sheet items: 192,203 19,918 28,813 4,517 13,110 182 12,782 79,322 112,881 911 Financial guarantees ................................................................21,051 1,283 6,015 30 2,977 - 2,330 12,635 8,416 291 Loan commitments ..................................................................171,152 18,635 22,798 4,487 10,133 182 10,452 66,687 104,465 620 Total 1,722,007 693,236 346,323 60,063 36,885 74,512 80,726 1,291,745 430,262 8,841
Íslandsbanki hf. Consolidated Financial Statements 2024
58
Amounts are in ISK million
48.
Notes to the Consolidated Financial Statements
Maximum credit exposure and collateral (continued)
Maximum credit exposure for off-balance sheet items reflect the maximum amount, not taking into account the Group's ability to reduce its loan commitments before the current undrawn amount is fully utilised
by the customer.
Total credit Total credit At 31 December 2023Maximum exposure exposure exposure to Residential Commercial Cash & Vehicles & Other covered by not covered by Associated Collateral held against credit exposure credit risk real estate real estate Vessels securities equipment collateral collateral collateral ECL Cash and balances with Central Bank .........................................87,504 - - - - - - - 87,504 18 Loans to credit institutions ...........................................................73,475 - - - - - - - 73,475 90 Loans to customers: 1,223,426 606,706 307,978 60,466 23,517 76,787 66,315 1,141,769 81,657 11,728 Individuals ................................................................................594,631 532,832 8,280 4 185 17,368 184 558,853 35,778 3,560 - Thereof mortgages .............................................................530,676 528,534 1,499 - 177 - - 530,210 466 2,051 Commerce and services ..........................................................182,808 14,159 71,111 753 3,969 47,061 31,546 168,599 14,209 2,162 Construction ............................................................................80,099 25,822 45,510 76 367 3,543 2,389 77,707 2,392 1,009 Energy .....................................................................................7,938 30 6,623 - 1 10 21 6,685 1,253 79 Financial services ....................................................................214 - 61 - - - - 61 153 1 Industrial and transportation .....................................................75,802 2,122 47,248 1,829 316 8,084 12,073 71,672 4,130 2,835 Investment companies .............................................................45,931 4,018 11,646 - 18,521 198 11,200 45,583 348 764 Public sector and non-profit organisations ...............................18,476 61 754 - - 20 15 850 17,626 24 Real estate ..............................................................................144,173 27,169 110,037 - 94 368 1,363 139,031 5,142 1,179 Seafood ...................................................................................73,354 493 6,708 57,804 64 135 7,524 72,728 626 115 Other financial assets ..................................................................2,846 - - - - - - - 2,846 8 Off-balance sheet items: 197,115 9,629 31,770 6,492 4,227 1,139 20,464 73,721 123,394 1,184 Financial guarantees ................................................................20,680 - 6,766 105 1,532 - 1,961 10,364 10,316 347 Loan commitments ..................................................................176,435 9,629 25,004 6,387 2,695 1,139 18,503 63,357 113,078 837 Total 1,584,366 616,335 339,748 66,958 27,744 77,926 86,779 1,215,490 368,876 13,028
Íslandsbanki hf. Consolidated Financial Statements 2024
59
Amounts are in ISK million
Notes to the Consolidated Financial Statements
49. Credit quality of financial assets
The following tables provide the gross carrying amount of loans and credit risk exposure on loan commitments and financial guarantees.
Amounts are broken down by risk class and the method by which their respective credit loss allowances (ECL) are calculated, i.e. Stage 1,
2 and 3.
The Group uses internal rating models to assess the default probability of corporate and retail customers. The models assign each
customer to one of ten risk classes. One risk class is for customers in default (risk class 10), and nine risk classes are for performing
customers (risk classes 1-9). Risk classes are assigned on customer level and not facility level.
The rating of corporate customers is based on a company's most recent financial statements, together with a qualitative assessment of its
management, market position and industry sector.
For retail customers the Group uses two different statistical rating models. One model is for individuals and another is for small companies
with a total exposure to the Group of less than ISK 150 million. These models are behavioural scoring models and use information about a
customer's payment history, amount of debt and deposits, and demographic variables to assess the probability that a customer will default
on any of his obligations within 12 months of the rating assessment.
Risk classes 1-4 represent low risk, risk classes 5-6 moderate risk, risk classes 7-8 increased risk, risk class 9 high risk, and risk class 10
represents customers that are in default. Unrated are loans that are yet to be rated.
Further information on the risk classes, including the mapping from risk classes to the probability of default, can be found in Section 4.2.2 of
the unaudited Pillar 3 2024 Report.
The same customer can have loans and off-balance sheet commitments in Stages 1 and 2 simultaneously. However, if a customer has an
exposure in Stage 3 then all other loans and commitments are classified as Stage 3 as well.
At 31 December 2024Loans to customers: Stage 1 Stage 2 Stage 3 Total Risk class 1-4 .....................................................................................................................507,626 702 - 508,328 Risk class 5-6 .....................................................................................................................545,101 10,258 - 555,359 Risk class 7-8 .....................................................................................................................172,922 24,624 - 197,546 Risk class 9 ........................................................................................................................14,919 5,291 - 20,210 Risk class 10 ...................................................................................................................... - - 21,487 21,487 Unrated ...............................................................................................................................102 176 - 278 1,240,670 41,051 21,487 1,303,208 Expected credit losses ........................................................................................................( 3,496) ( 975) ( 3,349) ( 7,820)Net carrying amount 1,237,174 40,076 18,138 1,295,388 Off-balance sheet loan commitments and financial guarantees: Stage 1 Stage 2 Stage 3 Total Risk class 1-4 .....................................................................................................................89,049 24 - 89,073 Risk class 5-6 .....................................................................................................................76,133 410 - 76,543 Risk class 7-8 .....................................................................................................................23,690 799 - 24,489 Risk class 9 ........................................................................................................................721 90 - 811 Risk class 10 ...................................................................................................................... - - 1,752 1,752 Unrated ...............................................................................................................................438 8 - 446 190,031 1,331 1,752 193,114 Expected credit losses ........................................................................................................( 565) ( 32) ( 314) ( 911)Total 189,466 1,299 1,438 192,203
Íslandsbanki hf. Consolidated Financial Statements 2024
60
Amounts are in ISK million
Notes to the Consolidated Financial Statements
49.
At 31 December 2023
Credit quality of financial assets (continued)
Loans to customers: Stage 1 Stage 2 Stage 3 Total Risk class 1-4 .....................................................................................................................487,172 2,604 - 489,776 Risk class 5-6 .....................................................................................................................485,438 17,968 - 503,406 Risk class 7-8 .....................................................................................................................184,363 14,490 - 198,853 Risk class 9 ........................................................................................................................15,519 5,324 - 20,843 Risk class 10 ...................................................................................................................... - - 22,272 22,272 Unrated ...............................................................................................................................3 1 - 4 1,172,495 40,387 22,272 1,235,154 Expected credit losses ........................................................................................................( 4,788) ( 2,727) ( 4,213) ( 11,728)Net carrying amount 1,167,707 37,660 18,059 1,223,426 Off-balance sheet loan commitments and financial guarantees: Stage 1 Stage 2 Stage 3 Total Risk class 1-4 .....................................................................................................................93,558 168 - 93,726 Risk class 5-6 .....................................................................................................................71,681 417 - 72,098 Risk class 7-8 .....................................................................................................................24,477 3,370 - 27,847 Risk class 9 ........................................................................................................................961 447 - 1,408 Risk class 10 ...................................................................................................................... - - 1,220 1,220 Unrated ...............................................................................................................................1,983 17 - 2,000 192,660 4,419 1,220 198,299 Expected credit losses ........................................................................................................( 916) ( 106) ( 162) ( 1,184)Total 191,744 4,313 1,058 197,115
Íslandsbanki hf. Consolidated Financial Statements 2024
61
Amounts are in ISK million
Notes to the Consolidated Financial Statements
50.
period.
The following table provides a summary of the Group's forborne assets.
At 31 December 2024Gross carrying amountStage 1 Stage 2 Stage 3 TotalIndividuals ..........................................................................................................................2,811 4,249 2,027 9,087 Companies .........................................................................................................................1,929 14,690 6,424 23,043 Total 4,740 18,939 8,451 32,130 Expected credit lossesStage 1 Stage 2 Stage 3 TotalIndividuals ..........................................................................................................................( 13) ( 44) ( 131) ( 188)Companies .........................................................................................................................( 33) ( 220) ( 1,157) ( 1,410)Total ( 46) ( 264) ( 1,288) ( 1,598)At 31 December 2023Gross carrying amountStage 1 Stage 2 Stage 3 TotalIndividuals ..........................................................................................................................1,975 4,323 1,650 7,948 Companies .........................................................................................................................2,136 16,853 5,230 24,219 Total 4,111 21,176 6,880 32,167 Expected credit lossesStage 1 Stage 2 Stage 3 TotalIndividuals ..........................................................................................................................( 16) ( 75) ( 124) ( 215)Companies .........................................................................................................................( 32) ( 504) ( 1,224) ( 1,760)Total ( 48) ( 579) ( 1,348) ( 1,975)
Forbearance
When restructuring or modification measures are believed to be more appropriate than collection procedures, the Group offers several debt
relief measures and restructuring frameworks for customers in financial difficulties. These forbearance measures include temporary
payment holidays, extension of loan terms, capitalisation of arrears, and waiving of covenants.
The relationship between forbearance and stages is discussed in Note 64.3.
Once an asset has been classified as forborne, it will remain forborne for a minimum 24-month probation period. In order for a loan to be
reclassified out of the forborne category, the customer has to meet all of the following criteria:
- All of the customer's facilities have to be considered performing during the probation period; and
- The customer does not have any contract that is more than 30 days past due; and
- The probation period of two years has passed from the date of the forbearance event; and
- Regular payments of more than an insignificant amount of principal or interest have been made during at least half of the probation
Íslandsbanki hf. Consolidated Financial Statements 2024
62
Amounts are in ISK million
Notes to the Consolidated Financial Statements
51.
At 31 December 2024
52. Liquidity risk
The Group's main source of funding is customer deposits. Treasury is responsible for the Bank's funding and liquidity management in line
with internal and regulatory limits and policies. Treasury manages the Bank's intraday liquidity. Risk Management, as the second line of
defence, is responsible for independent reporting on the liquidity position to internal and external stakeholders and for providing a holistic
view of liquidity risk on a consolidated basis.
The Group's largest exposure before eligible credit risk mitigating effects is the Icelandic Government. Largest part of the exposure is due to
Icelandic Government Bonds in the Group's liquidity portfolio.
The Group defines liquidity risk as the risk of not being able to fund its financial obligations or planned growth, or only being able to do so
substantially above the prevailing market cost of funds.
Groups of connected clients:Before AfterGroup 1 .....................................................................................................................................................................81% 6%Group 2 .....................................................................................................................................................................11% 11%Group 3 .....................................................................................................................................................................10% 10%At 31 December 2023Groups of connected clients:Before AfterGroup 1 .....................................................................................................................................................................76% 2%Group 2 .....................................................................................................................................................................15% 15%Group 3 .....................................................................................................................................................................10% 10%
Large exposures disclosure
When the Group's total exposure to a group of connected clients is 10% or higher of the Group's Tier 1 capital it is considered a large
exposure. Both on-balance sheet and off-balance sheet items from all types of financial instruments are included in the exposure as defined
by EU regulation no. 575/2013 on prudential requirements for financial undertakings (CRR). The Group has internal criteria that define
connections between clients. These criteria reflect the Group's interpretation of CRR, where groups of connected clients are defined.
The exposure is evaluated both before and after credit risk mitigating effects according to the aforementioned regulation. After mitigating
effects, the Group had two large exposures at 31 December 2024 (year-end 2023: two). No large exposure is above the maximum 25%
large exposure limit set by the law.
Íslandsbanki hf. Consolidated Financial Statements 2024
63
Amounts are in ISK million
Notes to the Consolidated Financial Statements
53.
Liquidity coverage and net stable funding ratio
Net stable funding ratio 31.12.2024 31.12.2023For all currencies .......................................................................................................................................................125% 124%Liquidity coverage ratio 31.12.2024 31.12.2023For all currencies .......................................................................................................................................................168% 195%ISK ............................................................................................................................................................................126% 115%EUR ..........................................................................................................................................................................449% 663%The following table shows the composition of the Group's liquidity reserve.At 31 December 2024ISK EUR USD Other Total Cash and balances with Central Bank ..............................................................60,746 548 317 502 62,113 Foreign government bonds ............................................................................... - 7,843 3,446 862 12,151 Domestic bonds eligible as collateral with Central Bank ...................................97,314 4,934 - 7,744 109,992 Level 2 liquid assets .........................................................................................32,515 3,888 21 437 36,861 High quality liquidity assets190,575 17,213 3,784 9,545 221,117 Balance with financial institutions .....................................................................107 24,009 20,929 2,176 47,221 Liquidity reserve190,682 41,222 24,713 11,721 268,338 At 31 December 2023ISK EUR USD Other Total Cash and balances with Central Bank ..............................................................83,563 487 290 665 85,005 Foreign government bonds ............................................................................... - 31,371 20,913 29,735 82,019 Domestic bonds eligible as collateral with Central Bank ...................................73,995 - - - 73,995 Level 2 liquid assets .........................................................................................12,287 3 - 22 12,312 High quality liquidity assets169,845 31,861 21,203 30,422 253,331 Balance with financial institutions .....................................................................510 18,704 25,212 15,582 60,008 Liquidity reserve170,355 50,565 46,415 46,004 313,339
Key measures for the assessment of liquidity risk are the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). The
Central Bank of Iceland, which is the main supervisory authority regarding liquidity risk, has incorporated the LCR and the NSFR based on
the CRD IV standards into the rules on liquidity ratios and the rules on funding ratios. In addition, the Group complies with the FSA's
guidelines no. 2/2010 on best practices in liquidity management and the liquidity coverage ratio rules no. 1520/2022.
As of January 2023 rules no. 1520/2022 took effect. The minimum LCR ratio that the Group is required to maintain remains 100% for the
total LCR. A new requirement for LCR in EUR is 80% and in ISK the requirement is 50%. The Group is required to maintain a 100%
minimum NSFR ratio.
The following tables show the NSFR and the LCR for the Group at year-end 2024 and 2023.
Íslandsbanki hf. Consolidated Financial Statements 2024
64
Amounts are in ISK million
Notes to the Consolidated Financial Statements
54.
Maturity analysis of financial assets and financial liabilities
Bonds and debt instruments are based on contractual maturity and therefore do not represent their estimated liquidation time.
The tables show undiscounted contractual payments of principal and interest for the Group's financial assets and liabilities. Thus, the total
figures for each asset or liability class are higher than the respective balance sheet amount. Cash flows for payments of unknown nature,
such as for floating rate, CPI-linked or foreign currency denominated instruments, are based on internal yield curves and forecasts.
For dated financial assets or liabilities the amounts are grouped into maturity buckets according to contractual maturities of principal and
estimated contractual payments of interest. For demand deposits or other non-dated liabilities, the figures are grouped according to the first
possible required payment date.
The following tables also show the contractual cash flow of the Group's derivatives, i.e. derivatives that have a negative and a positive
carrying amount at the reporting date. For derivatives settled on a gross basis, the cash flow for both legs of the derivative is shown, since
netting cannot be applied upon settlement.
At 31 December 2024On Up to 3 3-12 1-5 Over No Carrying demand months months years 5 years maturity Total amount Cash and balances with Central Bank ........43,174 22,572 - - - - 65,746 65,716 Loans to credit institutions ..........................13,542 38,732 - - - - 52,274 50,486 Bonds and debt instruments ....................... - 37,837 37,480 75,968 3,977 - 155,262 142,618 Derivatives ................................................. - 2,070 ( 41) 2,181 - - 4,210 5,324 - Net settled derivatives ............................. - 782 - - - - 782 782 - Inflow ...................................................... - 52,343 6,714 16,193 1 - 75,251 63,291 - Outflow .................................................... - ( 51,055) ( 6,755) ( 14,012) ( 1) - ( 71,823) ( 58,749)Loans to customers .................................... - 130,860 185,438 693,506 1,912,186 - 2,921,990 1,295,388 Shares and equity instruments ................... - - - - - 24,330 24,330 24,330 Other financial assets .................................5,873 389 44 - - - 6,306 6,306 Total financial assets 62,589 232,460 222,921 771,655 1,916,163 24,330 3,230,118 1,590,168 Deposits from CB and credit institutions .....10,071 2,466 - - - - 12,537 12,535 Deposits from customers ............................772,152 59,537 71,320 27,466 49,022 - 979,497 926,846 Derivative instruments and short positions . - 3,904 2,121 967 282 - 7,274 7,306 - Net settled derivatives ............................. - 1,532 - - - - 1,532 1,532 - Inflow ...................................................... - ( 46,533) ( 43,730) ( 20,746) ( 1) - ( 111,010) ( 96,146) - Outflow .................................................... - 48,900 45,848 21,679 1 - 116,428 101,790 - Short positions ........................................ - 5 3 34 282 - 324 130 Debt issued and other borrowed funds ....... - 33,410 38,179 382,618 52,024 - 506,231 367,586 Subordinated loans .................................... - 330 1,449 16,457 34,182 - 52,418 31,695 Other financial liabilities ..............................7,331 1,691 1,710 2,108 938 - 13,778 13,530 - Lease liabilities ........................................ - 162 450 2,089 938 - 3,639 3,391 - Other liabilities ........................................7,331 1,529 1,260 19 - - 10,139 10,139 Total financial liabilities 789,554 101,338 114,779 429,616 136,448 - 1,571,735 1,359,498 Net financial assets and financial liab. ( 726,965) 131,122 108,142 342,039 1,779,715 24,330 1,658,383 230,670
In 2024, the Group updated its methodology for the maturity analysis of financial assets. Financial assets are now presented as
undiscounted contractual payments of principal and interest, instead of discounted amounts including impairment charges as presented on
the balance sheet. Comparative figures have been changed to reflect the updated methodology.
The following tables show the maturity profile of the Group's financial assets and the undiscounted cash flows of its financial liabilities.
Maturity classification of assets is based on contractual maturity.
Íslandsbanki hf. Consolidated Financial Statements 2024
65
Amounts are in ISK million
Notes to the Consolidated Financial Statements
54.
Note 48 Maximum credit exposure and collateral shows the amount of contractual obligations of off-balance sheet liabilities that the Group
has taken towards customers, either by committing to lend out money in the future or as third party guarantees. The amounts shown reflect
the maximum amount, not taking into account the Group's ability to reduce financial guarantees and credit commitments before the current
undrawn amount is fully utilised by the customer. These obligations are all categorised as on demand since contractually, on a case-by-
case basis, the Group could be required to fulfil these obligations instantaneously.
Off-balance sheet liabilities
*In 2024, the Group updated its methodology for the maturity analysis of financial assets. Financial assets are now presented as
undiscounted contractual payments of principal and interest, instead of discounted amounts including impairment charges as presented on
the balance sheet. Comparative figures have been changed to reflect the updated methodology.
Maturity analysis of financial assets and financial liabilities (continued)
At 31 December 2023*On Up to 3 3-12 1-5 Over No Carrying demand months months years 5 years maturity Total amount Cash and balances with Central Bank ........40,011 47,509 - - - - 87,520 87,504 Loans to credit institutions ..........................18,911 58,056 - - - - 76,967 73,475 Bonds and debt instruments ....................... - 86,144 51,697 28,009 4,024 - 169,874 161,342 Derivatives ................................................. - 1,887 1,474 2,842 - - 6,203 5,776 - Net settled derivatives ............................. - 490 - - - - 490 490 - Inflow ...................................................... - 34,297 27,617 32,655 - - 94,569 76,961 - Outflow .................................................... - ( 32,900) ( 26,143) ( 29,813) - - ( 88,856) ( 71,675)Loans to customers .................................... - 113,793 183,557 644,034 1,915,795 - 2,857,179 1,223,426 Shares and equity instruments ................... - - - - - 13,241 13,241 13,241 Other financial assets .................................2,413 365 68 - - - 2,846 2,846 Total financial assets 61,335 307,754 236,796 674,885 1,919,819 13,241 3,213,830 1,567,610 Deposits from CB and credit institutions .....7,611 7,028 1,564 - - - 16,203 16,149 Deposits from customers ............................668,448 88,729 46,467 35,530 43,896 - 883,070 850,709 Derivative instruments and short positions . - 2,042 2,103 2,115 913 - 7,173 5,090 - Net settled derivatives ............................. - 391 - - - - 391 391 - Inflow ...................................................... - ( 43,522) ( 20,508) ( 18,591) - - ( 82,621) ( 68,235) - Outflow .................................................... - 45,161 22,578 20,407 - - 88,146 72,294 - Short positions ........................................ - 12 33 299 913 - 1,257 640 Debt issued and other borrowed funds ....... - 18,071 35,902 430,196 70,359 - 554,528 417,573 Subordinated loans .................................... - 290 2,026 20,525 44,852 - 67,693 38,155 Other financial liabilities ..............................2,522 1,546 1,629 2,024 1,399 - 9,120 8,879 - Lease liabilities ........................................ - 151 449 1,962 1,399 - 3,961 3,720 - Other liabilities ........................................2,522 1,395 1,180 62 - - 5,159 5,159 Total financial liabilities 678,581 117,706 89,691 490,390 161,419 - 1,537,787 1,336,555 Net financial assets and financial liab. ( 617,246) 190,048 147,105 184,495 1,758,400 13,241 1,676,043 231,055
Íslandsbanki hf. Consolidated Financial Statements 2024
66
Amounts are in ISK million
Notes to the Consolidated Financial Statements
55.
Market risk
56. Interest rate risk
The following table shows the interest rate sensitivity of the Group's trading book from a parallel 100 basis points change in all yield curves.
31.12.202431.12.2023Sensitivity analysis for trading bonds and debt instrumentsEffect on profit before taxDownwardUpwardDownwardUpwardCurrencyshiftshift shiftshift ISK, indexed .......................................................................................................................73 ( 73) 54 ( 54)ISK, non-indexed ................................................................................................................83 ( 83) 59 ( 59)Total156 ( 156) 113 ( 113)
In the sensitivity analysis the effects on profit are shown before tax. The tax effects are equal to the Group's marginal tax rate. The enacted
tax rate was temporarily increased from 20% to 21% for taxable income in 2024, in addition the Group pays a special financial activities tax
of 6% of taxable profit exceeding ISK 1,000 million.
To illustrate further, when using a 26% marginal tax rate, if the sensitivity analysis shows an ISK 100 million increase in profit before tax, the
effects of profit after tax are ISK 74 million.
The Group defines market risk as the current or prospective risk to earnings and capital arising from adverse movements in the level or
volatility of prices of market instruments, such as those that arise from changes in interest rates, foreign exchange rates, equity prices, CPI-
indexation, and commodity prices. Sources of market risk are imbalances in the Group's balance sheet and open positions in bonds,
currencies, and equities. Derivative contracts are also potential sources of market risk (see Note 24).
Market risk within the Group can broadly be split into two categories, trading book and banking book (or non-trading book). The trading book
includes market risk exposures related, directly or indirectly, to the Group's short- and medium-term trading in securities, currencies and
other capital market instruments and derivatives. All financial assets and liabilities in the trading portfolio are recognised at fair value and all
resulting changes are immediately reflected in the income statement. The banking book includes market risk exposures related to securities
held for long-term investment purposes, unlisted securities or holdings in subsidiaries or affiliates. A large part of the banking book market
risk is due to mismatches in the composition of assets and liabilities, for example with respect to currencies, interest rates, CPI-indexation
or other factors that can affect the Group's earnings or earnings volatility. These mismatches are reported to management and are subject
to internal and regulatory limits.
Interest rate risk is defined as the current or prospective risk to earnings or capital arising from adverse movements in interest rates.
Interest rate risk in the trading book
Íslandsbanki hf. Consolidated Financial Statements 2024
67
Amounts are in ISK million
Notes to the Consolidated Financial Statements
56.
Interest rate risk in the banking book
Interest rate risk in the banking book arises from the Group's core banking activities. The main source of this type of interest rate risk is the
risk of loss from fluctuations in future cash flows or fair value of financial instruments as interest rates change over time, reflecting the fact
that the Group's assets and liabilities are of different maturities and are priced relative to different interest rates.
The following table shows the interest sensitivity of the Group's banking book from a parallel upward 100 basis points change in all yield
curves, with all other variables held constant, categorised by the repricing date. The interest rate sensitivity in the banking book is estimated
using contractual cash flows except for callable debt issued and applicable non-maturing deposits (NMDs) where behavioural assumptions
are applied.
Interest rate risk (continued)
To illustrate further, when using a 26% marginal tax rate, if the sensitivity analysis shows an ISK 100 million increase in profit before tax, the
effects of profit after tax are ISK 74 million.
In the sensitivity analysis the effects on profit are shown before tax. The tax effects are equal to the Group's marginal tax rate. The enacted
tax rate was temporarily increased from 20% to 21% for taxable income in 2024, in addition the Group pays a special financial activities tax
of 6% of taxable profit exceeding ISK 1,000 million.
Sensitivity analysis for interest rate risk in the banking bookAt 31 December 20240-3 3-12 1-2 2-5 5-10 Over 10Currency months months years years years years Total ISK, indexed .................................................................28 ( 261) ( 173) ( 1,456) 2,701 ( 331)508ISK, non-indexed ..........................................................70 ( 327) ( 379) 445 ( 48) 39 (200)EUR .............................................................................199 ( 12) ( 55) ( 156) - -(24)SEK ..............................................................................45 ( 4) - ( 163) - -(122)NOK .............................................................................165 ( 13) ( 4) ( 45) - -103USD .............................................................................16 - - - - -16Total 523 ( 617) ( 611) ( 1,375) 2,653 ( 292) 281 At 31 December 20230-3 3-12 1-2 2-5 5-10 Over 10Currency months months years years years years Total ISK, indexed .................................................................14 ( 64) ( 948) ( 2,761) 3,223 43 (493)ISK, non-indexed ..........................................................( 28) ( 276) ( 794) 1,465 46 ( 4)409EUR .............................................................................114 86 ( 5) 133 - -328SEK ..............................................................................49 ( 54) - - - -(5)USD .............................................................................9 ( 12) - - - -(3)Other ............................................................................51 ( 47) - - - -4Total 209 ( 367) ( 1,747) ( 1,163) 3,269 39 240
Íslandsbanki hf. Consolidated Financial Statements 2024
68
Amounts are in ISK million
Notes to the Consolidated Financial Statements
57. Currency risk
At 31 December 2024Other foreign Total foreign EUR USD GBP CHF JPY SEK NOK DKK CAD currencies currencies Cash and balances with Central Bank ..................... 633 367 121 - - 37 114 114 - 161 1,547 Loans to credit institutions ....................................... 24,060 20,956 1,400 85 183 22 34 57 256 134 47,187 Bonds and debt instruments .................................... 17,897 3,446 - - - 5,220 6,918 - - - 33,481 Loans to customers ................................................. 102,983 15,816 231 548 1,546 6 455 621 9,090 - 131,296 Shares and equity instruments ................................ 44 1,616 102 - - 362 - - - - 2,124 Other assets ............................................................ 7 225 31 - - 3 2 - 8 - 276 Total assets 145,624 42,426 1,885 633 1,729 5,650 7,523 792 9,354 295 215,911 Deposits from credit institutions .............................. 2,150 790 10 4 - 4 - 1 22 - 2,981 Deposits from customers ........................................ 34,250 45,050 3,975 477 238 905 3,108 3,081 185 18 91,287 Debt issued and other borrowed funds .................... 109,990 12,031 - - - 22,960 26,446 - - - 171,427 Subordinated loans ................................................. - - - - - 9,371 - - - - 9,371 Other liabilities ......................................................... 1,008 190 31 - - 40 2 201 16 25 1,513 Total liabilities 147,398 58,061 4,016 481 238 33,280 29,556 3,283 223 43 276,579 Net on-balance sheet position ( 1,774) ( 15,635) ( 2,131) 152 1,491 ( 27,630) ( 22,033) ( 2,491) 9,131 252 ( 60,668)Net off-balance sheet position 3,439 16,686 2,206 ( 130) ( 1,479) 27,508 22,068 2,545 ( 9,067) ( 246) 63,530 Net position1,665 1,051 75 22 12 ( 122) 35 54 64 6 2,862
Currency risk is the risk that earnings or capital may be negatively affected from the fluctuations of foreign exchange rates, due to transactions in foreign currencies or due to a mismatch in the currency
composition of assets or liabilities.
The analysis of the Group's foreign currency exposure presented below is based on the contractual currency of the underlying balance sheet items. Additionally, there are off-balance sheet items that carry
currency risk and are included in the total currency imbalance. The off-balance sheet amounts below represent the notional amounts of derivatives and unsettled spot agreements.
In 2024, the Group updated its methodology for managing currency risk related to debt issued measured at fair value. The analysis of the Group's foreign currency exposure at 31 December 2024, reflects this
change. Debt issued measured at fair value is presented at fair value instead of the nominal amount plus accrued interest. This better reflects foreign exchange differences recognised in the Group's financial
statements. Comparative figures have been changed to reflect the updated methodology.
Íslandsbanki hf. Consolidated Financial Statements 2024
69
Amounts are in ISK million
Notes to the Consolidated Financial Statements
57.
Currency risk (continued)
At 31 December 2023*Other foreign Total foreign EUR USD GBP CHF JPY SEK NOK DKK CAD currencies currencies Cash and balances with Central Bank ..................... 487 290 120 49 10 52 85 141 27 182 1,443 Loans to credit institutions ....................................... 18,752 25,198 1,626 4,301 314 2,794 17,994 207 685 58 71,929 Bonds and debt instruments .................................... 31,377 20,919 - - - 17,920 11,812 - - - 82,028 Loans to customers ................................................. 92,652 15,817 293 618 1,816 736 2,496 588 6,880 - 121,896 Shares and equity instruments ................................ 46 302 102 - - 22 - - - - 472 Other assets ............................................................ 221 38 - - - - - - - - 259 Total assets 143,535 62,564 2,141 4,968 2,140 21,524 32,387 936 7,592 240 278,027 Deposits from credit institutions .............................. 7,731 995 20 - - 4 - 1 - - 8,751 Deposits from customers ........................................ 38,255 48,952 4,322 545 445 767 4,459 1,440 204 24 99,413 Debt issued and other borrowed funds .................... 156,076 11,719 - - - 30,343 34,725 - - - 232,863 Subordinated loans ................................................. - - - - - 16,780 - - - - 16,780 Other liabilities ......................................................... 7 25 - - - - - 111 - - 143 Total liabilities 202,069 61,691 4,342 545 445 47,894 39,184 1,552 204 24 357,950 Net on-balance sheet position ( 58,534) 873 ( 2,201) 4,423 1,695 ( 26,370) ( 6,797) ( 616) 7,388 216 ( 79,923)Net off-balance sheet position 60,795 1,091 2,270 ( 4,400) ( 1,696) 26,007 6,918 693 ( 7,334) ( 281) 84,063 Net position 2,261 1,964 69 23 ( 1) ( 363) 121 77 54 ( 65) 4,140
*In 2024, the Group updated its methodology for managing currency risk related to debt issued measured at fair value. The analysis of the Group's foreign currency exposure at 31 December 2024, reflects this
change. Debt issued measured at fair value is presented at fair value instead of the nominal amount plus accrued interest. This better reflects foreign exchange differences recognised in the Group's financial
statements. Comparative figures have been changed to reflect the updated methodology.
Íslandsbanki hf. Consolidated Financial Statements 2024
70
Amounts are in ISK million
Notes to the Consolidated Financial Statements
57. Currency risk (continued)
58. Shares and equity instruments
Upward
shift
The effects of profit in the sensitivity analysis are shown before tax. The tax effects are equivalent to the Group's marginal tax rate. The
enacted tax rate was temporarily increased from 20% to 21% for taxable income in 2024, in addition the Group pays a special financial
activities tax of 6% on taxable profit exceeding ISK 1,000 million.
The Group's equity exposure in the trading book arises from flow trading and market making with shares listed on the Nasdaq Iceland Stock
Exchange. Shares and equity instruments in the banking book are classified as mandatorily at fair value through profit or loss or are
classified as held for sale.
The following table shows how a 10% shift in equity prices would affect the Group's equity and net financial income. Securities used for
hedging are excluded. The effects on profit shown in the sensitivity analysis are the same before and after tax.
The following table shows the effect of a 10% depreciation or appreciation of foreign exchange rates where the Group had positions at year-
end, with all other variables held constant.
Sensitivity analysis for currency risk31.12.202431.12.2023Effect on profit before taxCurrency-10% 10% -10% 10%EUR ............................................................................................................................( 167) 167 ( 427) 427 USD ............................................................................................................................( 105) 105 ( 196) 196 GBP ............................................................................................................................( 8) 8 ( 7) 7 CHF ............................................................................................................................( 2) 2 ( 2) 2 JPY .............................................................................................................................( 1) 1 - -SEK .............................................................................................................................12 ( 12) 36 ( 36)NOK ............................................................................................................................( 4) 4 ( 12) 12 DKK ............................................................................................................................( 5) 5 ( 8) 8 CAD ............................................................................................................................( 6) 6 ( 5) 5 Other foreign currencies ..............................................................................................( 1) 1 7 ( 7)Total ( 287) 287 ( 614) 614
To illustrate further, using a 26% marginal tax rate, if the sensitivity analysis shows an ISK 100 million increase in profit before tax, the
increase in profit after tax would be ISK 74 million. However, since the Group records a deferred tax liability at the end of 2024 based on a
20% tax rate instead of a 26% tax rate, and exchange rate differences are recognised as taxable income or expenses over three years, the
tax effects would appear over three years.
Sensitivity analysis for shares and equity instruments31.12.202431.12.2023Effect on profitDownward Upward Downward Portfolio shiftshift shiftTrading book ...............................................................................................................( 442) 442 ( 62) 62 Banking book ..............................................................................................................( 228) 228 ( 178) 178 Total ( 670) 670 ( 240) 240
Íslandsbanki hf. Consolidated Financial Statements 2024
71
Amounts are in ISK million
Notes to the Consolidated Financial Statements
59.
Inflation risk
60. Capital management
31.12.2024 31.12.2023
Own funds
9,473 9,898
55,000 55,000
7,102 5,083
155,780 154,712
135 1,827
( 15,760) ( 14,990)
( 164) ( 122)
( 2,070) ( 1,922)
( 17) ( 3)
CET1 capital 209,479 209,483
9,371 10,019
Tier 1 capital 218,850 219,502
22,324 28,135
Total capital base 241,174 247,637
The effects of a change in the index on profit are shown before tax. The tax effects are equal to the Group's marginal tax rate. The enacted
tax rate was temporarily increased from 20% to 21% for taxable income in 2024, in addition the Group pays a special financial activities tax
of 6% of taxable profit exceeding ISK 1,000 million.
The Group is exposed to inflation risk since the value of CPI-linked assets exceeds CPI-linked liabilities. The value of these assets and
liabilities changes according to changes in the CPI at any given time and all changes in the CPI affect profit and loss. A 1% increase in the
index would lead to an ISK
1,934 m
illion increase in profit before tax and a 1% decrease would lead to a corresponding decrease, other risk
factors held constant.
The minimum leverage ratio for Icelandic financial institutions is 3%.
Additional Tier 1 capital .........................................................................................................................................
Tier 2 capital .........................................................................................................................................................
Reserves ...............................................................................................................................................................
*The AGM of Íslandsbanki held on 21 March 2024 authorises the Board of Directors to acquire on behalf of the Bank up to 10% of issued
share capital of the Bank. The Central Bank has furthermore granted a permission for the Bank to acquire, through buyback, share capital of
the Bank equivalent to ISK 10 billion in addition to the previously approved ISK 5 billion, which is within the 10% authorisation from the AGM.
At 31 December 2024 ISK 3.6 billion remained of the approved buyback and is therefore deducted from CET1 capital.
Fair value changes due to own credit standing ......................................................................................................
Retained earnings .................................................................................................................................................
Foreseeable dividend payment and approved buyback* ........................................................................................
Intangible assets ...................................................................................................................................................
Tax assets .............................................................................................................................................................
The Group aims at managing its capital position and the corresponding capital ratios above the overall regulatory capital requirement.
According to the latest SREP report from the Financial Supervisory Authority of the Central Bank, the Bank shall as of 30 June 2024
maintain an additional capital requirement of 1.8% of the risk exposure amount. The Group's overall capital requirement, taking into account
capital buffers, is 19.7%. The Group's capital target includes a 1-3% management buffer on top of the overall capital requirement.
Ordinary share capital ...........................................................................................................................................
Share premium .....................................................................................................................................................
Insufficient coverage for non-performing exposures ..............................................................................................
The following tables show the capital base, the risk exposure amount (REA), the resulting capital ratios, and the leverage ratio for the Group
at 31 December 2024 and 31 December 2023.
The Group's regulatory capital requirement is calculated according to EU regulation no. 575/2013 as implemented through the Act on
Financial Undertakings no. 161/2002. Capital requirement calculations for credit risk, market risk and operational risk are based on the
standardised approach whereas the simplified standardised approach is used for counterparty credit risk.
31.12.2024 31.12.2023Bonds and debt instruments ..................................................................................................................................3,905 1,551 Loans to customers ...............................................................................................................................................501,595 405,910 Total CPI-linked assets 505,500 407,461 Deposits from customers ......................................................................................................................................119,588 116,551 Debt issued and other borrowed funds ..................................................................................................................155,184 140,428 Subordinated loans ...............................................................................................................................................20,798 19,850 Off-balance sheet exposures .................................................................................................................................16,521 1,176 Short positions ......................................................................................................................................................47 11 Total CPI-linked liabilities 312,138 278,016 CPI imbalance 193,362 129,445
Íslandsbanki hf. Consolidated Financial Statements 2024
72
Amounts are in ISK million
Notes to the Consolidated Financial Statements
60.
61.
Capital management (continued)
The MREL requirement for Íslandsbanki is the sum of the loss absorption amount (LAA) and recapitalisation amount (RCA). At 31 December
2024 the LAA and RCA were both equal to the total SREP capital requirement for 2024 of 9.8%, resulting in an MREL requirement of 19.6%
of REA.
31.12.2024 31.12.2023Risk exposure amountDue to credit risk ...................................................................................................................................................922,533 865,758 Due to market risk .................................................................................................................................................10,606 10,360 Due to credit valuation adjustment ........................................................................................................................714 677 Due to operational risk ..........................................................................................................................................107,119 100,237 Total risk exposure amount 1,040,972 977,032 Capital ratiosCET1 ratio .............................................................................................................................................................20.1% 21.4%Tier 1 ratio .............................................................................................................................................................21.0% 22.5%Total capital ratio ...................................................................................................................................................23.2% 25.3%Leverage ratioExposure amountOn-balance sheet exposures .................................................................................................................................1,594,192 1,571,430 Off-balance sheet exposures .................................................................................................................................57,583 53,224 Derivative exposures .............................................................................................................................................9,223 11,246 Leverage ratio total exposure measure 1,660,998 1,635,900 Tier 1 capital .........................................................................................................................................................218,850 219,502 Leverage ratio 13.2% 13.4%
Minimum requirement for own funds and eligible liabilities (MREL)
31.12.202431.12.2023Minimum requirements for own funds and eligible liabilities Amount % of REA Amount % of REAMREL .......................................................................................................................... 204,031 19.6% 203,223 20.8%Combined buffer requirement ...................................................................................... 103,002 9.9% 91,450 9.4%MREL including combined buffer requirement 307,033 29.5% 294,673 30.2%31.12.202431.12.2023Own funds and eligible liabilitiesAmount % of REA Amount % of REAOwn funds ................................................................................................................... 241,174 23.2% 247,637 25.3%Eligible liabilities .......................................................................................................... 106,878 10.3% 155,617 15.9%Own funds and eligible liabilities 348,052 33.4% 403,254 41.3%
The minimum requirement for own funds and eligible liabilities (MREL) for Íslandsbanki is based on the Bank's resolution plan that is
approved by the Icelandic Resolution Authority. The requirement can be met with the total capital base in addition to senior non-preferred
and senior preferred debt with some conditions, such as having more than one year to maturity. This debt is referred to as eligible liabilities.
No market confidence charge is applied in Iceland.
Íslandsbanki hf. Consolidated Financial Statements 2024
73
Amounts are in ISK million
Notes to the Consolidated Financial Statements
62.
Effects of changes in regulation on capital requirements
63. Operational risk
The ultimate responsibility for ensuring an adequate operational risk management and internal control framework at Íslandsbanki lies with the
Board of Directors. The Board has approved an Operational Risk Policy which outlines the Bank's framework for operational risk
management. Risk Management is responsible for implementing the Bank's operational risk framework, for developing, maintaining the
Operational Risk Policy, and for communicating the policy to the Bank's employees.
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. The
Group's definition of operational risk includes reputational risk, legal risk, model risk, conduct risk, and compliance risk among other risk
factors.
The European Union has introduced regulatory changes effective from January 2025 to finalise the implementation of the Basel III
framework. These changes to the capital requirement regulation, known as CRR 3, are expected to be incorporated into Icelandic regulations
through the EEA Agreement later in the year 2025. The foreseeable changes to the regulation will modify the calculation of Risk Exposure
Amount (REA) that in turn will impact capital ratios and certain disclosures, including the large exposure disclosure and the operating
segment disclosure
Below are the estimated main effects of these changes on the Group, based on year-end 2024 amounts:
Foreseeable CRR Current CRRrequirementsrequirementsRisk exposure amountDue to credit risk ................................................................................................................................................... 896,371 922,533 Due to market risk ................................................................................................................................................. 10,606 10,606 Due to credit valuation adjustment ........................................................................................................................ 714 714 Due to operational risk .......................................................................................................................................... 85,944 107,119 Total risk exposure amount 993,635 1,040,972 CET1 ratio .............................................................................................................................................................21.1% 20.1%Tier 1 ratio .............................................................................................................................................................22.0% 21.0%Total capital ratio ...................................................................................................................................................24.3% 23.2%MREL ratio ............................................................................................................................................................35.0% 33.4%
Íslandsbanki hf. Consolidated Financial Statements 2024
74
Amounts are in ISK million
Notes to the Consolidated Financial Statements
64. Material accounting policies
The accounting policies set out below have been applied consistently by the Group for the periods presented in these Consolidated
Fi
nancial Statements.
Contents
64.1 Basis of consolidation ................................................................................................................................................................. 76
64.2 Investments in associates ........................................................................................................................................................... 76
64.3 Financial assets and financial liabilities ....................................................................................................................................... 76
64.4 Cash and cash equivalents ......................................................................................................................................................... 82
64.5 Derivative financial instruments .................................................................................................................................................. 82
64.6 Hedge accounting ....................................................................................................................................................................... 83
64.7 Leases ........................................................................................................................................................................................ 83
64.8 Loan commitments and financial guarantees .............................................................................................................................. 84
64.9 Provisions ................................................................................................................................................................................... 84
64.10 Employee benefits .................................................................................................................................................................... 84
64.11 Equity ....................................................................................................................................................................................... 84
64.12 Interest income and interest expense........................................................................................................................................ 85
64.13 Net fee and commission income ............................................................................................................................................... 86
64.14 Net financial income (expense) ................................................................................................................................................. 86
64.15 Taxes........................................................................................................................................................................................ 87
Íslandsbanki hf. Consolidated Financial Statements 2024
75
Notes to the Consolidated Financial Statements
64.1 Basis of consolidation
The Consolidated Financial Statements of the Group comprise the financial statements of Íslandsbanki hf., as the parent company,
and its subsidiaries.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the
Group's accounting policies.
Business combinations
The Group accounts for business combinations under common control at book value. Under the book-value method, the Group
measures assets and liabilities received in the combination at their existing book values.
The Group accounts for other business combination by applying the acquisition method. Under the acquisition method, the Group
identifies itself as the acquirer, determines the acquisition date, recognises and measures the identifiable assets acquired, the liabilities
assumed and any non-controlling interests in the acquiree, and recognises and measures any goodwill or gain from a bargain
purchase.
Funds management
The Group acts as a manager for Undertakings for Collective Investment in Transferable Securities (UCITS) and investment funds as
well as other funds for collective investment that accept capital from investors. Such funds are financed by issuing unit share
certificates or shares. The Group does not have any contractual financial responsibility with respect to such custom units. The funds
are not consolidated unless they are under the control of the Group.
The Group reviews all the facts and circumstances in order to decide if these funds should be consolidated. The Group is deemed to
be a principal and hence controls and consolidates the funds, when it acts as fund manager and cannot be removed without cause,
has variable returns through significant unit holdings and/or guarantees, and is able to influence the returns of the funds by exercising
its power.
64.2 Investments in associates
The Group accounts for its investments in associates using the equity method. Income and expenses from investments in associates
are recognised in profit or loss in the line item "Other operating income".
64.3 Financial assets and financial liabilities
Recognition
The Group recognises a financial asset and a financial liability in its Statement of Financial Position on the trade date, which is the
date on which the Group becomes party to the contractual provisions of the instrument, except for loans which are recognised on the
date when cash is advanced by the Group to the borrowers.
Derecognition
Any interest in transferred financial assets that qualify for derecognition that is created or retained by the Group is recognised as a
separate asset or liability. On derecognition of a financial asset, the difference between the carrying amount of the asset (or the
carrying amount allocated to the portion of the asset transferred), and the sum of (i) the consideration received (including any new
asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in other comprehensive
income is recognised in profit or loss.
The Group enters into transactions whereby it transfers assets recognised in its Statement of Financial Position, but retains either all
or substantially all risks and rewards of the transferred assets or a portion of them. If all or substantially all risks and rewards are
retained, then the transferred assets are not derecognised from the Statement of Financial Position of the Group. Transfers of assets
with retention of all or substantially all risks and rewards include, for example, repurchase transactions and securities lending.
Íslandsbanki hf. Consolidated Financial Statements 2024
76
Notes to the Consolidated Financial Statements
64.3 Financial assets and financial liabilities (continued)
The Group does not derecognise from its Statement of Financial Position securities which the Group sells under agreements to
repurchase at a specified future date ("repos") at a fixed price or at the sale price plus a lender's return. The Group recognises the
cash received as a liability in its Statement of Financial Position. The difference between the sale and repurchase prices is recognised
as interest expense over the life of the agreement using the effective interest method.
Securities lending and borrowing transactions are usually collateralised by securities or cash. The transfer of securities to
counterparties is only reflected in the Statement of Financial Position if the risks and rewards of ownership are also transferred. Cash
advanced or received as collateral is recorded as an asset or liability.
In transactions in which the Group neither retains nor transfers substantially all the risks and rewards of ownership of a financial asset
and it retains control over the asset, the Group continues to recognise the asset to the extent of its continuing involvement, determined
by the extent to which it is exposed to changes in the value of the transferred asset.
Modifications
Substantial modifications of terms of existing financial assets, or replacements with new ones with significantly different terms, result
in the Group derecognising the original financial assets and recognising new financial assets at fair value.
Classification and measurement of financial assets
For the purpose of measuring its financial assets, the Group classifies them at inception in one of the following categories:
• Financial assets at amortised cost
• Financial assets at fair value through other comprehensive income
• Financial assets at fair value through profit or loss
• Derivative assets in hedge accounting
The measurement basis of individual financial assets is determined based on an assessment of the cash flow characteristics of the
assets and the business models under which they are managed.
The business models
The business models are determined by the Group's key management personnel in the way that assets are managed, and their
performance is reported to them. The Group determines its business models at a level that reflects the way groups of financial assets
are managed together to achieve a particular business objective. This condition is not an instrument-by-instrument approach to
classification, but is determined at a higher level of aggregation. The Group's business models fall into the following three categories:
Held to collect, Held to collect and for sale, and Other fair value business models, where assets are held for trading or managed on a
fair value basis and are neither Held to collect nor Held to collect and for sale.
Solely payments of principal and interest (SPPI)
Financial assets held within the business models Held to collect and Held to collect and for sale, are assessed to evaluate if their
contractual cash flows are comprised of solely payments of principal and interest. SPPI payments are those which are consistent with
a basic lending arrangement. Principal is the fair value of the financial asset at initial recognition and changes over the life of the
financial asset, for example if there are repayments of principal. Interest relates to basic lending returns, including compensation for
the time value of money and credit risk associated with the principal amount outstanding over a period of time. Interest can also
include consideration for other basic lending risks (for example, liquidity risk) and costs (for example, servicing or administrative costs),
as well as a profit margin that is consistent with a basic lending arrangement.
Where the contractual terms introduce exposure to risk or variability of cash flows that are inconsistent with a basic lending
arrangement, the related financial asset is classified and measured at fair value through profit or loss.
Financial assets at amortised cost
A financial asset is classified as being subsequently measured at amortised cost if the contractual terms of the financial asset give
rise to cash flows that are solely payments of principal and interest and the asset is held within a business model whose objective is
to collect contractual cash flows, i.e. Held to collect.
Financial assets at amortised cost are measured using the effective interest method. Amortised cost is calculated by taking into
account the amount at which the assets are measured at initial recognition less principal repayments, plus or minus the cumulative
amortisation using the effective interest method of any difference between that initial amount and the maturity amount (such as due
to discounts or premiums on acquisition and fees and costs that are an integral part of the effective interest rate), and minus any
reduction for impairment. Accrued interest is included in the carrying amount of the financial asset in the Statement of Financial
Position. Impairment losses and reversals of impairment losses are recognised in profit or loss in the line item "Net impairment on
financial assets".
Íslandsbanki hf. Consolidated Financial Statements 2024
77
Notes to the Consolidated Financial Statements
64.3 Financial assets and financial liabilities (continued)
Financial assets at fair value through other comprehensive income (FVOCI)
A financial asset is classified as being subsequently measured at fair value through other comprehensive income if the contractual
terms of the financial asset give rise to cash flows that are solely payments of principal and interest and the asset is held within a
business model whose objective is to collect contractual cash flows and sell, i.e. Held to collect and for sale.
Financial assets at fair value through other comprehensive income are initially recognised and subsequently measured at fair value
in the Statement of Financial Position. Changes in fair value are recognised in other comprehensive income, except for interest earned
which is recognised using the effective interest method in the line item "Net interest income" and foreign exchange gains and losses,
which are included in the line item “Net foreign exchange gain (loss)”. Impairment and reversals of impairment are recognised in profit
or loss in the line item "Net impairment on financial assets", offset due to impairment is then transferred to other comprehensive
income. Impairment of financial assets measured at fair value through other comprehensive income does not affect the book value of
the financial assets since the financial assets are measured at fair value. On derecognition fair value gains and losses are recycled
to profit or loss.
Financial assets at fair value through profit or loss (FVTPL)
Financial assets classified at fair value through profit or loss are all other financial assets which are not classified at amortised cost or
at fair value through other comprehensive income. During the year the Group did not classify any financial assets as designated at
fair value through profit or loss.
Changes in fair value are recognised in profit or loss in the line item "Net financial income (expense)", except for interest earned,
which is recognised in the line item "Net interest income" and foreign exchange gains and losses, which are included in the line item
"Net foreign exchange gain (loss)".
Derivative assets in hedge accounting
Derivative assets in hedge accounting consist of derivatives with positive fair value which are designated and accounted for as hedging
instruments (see Note 64.6).
Classification and measurement of financial liabilities
For the purpose of measuring its financial liabilities, the Group classifies them at inception in one of the following categories, except
for loan commitments and financial guarantees (see Note 64.8):
• Financial liabilities at amortised cost
• Financial liabilities mandatorily at fair value through profit or loss
• Financial liabilities designated as at fair value through profit or loss
• Derivative liabilities in hedge accounting
Financial liabilities at amortised cost
Financial liabilities at amortised cost are non-derivative financial liabilities. Financial liabilities at amortised cost include deposits, debt
issued and other borrowed funds, and subordinated loans.
Financial liabilities at amortised cost are recognised initially at fair value net of transaction costs incurred, and subsequently are carried
at amortised cost using the effective interest method. Amortised cost is calculated by taking into account the amount at which the
financial liabilities are measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation using the
effective interest method of any difference between that initial amount and the maturity amount (such as due to discounts or premiums
and fees and costs that are an integral part of the effective interest rate). Accrued interest is included in the carrying amount of the
liabilities in the Statement of Financial Position.
The amortised cost of certain bonds issued by the Group, which are designated as hedged items in qualifying fair value hedge
relationships, is adjusted for changes in the fair value of the bonds attributable to interest rate risk (see Note 64.6).
Financial liabilities mandatorily at fair value through profit or loss
Financial liabilities mandatorily at fair value through profit or loss are financial liabilities incurred principally for the purpose of
generating profits from short-term price fluctuations or from the dealer's margin. Financial liabilities mandatorily at fair value through
profit or loss consist of short positions in listed bonds and derivatives with negative fair value which are not classified as financial
guarantees or are not designated as hedging instruments.
Changes in fair value are recognised in profit or loss in the line item "Net financial income (expense)", except for interest incurred,
which is recognised in the line item "Net interest income" on an accrual basis and foreign exchange gains and losses which are
included in the line item "Net foreign exchange gain (loss)".
Íslandsbanki hf. Consolidated Financial Statements 2024
78
Notes to the Consolidated Financial Statements
64.3 Financial assets and financial liabilities (continued)
Financial liabilities designated as at fair value through profit or loss
Financial liabilities designated as at fair value through profit or loss are recognised at fair value and changes in fair value attributable
to changes in the credit risk of those liabilities are recognised in other comprehensive income and are not subsequently reclassified
to profit or loss. The remaining fair value changes are included in profit or loss in the line item "Net financial income (expense)", except
for interest incurred, which is recognised in the line item "Net interest income" using the contractual interest rate and foreign exchange
gains and losses which are included in the line item "Net foreign exchange gain (loss)".
The Group calculates the fair value attributable to changes in credit risk as the difference between the changes in fair value of the
financial liability and the amount of changes in fair value attributable to changes in market interest rates. The change in fair value
attributable to changes in market interest rates on financial liabilities is calculated by discounting contractual cash flows at the end of
the period with the discount rate of the appropriate market interest rate.
Upon initial recognition, the Group determines if the recognition of gains and losses in other comprehensive income creates or
enlarges an accounting mismatch in profit or loss, if applicable the whole fair value change is presented in profit or loss.
Derivative liabilities in hedge accounting
Derivative liabilities in hedge accounting consist of derivatives with negative fair value which are designated and accounted for as
hedging instruments (see Note 64.6).
Determination of fair value
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. When available, the Group measures the fair value of financial
assets and financial liabilities using quoted prices in an active market for that instrument. A market is considered active if quoted
prices are readily and regularly available and those prices represent actual and regularly occurring transactions. The fair value is
based on the most recent observed market prices at the reporting date.
If a market for a financial instrument is not active, the Group establishes its fair value using valuation techniques. Valuation techniques
include net present value and discounted cash flow models, comparison with similar instruments for which observable market prices
exist, Black-Scholes option pricing model and other valuation models. Assumptions and inputs used in valuation techniques include
risk-free and benchmark interest rates, credit spreads and other premia used in estimating discount rates, bond and equity prices,
foreign currency exchange rates, and expected price volatilities and correlations. In some cases, where significant inputs into these
models are not observable, expert judgement and estimation for these inputs are required. Fair values reflect the credit risk of the
instrument and include adjustments to take account of the credit risk of the Group and the counterparty where appropriate.
Periodically, the Group tests the valuation techniques and calibrates against historical data and using prices from observable current
market transactions for the same instrument, or based on other available observable market data.
Changes in the fair value of financial assets and financial liabilities are recognised in profit or loss in the line item "Net financial income
(expense)".
The Group has an established control framework with respect to the measurement of fair values. The business unit owning the
positions is responsible for their valuations and for submitting the valuation to the Bank's Investment Committee for approval. Risk
Management provides an independent review of the results, the valuation methods used and of the use of significant unobservable
inputs. The final decision on the validity of the valuation is in the hands of the Bank's Investment Committee.
Financial instruments carried at fair value are categorised into three levels of fair value hierarchy that reflect the type of inputs used
in making the fair value measurements. At the end of each reporting period the Group determines whether transfers have occurred
between levels in the hierarchy, by reassessing categorisation based on the lowest level input that is significant to the fair value
measurement as a whole.
Level 1: Fair Value Established from Quoted Market Prices
Financial instruments at this level are financial assets and financial liabilities containing actively traded bonds and shares that are
listed either domestically or abroad.
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Notes to the Consolidated Financial Statements
64.3 Financial assets and financial liabilities (continued)
Level 2: Fair Value Established Using Valuation Techniques with Observable Market Information
Financial instruments at this level are assets and liabilities containing domestic bonds, shares as well as derivatives. For interest rate
derivatives contracts such as interest rate swaps (IRS) and cross-currency interest rate swaps (CIRS) the Group calculates the net
present value of estimated future cash flows based on yield curves with key inputs such as interest swap rates and forward-rate
agreements (FRAs) rates. Foreign-currency forwards and foreign-currency swaps are valued using the FX spot rate adjusted for
forward pricing points that can be obtained from market sources. These products are classified as Level 2. Bond forwards and equity
forwards are also classified as Level 2 as they are valued using standard models with key inputs observed from stock prices, estimated
dividend rates and funding rates.
Level 3: Fair Value Established Using Valuation Techniques Using Significant Unobservable Market Information
Financial instruments at this level contain primarily unlisted and illiquid shares and bonds. Unlisted shares and bonds are initially
recorded at their transaction price but are revalued each quarter based on the models as described above.
Impairment of financial assets
The impairment model of IFRS 9 is forward-looking and should reflect a probability weighted average of possible outcomes. In addition,
the expected credit loss model in IFRS 9 employs a dual measurement approach, under which the loss allowance for expected credit
losses (ECL) is measured at each reporting date as either 12-month ECL or lifetime ECL, depending on whether there has been a
significant increase in credit risk (SICR) of the financial instrument since initial recognition. The models which the Group uses for the
calculation of the impairment amount are developed according to the Group's modelling framework. This framework imposes structure
on the initial model development work, the model documentation, the approval process for models, the implementation of models and
the lifetime support for models, including validation and back-testing. The Group's impairment process, which encompasses all the
steps needed to derive the appropriate impairment allowance for each accounting period, is documented and approved by the All Risk
Committee.
Stage assignment
At each reporting date, all assets subject to the impairment methodology must be divided into three groups, termed "Stages", reflecting
the extent of credit deterioration since initial recognition. This division then determines how the impairment is measured and how
interest is recognised.
Stage 1
All assets that have not experienced a SICR are assigned to Stage 1. For these assets, an impairment allowance is recognised which
is equal to the expected credit loss arising from credit events occurring within 12 months of the reporting date (12-month ECL). Interest
is recognised on the gross carrying amount of the assets.
Stage 2
Assets that the Group determines to have experienced a SICR, but are not credit-impaired, are classified as Stage 2. For these assets,
an impairment allowance is recognised which is equal to the expected credit loss arising from all credit events occurring within the
expected lifetime of the assets (lifetime ECL). Interest is recognised on the gross carrying amount of the assets.
The Group defines a SICR as a situation where the financial position of the obligor has deteriorated so much from the time of origination
that the Group would likely not extend the same credit under the same terms today. Note that this definition applies at the individual
asset level. For this purpose, origination does not refer to any modification events which have not resulted in derecognition of the
asset. The assessment is based on a predefined set of triggers. This includes, as a backstop, the trigger that the asset is more than
30 days past due. Other triggers are internal assessments of outlook, events such as forbearance events which are less severe than
a credit event, external credit related information and a significant deterioration in risk assessment compared with the risk assessment
done in relation to the origination of the asset. The definition of a SICR depends only on the probability of a credit event occurring, it
does not take into account collateralisation, or any other information related to the expected loss arising from the event. As soon as
all triggers for Stage 2 for a particular asset are no longer activated then the asset moves back to Stage 1. Additionally, assets are
classified as forborne for two years after a forbearance event has occurred, but forbearance events only cause assets to be in Stage
2 for twelve months and then they migrate back to Stage 1 unless other triggers apply.
The Group does not employ the low credit risk exemption in the Stage assignment process. In alignment with its operating procedures,
the Group has chosen as its accounting policy to measure the impairment allowance for lease receivables at an amount equal to the
lifetime ECL only for those assets which have a SICR or are credit impaired. For other lease receivables the impairment allowance is
equal to the 12-month ECL.
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Notes to the Consolidated Financial Statements
64.3 Financial assets and financial liabilities (continued)
Stage 3
This Stage is for assets which are credit-impaired according to the Group's assessment. These assets are therefore experiencing an
ongoing credit event and are considered to be in default. Thus, the 12-month ECL and lifetime ECL are the same amount, and this
amount is recognised as impairment allowance. For assets in this Stage, interest is recognised on the net carrying amount of assets,
i.e., net of impairment allowance.
The Group's definition of being credit-impaired is on a customer level, rather than on the level of an individual asset. According to the
definition, a customer is credit-impaired when either of the following holds:
a) The Group assesses that it is unlikely that the customer can service all of their commitments to the Group in accordance with
the terms of the agreements without recourse to default provisions in the agreements, or
b) The customer has been more than 90 days past due on material credit commitments
The assessment in point a) is made based on a defined set of triggers, which includes serious breach of covenants, serious
registrations on an internal watchlist, initiation of serious collection actions and serious external credit related information. Furthermore,
there is a defined set of conditions which must be satisfied so that customers that have been assessed as being credit impaired are
no longer subject to this assessment. This includes probation periods and a view to the future outlook of the customer.
Expected credit loss (ECL)
The ECL for each asset is calculated using models for the probability of a credit impairment event occurring (PD), the loss percentage
expected in case of such an event (LGD) and the outstanding amount at the time of the event (EAD).
The PD models are either fully automated statistical models, expert models or hybrid models. For the models with a component
involving expert input there is a process in place to ensure proper review of the model outcome and periodic reassessment of obligors.
The inputs into the models include demographic variables, information from financial statements and past payment behaviour, among
other variables.
The effect of the economy on the PD is accounted for with the use of scaling factors which map through-the-cycle PD values to point-
in-time PD values. The Group has a model to predict these scaling factors based on an economic forecast. The economic forecast is
provided by the Group's Chief Economist. The forecast predicts a range of macroeconomic indicators over a horizon of five years.
The model is applied to a subset of these indicators and produces a set of scaling factors. The scaling factors are then reviewed by
the All Risk Committee with respect to all of the indicators and any other relevant information available and the committee approves
their use for the calculation of the impairment. This process is carried out at least quarterly.
The Group uses three scenarios. In addition to the base case, scaling factors are produced for good and bad cases. This is done in
order to represent a range of possible future developments. The actual impairment allowance is the weighted average of the ECL in
these different scenarios.
The All Risk Committee determined that it was appropriate to adjust the weights of the forward-looking scenarios to better reflect
uncertainty in economic conditions for borrowers and the ongoing uncertainty in global markets. The scenarios are usually weighted
25%-50%-25% (optimistic, base, pessimistic), but it was decided to keep using 20%-50%-30% at year-end 2024, as it had been
throughout the year.
The table below shows macroeconomic indicators of the Group's Chief Economist's macroeconomic forecast used for all cases in
ECL calculations 31.12.2024.
Change in economic indicators %
Estimate
2024
Forecast
2025
Forecast
2026
Forecast
2027
Forecast
2028
Economic growth (YoY real GDP change)
0.3
1.2
2.5
2.5
2.4
Housing prices in Iceland (average YoY change)
10.7
7.0
6.1
3.5
3.5
Purchasing power (average YoY change)
(0.2)
1.8
1.9
1.5
1.4
ISK exchange rate index (YoY change in average)
0.0
0.2
(1.5)
1.0
1.0
Policy rate, Central Bank of Iceland (average per year)
9.1
7.5
5.7
5.5
5.0
Inflation (average per year)
5.9
3.3
2.8
2.7
3.1
Capital formation (YoY real change)
2.3
0.2
3.8
2.9
2.9
- thereof capital formation in industry
2.6
(0.9)
4.0
2.8
2.8
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Notes to the Consolidated Financial Statements
64.3 Financial assets and financial liabilities (continued)
The LGD model considers several scenarios for how a facility may develop once a credit event has occurred. One possibility is that
the facility cures without a loss. If not, the recoveries may be based on the seizing of collateral and to estimate such recoveries,
several scenarios for the development of the value of the collateral are considered. Finally, there may be recoveries even though a
formal collateral is not in place. These different recovery scenarios are weighted differently depending on the economic scenario under
consideration. This leads to a non-linear interaction and thus a difference between the probability weighted average ECL and the ECL
in the most likely scenario.
For EAD it is necessary to account for expected prepayments on term loans and for the expected utilisation of commitments such as
credit cards, overdrafts, financial guarantees, and credit lines. The expected lifetime of agreements may also extend beyond the
contractual lifetime for contracts which are generally extended.
Temporary changes have been made to the impairment model in response to seismic activity in Reykjanes since the last quarter of
2023. For further information see Note 3.
Write-off policy
When the Group has no reasonable expectations of recovering a credit exposure or when it is uneconomical to pursue legal collection,
the financial asset is written off. A write-off does not change the debt obligation which is therefore still subject to enforcement activity.
Any recoveries of amounts previously written off are credited to the income statement.
The impairment process
In the Group's impairment framework, the Stage assignment and ECL for each financial asset is calculated from the aforementioned
models. The outcome is reviewed by the business units, and they can propose changes if they provide sufficient supporting material.
The impairment and any proposals for changes are reviewed by an Impairment Council appointed by the All Risk Committee and the
impairment allowance is approved by the All Risk Committee on a quarterly basis.
The principle of materiality applies to the above discussion on impairment, whereby exceptions related to non-materiality and
immaterial adjustments are not discussed.
64.4 Cash and cash equivalents
Cash and cash equivalents are carried at amortised cost in the Statement of Financial Position and at the reporting date the expected
credit loss is considered to be low.
Cash and cash equivalents in the statement of cash flows consist of cash on hand, unrestricted balances with the Central Bank, and
demand deposits with credit institutions. Cash and cash equivalents comprise balances with less than three months maturity from the
date of acquisition.
64.5 Derivative financial instruments
Derivatives are primarily used in trading activities but are also used to manage the Group's exposure to various risks, such as interest
rate risk, inflation risk, and currency risk. Derivatives are classified as financial assets or financial liabilities, measured at fair value
and presented in the Statement of Financial Position in separate line items as assets or liabilities, depending on whether their fair
value at the reporting date is positive (assets) or negative (liabilities).
The Group applies hedge accounting. Accordingly, some of the Group's derivative financial assets and financial liabilities are
accounted for as financial assets or financial liabilities mandatorily at fair value through profit or loss while others are accounted for
as derivative assets or liabilities in hedge accounting (see Note 64.3 and Note 64.6).
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Notes to the Consolidated Financial Statements
64.6 Hedge accounting
The Group elected, as a policy choice permitted under IFRS 9, to continue to apply hedge accounting in accordance with IAS 39.
On initial designation of the hedges, the Group formally documented the relationship between the hedging instruments and hedged
items, including the risk management objective and strategy in undertaking the hedge, together with the method that will be used to
assess the effectiveness of the hedging relationships. The Group makes an assessment, both at inception of the hedge relationships
and on an ongoing basis, of whether the hedging instruments are expected to be highly effective in offsetting the changes in the fair
value of the hedged items during the period for which the hedge is designated, and whether the actual results of each hedge are
within the range of 80-125%. In the assessment the Group assumes that the benchmark interest rate is not altered as result of the
transition to alternative benchmark interest rates.
The Group applies fair value hedge accounting with respect to designated hedging relationships consisting of certain fixed-rate Euro
denominated bonds issued by the Group as the hedged items and certain Euro denominated interest rate swaps as the hedging
instruments, whereby the Group pays floating rate interest and receives fixed rate interest. The hedging relationships are designated
and accounted for as fair value hedges because the interest rate swaps are hedging the exposure of the Group to changes in the fair
value of the bonds arising from changes in interest rates. The Group recognises the changes in the fair value of the interest rate swaps
immediately in profit or loss together with the changes in the fair value of the bonds which are attributable to the interest rate risk. The
changes in the clean fair value of the swaps and the bonds are included in the line item "Net financial income (expense) ", the accrued
interest on the bonds and the swaps is included in the line item "Net interest income" and foreign exchange gains and losses on the
bond are included in the line item "Net foreign exchange gain (loss)".
If a hedging derivative expires or is sold, terminated or exercised, or a hedge no longer meets the criteria for fair value hedge
accounting, or the hedge designation is revoked, then hedge accounting for the corresponding hedging relationship is discontinued
permanently. Any adjustment up to the point of discontinuation to a hedged item for which the effective interest method is used is
amortised to profit or loss as part of the recalculated effective interest rate of the item over its remaining life.
64.7 Leases
The Group has elected not to separate non-lease components and account for lease and non-lease components of a contract as a
single lease component.
The Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-
value assets. The Group recognises a lease liability and a right-of-use asset at the lease commencement date. The Group has elected
not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases
of low-value assets. The Group recognises lease payments associated with these leases as an expense on a straight-line basis over
the lease term.
The Group presents right-of-use assets in the line item "Property and equipment" and lease liabilities in the line item "Other liabilities"
in the Statement of Financial Position. Maturity analysis of lease liabilities is disclosed in Note 54. Interest on lease liabilities is
recognised in profit or loss in the line item "Net interest income". Depreciation of right-of-use assets is recognised in profit or loss in
the line item "Other operating expenses".
The Group as a lessor
When the Group is the lessor in a finance lease, the Group recognises a receivable equal to the net investment in the lease and
presents it in the line item "Loans to customers" in the Statement of Financial Position. The Group applies its accounting policies for
derecognition and impairment of financial assets also to its finance lease receivables. The Group recognises the finance income from
finance lease receivables in profit or loss in the line item "Net interest income" over the period of the finance lease so as to give a
constant periodic rate of return on the net investment in the finance lease.
When the Group is a lessor in arrangements which involve the legal form of finance leases, but which in substance do not involve
leases, the Group classifies them within loans at amortised cost.
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Notes to the Consolidated Financial Statements
64.8 Loan commitments and financial guarantees
Loan commitments are firm commitments of the Group to provide credit under a binding agreement for the exchange of a specified
quantity of resources at a specified price on a specified future date or dates. Expected credit loss of loan commitments (see Note
64.3) is recognised in the Statement of Financial Position in the line item "Other liabilities". Loan commitment fees received by the
Group are recognised in profit or loss in the line item "Fee and commission income".
Financial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss it incurs
because a specified debtor fails to make payments when due, in accordance with the terms of a debt instrument. Financial guarantees
are issued by the Group to credit institutions and other parties on behalf of its customers so that they can secure loans, overdrafts,
and banking facilities.
Liabilities arising from financial guarantees issued by the Group are initially measured at their fair value, being the premium received.
Subsequently the liabilities are carried at the higher of the amount representing the initial fair value of the guarantee and the expected
credit loss allowance of the guarantee (see Note 64.3). Any changes in the liabilities arising from financial guarantees are recognised
in profit or loss. The premium received is recognised in profit or loss in the line item "Fee and commission income" over the life of the
guarantee.
64.9 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, if it is probable
that the Group will be required to settle the obligation with an outflow of resources, and a reliable estimate can be made of the amount
of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting
date, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows
estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When management assesses
that disclosing all information regarding certain matters can be expected to affect their outcome, then such detailed disclosures are
not included in the Consolidated Financial Statements.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable
is recognised as an asset if it is virtually certain that the reimbursement will be received, and the amount of the receivable can be
measured reliably.
64.10 Employee benefits
All Group entities are required to pay, on a mandatory and contractual basis, contributions to public and private pension funds. The
Group has no further payment obligations once these contributions have been paid. The Group recognises these contributions as
salary related expenses when they become due.
Short-term employee benefits include salaries, cash bonuses, non-monetary benefits and compensated absences. Short-term
employee benefit obligations are expensed by the Group as the related service is provided. A liability is recognised for the amount
expected to be paid under short-term cash bonus plans if the Group has a present legal or constructive obligation to pay this amount
as a result of past service provided by the employee and the obligation can be estimated reliably.
The Group does not have a defined benefit pension plan or an active remuneration policy.
64.11 Equity
Share capital
The share capital disclosed in the Consolidated Financial Statements represents the total nominal value of ordinary shares issued by
the Bank. Incremental costs directly attributable to the issuance of ordinary shares are recognised as a deduction from equity, net of
any tax effects.
Dividends on shares
Dividends payable to shareholders of the Bank are recognised as a liability and deducted from equity in the period in which the
dividends are approved by the shareholders at the Bank's Annual General meeting. Dividends declared after the reporting date are
not recognised as a liability at the reporting date.
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Notes to the Consolidated Financial Statements
64.11 Equity (continued)
Statutory reserve
According to the Act on Public Limited Companies no. 2/1995 the statutory reserve shall amount to 25% of the share capital of the
Bank.
Restricted reserves
The Group is to transfer, if applicable, certain amounts from retained earnings to restricted reserves which can therefore not be
distributed as dividends to shareholders. These restricted reserves are specified as follows:
Restricted reserve due to capitalised development costs
When the Group capitalises development cost it transfers a corresponding amount from retained earnings to a restricted reserve. In
the future the restricted amount is to be transferred back to retained earnings as the capitalised development cost is amortised in
profit or loss.
Restricted reserve due to fair value changes of financial assets
The Group transfers fair value changes of financial assets at fair value through profit or loss, net of tax if applicable, from retained
earnings to a restricted reserve. Amounts recognised in the reserve are transferred back to retained earnings upon sale of the financial
asset.
Restricted reserve due to unrealised profit of associates
If share of profit of an associated company is in excess of dividend received or which can be claimed, the Group transfers the difference
to a restricted reserve in equity. If the Group's shareholding in an associate is sold or written off the applicable amount recognised in
the reserve is transferred to retained earnings.
Liability credit reserve
Changes in fair value attributable to changes in the credit risk of financial liabilities designated as at fair value through profit or loss
are recognised in liability credit reserve. On derecognition the fair value changes are not reclassified to profit or loss.
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign
subsidiaries.
64.12 Interest income and interest expense
For all financial assets and financial liabilities measured at amortised cost, interest income and interest expense are recognised in
profit or loss using the effective interest method.
The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of
the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset or financial liability.
When calculating the effective interest rate, the Group estimates cash flows, considering all contractual terms of the financial
instrument, but does not consider future credit losses. The calculation generally includes all fees and amounts paid or received
between parties to the contract that are an integral part of the effective interest rate, as well as transaction costs and all other premiums
or discounts.
The effective interest rate is established on initial recognition of financial assets and financial liabilities and their carrying amount is
subsequently adjusted if the Group revises its estimates of payments or receipts. The adjusted carrying amount is calculated based
on the original effective interest rate. The change in carrying amount is recorded as interest income or interest expense. For floating
rate instruments, interest income or interest expense is recognised based on the current market rate plus or minus amortisation or
accretion of the discount or premium based on the original effective interest rate.
Interest on impaired financial assets is calculated by applying the original effective interest rate of the financial asset. For financial
assets in Stage 1 and Stage 2 interest is recognised on the gross carrying amount of the assets and for financial assets in Stage 3
interest is recognised on the gross carrying amount of the assets, net of impairment allowance (see Note 64.3).
For financial assets and financial liabilities at fair value through profit and loss, interest income and interest expense are recognised
through profit or loss on an accrual basis, except for financial liabilities designated as at fair value through profit or loss (see Note
64.3).
Accrued interest on interest rate swaps, which are designated and accounted for as hedging instruments in fair value hedges of the
interest rate risk arising from certain fixed-rate Euro denominated bonds issued by the Group (see Note 64.6), is recognised in profit
or loss as an adjustment to the interest expense recognised for the bonds.
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Notes to the Consolidated Financial Statements
64.13 Net fee and commission income
Fees and commissions are recognised to reflect the transfer of services to customers at an amount that reflects the consideration that
is expected to be received for such services. Fee and commission income and expenses that are integral to the effective interest rate
on a financial asset or financial liability are included in the measurement of the effective interest rate.
Fees for loan commitments that are likely to be utilised are recognised as an adjustment to the effective interest rate of the loan. When
a loan commitment is not expected to be utilised, fees are recognised in profit or loss on a straight-line basis over the commitment
period.
Loan syndication fees are recognised as revenue in profit or loss when the syndication has been completed and the Group has
retained no part of the loan package for itself or has retained a part at the same effective interest rate as the other participants.
Commission and fees arising from negotiating, or participating in the negotiation of, a transaction for a third party, such as the
arrangement of the acquisition of shares or other securities, or the purchase or sale of businesses, are recognised on completion of
the underlying transaction.
Portfolio and other management advisory and service fees are recognised based on the applicable service contracts, usually on a
time-apportioned basis.
Asset management fees related to investment funds are recognised rateably over the period in which the service is provided. The
same principle is applied for wealth management, financial planning, and custody services that are continuously provided over an
extended period of time. Performance-linked fees or fee components are recognised when the performance criteria are fulfilled.
Where it is assessed that the Group is acting as an agent, the consideration is presented on a net basis.
64.14 Net financial income (expense)
Net financial income (expense) consists of net gain (loss) on financial assets and financial liabilities mandatorily at fair value through
profit or loss, net gain (loss) on financial liabilities designated as at fair value through profit or loss, net gain (loss) on fair value hedges,
net gain (loss) on derecognition of financial liabilities measured at amortised cost, net gain (loss) on derecognition of financial assets
measured at amortised cost, and net gain (loss) on sale of debt instruments measured at fair value through other comprehensive
income.
Net gain (loss) on financial assets and financial liabilities mandatorily at fair value through profit or loss
Net gain (loss) on financial assets and financial liabilities mandatorily at fair value through profit or loss includes all realised and
unrealised fair value changes of financial assets and financial liabilities classified by the Group as mandatorily at fair value through
profit or loss, except for interest income and interest expense, which are included in the line item "Net interest income", and foreign
exchange gains and losses, which are included in the line item "Net foreign exchange gain (loss)". Dividend income from financial
assets is recognised in the income statement when the Group's right to receive payment is established.
Net gain (loss) on financial liabilities designated as at fair value through profit or loss
Net gain (loss) on financial liabilities designated as at fair value through profit or loss includes all realised and unrealised fair value
changes of financial liabilities designated by the Group as at fair value through profit or loss, except for changes in fair value attributable
to changes in credit risk which is recognised in other comprehensive income, interests incurred which are included in the line item
"Net interest income", and foreign exchange gains and losses which are included in the line item "Net foreign exchange gain (loss)".
Net gain (loss) on fair value hedges
Net gain (loss) on fair value hedges includes the changes in the clean fair value of interest rate swaps which are accounted for as
hedging instruments in fair value hedges and the changes in the fair value of certain bonds, which are attributable to the interest rate
risk of the bonds, and are accounted for as the hedged items in fair value hedges (see Note 64.6).
Net gain (loss) on derecognition of financial liabilities measured at amortised cost
Net gain (loss) on derecognition of financial liabilities measured at amortised cost includes the difference between the buyback price
and the carrying amount of debt issued measured at amortised cost at the derecognition date.
Net gain (loss) on derecognition of financial assets measured at amortised cost
Net gain (loss) on derecognition of financial assets measured at amortised cost includes the difference between the consideration
received and the carrying amount of financial assets measured at amortised cost at the derecognition date.
Net gain (loss) on sale of debt instruments measured at fair value through other comprehensive income
Net gain (loss) on sale of debt instruments measured at fair value through other comprehensive income includes cumulative fair value
gains and losses reclassified to profit or loss upon the sale of debt instruments measured at fair value through other comprehensive
income.
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Notes to the Consolidated Financial Statements
64.15 Taxes
Income tax expense
Income tax expense comprises special financial activities tax, current tax and deferred tax and is disclosed as a separate line item in
the income statement. Income tax expense from non-current assets held for sale is included in the income statement in the line item
"Profit from non-current assets held for sale, net of income tax". Income tax is recognised in profit or loss, except to the extent that it
relates to items recognised directly in equity, consistent with the recognition of the underlying item to which it relates.
Bank tax
Bank tax is calculated as 0.145% (2023: 0.145%) of total liabilities at year-end as determined for tax purposes, in excess of ISK 50,000
million, excluding tax liabilities. The Bank tax is considered a non-deductible expense for the calculation of income tax. The Bank tax
is shown in a separate line in the income statement and is included in the Statement of Financial Position in the line item "Tax
liabilities".
Special financial activities tax
Special financial activities tax is calculated as 6% of taxable profit exceeding ISK 1,000 million. Special financial activities tax is
included in the Statement of Financial Position in the line item "Tax liabilities".
Current tax
Current tax is the expected tax payable on the taxable income for the year using tax rates enacted at the reporting date. Current tax
also includes any adjustment to tax payable in respect of previous years. Current tax assets and current tax liabilities are offset in the
Statement of Financial Position if the Group has a legally enforceable right to set off the recognised amounts and intends either to
settle on a net basis, or to realise the asset and settle the liability simultaneously. Current tax is included in the Statement of Financial
Position in the line item "Tax liabilities".
Deferred tax
Deferred tax is recognised based on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts. However, deferred taxes are not recognised if it arises from the initial recognition of an asset or liability, in a transaction
other than a business combination, that at the time of the transaction affects neither the taxable profit nor the accounting profit. In
addition, deferred taxes are not recognised if the temporary difference arises from the initial recognition of goodwill.
Deferred tax is measured using tax rates enacted at the reporting date. The enacted tax rate was temporarily increased from 20% to
21% for taxable income in 2024, this temporary change in tax rate impacted deferred tax calculations at year-end 2023.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which
deduct
ible temporary differences can be utilised. The deferred tax asset is reviewed at each reporting date and reduced to the extent
that it is no longer probable that the related tax benefit will be realised.
Deferred tax liabilities are included in the Statement of Financial Position in the line item "Tax liabilities" and deferred tax assets are
included in the Statement of Financial Position in the line item "Other assets".
Íslandsbanki hf. Consolidated Financial Statements 2024
87
islandsbanki.is
The Board of Directors of Íslandsbanki is
committed to excellence in corporate governance
and complying with the applicable regulatory
standards and best international practices in the
eld of corporate governance.
The regulatory framework for corporate
governance practices within Íslandsbanki consists
of the law applicable to entities subject to the
supervision of the Financial Supervisory Authority
of the Central Bank of Iceland (FSA) as well as
other applicable law and regulations, including
those imposed by the FSA and Nasdaq Iceland,
available at their respective websites, cb.is and
nasdaqomxnordic.com. The applicable law
includes, inter alia, the Act on Financial
Undertakings no. 161/2002, the Act on Recovery
and Resolution of Credit Institutions and
Investment Firms no. 70/2020, the Act on
Markets for Financial Instruments no. 115/2021,
the Act on Payment Services no. 114/2021, the
Act on Payment Accounts no. 5/2023, the Act on
Measures against Money Laundering and Terrorist
Financing no. 140/2018, the Act on Measures
against Market Abuse no. 60/2021, the Act on
Sustainability Disclosure Requirements in the
Financial Sector and a Classication System for
Sustainable Investments no. 25/2023, the Act on
Mortgage Lending to Consumers no. 118/2016,
the Act on Consumer Credit no. 33/2013, the
Act on Competition no. 44/2005 and the Act on
Public Limited Companies no. 2/1995, which along
with Íslandsbanki's Articles of Association lay the
foundation for the Bank's existence and activities.
The relevant laws are available on the Icelandic
legislature's website, althingi.is.
According to paragraph 7 of article 54 of the Act on
Financial Undertakings no. 161/2002 Íslandsbanki
is required to comply with the accepted Guidelines
on Corporate Governance. The Bank's compliance
with Corporate Governance Guidelines issued
by the Iceland Chamber of Commerce, Nasdaq
Iceland and SA Business Iceland (hereinafter the
Guidelines) is reviewed annually. The Guidelines
provide that companies are to disclose any
deviations from the Guidelines and explain the
reasons for such deviations. There are no deviations
from the Guidelines at Íslandsbanki. The Guidelines
are available on leidbeiningar.is.
Moreover, the Bank's governance practices are
based on the European Banking Authority's
Guidelines on Internal Governance for Financial
Undertakings (EBA/GL/2021/05), cf. article 16 of
regulation (EC) no. 1093/2010, transposed into
Icelandic law with Act no. 24/2017, on European
Financial Supervisory System.
The Bank's shares are admitted to trading on the
Nasdaq Main Market in Iceland. The Bank also
regularly issues bonds on the regulated securities
market in both Iceland and Ireland. The Bank is
therefore subject to the disclosure obligation of
issuers pursuant to the Act on the Disclosure and
Information requirements of Issuers of Securities
and Notications on Major Holdings no. 20/2021
and the rules of the relevant stock exchange.
Consolidated Financial Statements
Íslandsbanki's Corporate
Governance Statement 2024
Unaudited
88
islandsbanki.is
Main Aspects of Risk Management
and Internal Control
Internal Control
The risk management and internal control
framework of the Bank is based on the three lines
of defence model, as referred to in the European
Banking Authority's Guidelines on Internal
Governance, and aims for informed decision
making and strong risk awareness throughout the
Bank. The framework is intended to ensure ecient
operations, adequate control of risks, prudent
conduct of business, reliability of nancial and
non-nancial information reported internally and
externally, and compliance with the applicable
laws, regulations, supervisory requirements, and
the Bank's internal rules.
The rst line of defence consists of the Bank's
business and support units, which are responsible
for establishing and maintaining eective internal
controls and managing risk in the Bank's daily
operations. This means that the respective units
and their managers must actively and regularly
ensure that risks within their areas of responsibility
are identied, assessed, and managed
appropriately. This includes the implementation
of internal rules along with appropriate processes
and monitoring their execution, in accordance with
laws, regulations and the Bank's policies.
The second line of defence is comprised of the
Bank's internal control units, Risk Management
and Compliance, which shall facilitate the
implementation of a sound risk management and
internal control framework. Moreover, the second
line of defence is responsible for further analysing,
monitoring, measuring and reporting on risks and
for forming a holistic view on all risks on an individual
and consolidated basis.
The third line of defence is Group Internal Audit
which keeps the Board informed of the quality
of corporate governance, risk management
and internal controls, including by performing
independent and objective audits.
Risk Management
The Board of Directors approves the risk policy,
risk appetite statement and procedure for risk
management and ensures that internal procedures
for risk management are revised at least annually.
The All Risk Committee, a Senior Management
Committee, is comprised of the Chief Executive
Ocer (CEO), all the managing directors of
the Bank and other members of management
appointed by the CEO. The committee takes major
decisions on implementation of the Bank's risk
management and internal control frameworks and
conducts oversight to ensure that the Bank's risk
prole is within the limits dened in the Board's risk
appetite statement. The All Risk Committee issues
guidelines for risk assessment and individual risk
thresholds or limits.
Further information on the Bank's risk management
structure and internal control can be found in the
Bank's unaudited Pillar 3 Report, which is available
on the Bank's website.
Audit and Accounting
The CEO ensures that the Board of Directors is
provided with accurate information on the Bank's
nances, development and operations on a regular
basis and the Board Audit Committee assists the
Board in fullling its oversight responsibilities
concerning the nancial reporting process and the
system of internal control.
The Bank's Finance division is responsible for the
preparation of the Group's Consolidated Financial
Statements in line with the International Financial
Reporting Standards (IFRS) as adopted by the
European Union and additional requirements
in the Act on Annual Accounts no. 3/2006, the
Act on Financial Undertakings no. 161/2002,
and rules on accounting for credit institutions,
where applicable. The Board's Audit Committee
reviews annual and interim Consolidated Financial
Statements before their submission for Board
approval and endorsement. The Board's Audit
Committee regularly discusses the Group's
89
islandsbanki.is
nancial statements and evaluates its internal
control processes. Management reporting is
generally presented to the Board at least 10 times
a year. The Consolidated Financial Statements are
published on an annual basis and the Condensed
Consolidated Interim Financial Statements on a
quarterly basis.
The Annual General Meeting (AGM) elects an
external audit rm in accordance with the Bank's
Articles of Association. The Board's proposal to the
AGM is based on the Audit Committee's proposal
on the selection of an audit rm. KPMG ehf. was
elected as the Bank's audit rm at the last AGM
and conducts the Group's external audit. The
external auditors review the half year Condensed
Consolidated Interim Financial Statements and
audit the Consolidated Financial Statements.
Additionally, for the year 2024 the external auditors
reviewed the Condensed Consolidated Interim
Financial Statements for the third quarter.
Group Internal Audit
The Board appoints the Chief Audit Executive,
who is responsible for internal audit of the Bank
and its subsidiaries. Group Internal Audit reports
directly to the Board and operates independently
from other departments in accordance with
article 16 of the Act on Financial Undertakings
no. 161/2002. The department evaluates and
promotes improvements to the eectiveness
of governance, risk management, and control
processes. The responsibilities and authorisations
of the Chief Audit Executive and Group Internal
Audit are further outlined in the Group Internal
Audit Charter.
Compliance
The Bank's Chief Compliance Ocer (CCO) is
hired by the CEO, subject to Board conrmation.
The CCO is a part of the Bank's Executive
Committee. The CCO's role is to supervise and
to have an overview of compliance risk, which
include nancial crime risk, data protection risk,
breach of conduct and changes in the relevant
law. Additionally, the CCO is responsible for
monitoring and assessing the Bank's operations
regarding securities transactions. Furthermore, the
CCO is responsible for assessing and monitoring
the Bank's compliance with the Act on Measures
against Money Laundering and Terrorist Financing
no. 140/2018.
Íslandsbanki Values, Sustainability and Code of
Conduct
The Bank's purpose is to empower its customers
to be a force for good. Íslandsbanki's values
are progressive thinking, collaboration and
professionalism and they are the pillars of the
Bank's corporate culture, shaping the conduct and
attitudes of its employees.
The Board approves a Code of Conduct for
the Bank's employees. The aim of the Code is
to promote good operational practices. The
document is available on the Bank's website.
The Bank has in place a Sustainability Policy which
is focused on making its operations exemplary
in the Icelandic business environment, based on
internationally recognised environmental, social,
and governance criteria. The Bank aspires to be a
leader in sustainable development.
The Bank has decided to focus particularly on four
of the UN Sustainable Development Goals (SDGs)
in its course of business: quality education; gender
equality; industry, innovation and infrastructure;
and climate action. Annually the Bank publishes
an Annual and Sustainability Report. This year
the report is partly based on ESRS (European
Sustainability Reporting Standards), adopted by
the European Commission, and the applicable
Global Reporting Initiative (GRI) metrics, the UN
Principles for Responsible Banking (UN PRB),
and the SDGs. Since 2009 Íslandsbanki has been
a signatory to the UN Global Compact on social
responsibility.
Board of Directors
At each AGM seven non-executive directors, and
two alternate members, are elected to the Board
90
islandsbanki.is
for a term of one year. The Chairman of the Board is
elected separately at the AGM or the shareholders'
meeting. There are no limitations on duration of
Board membership.
The Board undertakes the Bank's aairs in between
shareholders' meetings unless otherwise provided
by law or the Bank's Articles of Association. The
Board is responsible for setting the Bank's general
strategy and instructs the CEO on its further
implementation and execution. The Board has a
supervisory role in that it oversees that the Bank's
organisation and activities are at all times in
accordance with the relevant law, regulations and
good business practices. The CEO and Chief Audit
Executive are hired by the Board.
The Rules of Procedure of the Board are adopted
in accordance with article 70 of the Act on Public
Limited Companies no. 2/1995 and article 54 of the
Act on Financial Undertakings no. 161/2002. The
Board's current Rules of Procedure are available on
the Bank's website. According to the Bank's Articles
of Association a Board meeting has a quorum if
a majority of directors attend. The Board met 27
times in 2024, each time constituting a quorum.
The Articles of Association of the Bank provide that
the ratio of each gender on the Board of Directors
shall not be lower than 40%, currently the Board
is comprised of four men and three women. The
Board has approved a policy on the suitability of
the Board of Directors, CEO and key function
holders. The policy states, among other things,
that the composition of the Board, the Executive
Committee and key function holders shall at
any time be diverse, with regard to educational
and professional background, gender and age.
Moreover, the policy provides that the proportion
of either gender should not exceed 60% in the
Executive Committee.
The Board Sub-Committees
The Board sub-committees are three in total,
and they operate under the terms of a mandate
letter from the Board as well as the Rules of
Procedure of the Board. The mandate letters
of the Board sub-committees are available on
the Bank's website. The Board appoints the
members of the sub-committees as well as their
chairman. When appointing the sub-committees,
the Board shall take into account the expertise,
skills and experience needed of a member to be
appointed to the relevant sub-committee. All of
the sub-committees are constituted of members
of the Board, in addition to one external committee
member in the Board Audit Committee.
The Board Audit Committee, comprising three
Board members and one external committee
member, assists the Board in fullling its oversight
responsibilities concerning the nancial reporting
process, the system of internal control, the audit
process and the Bank's process for monitoring
compliance with the relevant laws and regulations
and its Code of Conduct. The committee met 14
times in 2024, each time constituting a quorum.
The Board Risk Management Committee, comprising
three Board members, assists the Board in its
advisory and supervisory role, i.a. in relation to the
formulation and implementation of the Bank's
risk policy and risk appetite. The committee's
responsibilities include the parent company, its
subsidiaries, and the whole Group. The committee
met 10 times in 2024, each time constituting a
quorum.
The Board Corporate Governance and Human
Resource Committee,
comprising three Board
members, assists the Board in overseeing and
assessing the Bank's compliance with generally
accepted corporate governance practices
and Board eectiveness. Furthermore, the
committee assists the Board in fullling its
oversight responsibilities concerning the Bank's
Compensation Policy, implementation of the
Bank's Sustainability Policy and issues concerning
human resources. The committee met eight times
in 2024, each time constituting a quorum.
The structure and composition of Board sub-
committees is illustrated below.
91
islandsbanki.is
Stefán Pétursson
(b. 1963)
Joined the Board as
Vice-Chairman in
July 2023
Main Occupation: CFO of EpiEndo Pharmaceuticals
ehf.
Work experience: CFO of Arion Bank hf. (2010-2021).
Head of Financing, Executive Director of Finance and
CFO at Landsvirkjun (1993-2010).
Other directorships: Has been on the boards of
Landfestar ehf., Valitor hf., The Icelandic Depositors'
and Investors' Guarantee Fund, Icelandic Chamber of
Commerce, Landey ehf. and Hablaer and is a former
Committee Member of ÍL Fund Projects Committee.
Education: MBA from Babson College in Boston. Cand.
oecon in Business Administration from the University of
Iceland.
Shareholding and independence: Stefán holds no
shares in Íslandsbanki and is considered independent of
the Bank and major shareholders. No interest ties with
main customers or competitors of the Bank.
Sub-Committees: Board Audit Committee and the
Board Risk Committee.
Linda Jónsdóttir
(b. 1978)
Joined the Board as
Chairman in July 2023
Main occupation: Deputy CEO and CFO of Sidekick
Health.
Work experience: COO at Marel hf. (2022-2024). CFO
at Marel hf. (2014-2022). Executive Director of Treasury,
Finance and Investor Relations at Marel hf. (2009-2014).
Senior Vice President of Treasury at Straumur Burðarás
Investment Bank hf. (2005-2009). Director of Treasury
and Financing at Burðarás hf. (2003-2005). Managing
Director of Eimskipafélag Íslands pension fund (2002-
2003). Manager of Treasury at Eimskip hf. (1999-2003).
Other directorships: University of Iceland Science Park
(Board member). Has been a member of the boards of
Icelandic Enterprise Investment Fund, Iceland Chamber
of Commerce and Eimskipafélags Íslands pension fund.
Education: M.Sc. in Corporate Finance from Reykjavík
University. Cand. oecon in Business Administration from
the University of Iceland. Securities broker licensed by
the Icelandic Ministry of Finance and Economic Aairs.
Shareholding and independence: Linda holds 12,659
shares in Íslandsbanki. Linda's spouse holds 12,659
shares in Íslandsbanki. Linda is considered independent
of the Bank and major shareholders. No interest ties with
main customers or competitors of the Bank.
Sub-Committees: Board Audit Committee.
Members of the Board
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islandsbanki.is
Agnar Tómas
Möller (b. 1979)
Joined the Board in
March 2023
Main occupation: Independent investor.
Work experience: Fund Manager of bond funds at Kvika
Asset Management hf. (2018-2022). Fund Manager of
bond funds at GAMMA Capital Management hf. (2009-
2018). Bonds broker at Kaupþing Bank hf. (2006-2008).
Risk management at Kaupþing Bank hf. (2004-2006).
Teacher at the School of Business Administration and the
Faculty of Economics at the University of Iceland (2010-
2014).
Other directorships: ATM ehf. (Managing Director and
Board member). The Icelandic Chess Federation (Board
member).
Education: M.Sc. in Industrial Engineering from the
University of Iceland and studies towards a B.A. in history
at the same university.
Shareholding and independence: Agnar holds no
shares in Íslandsbanki and is considered independent of
the Bank and major shareholders. No interest ties with
main customers or competitors of the Bank.
Sub-Committees: Board Risk Committee.
Haukur Örn
Birgisson (b. 1978)
Joined the Board
in July 2023
Main Occupation: Supreme Court Attorney, owner, and
Managing Director of FIRMA Legal.
Work experience: Supreme Court Attorney, owner, and
Managing Director of Íslenska lögfræðistofan (2008-
2023). Chairman of the Rehearing Committee (2017-
2021). Chairman of the Board and CEO of Inkasso ehf.
(2010-2013). District Court Attorney and associate
at Lex lögmannsstofa (2004-2008). District Court
Attorney and associate at Nestor lögmenn (2004).
Teacher in various legal courses in Reykjavík University,
the University of Iceland, Verzlunarskóli Íslands and
Menntaskólinn Hraðbraut.
Other directorships: Reparations Settlement
Committee (as Chairman). Administrative Committee
of the International Golf Federation (Board member).
The Open Championship (member of the Executive
Committee). Has been on the board of GAM
Management hf., the Golf Union of Iceland (as President)
and the European Golf Association (as President).
Education: Cand. jur. from the University of Iceland.
Licenced Supreme Court Attorney.
Shareholding and independence: Haukur holds no
shares in Íslandsbanki and is considered independent of
the Bank and major shareholders. No interest ties with
main customers or competitors of the Bank.
Sub-Committees: Chairman of the Board Corporate
Governance and Human Resource Committee.
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islandsbanki.is
Helga Hlín
Hákonardóttir
(b. 1972)
Joined the Board in
July 2023
Main Occupation: Partner and consultant at Strategía.
Work experience: Founder and lawyer at Lixia
lögmannsstofa (2011-2014). Co-founder and Managing
Director of Legal at Saga Investment Bank hf. (2006-
2011). Attorney at Straumur Burðarás Investment Bank hf.
(2005-2006), Íslandsbanki hf. (2000-2005) and capital
markets lawyer at Fjárfestingarbanki atvinnulífsins hf.
(1998-2000) and the Iceland Stock Exchange (1996-
1998).
Other directorships: AÞ þrif ehf. (Board member) and
Rue de Net (Board member). Has been on the boards
of mark.is (as Chairman), Verðbréfaþing Ísland (as
Alternate), Skeljungur hf., Summa Rekstrarfélag hf.,
Greiðsluveitan, Icelandic Chamber of Commerce, Festi
hf., Krónan hf., Vís hf. (as Chairman), Lífís hf. (as Alternate),
WOW air hf., Meniga Ltd. and on the The University
Council of Akureyri University.
Education: Cand. jur. from the University of Iceland.
Licenced District Court Attorney. Securities broker
licensed by the Icelandic Ministry of Finance and
Economic Aairs.
Shareholding and independence: Helga Hlín holds no
shares in Íslandsbanki and is considered independent of
the Bank and major shareholders. No interest ties with
main customers or competitors of the Bank.
Sub-Committees: The Board Corporate Governance
and Human Resource Committee and Chairman of the
Board Risk Committee.
Stefán Sigurðsson
(b. 1972)
Joined the board in
March 2024
Main Occupation: Managing Director and owner of
Nordic Development ehf.
Work experience: CEO of Sýn hf. (2014-2019). Managing
Director of Wealth Management at Íslandsbanki hf.
(2008-2014). Executive Director and later Managing
Director of Strategic Development at Glitnir hf. (2007-
2008). Corporate Finance Associate at Glitnir hf. in
Denmark (2006-2007). Managing Director and co-
founder at Bæjarútgerðin (2002-2003). Managing
Director and co-founder at Inntak almannatengsl (2000-
2002). Senior Trader at Íslandsbanki (1998-2000).
Other directorships: Fólk Reykjavík ehf. (Board member).
Isavia ANS ehf. (Board member). North Ventures
ehf. (as Chairman). North Ranga ehf. (as Chairman).
Verðbréfamiðstöð Íslands hf. (as Chairman). Has been
on the boards of the Iceland's Chamber of Commerce,
Island Fund S.A. in Luxembourg and Verðbréfamiðstöð
Íslands hf.
Education: M.Sc. in Economics from the University of
Copenhagen. B.Sc. in Economics from the University of
Iceland.
Shareholding and independence: Stefán holds no
shares in Íslandsbanki and is considered independent of
the Bank and major shareholders. No interest ties with
main customers or competitors of the Bank.
Sub-Committees: The Board Corporate Governance
and Human Resource Committee.
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islandsbanki.is
Structure and Composition of Board Sub-Committees
Íslandsbanki's Nomination Committee
In accordance with the Bank's Articles of
Association the Bank operates a Nomination
Committee whose role is to nominate individuals
to the Bank's Board of Directors at the AGM, or as
the case may be at a shareholders' meeting where
Board elections are on the agenda. The members
of the Nomination Committee shall be three,
along with two alternates. Two members of the
Nomination Committee, along with one alternate,
shall be elected at the AGM or other shareholders'
meeting where the election of nomination
committee members is on the agenda, for a term
of one year. The third member of the Nomination
Committee and their alternate shall be Board
members of the Bank and are appointed by the
Board for a term of one year. The composition
Board
Audit Committee
Board
Risk Management Committee
Board Corporate Governance
and HR Committee
Valgerður Hrund
Skúladóttir
(b. 1963)
Joined the board in
March 2024
Main occupation: CEO of Sensa ehf.
Work Experience: Director of Corporate Services and
Holistic Solutions at Tæknival hf. (1994-2002). Head of
the Electrical Department at Jóhann Ólafsson og Co. ehf.
(1989-1994).
Other directorships: Memento (Board member).
Reykjavík Forest Society (Board member). Classical
Dance School (as Alternate). Business Iceland (as
Alternate). Has been on the boards of Confederation of
Icelandic Employers, Staki Automation, Talenta, Siminn
DK, Sensa A/S, the Federation of Icelandic Industries and
on its Intellectual Property Council, the Federation of IT
companies (as Chairman).
Education: MBA from the University of Miami. C.Sc. in
Electrical Engineering from the University of Iceland.
Shareholding and independence: Valgerður holds
12,659 shares in Íslandsbanki and is considered
independent of the Bank and major shareholders. No
interest ties with main customers or competitors of the
Bank.
Sub-Committees: Chairman of the Board Audit
Committee.
The alternate members of the Board are Herdís Gunnarsdóttir, since April 2016, and Páll Grétar
Steingrímsson, since March 2022.
Linda Jónsdóttir
Stefán Pétursson
Agnar Tómas Möller
Haukur Örn Birgisson
Helga Hlín Hákonardóttir
Stefán Sigurðsson
Valgerður Skúladóttir
Páll Grétar Steingrímsson
Chair Member External Committee Member
95
islandsbanki.is
and work of the Board shall be in accordance with
article 53 of the Act on Financial Undertakings no.
161/2002.
The Nomination Committee consists of:
- Helga Valfells, Chairman
- Linda Jónsdóttir, Chairman of the Board of
Íslandsbanki
- Hilmar Garðar Hjaltason
The Rules of Procedure of the Bank's Nomination
Committee are published on the Bank's website.
Board Performance and Suitability Assessment
At least once a year, as provided for in the Board's
Rules of Procedure, the Board assesses its work,
procedures and practices as well as each of
its members. This performance assessment is
intended to improve working methods and increase
the eciency of the Board. The assessment entails
an evaluation of the strengths and weaknesses of
the Board's work and practices. This is, inter alia,
based on the necessary number of Board directors,
the Board structure in relation to knowledge
and experience, Board procedure and practices.
Furthermore, the Board assesses, at least annually,
the collective suitability of the Board and individual
Board members in accordance with the Board's
Rules of Procedure and the Bank's policy on
the assessment of the suitability of the Board of
Directors, the CEO and key function holders. The
last assessment was performed by the Board in
December 2024. The Board assessed the collective
suitability of the Board as well as the suitability of
individual Board members and concluded that
the Board and individual Board members possess
sucient experience and knowledge to full the
requirements of the Act on Financial Undertakings
and the Bank's policy on the suitability of the Board
of Directors, CEO, and key function holders.
The Chief Executive Ocer
The CEO is responsible for the day-to-day
operations of the Bank and that the Bank's
business is, at all times, in accordance with the
Bank's Articles of Association, policies of the Board
and the relevant law. The CEO engages the Bank's
CCO and appoints members of the Executive
Committee and other Senior Management
Committees.
Jón Guðni
Ómarsson (b. 1976)
CEO since 28 June
2023
Work experience: CFO of Íslandsbanki hf. (2011-2023).
Head of Treasury at Íslandsbanki hf. from (2008-2011).
Education: M.Sc. in Quantitative and Computational
Finance (QCF) from Georgia Institute of Technology
and B.Sc. in Industrial Engineering from the University of
Iceland. AMP from Harvard Business School. Chartered
Financial Analyst (CFA). Securities broker licensed by
the Icelandic Ministry of Finance and Economic Aairs.
Other directorships: None.
Shareholding and independence: Jón Guðni holds
44,506 shares in Íslandsbanki as well as having an
indirect holding of 12,659 shares through Armis ehf. Jón
Guðni's spouse holds 12,659 shares in Íslandsbanki. Jón
Guðni is considered independent of the Bank and major
shareholders. No interest ties with main customers or
competitors of the Bank. No call-option agreements
exist between the CEO and the Bank.
96
islandsbanki.is
The Executive Committee
The Executive Committee consists of eight
people, including the CEO: Jón Guðni Ómarsson,
CEO since June 2023, Ellert Hlöðversson, Chief
Financial Ocer since January 2024, Barbara
Inga Albertsdóttir, Chief Compliance Ocer since
November 2023, Guðmundur Kristinn Birgisson,
Chief Risk Ocer since October 2018, Kristín
Hrönn Guðmundsdóttir, Managing Director
of Corporate & Investment Banking since July
2023, Ólöf Jónsdóttir, Managing Director of
Personal Banking since February 2024, Riaan
Dreyer, Managing Director of Digital & Data since
September 2019, and Una Steinsdóttir, Managing
Director of Business Banking since May 2017.
Senior Management Committees
Senior Management Committees are advisory
committees appointed by the CEO. Senior
Management Committees are divided into
Policy-Setting Committees, which implement
Board policies, and Business Committees, which
take a position on specic business matters. The
committees are appointed by the CEO, who also
approves their letter of mandate.
The Executive Committee and the All Risk
Committee are considered Policy-Setting
Committees and they take major decisions on the
implementation of the policies set by the Board.
Committee members include all of the Bank's
Managing Directors, as well as other members of
senior management appointed by the CEO.
- The Executive Committee oversees and
coordinates key aspects of the Bank's activities
and has decision-making authority in matters
assigned to it by the CEO, in accordance with
policies, goals, and risk appetite as dened by
the Board.
- The All Risk Committee takes major
decisions on implementation of the Bank's risk
management and internal audit frameworks
and conducts oversight to ensure that the
Bank's risk prole is within the limits dened in
the Board's risk appetite statement.
The Business Committees decide on individual
business and operational matters in accordance
with the rules and procedures issued by the
Board, the Executive Committee and the All Risk
Committee. The Bank's Business Committees are:
- The Senior Credit Committee decides on
proposals on lending and is the formal venue
for discussion and review of individual loan
proposals.
- The Asset and Liability Committee decides
on proposals regarding market risk, liquidity
risk, funding, capital, and internal and external
pricing.
- The Investment Committee decides on
proposals regarding the purchase, sale
and valuation of equity stakes and other
investments of the Bank.
- The Operational and Security Committee
decides on proposals regarding new products
and services, continuous operation and
material changes in systems and procedures.
- The Sustainability Committee is a formal
forum for reviewing and discussing matters
related to the Bank's sustainability strategy
formulation and the Bank's commitments
regarding sustainability.
- The Digital Product Committee is a formal
forum for prioritisation of initiatives between
product teams in line with the strategy and
goals of the Bank.
Arrangement of Communications
Between Shareholders and the Board
The Board communicates with shareholders in
accordance with the relevant laws, the Bank's
Articles of Association, and the Board's Rules of
Procedure. Shareholders' meetings, the supreme
authority of the Bank, are the general forum for
informing and communicating with shareholders.
All information that is dened as sensitive market
information is disclosed to the market through the
relevant regulated market's announcement system
97
islandsbanki.is
in accordance with the Bank's Disclosure and
Communication Policy. The Bank also organises
quarterly meetings for market participants where
the CEO, CFO and representatives of investor
relations present the Bank's nancial statements.
The Bank's Disclosure Committee assesses the
Bank's event-specic disclosure obligations and
decides on disclosure in accordance with the
Bank's Rules on insider trading and management
transactions. The Disclosure Committee consists of
the CFO, the General Counsel, Executive Director
of Treasury, Investor Relations and the CCO
(without a vote).
Information on Infringements of Laws and
Regulations Determined by the Appropriate
Supervisory or Ruling Body
In September 2022 the FSA conducted an onsite
inspection regarding the Bank's AML control.
Following the results of the inspection, the Bank's
Board decided in May 2024 to accept the FSA's
settlement oer in relation to the case. With
the settlement, the Bank agreed with the FSA's
assessment and committed to making appropriate
corrections and agreed to pay a ne in the amount
of ISK 570 million.
No other remarks were received from an
appropriate supervisory or ruling body concerning
violations of laws or regulations. Information
on legal cases relating to Íslandsbanki can be
found in the Notes to the Consolidated Financial
Statements.
This Corporate Governance Statement was
approved by Íslandsbanki's Board of Directors on
13 February 2025.
98
In accordance with Regulation (EU) 2020/852
on the establishment of a framework to facilitate
sustainable investment (the Taxonomy Regulation),
the Group discloses information about the Green
Asset Ratio (GAR). The Taxonomy Regulation was
implemented into Icelandic law by Act no. 25/2023
on sustainability disclosure in the nancial service
sector and a classication system for sustainable
investments.
The Taxonomy Regulation establishes a classication
system with definitions of what constitutes
environmentally sustainable economic activity.
Economic activity is considered environmentally
sustainable if it (i) contributes substantially to one
or more of the environmental objectives, (ii) does
not signicantly harm any of the environmental
objectives, (iii) is carried out in compliance with the
minimum safeguards and (iv) complies with technical
screening criteria.
The environmental objectives of the Taxonomy
Regulation are:
climate change mitigation;
climate change adaptation;
the sustainable use and protection of water and
marine resources;
the transition to a circular economy;
pollution prevention and control; and
the protection and restoration of biodiversity
and ecosystems.
Under the Taxonomy Regulation, undertakings
subject to the disclosure requirements of Article 8
must disclose information on how and to what extent
their activities are associated with activities that
qualify as environmentally sustainable. The Green
Asset Ratio is the proportion of the credit institution's
assets nancing and invested in taxonomy-aligned
economic activities as a proportion of total covered
assets, in accordance with Delegated Regulation
(EU) 2021/2178. Delegated Regulation (EU)
2021/2178 provides further detail on the content
and presentation of information that undertakings
must disclose about environmentally sustainable
economic activities and the methodology to comply
with that disclosure obligation.
The Group's disclosures are presented based on
the templates according to
Delegated Regulation (EU) 2021/2178. The
templates have been amended with Delegated
Regulations (EU) 2022/1214 and
2023/2486, which were implemented in
Iceland with regulation no. 10/2024 on
the classification system for sustainable
investments, and regulation no. 1207/2024
amending regulation no. 10/2024. The Group's
GAR is based on data on environmentally
sustainable economic activities from Icelandic
companies that are required to disclose
non-financial information according to Article
66 d. of Act no. 3/2006 on annual accounts, i.e.,
large companies, public-interest entities, and
parent companies of large groups.
Green Asset Ratio
Unaudited
Consolidated Financial Statements
99
islandsbanki.is
Information is provided for the rst two environmental
objectives of the Taxonomy Regulation, i.e., climate
change mitigation and climate change adaptation.
The technical screening criteria for the other four
environmental objectives did not come into eect in
Iceland until 1 January 2025. The information related
to the Taxonomy Regulation is disclosed on the basis
of the scope of prudential requirements determined
in accordance with Regulation (EU) 575/2013, Title
II, Chapter 2, Section 2.
The Green Asset Ratio is disclosed based on
environmentally sustainable economic activities data
for non-nancial undertakings for the nancial year
2023, both for year-end 2024 and year-end 2023
disclosures. Since nancial undertakings need to use
data from their counterparties for reporting, nancial
undertakings were unable to provide information
for the nancial year 2023 and can therefore not
be categorised as green assets. Additionally, loans
to small and medium-sized enterprises cannot be
categorised as green assets.
The Group has assessed a signicant p ortion of
mortgages and car loans to households that meet
the environmental objective of the Taxonomy
Regulation for climate change mitigation. However,
due
to extensive requirements and a lack of public
data, it is not possible to formally meet the Taxonomy
Regulation's criteria of "do no significant harm".
The Group's GAR based on turnover at year-end
2024 was 0.20% (year-end 2023: 0.00%).The Group's
GAR based on capital expenditure (CAPEX) at
year-end 2024 was 0.26% (year-end 2023: 0.11%).
100
0. Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation
Total environmentally
sustainable
assets
KPI (****) KPI (*****)
% coverage (over total
assets) (***)
% of assets excluded
from the numerator of
the GAR (Article 7(2)
and (3) and Section
1.1.2. of Annex V)
% of assets excluded
from the denominator of
the GAR (Article 7(1)
and Section 1.2.4 of
Annex V)
Main KPI Green asset ratio (GAR) stock 2,874 0.20% 0.26% 87.59% 31.17% 12.41%
Total environmentally sustainable
activities
KPI KPI
% coverage (over total
assets)
% of assets excluded from
the numerator of the GAR
(Article 7(2) and (3) and
Section 1.1.2. of Annex V)
% of assets excluded from
the denominator of the GAR
(Article 7(1) and Section
1.2.4 of Annex V)
Additional KPIs
GAR (flow) 2,871
1.10% 1.21% 81.60% 36.51% 18.40%
Trading book*
Financial guarantees - 0.00% 0.07%
Assets under management 69 0.02% 0.12%
Fees and commissions income**
(*) For credit institutions that do not meet the conditions of Article 94(1) of the CRR or the conditions set out in Article 325a(1) of the CRR.
(**) Fees and commissions income from services other than lending and AuM. Instutitons shall disclose forward-looking information for these KPIs, including information in terms of targets, together with relevant explanations on the methodology applied.
(***) % of assets covered by the KPI over banks’ total assets.
(****) Based on the Turnover KPI of the counterparty.
(*****) Based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used.
101
1. Assets for the calculation of GAR based on turnover
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
974,183 629,960 2,874 - - - - - - - - 629,960 2,874 - - -
2 Financial undertakings 114,131 1 - - - - - - - - - 1 - - - -
3
Credit institutions 62,882 - - - - - - - - - - - - - - -
4
Loans and advances 36,626 - - - - - - - - - - - - - - -
5
Debt securities, including UoP 26,256 - - - - - - - - - - - - - - -
6
Equity instruments - - - - -
- - - - - - - -
7
Other financial corporations 51,249 1 - - - - - - - - - 1 - - - -
8
of which investment firms 1,126 - - - - - - - - - - - - - - -
9
Loans and advances 847 - - - - - - - - - - - - - - -
10
Debt securities, including UoP - - - - - - - - - - - - - - - -
11
Equity instruments 279 - - - - - - - - - - - -
12
of which management companies 3 - - - - - - - - - - - - - - -
13
Loans and advances 3 - - - - - - - - - - - - - - -
14
Debt securities, including UoP - - - - - - - - - - - - - - - -
15
Equity instruments - - - - - - - - - - - - -
16
of which insurance undertakings 7 - - - - - - - - - - - - - - -
17
Loans and advances 7 - - - - - - - - - - - - - - -
18
Debt securities, including UoP - - - - - - - - - - - - - - - -
19
Equity instruments - - - - - - - - - - - - -
20 Non-financial undertakings 206,773 45,463 2,874 - - - - - - - - 45,463 2,874 - - -
21
Loans and advances 203,902 42,598 9 - - - - - - - - 42,598 9 - - -
22 Debt securities, including UoP 2,871 2,865 2,865 - - - - - - - - 2,865 2,865 - - -
23
Equity instruments - - - - - - - - - - - - -
24 Households 628,693 584,496 - - - - - - - - - 584,496 - - - -
25
of which loans collateralised by
residential immovable property
568,643 568,643 - - - - - - - - - 568,643 - - - -
26
of which building renovation loans - - - - - - - - - - - - - - - -
27
of which motor vehicle loans 15,853 15,853 - - - - 15,853 - - - -
28 Local governments financing 23,148 - - - - - - - - - - - - - - -
29
Housing financing 3,533 - - - - - - - - - - - - - - -
30
Other local government financing 19,615 - - - - - - - - - - - - - - -
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
1,438 - - - - - - - - - - - - - - -
Million ISK
Climate Change Mitigation (CCM)
Of which environmentally sustainable (Taxonomy-aligned)
Total (CCA + CCM)Climate Change Adaptation (CCA)
Disclosure reference date 31.12.2024
Total [gross]
carrying
amount
Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
102
1. Assets for the calculation of GAR based on turnover (continued)
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
32
Assets excluded from the numerator for
GAR calculation (covered in the
denominator)
441,120 - - - - - - - - - - - - - - -
33 Financial and Non-financial undertakings 401,978
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
392,521
35
Loans and advances 390,604
36
of which loans collateralised by
commercial immovable property
192,469
37
of which building renovation loans -
38
Debt securities 2,020
39
Equity instruments 320
40
Non-EU country counterparties not subject
to NFRD disclosure obligations
7,485
41
Loans and advances 7,383
42
Debt securities -
43
Equity instruments 102
44 Derivatives 3,682
45 On demand interbank loans 13,907
46 Cash and cash-related assets 3,635
47
Other categories of assets (e.g. Goodwill,
commodities etc.)
17,918
48 Total GAR assets 1,415,303 629,960 2,874 - - - - - - - - 629,960 2,874 - - -
49 Assets not covered for GAR calculation 200,434
50
Central governments and Supranational
issuers
109,115
51 Central banks exposure 62,187
52 Trading book 29,132
53 Total assets 1,615,737 629,960 2,874 - - - - - - - - 629,960 2,874 - - -
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54
Financial guarantees 21,342 1,916 - - - - - - - - - 1,916 - - - -
55
Assets under management 291,130 9,698 69 - - 67 - - - - - 9,698 69 - - 67
56
Of which debt securities 99,097 1,827 1 - - 1 - - - - - 1,827 1 - - 1
57
Of which equity instruments 97,512 7,501 62 - - 60 - - - - - 7,501 62 - - 60
Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
Million ISK
Disclosure reference date 31.12.2024
Total [gross]
carrying
amount
Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Total (CCA + CCM)
Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-aligned)
103
1. Assets for the calculation of GAR based on turnover (continued)
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
934,280 601,642 9 - - - - - - - - 601,642 9 - - -
2 Financial undertakings 108,483 1 - - - - - - - - - 1 - - - -
3
Credit institutions 55,385 - - - - - - - - - - - - - - -
4
Loans and advances 54,647 - - - - - - - - - - - - - - -
5
Debt securities, including UoP 738 - - - - - - - - - - - - - - -
6
Equity instruments - - - - - - - - - - - - -
7
Other financial corporations 53,098 1 - - - - - - - - - 1 - - - -
8
of which investment firms 508 - - - - - - - - - - - - - - -
9
Loans and advances 280 - - - - - - - - - - - - - - -
10
Debt securities, including UoP - - - - - - - - - - - - - - - -
11
Equity instruments 228 - - - - - - - - - - - -
12
of which management companies 2 - - - - - - - - - - - - - - -
13
Loans and advances 2 - - - - - - - - - - - - - - -
14
Debt securities, including UoP - - - - - - - - - - - - - - - -
15
Equity instruments - - - - - - - - - - - - -
16
of which insurance undertakings 6 - - - - - - - - - - - - - - -
17
Loans and advances 6 - - - - - - - - - - - - - - -
18
Debt securities, including UoP - - - - - - - - - - - - - - - -
19
Equity instruments - - - - - - - - - - - - -
20 Non-financial undertakings 207,412 47,738 9 - - - - - - - - 47,738 9 - - -
21
Loans and advances 207,412 47,738 9 - - - - - - - - 47,738 9 - - -
22 Debt securities, including UoP - - - - - - - - - - - - - - - -
23
Equity instruments - - - - - - - - - - - - - - -
24 Households 600,558 553,903 - - - - - - 553,903 - - - -
25
of which loans collateralised by
residential immovable property
535,672 535,672 - - - - - - - - - 535,672 - - - -
26
of which building renovation loans - - - - - - - - - - - - - - - -
27
of which motor vehicle loans 18,231 18,231 - - - - - - - - - 18,231 - - - -
28 Local governments financing 17,102 - - - - - - - - - - - - - - -
29
Housing financing 3,533 - - - - - - - - - - - - - - -
30
Other local government financing 13,569 - - - - - - - - - - - - - - -
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
725 - - - - - - - - - - - - - - -
Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-aligned)Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
Total [gross]
carrying
amount
Disclosure reference date 31.12.2023
Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Total (CCA + CCM)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Million ISK
104
1. Assets for the calculation of GAR based on turnover (continued)
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
32
Assets excluded from the numerator for
GAR calculation (covered in the
denominator)
399,689 - - - - - - - - - - - - - - -
33 Financial and Non-financial undertakings
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
35
Loans and advances
36
of which loans collateralised by
commercial immovable property
37
of which building renovation loans
38
Debt securities
39
Equity instruments
40
Non-EU country counterparties not subject
to NFRD disclosure obligations
41
Loans and advances
42
Debt securities
43
Equity instruments
44 Derivatives
45 On demand interbank loans
46 Cash and cash-related assets
47
Other categories of assets (e.g. Goodwill,
commodities etc.)
48 Total GAR assets 1,333,969 601,642 9 - - - - - - - - 601,642 9 - - -
49 Assets not covered for GAR calculation
50
Central governments and Supranational
issuers
51 Central banks exposure
52 Trading book
53 Total assets 1,594,538 601,642 9 - - - - - - - - 601,642 9 - - -
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54
Financial guarantees 21,027 2,516 - - - - - - - - - 2,516 - - - -
55
Assets under management 269,470 14,373 21 - - 21 - - - - - 14,373 21 - - 21
56
Of which debt securities 83,236 3,715 - - - - - - - - - 3,715 - - - -
57
Of which equity instruments 85,603 10,123 20 - - 19 - - - - - 10,123 20 - - 19
Million ISK
Disclosure reference date 31.12.2023
Total [gross]
carrying
amount
Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Total (CCA + CCM)
Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
105
2. GAR sector information based on turnover
Mn ISK
Of which
environmentally
sustainable (CCM)
Mn ISK
Of which
environmentally
sustainable (CCM)
Mn ISK
Of which
environmentally
sustainable (CCA)
Mn ISK
Of which
environmentally
sustainable (CCA)
Mn ISK
Of which
environmentally
sustainable (CCM
+ CCA)
Mn ISK
Of which
environmentally
sustainable (CCM
+ CCA)
1
0311 Marine fishing 1,212 - 1,212 - 1,212 -
2
0321 Marine aquaculture 7 - 7 - 7 -
3
0990 Support activities for other mining and quarrying 1 - 1 - 1 -
4
1013 Production of meat and poultry meat products 5,403 - 5,403 - 5,403 -
5
1020 Processing and preserving of fish, crustaceans and molluscs 27,790 - 27,790 - 27,790 -
6
1051 Operation of dairies and cheese making 7,385 - 7,385 - 7,385 -
7
1091 Manufacture of prepared feeds for farm animals 4,120 - 4,120 - 4,120 -
8
1107 Manufacture of soft drinks; production of mineral waters and other bottled waters 1,638 - 1,638 - 1,638 -
9
1412 Manufacture of workwear - - - - - -
10
2361 Manufacture of concrete products for construction purposes 1 - 1 - 1 -
11
2363 Manufacture of ready-mixed concrete 347 - 347 - 347 -
12
2399 Manufacture of other non-metallic mineral products n.e.c. 149 - 149 - 149 -
13
2651 Manufacture of instruments and appliances for measuring, testing and navigation - - - - - -
14
3250 Manufacture of medical and dental instruments and supplies 1 - 1 - 1 -
15
3312 Repair of machinery 116 - 116 - 116 -
16
3511 Production of electricity 2,871 2,865 2,871 - 2,871 2,865
17
3512 Transmission of electricity 1 1 1 - 1 1
18
3530 Steam and air conditioning supply 1,402 - 1,402 - 1,402 -
19
3821 Treatment and disposal of non-hazardous waste 680 - 680 - 680 -
20
4120 Construction of residential and non-residential buildings 2,992 - 2,992 - 2,992 -
21
4511 Sale of cars and light motor vehicles 12,502 - 12,502 - 12,502 -
22
4639 Non-specialised wholesale of food, beverages and tobacco 794 - 794 - 794 -
23
4643 Wholesale of electrical household appliances 335 - 335 - 335 -
24
4646 Wholesale of pharmaceutical goods 548 - 548 - 548 -
25
4671 Wholesale of solid, liquid and gaseous fuels and related products 4,173 - 4,173 - 4,173 -
26
4690 Non-specialised wholesale trade 5 - 5 - 5 -
27
4711 Retail sale in non-specialised stores with food, beverages or tobacco predominatin
3,850 - 3,850 - 3,850 -
28
4719 Other retail sale in nonspecialised stores 2,269 - 2,269 - 2,269 -
29
4730 Retail sale of automotive fuel in specialised stores 3,210 - 3,210 - 3,210 -
30
4773 Dispensing chemist in specialised stores 3,060 - 3,060 - 3,060 -
31
5020 Sea and coastal freight water transport 9,514 - 9,514 - 9,514 -
32
5110 Passenger air transport 2,199 - 2,199 - 2,199 -
33
5121 Freight air transport - - - - - -
34
5223 Service activities incidental to air transportation 391 - 391 - 391 -
35
5229 Other transportation support activities 1 - 1 - 1 -
36
5510 Hotels and similar accommodation 7,722 - 7,722 - 7,722 -
37
6110 Wired telecommunications activities 20,578 - 20,578 - 20,578 -
38
6120 Wireless telecommunications activities 6 - 6 - 6 -
39
6201 Computer programming activities - - - - - -
40
6202 Computer consultancy activities 9 - 9 - 9 -
41
6810 Buying and selling of own real estate - - - - - -
42
6820 Renting and operating of own or leased real estate 53,233 9 53,233 - 53,233 9
43
6920 Accounting, bookkeeping and auditing activities; tax consultancy 1 - 1 - 1 -
44
7022 Business and other management consultancy activities - - - - - -
45
7112 Engineering activities and related technical consultancy 2 - 2 - 2 -
46
7711 Renting and leasing of cars and light motor vehicles 25,876 - 25,876 - 25,876 -
47
7990 Other reservation service and related activities - - - - - -
48
8020 Security systems service activities 1 - 1 - 1 -
49
8121 General cleaning of buildings 115 - 115
- 115 -
50
8510 Pre-primary education 289 - 289 -
289 -
51
8542 Tertiary education - - - - - -
52
9313 Fitness facilities - - - - - -
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
Breakdown by sector - NACE 4 digits level (code and label)
[Gross] carrying amount [Gross] carrying amount
Total (CCM + CCA)
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
Climate Change Mitigation (CCM)
[Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount
Climate Change Adaption (CCA)
106
3. GAR KPI stock based on turnover
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
64.76% 0.30% - - - - - - - 64.76% 0.30% - - - 60.21%
2 Financial undertakings 0.00% - - - - - - - - 0.00% - - - - 7.06%
3
Credit institutions - - - - - - - - - - - - - - 3.89%
4
Loans and advances - - - - - - - - - - - - - - 2.27%
5
Debt securities, including UoP - - - - - - - - - - - - - - 1.63%
6
Equity instruments - - - - - - - - - - - - -
7
Other financial corporations 0.00% - - - - - - - - 0.00% - - - - 3.17%
8
of which investment firms - - - - - - - - - - - - - - 0.07%
9
Loans and advances - - - - - - - - - - - - - - 0.05%
10
Debt securities, including UoP - - - - - - - - - - - - - - -
11
Equity instruments - - - - - - - - - - - - 0.02%
12
of which management companies - - - - - - - - - - - - - - 0.00%
13
Loans and advances - - - - - - - - - - - - - - 0.00%
14
Debt securities, including UoP - - - - - - - - - - - - - - -
15
Equity instruments - - - - - - - - - - - - -
16
of which insurance undertakings - - - - - - - - - - - - - - 0.00%
17
Loans and advances - - - - - - - - - - - - - - 0.00%
18
Debt securities, including UoP - - - - - - - - - - - - - - -
19
Equity instruments - - - - - - - - - - - - - -
20 Non-financial undertakings 21.99% 1.39% - - - - - - - 21.99% 1.39% - - - 12.80%
21
Loans and advances 20.89% 0.00% - - - - - - - 20.89% 0.00% - - - 12.62%
22
Debt securities, including UoP 99.79% 99.79% - - - - - - - 99.79% 99.79% - - - 0.18%
23
Equity instruments - - - - - - - - - - - - -
24 Households 92.97% - - - - - - - 92.97% - - - - 38.91%
25
of which loans collateralised by
residential immovable property
100.00% - - - - - - - - 100.00% - - - - 35.20%
26
of which building renovation loans - - - - - - - - - - - - - - -
27
of which motor vehicle loans 100.00% - - - - 100.00% - - - - 0.98%
28 Local governments financing - - - - - - - - - - - - - - 1.43%
29
Housing financing - - - - - - - - - - - - - - 0.22%
30
Other local government financing - - - - - - - - - - - - - - 1.21%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
- - - - - - - - - - - - - - 0.00%
32 Total GAR assets 44.51% 0.20% - - - - - - - 44.51% 0.20% - - - 87.59%
Climate Change Mitigation (CCM) Total (CCM + CCA)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Climate Change Adaption (CCA)
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2024
Proportion of
total assets
covered
Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
107
3. GAR KPI stock based on turnover (continued)
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
64.39% 0.00% - - - - - - - 64.39% 0.00% - - - 57.83%
2 Financial undertakings 0.00% - - - - - - - - 0.00% - - - - 6.71%
3
Credit institutions - - - - - - - - - - - - - - 3.43%
4
Loans and advances - - - - - - - - - - - - - - 3.38%
5
Debt securities, including UoP - - - - - - - - - - - - - - 0.05%
6
Equity instruments - - - - - - - - - - - - -
7
Other financial corporations 0.00% - - - - - - - - 0.00% - - - - 3.29%
8
of which investment firms - - - - - - - - - - - - - - 0.03%
9
Loans and advances - - - - - - - - - - - - - - 0.02%
10
Debt securities, including UoP - - - - - - - - - - - - - - -
11
Equity instruments - - - - - - - - - - - - 0.01%
12
of which management companies - - - - - - - - - - - - - - 0.00%
13
Loans and advances - - - - - - - - - - - - - - 0.00%
14
Debt securities, including UoP - - - - - - - - - - - - - - -
15
Equity instruments - - - - - - - - - - - - -
16
of which insurance undertakings - - - - - - - - - - - - - - 0.00%
17
Loans and advances - - - - - - - - - - - - - - 0.00%
18
Debt securities, including UoP - - - - - - - - - - - - - - -
19
Equity instruments - - - - - - - - - - - - -
20 Non-financial undertakings 23.02% 0.00% - - - - - - - 23.02% 0.00% - - - 12.84%
21
Loans and advances 23.02% 0.00% - - - - - - - 23.02% 0.00% - - - 12.84%
22
Debt securities, including UoP - - - - - - - - - - - - - - -
23
Equity instruments - - - - - - - - - - - - -
24 Households 92.23% - - - - - - - 92.23% - - - - 37.17%
25
of which loans collateralised by
residential immovable property
100.00% - - - - - - - - 100.00% - - - - 33.15%
26
of which building renovation loans - - - - - - - - - - - - - - -
27
of which motor vehicle loans 100.00% - - - - 100.00% - - - - 1.13%
28 Local governments financing - - - - - - - - - - - - - - 1.06%
29
Housing financing - - - - - - - - - - - - - - 0.22%
30
Other local government financing - - - - - - - - - - - - - - 0.84%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
- - - - - - - - - - - - - - 0.05%
32 Total GAR assets 45.40% 0.00% - - - - - - - 45.40% 0.00% - - - 83.57%
Climate Change Mitigation (CCM) Climate Change Adaption (CCA)
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2023
Proportion of
total assets
covered
Of which environmentally sustainable (Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally sustainable (Taxonomy-aligned)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Total (CCM + CCA)
108
4. GAR KPI flow based on turnover
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
49.69% 1.10% - - - - - - - 49.69% 1.10% - - - 51.81%
2 Financial undertakings - - - - - - - - - - - - - - 11.42%
3
Credit institutions - - - - - - - - - - - - - - 7.40%
4
Loans and advances - - - - - - - - - - - - - - 7.30%
5
Debt securities, including UoP - -
- - -
- - - - - - - - - 0.10%
6
Equity instruments - - - - - - - - - - - -
7
Other financial corporations - - - - - -
- - - - - - - - 4.02%
8
of which investment firms - - - - - - - - - - - - - - 0.16%
9
Loans and advances - - - - - - - - - - - - - - 0.16%
10
Debt securities, including UoP - - - - - - - - - - - - - - -
11
Equity instruments - - - - - - - - - - - -
12
of which management companies - - - - - - - - - - - - - - -
13
Loans and advances - - - - - - - - - - - - - - -
14
Debt securities, including UoP - - - - - - - - - - - - - - -
15
Equity instruments - - - - - - - - - - - -
16
of which insurance undertakings - - - - - - - - - - - - - - 0.00%
17
Loans and advances - - - - - - - - - - - - - - 0.00%
18
Debt securities, including UoP - - - - - - - - - - - - - - -
19
Equity instruments - - - - - - - - - - - -
20 Non-financial undertakings 21.91% 4.44% - - - - - - - 21.91% 4.44% - - - 12.90%
21
Loans and advances 18.29% 0.01% - - - - - - - 18.29% 0.01% - - - 12.33%
22
Debt securities, including UoP 99.79% 99.79% - - - - - - - 99.79% 99.79% - - - 0.57%
23
Equity instruments - - - - - - - - - - - -
24 Households 86.74% - - - - - - - - 86.74% - - - - 26.42%
25
of which loans collateralised by
residential immovable property
100.00% - - - - - - - - 100.00% - - - - 21.85%
26
of which building renovation loans - - - - - - - - - - - - - - -
27
of which motor vehicle loans 100.00% - - - - 100.00% - - - - 1.07%
28 Local governments financing - - - - - - - - - - - - - - 1.07%
29
Housing financing - - - - - - - - - - - - - - 0.70%
30
Other local government financing - - - - - - - - - - - - - - 0.37%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
- - - - - - - - - - - - - - -
32 Total GAR assets 31.55% 0.70% - - - - - - - 31.55% 0.70% - - - 81.60%
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally sustainable (Taxonomy-aligned)
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2024
Climate Change Mitigation (CCM) Climate Change Adaption (CCA) Total (CCM + CCA)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Proportion of
total assets
covered
Of which environmentally sustainable (Taxonomy-aligned)
109
5. KPI off-balance sheet exposures based on turnover
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
1
Financial guarantees (FinGuar KPI) 8.98% -
- -
- - - - - - 8.98% - - - -
2
Assets under management (AuM KPI) 3.33% 0.02%
- -
0.02% - - - - - 3.33% 0.02% - - 0.02%
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31.12.2024
Of which environmentally sustainable (Taxonomy-aligned)
Climate Change Mitigation (CCM) Climate Change Adaption (CCA) Total (CCM + CCA)
Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
110
1. Assets for the calculation of GAR based on CapEx
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
974,183 658,069 3,656 - - - - - - - - 658,069 3,656 - - -
2 Financial undertakings 114,131 9 - - - - - - - - - 9 - - - -
3
Credit institutions 62,882 - - - - - - - - - - - - - - -
4
Loans and advances 36,626 - - - - - - - - - - - - - - -
5
Debt securities, including UoP 26,256 - - - - - - - - - - - - - - -
6
Equity instruments - -
- - - - - - - - - - -
7
Other financial corporations 51,249 9 - - - - - - - - - 9 - - - -
8
of which investment firms 1,126 - - - -
- - - - - - - - - - -
9
Loans and advances 847 - - - - - - - - - - - - - - -
10
Debt securities, including UoP - - - - - - - - - - - - - - - -
11
Equity instruments 279 - - - - - - - - - - - -
12
of which management companies 3 - - - - - - - - - - - - - - -
13
Loans and advances 3 - - - - - - - - - - - - - - -
14
Debt securities, including UoP - - - - - - - - - - - - - - - -
15
Equity instruments - - - - - - - - - - - - -
16
of which insurance undertakings 7 - - - - - - - - - - - - - - -
17
Loans and advances 7 - - - - - - - - - - - - - - -
18
Debt securities, including UoP - - - - - - - - - - - - - - - -
19
Equity instruments - - - - - - - - - - - - -
20 Non-financial undertakings 206,773 73,564 3,656 - - - - - - - - 73,564 3,656 - - -
21
Loans and advances 203,902 71,350 1,442 - - - - - - - - 71,350 1,442 - - -
22
Debt securities, including UoP 2,871 2,214 2,214 - - - - - - - - 2,214 2,214 - - -
23
Equity instruments - - - - - - - - - - - - -
24 Households 628,693 584,496 - - - - - - - - - 584,496 - - - -
25
of which loans collateralised by
residential immovable property
568,643 568,643 - - - - - - - - - 568,643 - - - -
26
of which building renovation loans - - - - - - - - - - - - - - - -
27
of which motor vehicle loans 15,853 15,853 - - - - 15,853 - - - -
28 Local governments financing 23,148 - - - - - - - - - - - - - - -
29
Housing financing 3,533 - - - - - - - - - - - - - - -
30
Other local government financing 19,615 - - - - - - - - - - - - - - -
31
Collateral obtained by taking possession:
residential and commercial immovable
1,438 - - - - - - - - - - - - - - -
Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Total (CCA + CCM)
Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
Million ISK
Disclosure reference date 31.12.2024
Total [gross]
carrying
amount
Climate Change Mitigation (CCM) Climate Change Adaptation (CCA)
111
1. Assets for the calculation of GAR based on CapEx (continued)
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
32
Assets excluded from the numerator for
GAR calculation (covered in the
denominator)
441,120 - - - - - - - - - - - - - - -
33 Financial and Non-financial undertakings 401,978
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
392,521
35
Loans and advances 390,604
36
of which loans collateralised by
commercial immovable property
192,469
37
of which building renovation loans -
38
Debt securities 2,020
39
Equity instruments 320
40
Non-EU country counterparties not subject
to NFRD disclosure obligations
7,485
41
Loans and advances 7,383
42
Debt securities -
43
Equity instruments 102
44 Derivatives 3,682
45 On demand interbank loans 13,907
46 Cash and cash-related assets 3,635
47
Other categories of assets (e.g. Goodwill,
commodities etc.)
17,918
48 Total GAR assets 1,415,303 658,069 3,656 - - - - - - - - 658,069 3,656 - - -
49 Assets not covered for GAR calculation
200,434
50
Central governments and Supranational
issuers
109,115
51 Central banks exposure 62,187
52 Trading book 29,132
53 Total assets 1,615,737 658,069 3,656 - - - - - - - - 658,069 3,656 - - -
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54
Financial guarantees 21,342 1,543 15 - - - - - - - - 1,543 15 - - -
55
Assets under management 291,130 13,091 354 - - 318 - - - - - 13,091 354 - - 318
56
Of which debt securities 99,097 2,850 85 - - 84 - - - - - 2,850 85 - - 84
57
Of which equity instruments 97,512 9,743 255 - - 221 - - - - - 9,743 255 - - 221
Million ISK
Disclosure reference date 31.12.2024
Total [gross]
carrying
amount
Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Total (CCA + CCM)
Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
112
1. Assets for the calculation of GAR based on CapEx (continued)
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
934,280 629,373 1,484 - - - - - - - - 629,373 1,484 - - -
2 Financial undertakings 108,483 9 - - - - - - - - - 9 - - - -
3
Credit institutions 55,385 - - - - - - - - - - - - - - -
4
Loans and advances 54,647 - - - - - - - - - - - - - - -
5
Debt securities, including UoP 738 - - - - - - - - - - - - - - -
6
Equity instruments - - - - - - - - - - - - -
7
Other financial corporations 53,098 9 - - - - - - - - - 9 - - - -
8
of which investment firms 508 - - - - - - - - - - - - - - -
9
Loans and advances 280 - - - - - - - - - - - - - - -
10
Debt securities, including UoP - - - - - - - - - - - - - - - -
11
Equity instruments 228 - - - - - - - - - - - -
12
of which management companies 2 - - - - - - - - - - - - - - -
13
Loans and advances 2 - - - - - - - - - - - - - - -
14
Debt securities, including UoP - - - - - - - - - - - - - - - -
15
Equity instruments - - - - - - - - - - - - -
16
of which insurance undertakings 6 - - - - - - - - - - - - - - -
17
Loans and advances 6 - - - - - - - - - - - - - - -
18
Debt securities, including UoP - - - - - - - - - - - - - - - -
19
Equity instruments - - - - - - - - - - - - -
20 Non-financial undertakings 207,412 75,461 1,484 - - - - - - - - 75,461 1,484 - - -
21
Loans and advances 207,412 75,461 1,484 - - - - - - - - 75,461 1,484 - - -
22
Debt securities, including UoP - - - - - - - - - - - - - - - -
23
Equity instruments - - - - - - - - - - - - -
24 Households 600,558 553,903 - - - - - - 553,903 - - - -
25
of which loans collateralised by
residential immovable property
535,672 535,672 - - - - - - - - - 535,672 - - - -
26
of which building renovation loans - - - - - - - - - - - - - - - -
27
of which motor vehicle loans 18,231 18,231 - - - - - - - - - 18,231 - - - -
28 Local governments financing 17,102 - - - - - - - - - - - - - - -
29
Housing financing 3,533 - - - - - - - - - - - - - - -
30
Other local government financing 13,569 - - - - - - - - - - - - - - -
31
Collateral obtained by taking possession:
residential and commercial immovable
725 - - - - - - - - - - - - - - -
Total [gross]
carrying
amount
Climate Change Mitigation (CCM)
Of which environmentally sustainable (Taxonomy-aligned)
Climate Change Adaptation (CCA) Total (CCA + CCM)
Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
Million ISK
Disclosure reference date 31.12.2023
113
1. Assets for the calculation of GAR based on CapEx (continued)
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
32
Assets excluded from the numerator for
GAR calculation (covered in the
denominator)
399,689 - - - - - - - - - - - - - - -
33 Financial and Non-financial undertakings
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
35
Loans and advances
36
of which loans collateralised by
commercial immovable property
37
of which building renovation loans
38
Debt securities
39
Equity instruments
40
Non-EU country counterparties not subject
to NFRD disclosure obligations
41
Loans and advances
42
Debt securities
43
Equity instruments
44 Derivatives
45 On demand interbank loans
46 Cash and cash-related assets
47
Other categories of assets (e.g. Goodwill,
commodities etc.)
48 Total GAR assets 1,333,969 629,373 1,484 - - - - - - - - 629,373 1,484 - - -
49 Assets not covered for GAR calculation
50
Central governments and Supranational
issuers
51 Central banks exposure
52 Trading book
53 Total assets 1,594,538 629,373 1,484 - - - - - - - - 629,373 1,484 - - -
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54
Financial guarantees 21,027 1,987 18 - - - - - - - - 1,987 18 - - -
55
Assets under management 269,470 15,894 220 - - 214 - - - - - 15,894 220 - - 214
56
Of which debt securities 83,236 4,150 34 - - 34 - - - - - 4,150 34 - - 34
57
Of which equity instruments 85,603 11,149 179 - - 173 - - - - - 11,149 179 - - 173
Million ISK
Disclosure reference date 31.12.2023
Total [gross]
carrying
amount
Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Total (CCA + CCM)
Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
114
2. GAR sector information based on CapEx
Mn ISK
Of which
environmentally
sustainable (CCM)
Mn ISK
Of which
environmentally
sustainable (CCM)
Mn ISK
Of which
environmentally
sustainable (CCA)
Mn ISK
Of which
environmentally
sustainable (CCA)
Mn ISK
Of which
environmentally
sustainable (CCM
+ CCA)
Mn ISK
Of which
environmentally
sustainable (CCM
+ CCA)
1
0311 Marine fishing 1,212 - 1,212 - 1,212 -
2
0321 Marine aquaculture 7 - 7 - 7 -
3
0990 Support activities for other mining and quarrying 1 - 1 - 1 -
4
1013 Production of meat and poultry meat products 5,403 - 5,403 - 5,403 -
5
1020 Processing and preserving of fish, crustaceans and molluscs 27,790 - 27,790 - 27,790 -
6
1051 Operation of dairies and cheese making 7,385 - 7,385 - 7,385 -
7
1091 Manufacture of prepared feeds for farm animals 4,120 - 4,120 - 4,120 -
8
1107 Manufacture of soft drinks; production of mineral waters and other bottled waters 1,638 - 1,638 - 1,638 -
9
1412 Manufacture of workwear - - - - - -
10
2361 Manufacture of concrete products for construction purposes 1 - 1 - 1 -
11
2363 Manufacture of ready-mixed concrete 347 - 347 - 347 -
12
2399 Manufacture of other non-metallic mineral products n.e.c. 149 - 149 - 149 -
13
2651 Manufacture of instruments and appliances for measuring, testing and navigation - - - - - -
14
3250 Manufacture of medical and dental instruments and supplies 1 - 1 - 1 -
15
3312 Repair of machinery 116 - 116 - 116 -
16
3511 Production of electricity 2,871 2,865 2,871 - 2,871 2,865
17
3512 Transmission of electricity 1 1 1 - 1 1
18
3530 Steam and air conditioning supply 1,402 - 1,402 - 1,402 -
19
3821 Treatment and disposal of non-hazardous waste 680 - 680 - 680 -
20
4120 Construction of residential and non-residential buildings 2,992 - 2,992 - 2,992 -
21
4511 Sale of cars and light motor vehicles 12,502 - 12,502 - 12,502 -
22
4639 Non-specialised wholesale of food, beverages and tobacco 794 - 794 - 794 -
23
4643 Wholesale of electrical household appliances 335 - 335 - 335 -
24
4646 Wholesale of pharmaceutical goods 548 - 548 - 548 -
25
4671 Wholesale of solid, liquid and gaseous fuels and related products 4,173 - 4,173 - 4,173 -
26
4690 Non-specialised wholesale trade 5 - 5 - 5 -
27
4711 Retail sale in non-specialised stores with food, beverages or tobacco predominatin
3,850 - 3,850 - 3,850 -
28
4719 Other retail sale in nonspecialised stores 2,269 - 2,269 - 2,269 -
29
4730 Retail sale of automotive fuel in specialised stores 3,210 - 3,210 - 3,210 -
30
4773 Dispensing chemist in specialised stores 3,060 - 3,060 - 3,060 -
31
5020 Sea and coastal freight water transport 9,514 - 9,514 - 9,514 -
32
5110 Passenger air transport 2,199 - 2,199 - 2,199 -
33
5121 Freight air transport - - - - - -
34
5223 Service activities incidental to air transportation 391 - 391 - 391 -
35
5229 Other transportation support activities 1 - 1 - 1 -
36
5510 Hotels and similar accommodation 7,722 - 7,722 - 7,722 -
37
6110 Wired telecommunications activities 20,578 - 20,578 - 20,578 -
38
6120 Wireless telecommunications activities 6 - 6 - 6 -
39
6201 Computer programming activities - - - - - -
40
6202 Computer consultancy activities 9 - 9 - 9 -
41
6810 Buying and selling of own real estate - - - - - -
42
6820 Renting and operating of own or leased real estate 53,233 9 53,233 - 53,233 9
43
6920 Accounting, bookkeeping and auditing activities; tax consultancy 1 - 1 - 1 -
44
7022 Business and other management consultancy activities - - - - - -
45
7112 Engineering activities and related technical consultancy 2 - 2 - 2 -
46
7711 Renting and leasing of cars and light motor vehicles 25,876 - 25,876 - 25,876 -
47
7990 Other reservation service and related activities - - - - - -
48
8020 Security systems service activities 1 - 1 - 1 -
49
8121 General cleaning of buildings 115 - 115 - 115 -
50
8510 Pre-primary education 289 - 289 - 289 -
51
8542 Tertiary education - - - - - -
52
9313 Fitness facilities - - - - - -
[Gross] carrying amount
Breakdown by sector - NACE 4 digits level (code and label)
Climate Change Mitigation (CCM) Climate Change Adaption (CCA) Total (CCM + CCA)
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
[Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount
115
3. GAR KPI stock based on CapEx
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
67.65% 0.38% - - - - - - - 67.65% 0.38% - - - 60.21%
2 Financial undertakings 0.01% - - - - - - - - 0.01% - - - -
7.06%
3
Credit institutions - - - - - - - - - - - - - - 3.89%
4
Loans and advances - - - - - - - - - - - - - - 2.27%
5
Debt securities, including UoP - - -
- - - - - - - - - - - 1.63%
6
Equity instruments - - - - -
- - - - - - -
7
Other financial corporations 0.02% -
- - - - - - - 0.02% - - - - 3.17%
8
of which investment firms - - - - - - - - - - - - - - 0.07%
9
Loans and advances - - - - - - - - - - - - - - 0.05%
10
Debt securities, including UoP - - - - - - - - - - - - - - -
11
Equity instruments - - - - - - - - - - - 0.02%
12
of which management companies - - - - - - - - - - - - - - 0.00%
13
Loans and advances - - - - - - - - - - - - - - 0.00%
14
Debt securities, including UoP - - - - - - - - - - - - - - -
15
Equity instruments - - - - - - - - - - - -
16
of which insurance undertakings - - - - - - - - - - - - - - 0.00%
17
Loans and advances - - - - - - - - - - - - - - 0.00%
18
Debt securities, including UoP - - - - - - - - - - - - - - -
19
Equity instruments - - - - - - - - - - - -
20 Non-financial undertakings 35.58% 1.77% - - - - - - - 35.58% 1.77% - - -
12.80%
21
Loans and advances 34.99% 0.71% - - - - - - - 34.99% 0.71% - - - 12.62%
22
Debt securities, including UoP 77.12% 77.12% - - - - - - - 77.12% 77.12% - - - 0.18%
23
Equity instruments - - - - - - - - - - - -
24 Households 92.97% - - - - - - - 92.97% - - - -
38.91%
25
of which loans collateralised by
residential immovable property
100.00% - - - - - - - - 100.00% - - - - 35.20%
26
of which building renovation loans - - - - - - - - - - - - - - -
27
of which motor vehicle loans 100.00% - - - - 100.00% - - - - 0.98%
28 Local governments financing - - - - - - - - - - - - - -
1.43%
29
Housing financing - - - - - - - - - - - - - - 0.22%
30
Other local government financing - - - - - - - - - - - - - - 1.21%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
- - - - - - - - - - - - - - 0.00%
32 Total GAR assets 46.50% 0.26% - - - - - - - 46.50% 0.26% - - - 87.59%
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2024
Climate Change Mitigation (CCM) Climate Change Adaption (CCA) Total (CCM + CCA)
Of which environmentally sustainable (Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally sustainable (Taxonomy-aligned)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Proportion of
total assets
covered
116
3. GAR KPI stock based on CapEx (continued)
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
67.36% 0.16% - - - - - - - 67.36% 0.16% - - - 57.83%
2 Financial undertakings 0.01% - - - - - - - - 0.01% - - - -
6.71%
3
Credit institutions - - - - - - - - - - - - - - 3.43%
4
Loans and advances - - - - - - - - - - - - - - 3.38%
5
Debt securities, including UoP - - - - - - - - - - - - - - 0.05%
6
Equity instruments - - - - - - - - - - - -
7
Other financial corporations
0.02% - - - - - - - - 0.02% - - - -
3.29%
8
of which investment firms - - - - - - - - - - - - - - 0.03%
9
Loans and advances - - - - - - - - - - - - - - 0.02%
10
Debt securities, including UoP - - - - - - - - - - - - - - -
11
Equity instruments - - - - - - - - - - - 0.01%
12
of which management companies - - - - - - - - - - - - - - 0.00%
13
Loans and advances - - - - - - - - - - - - - - 0.00%
14
Debt securities, including UoP - - - - - - - - - - - - - - -
15
Equity instruments - - - - - - - - - - - -
16
of which insurance undertakings - - - - - - - - - - - - - - 0.00%
17
Loans and advances - - - - - - - - - - - - - - 0.00%
18
Debt securities, including UoP - - - - - - - - - - - - - - -
19
Equity instruments - - - - - - - - - - - -
20 Non-financial undertakings 36.38% 0.72% - - - - - - - 36.38% 0.72% - - -
12.84%
21
Loans and advances 36.38% 0.72% - - - - - - - 36.38% 0.72% - - - 12.84%
22
Debt securities, including UoP - - - - - - - - - - - - - - -
23
Equity instruments - - - - - - - - - - - -
24 Households 92.23% - - - - - - - 92.23% - - - -
37.17%
25
of which loans collateralised by
residential immovable property
100.00% - - - - - - - - 100.00% - - - - 33.15%
26
of which building renovation loans - - - - - - - - - - - - - - -
27
of which motor vehicle loans 100.00% - - - - 100.00% - - - - 1.13%
28 Local governments financing - - - - - - - - - - - - - -
1.06%
29
Housing financing - - - - - - - - - - - - - - 0.22%
30
Other local government financing - - - - - - - - - - - - - - 0.84%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
- - - - - - - - - - - - - - 0.05%
32 Total GAR assets 47.49% 0.11% - - - - - - - 47.49% 0.11% - - - 83.57%
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2023
Climate Change Mitigation (CCM) Climate Change Adaption (CCA) Total (CCM + CCA)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Proportion of
total assets
covered
Of which environmentally sustainable (Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally sustainable (Taxonomy-aligned)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
117
4. GAR KPI flow based on CapEx
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
54.76% 1.21% - - - - - - - - - - - - 51.81%
2 Financial undertakings - - - - - - - - - - - - - - 11.42%
3 Credit institutions - - - - - - - - - - - - - - 7.40%
4 Loans and advances - - -
-
- - - - - - - - - - 7.30%
5 Debt securities, including UoP - -
- - - -
- - - - - - - - 0.10%
6 Equity instruments - - -
- - - - - - - - -
7 Other financial corporations - - -
- - - - - - - - - - - 4.02%
8 of which investment firms - - -
- - - - - - - - - - - 0.16%
9 Loans and advances - -
- - - -
- - - - - - - - 0.16%
10 Debt securities, including UoP - - -
- - - - - - - - - - - -
11 Equity instruments - -
- - -
- - - - - - -
12 of which management companies - - -
- - - - - - - - - - - -
13 Loans and advances - -
- - - -
- - - - - - - - -
14 Debt securities, including UoP - - -
- - - - - - - - - - - -
15 Equity instruments - -
- - -
- - - - - - -
16 of which insurance undertakings - - -
- - - - - - - - - - - 0.00%
17 Loans and advances - -
- - - -
- - - - - - - - 0.00%
18 Debt securities, including UoP - - -
- - - - - - - - - - - -
19 Equity instruments - -
-
- -
- - - - - - -
20 Non-financial undertakings 42.29% 4.84% -
-
- - - - - 42.29%
4.84% - - - 12.90%
21 Loans and advances 40.68% 1.49% - - - -
- - - 40.68% 1.49% - - - 12.33%
22 Debt securities, including UoP 77.12% 77.12% -
- - - - - - 77.12%
77.12% - - - 0.57%
23 Equity instruments - -
- - -
- - - - - - -
24 Households 86.74% -
- - - - - - - 86.74%
- - - - 26.42%
25
of which loans collateralised by
residential immovable property
100.00% - - - - - - - - 100.00% - - - - 21.85%
26 of which building renovation loans - - -
- - - - - - - - - - - -
27 of which motor vehicle loans 100.00%
- -
- - -
- - - 100.00%
- - - - 1.07%
28 Local governments financing - - -
- - - - - - - - - - - 1.07%
29 Housing financing - - - - - - - - - - - - - - 0.70%
30 Other local government financing - - - - - - - - - - - - - - 0.37%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
- - - - - - - - - - - - - - -
32 Total GAR assets 34.77% 0.77% - - - - - - - 34.77% 0.77% - - - 81.60%
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally sustainable (Taxonomy-aligned)
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2024
Climate Change Mitigation (CCM) Climate Change Adaption (CCA) Total (CCM + CCA)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Proportion of
total assets
covered
Of which environmentally sustainable (Taxonomy-aligned)
118
5. KPI off-balance sheet exposures based on CapEx
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
1
Financial guarantees (FinGuar KPI) 7.23% 0.07% - - - - - - - - 7.23% 0.07% - - -
2
Assets under management (AuM KPI) 4.50% 0.12% - - 0.11% - - - - - 4.50% 0.12% - - 0.11%
Disclosure reference date 31.12.2024
% (compared to total eligible off-balance
sheet assets)
Climate Change Mitigation (CCM) Climate Change Adaption (CCA) Total (CCM + CCA)
Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
119
Row
1.
The undertaking carries out, funds or has exposures to research, development, demonstration and
deployment of innovative electricity generation facilities that produce energy from nuclear
processes with minimal waste from the fuel cycle.
No
2.
The undertaking carries out, funds or has exposures to construction and safe operation of new
nuclear installations to produce electricity or process heat, including for the purposes of district
heating or industrial processes such as hydrogen production, as well as their safety upgrades,
using best available technologies.
No
3.
The undertaking carries out, funds or has exposures to safe operation of existing nuclear
installations that produce electricity or process heat, including for the purposes of district heating
or industrial processes such as hydrogen production from nuclear energy, as well as their safety
upgrades.
No
4.
The undertaking carries out, funds or has exposures to construction or operation of electricity
generation facilities that produce electricity using fossil gaseous fuels.
No
5.
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation
of combined heat/cool and power generation facilities using fossil gaseous fuels.
No
6.
The undertaking carries out, funds or has exposures to construction, refurbishment and operation
of heat generation facilities that produce heat/cool using fossil gaseous fuels.
No
Template 1 Nuclear and fossil gas related activities
Nuclear energy related activities
Fossil gas related activities
120
Template 2 Taxonomy-aligned economic activities (denominator) based on turnover
Amount in million ISK
Amount % Amount % Amount %
1.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
2.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
3.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
4.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
5.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
6.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
7.
Amount and proportion of other
taxonomy-aligned economic activities
not referred to in rows 1 to 6 above in
the denominator of the applicable KPI
2,874 0.20% 2,874 0.20% - -
8.
Total applicable KPI
2,874
0.20% 2,874
0.20% -
-
Row Economic activities
Amount and proportion (the information is to be presented in monetary amounts and as percentages)
CCM + CCA
Climate change mitigation (CCM)
Climate change adaptation (CCA)
121
Template 3 Taxonomy-aligned economic activities (numerator) based on turnover
Amount in million ISK
Amount % Amount % Amount %
1.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
2.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
3.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
4.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
5.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
6.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
7.
Amount and proportion of other
taxonomy-aligned economic activities
not referred to in rows 1 to 6 above in
the numerator of the applicable KPI
2,874 100.00% 2,874 100.00% - -
8.
Total amount and proportion of
taxonomy-aligned economic activities in
the numerator of the applicable KPI
2,874 100.00% 2,874 100.00% -
-
Row Economic activities
Amount and proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation
Climate change adaptation
122
Amount in million ISK
Amount % Amount % Amount %
1.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.26 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
2.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.27 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
3.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.28 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
4.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.29 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
5.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.30 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
6.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.31 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
7.
Amount and proportion of other
taxonomy-eligible but not taxonomy-
aligned economic activities not referred
to in rows 1 to 6 abo ve in the
denominator of the applicable KPI
627,086 100.00% 627,086 100.00% - -
8.
Total amount and proportion of
taxonomy-eligible but not taxonomy-
aligned economic activities in the
denominator of the applicable KPI
627,086 100.00% 627,086 100.00% - -
Template 4 Taxonomy-eligible but not taxonomy-aligned economic activities based on turnover
Row Economic activities
Proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation
Climate change adaptation
123
Template 5 Taxonomy non-eligible economic activities based on turnover
Amount in million ISK
Row
Economic activities Amount Percentage
1.
Amount and proportion of economic activity
referred to in row 1 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
2.
Amount and proportion of economic activity
referred to in row 2 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
3.
Amount and proportion of economic activity
referred to in row 3 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
4.
Amount and proportion of economic activity
referred to in row 4 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
5.
Amount and proportion of economic activity
referred to in row 5 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
6.
Amount and proportion of economic activity
referred to in row 6 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
7.
Amount and proportion of other
taxonomy-non-eligible economic
activities not referred to in rows 1 to 6
above in the denominator of the
applicable KPI
785,297 55.49%
8.
Total amount and proportion of
taxonomy-non-eligible economic
activities in the denominator of the
applicable KPI
785,297 55.49%
124
Template 2 Taxonomy-aligned economic activities (denominator) based on CapEx
Amount in million ISK
Amount % Amount % Amount %
1.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
2.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
3.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
4.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
5.
Amount and proportion of
taxonomyaligned economic activity
referred to in Section 4.30 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
6.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
7.
Amount and proportion of other
taxonomy-aligned economic activities
not referred to in rows 1 to 6 above in
the denominator of the applicable KPI
3,656 0.26% 3,656 0.26% - -
8.
Total applicable KPI
3,656
0.26% 3656 0.26% -
-
Row Economic activities
Amount and proportion (the information is to be presented in monetary amounts and as percentages)
CCM + CCA
Climate change mitigation (CCM)
Climate change adaptation (CCA)
125
Template 3 Taxonomy-aligned economic activities (numerator) based on CapEx
Amount in million ISK
Amount % Amount % Amount %
1.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
2.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
3.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
4.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
5.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
6.
Amount and proportion of taxonomy-
aligned economic activity referred to in
Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the
numerator of the applicable KPI
- - - - - -
7.
Amount and proportion of other
taxonomy-aligned economic activities
not referred to in rows 1 to 6 above in
the numerator of the applicable KPI
3,656 100.00% 3,656 100.00% - -
8.
Total amount and proportion of
taxonomy-aligned economic activities in
the numerator of the applicable KPI
3,656 100.00% 3,656 100.00% -
-
Row Economic activities
Amount and proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation
Climate change adaptation
126
Amount in million ISK
Amount % Amount % Amount %
1.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.26 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
2.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.27 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
3.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.28 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
4.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.29 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
5.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.30 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
6.
Amount and proportion of taxonomy-eligible
but not taxonomy-aligned economic activity
referred to in Section 4.31 of Annexes I and
II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- - - - - -
7.
Amount and proportion of other
taxonomy-eligible but not taxonomy-
aligned economic activities not referred
to in rows 1 to 6 abo ve in the
denominator of the applicable KPI
654,413 100.00% 654,413 100.00% - -
8.
Total amount and proportion of
taxonomy-eligible but not
taxonomyaligned economic activities
in the denominator of the applicable KPI
654,413 100.00% 654,413 100.00% - -
Template 4 Taxonomy-eligible but not taxonomy-aligned economic activities based on CapEx
Row Economic activities
Proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation
Climate change adaptation
127
Amount in million ISK
Row
Economic activities Amount Percentage
1.
Amount and proportion of economic activity
referred to in row 1 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.26 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
2.
Amount and proportion of economic activity
referred to in row 2 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.27 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
3.
Amount and proportion of economic activity
referred to in row 3 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.28 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
4.
Amount and proportion of economic activity
referred to in row 4 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.29 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
5.
Amount and proportion of economic activity
referred to in row 5 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.30 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
6.
Amount and proportion of economic activity
referred to in row 6 of Template 1 that is
taxonomy-non-eligible in accordance with
Section 4.31 of Annexes I and II to
Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
- -
7.
Amount and proportion of other
taxonomy-non-eligible economic
activities not referred to in rows 1 to 6
above in the denominator of the
applicable KPI
757,188 53.50%
8.
Total amount and proportion of
taxonomy-non-eligible economic
activities in the denominator of the
applicable KPI
757,188 53.50%
Template 5 Taxonomy non-eligible economic activities based on CapEx
128
Íslandsbanki hf.
•
Hagasmári 3
•
201 Kópavogur
•
Iceland
•
Reg.no. 491008-0160
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