Consolidated
Financial
Statements
2025
Íslandsbanki
Íslandsbanki hf.
•
Hagasmári 3
•
201 Kópavogur
•
Iceland
•
Reg.no. 491008-0160
Contents
3
4 - 12
13 - 16
17
18
19
20 - 21
22 - 23
24 - 91
92 - 102
103 - 127
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 ............................................................................................
Íslandsbanki's Corporate Governance Statement 2025 .............................................................................
Independent Auditor's Report .....................................................................................................................
Profit after tax
(ISKm)
Loans to customers
(
Sector split as of 31.12.25)
Cost-to-income ratio
1
Loans to customers
(ISKbn)
Factsheet
Total assets
(ISKbn)
Liquiditycoverage ratio Leverageratio
2
Total capital ratio
2
The information above has not been reviewed or audited by the Group's auditor.
1. C/I ratio for 4Q25 excludes salary expenses of ISK 804m due to early retirement of employees and an income of ISK 237m within net interest income (ISK 550m reversed from charge in 3Q25
due to provision for legal proceedings and a charge of ISK 313m due to correction from previous years). C/I ratio for 3Q25 excludes a charge of ISK 550m within net interest income due to a
provision for legal proceedings.
2. Including 3Q25 profit for 30.9.25.
Key figures 2025
Return on equity
Net profit
ISK 25.2bn
ROE
11.2%
Cost-to-income
ratio 42.4%
NIM
3.1%
Ratings and certifications
A3
Stable outlook
BBB+/A-2
Positive outlook
ISK
1,367bn
A3
Exceptional
ESG risk rating
11.2%
9.4%
13.0%
12.2%
10.5%
4Q24 1Q25 2Q25 3Q25 4Q25
6,283
5,209
7,192
6,901
5,947
4Q24 1Q25 2Q25 3Q25 4Q25
45.7%
47.6%
41.0%
38.2%
43.5%
4Q24 1Q25 2Q25 3Q25 4Q25
1,608
1,667
1,696
1,734
1,728
64.7%
63.7%
63.9%
62.5%
59.8%
31.12.24 31.3.25 30.6.25 30.9.25 31.12.25
REA / total assets
1,295
1,299
1,331
1,333
1,367
140%
139%
138%
132%
141%
31.12.24 31.3.25 30.6.25 30.9.25 31.12.25
Customer loans / customer deposits ratio
13.2%
12.1%
12.0%
11.9%
12.5%
31.12.24 31.3.25 30.6.25 30.9.25 31.12.25
23.2%
21.6%
21.5%
21.9%
24.0%
20.1%
18.6%
18.5%
18.9%
20.1%
31.12.24 31.3.25 30.6.25 30.9.25 31.12.25
CET1 ratio
Mortgages
to individuals
43%
Other loans to
individuals 5%
Seafood
7%
Commerce
and services
15%
Real
estate 10%
Industrial and
transportation
7%
Construction 7%
Other 6%
168%
202%
185%
207%
203%
125%
128%
125%
129%
127%
31.12.24 31.3.25 30.6.25 30.9.25 31.12.25
Net stable funding ratio (NSFR)
Íslandsbanki hf. Consolidated Financial Statements 2025
3
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 2025.
Íslandsbanki is a customer-centric universal bank offering comprehensive financial services to individuals, corporations, and institutional
investors in Iceland through various channels, including 12 branches. The Group seeks to move Iceland forward by empowering its
customers to succeed and prioritising sustainability as an integral driver of its strategy and value creation. The Group's core values are
progressive thinking, collaboration, and professionalism. The Group aims to be a force for good, with its corporate vision to create value
for the future through excellent service, ultimately enhancing the financial health of its customers.
Driven by the corporate vision to create value for the future with excellent service, Íslandsbanki's banking model is led by three business
divisions that build and manage relationships with its customers. The Group maintains a strong market share through its efficient branch
network across the country, supporting at the same time its customers' move to more digital services through its technically strong
foundations.
Íslandsbanki has an A3 rating from Moody's Ratings (stable outlook) and a BBB+/A-2 rating from S&P Global Ratings (positive outlook).
The Bank's shares are listed on Nasdaq Iceland Main Market.
Summary of the year 2025
• The Group's profit for the reporting period amounted to ISK 25,249 million, corresponding to a return on equity of 11.2%
• Strong total capital position of 24.0% and CET1 position of 20.1% – excess capital amounted to ISK 36 billion at the end of the reporting
period
• Updated financial targets set for the medium term: ROE >13% and cost-to-income <43%
A strong finish to an eventful year
The year 2025 was eventful for Íslandsbanki. Early in the first quarter, the Bank introduced a revised strategy, paving the way for further
growth on the foundation to empower its customers to succeed and further improve their financial health. The Bank's values were revised
placing emphasis on progressive thinking, alongside collaboration and professionalism. In addition, the strategic pillars of attracting and
maintaining the best team, making data-driven decisions, enhancing service and customer experience, as well as achieving profitable
growth, were decided.
During the year, the Bank continued to deliver on its strategy across various fronts. Market share and competitiveness have been
maintained throughout, and the Bank remains the partner of choice for SMEs. Several new corporate digital solutions have been
introduced, including an expense management tool, new and improved online banking platform, and more. Íslandsbanki Securities Sales
continues to hold the highest overall market share as well as the leading position in equities on Nasdaq OMX Iceland, as in 2024. The
Corporate Finance team successfully executed various high-profile transactions, including fundraising for Eldisgarðar (land-based fish
farming). On the Corporate Banking lending side, emphasis has been placed on growing the international loan book, resulting in
considerable growth throughout the year. Special focus has been given to infrastructure projects, with the financing of Ölfusá Bridge in
South Iceland – in cooperation with several Icelandic pension funds and representing the country's largest infrastructure project in recent
years – serving as a prime example. In the retail space, the Bank has maintained its market share for both loans and deposits. Additionally,
the Bank introduced a collaboration with VÍS Tryggingar hf., the second largest insurance company in Iceland, with the goal of enhancing
the Bank's customer service and retention of customer relations.
In October 2025, the Supreme Court of Iceland delivered its judgement in a case concerning variable interest rates on a non-index linked
mortgage. Although the ruling concerned a non-index linked mortgage, it could not be ruled out that the judgement or pending judgements
at the time in cases towards other lenders, would set some precedent regarding the interpretation of CPI-linked mortgages and other
consumer loans. As a result, the Bank quickly implemented interim measures by adjusting its mortgage product offering and will introduce
further additions to the product offering in the coming weeks. By those changes, the Bank believes it has done its part to eliminate
uncertainty and ensuring that the mortgage market remains active, for the benefit of both customers and the Bank itself.
Despite considerable turmoil in international financial markets during the second quarter, stemming from discussions and the
implementation of tariffs on international trade, market conditions strengthened for domestic capital markets. On the back of this recovery,
the Minister of Finance and Economic Affairs decided to launch a fully marketed offering of the Government of Iceland's stake in the Bank.
The Government initially intended to sell a 20% stake in the Bank but, following considerable demand from both retail and institutional
investors, the Minister decided to upsize the offering to include the Government's entire stake. As a result, the full 45.4% stake was sold
to a total of over 31 thousand investors, nearly all domestic retail investors. This strong demand and the successful result of the offering
can, among other factors, be attributed to the Bank's effective strategy execution and the ample opportunities investors foresee in the
coming years. The Bank is proud to be so well received by both retail and institutional investors, domestically and internationally, which is
a testament to the Bank's success. Following the transaction, the Bank's shareholder base widened considerably from approximately 10
thousand shareholders to over 35 thousand.
Íslandsbanki hf. Consolidated Financial Statements 2025
4
A
t the beginning of the fourth quarter, the Bank announced that merger discussions had been initiated with Skagi, a domestic company in
the financial services sector, and that head of terms had been agreed, subject to due diligence and other customary conditions. According
to the term sheet, Skagi would be fully merged with the Bank, and the shareholders of Skagi would receive approximately 15% of the share
capital of the merged entity. Following the announcement, due diligence has been nearly concluded. In parallel with due-diligence
proceedings, new information has emerged, including matters related to potential changes that may lead to increased capital requirements
related to risks from the holding in insurance undertakings, which was presented in a discussion draft document no. 2/2025 from the
Central Bank of Iceland on guidelines related to the SREP process. The development of a draft merger notice to the Icelandic Competition
Authority (ICA) has progressed well and has been presented to the ICA, along with key assumptions related to the merger. Íslandsbanki
and Skagi will continue to work on the terms of a formal merger agreement.
During the year, two shareholders' meetings were held in addition to the AGM. First, on 30 June 2025, a shareholders' meeting was
convened at which changes to the Bank's remuneration policy were approved to include an incentive scheme and a stock option plan.
Subsequently, the Bank introduced stock options for all employees, except for the employees of Group Internal Audit, to ensure the
alignment of interests of shareholders and employees, with nearly all employees participating. Towards the end of the fourth quarter, the
previous Chairman of the Board stated that she would not run for a re-election at the next AGM. Following this announcement, a request
was submitted to convene a shareholders' meeting where an election for the Board of Directors was on the agenda. The request was
made by a group of shareholders who collectively held more than 1/20 of the shares in the Bank. Following this request, a shareholders'
meeting was held on 19 January 2026, during which the election took place. At the meeting, two changes were made to the composition
of the Board, with Heiðar Guðjónsson and Margrét Pétursdóttir elected as new members. In addition, Heiðar Guðjónsson was elected as
the Chairman of the Board.
Capital optimisation remains a focal point for the Bank. At the reporting date, the excess capital position, measured from the current CET1
level down to the midpoint of the management buffer, amounts to ISK 36 billion. However, in the beginning of 2026 the Bank has purchased
own shares amounting ISK 4 billion bringing the excess capital position down to ISK 32 billion. In 2025, the Bank paid an ordinary dividend
of ISK 12.1 billion, representing 50% of 2024 profit. In addition, in 2025 the Bank repurchased shares amounting to ISK 14.6 billion, bringing
the total payout ratio to 110% of the previous year's profit. The Bank remains committed to optimising its capital structure through growth
and/or disbursements through dividend and/or share buy-backs. The Board of Directors will propose to the AGM in March 2026 that an
ordinary dividend of 50% of profit for the year 2025 will be paid to shareholders, amounting to ISK 12.6 billion. Additionally, the Board of
Directors reserves the right to propose an extraordinary dividend to either the AGM or later dated shareholders' meeting.
Updated financial targets for the medium term
The Bank has set new financial targets for the medium term, i.e., 3-4 years, as follows:
Previous target
Updated target for
the medium term
2025 result
Guidance for
year-end 2026
Return on equity 10% >13% 11.2% ~12%
Cost-to-income <45% <43% 42.4% ~43%
CET1 excess 100-300 bps 100-300 bps 510 bps 200 bps
Dividend payout ratio 50% 50% 50% 50%
Core income growth of 10% in 2025
The Group's profit for the reporting period amounted to ISK 25,249 million, thereof ISK 5,947 million in the fourth quarter. This corresponds
to a return on equity of 11.2% and 10.5%, respectively, meeting the Bank's target of exceeding 10%.
Net interest income amounted to ISK 52,471 million in 2025, growing by 11.0% year-on-year, which represents a 3.1% net interest margin
compared to 2.9% in the previous year. This increase can be attributed to the subsiding effects of the CPI and the nominal fixed rate
imbalance in the banking book, as well as persistent domestic inflation. The CPI imbalance remained broadly stable, totalling ISK 200
billion at year-end 2025, compared to ISK 193 billion coming into the year. Due to seasonality in inflationary ticks throughout the year, net
interest margins were stronger in the first half of the year compared to the second half, particularly in the fourth quarter where inflation was
at an unusually low level resulting in a 2.9% net interest margin. As before, volatility may be experienced in the Bank's profits related to
this seasonality, while the effects of the CPI imbalance remain in the banking book.
Net fee and commission income for the fourth quarter amounted to ISK 4,183 million, a strong 16.0% growth from the previous year. In
2025, net fee and commission income amounted to ISK 14,099 million compared to ISK 13,122 million in the previous year – or 7.4%
growth year-on-year. As before, cards and payments remain the largest fee income stream. Recovery and increasing volumes in capital
markets, as well as a strong quarter for Corporate Finance, further bolstered growth in both asset management and investment banking
and brokerage in the fourth quarter compared to previous quarters within 2025. Overall, total operating income grew by 6.6% in 2025 while
core operating income, defined as net interest income and net fee and commission income, grew by 10.2% compared to the previous year.
Íslandsbanki hf. Consolidated Financial Statements 2025
5
Salaries and related expenses rose by ISK 1,475 million between years, mainly attributable to costs related to early retirement of employees
and redundancies. Other operating expenses amounted to ISK 11,676 million, which grew by 3.3% between years, thereby declining in
real terms. As a result, total administrative expenses amounted to ISK 29,480 million compared to ISK 28,098 million in the previous year.
The cost-to-income ratio was 42.4% in 2025, down from 43.8% in the previous year. During the year, net impairments amounted to ISK
681 million, compared to impairment reversals of ISK 645 million in the previous year. Looking at the fourth quarter alone, net impairments
amounted to ISK 1,087 million, arising from a few distressed credit cases.
Growth in loan portfolio in line with expectations and Stage 3 loans remain stable
As in previous years, loans to customers remain the lion's share of the Bank's balance sheet, accounting for close to 80% of total assets.
Within the loan portfolio, mortgages constitute the largest portion, at 43%. The remainder is well diversified across industries. Despite long
period of high interest rates and inflation, Stage 3 loans remain stable, closing at 1.5%. However, Stage 2 loans, reflecting loans which
are showing signs of deterioration in credit quality have grown from 3.1% year-end 2024 to 4.6% at year-end 2025. The effects of longer
time on market for new residential housing and reduced activity has started to impact the construction portfolio, albeit risk of credit losses
remains low. This development, however, mainly relates to a few distressed credit cases rather than to structural issues within certain
sectors of borrowers. LTVs for both the loan book as a whole and the mortgage book remain healthy and stable. Deposits from customers
grew by 4.5% between years and totalled ISK 968,695 million at year-end 2025. As before, concentration within the depositor base is
limited.
AT1 issuance towards the end of the year at record low spread
In terms of market-based funding, the Bank's FX-denominated debt experienced a spread compression of approximately 50 basis points
in secondary markets during 2025. The Bank took advantage of the favourable market conditions and issued two EUR 300 million green
senior preferred bonds: a 5.5-year bond in March at mid-swaps +140 basis points, which is currently trading around mid-swaps +90 basis
points, and a 7-year bond in November at mid-swaps +130 basis points, which is currently trading around mid-swaps +120 basis points.
In November, the Bank also issued AT1 bonds in the Nordic market, comprising SEK 700 million and NOK 200 million at STIBOR +350
basis points and NIBOR +358 basis points, respectively. This represented the tightest AT1 pricing achieved by an Icelandic bank since
2008. In the domestic market, the Bank issued ISK 32 billion of covered bonds during the year, as well as ISK 9 billion of senior preferred
bonds.
The Bank holds an A3 (stable outlook) issuer rating from Moody's Ratings and a BBB+/A-2 (positive outlook) from S&P Global Ratings.
Capital optimisation remains a focal point as excess capital amounts to ISK 36 billion
Throughout the year, the Bank remained committed to its capital optimisation journey. In March, the AGM declared an ordinary dividend
amounting to ISK 12.1 billion, equivalent to 50% of profit for the year 2024. In addition, the Bank bought back shares amounting to ISK
14.6 billion in 2025. Overall, the Bank has distributed 110% of profit for the year 2024 to shareholders through dividend and buybacks. At
the end of the reporting period, ISK 4 billion remained of the ISK 16 billion allocated to buybacks, with all necessary regulatory approvals
in place. The Bank remained active in buybacks in 2026 and has now completed ISK 4 billion in buybacks, effectively completing the
buyback allocation.
The Group's most recent Supervisory Review and Evaluation Process (SREP), published 30 June 2025, resulted in a considerable
reduction of Pillar-2R requirements, lowering the additional capital requirement by 0.4 percentage points from the previous assessment to
1.4%. Due to this, the Bank's overall capital requirement, taking into account the buffer requirement at the reporting date, therefore
decreases from 19.7% to 19.1%. Towards the end of the year, Capital Requirements Regulation (CRR) 3, an amendment to the previous
CRR, entered into Icelandic law. As a result, the Bank saw considerable reduction in the risk exposure amount (REA), or ISK 88 billion,
increasing the total capital ratio from 22.1% to 24.0%, well in excess of requirements.
At the end of the reporting period, the Bank's CET1 ratio was 20.1% compared to a regulatory minimum of 15.0%, on top of which the
Bank places a management buffer of 100-300 basis points. Consequently, the Bank's excess capital position at the end of the reporting
period amounted to approximately ISK 36 billion, of which approximately ISK 4 billion has already been used for buybacks at the beginning
of 2026. As in previous disclosures, the excess capital position assumes a fully optimised capital structure and the midpoint of the
management buffer.
The Bank intends to continue to optimise its capital structure. As previously stated, capital optimisation measures may include internal
and/
or external growth, as well as increased share buybacks or extraordinary dividends, subject to market conditions.
Íslandsbanki hf. Consolidated Financial Statements 2025
6
Introduction of variable compensation vital to aligning shareholders' and employees' interests
Changes were made to the Bank's remuneration policy at a shareholder meeting in June 2025, to allow for both stock option plans as well
as variable compensation. The Bank believes this is vital to ensure the alignment of interests between shareholders and employees, and
necessary to attract and maintain the best possible team.
Following these changes, in August 2025 the Bank introduced a stock option plan for all employees of the Bank, except for employees of
Group Internal Audit, in which nearly all employees participated. Through this plan, employees were granted the right to purchase shares
in the Bank at a predetermined price of ISK 126.4 per share, for a market value of up to ISK 1.5 million in each of the years 2026 through
2030. At the AGM, which will be held on 19 March 2026, the Bank will seek the authorisation to use a part of the shares being repurchased
through share buybacks to settle those obligations as they fall due.
In addition, a variable compensation plan was implemented in early February 2026. The compensation plan applies to all employees of
the Bank permitted under Icelandic law, where most employees are able to receive up to 10% of annual salaries as variable compensation,
subject to the Bank reaching its performance metrics. Furthermore, a limited number of employees who have the most influence on the
Bank's performance and strategic execution are eligible to higher variable compensation, up to 25% of annual salaries. For those, such
part of the variable compensation exceeding 10% is payable in shares in the Bank, which are subject to a predetermined vesting period
to further align the long-term interest of the Bank, its shareholders, and the employees.
At year-end the Group employed 769 full-time equivalents, 725 within the Bank, 56% female and 44% male (57% female and 43% male
within the executive board), and 44 in subsidiaries.
Economic outlook
Following a contraction of 1.2% in real GDP in 2024, Iceland's economy entered a new phase of moderate recovery in 2025. The first three
quarters of the year marked a cyclical turning point, with GDP growth of 1.5%, supported by strong investment activity and a rebound in
private consumption. Investment remained the primary growth driver, particularly in export-oriented sectors such as aquaculture and data
centres, while consumption also contributed positively. However, robust imports – typical during investment booms – offset part of the
gains while exports treaded water.
High-frequency indicators for the fourth quarter including payment card turnover, Keflavík international airport departures, and new vehicle
registrations, point to sustained private consumption while investment goods imports point to a significant contraction year-on-year.
Tourism, which had a weak start to the year, recovered notably during the summer season, then reverting back to contraction in the fourth
quarter.
The labour market has softened markedly with registered unemployment measuring 4.2% on average in the fourth quarter, up 0.6
percentage points year-on-year. Employment levels remain stable as labour demand has eased, particularly in construction, manufacturing
and tourism, while immigration has slowed. Despite these shifts, rising real wages and household savings continue to support private
consumption.
Inflation, which had declined from a peak of 10.2% in early 2022 to 3.9% by March 2025, proved persistent throughout the year, measuring
4.5% in December. Domestic inflation pressures persist due to a resilient housing market and buoyant wage growth, while imported inflation
has eased thanks to global disinflation, lower fuel prices and a relatively strong ISK. The Central Bank of Iceland eased its policy rate to
7.25% in November, signalling that further rate cuts are unlikely in the near term unless clear signs of inflation aligning better with the 2.5%
target emerge.
Íslandsbanki Research estimates GDP growth of 1.3% for 2025, driven by robust domestic demand while net exports will subtract from
total GDP growth. Consumption is supported by real wage growth and accumulated household savings. Investment remains strong,
particularly in IP-based exports and aquaculture. Export growth is expected to be modest, with service exports growing moderately while
goods exports flatline.
For 2026, GDP growth of just 0.6% is forecast as exports and investment contract moderately while reduced imports and resilient
consumption support growth. Inflation is projected to average 4.0% in 2026, gradually declining thereafter, but remaining above target.
The policy rate is expected to ease gradually from the second quarter onward, ending the year close to 6%.
The ISK is likely to remain relatively strong in the near term, supported by improvements in external trade and interest rate differentials.
However, the high real exchange rate poses challenges for competitiveness, and a modest nominal depreciation is expected over the
year.
Íslandsbanki hf. Consolidated Financial Statements 2025
7
Outlook for the Group
Coming into 2026, the macroeconomic outlook was for moderately paced reduction in inflation, paving the way for further rate cuts.
However, indications are that inflation has been more persistent and may remain so – evident by an inflationary tick in excess of analyst
consensus in January 2026. As a result, uncertainty remains on the timing and extent of further rate cuts. As inflation subsides, it is
assumed that rates are cut in line. Due to this, pressure may be on interest rate margins through both the CPI-related imbalance as well
as through the Bank's own liquidity portfolio which is expected to reduce as capital optimisation continues. For the medium term, real rates
in the banking book are considered appropriate. As in previous years, seasonality may be experienced in the net interest margins in line
with seasonality of inflationary ticks. Overall, net interest margin is expected to be around 3% level for the medium term.
Through the fourth quarter of 2025 and into 2026, capital markets have shown increasing activity and volumes. The Bank believes that
this momentum will continue throughout the year, paving the way for growth in both asset management and investment banking and
brokerage. However, should uncertainty surrounding interest rate cuts continue to grow, market conditions may be adversely affected.
Emphasis has been placed on international loan growth and infrastructure lending, providing an additional pocket of growth in the loan
book. Overall, the domestic loan book is, however, expected to grow modestly throughout 2026 and in line with nominal GDP through the
cycle.
The Bank's equity and liquidity positions remain both strong and well in excess of both regulatory and internal requirements. Capital
optimisation is expected to continue throughout the year, subject to market conditions and regulatory approvals. As before, the Bank may
allocate capital towards growth and/or distributions through dividend or share buybacks.
As a result, the Bank guides for an ROE of around 12% and cost-to-income of around 43% in 2026.
Other matters
In October 2025, the Supreme Court of Iceland delivered its judgement in a case concerning a non-index linked mortgage bearing variable
interest rates, in which the plaintiffs argued that the terms on interest-rate changes were invalid. The monetary claims in the case were
dismissed by both the District Court and the Supreme Court, although the Supreme Court concluded that certain parts of the clause on
interest-rate changes were unclear and therefore invalid. Although the ruling concerned a non-index linked mortgage, it could not be ruled
out that the judgement or pending judgements at the time in cases towards other lenders, would set a precedent regarding the interpretation
of CPI-linked mortgages and other consumer loans. As a result, the Bank quickly implemented interim measures by adjusting its mortgage
product offering and will introduce further additions to the product offering in coming weeks. By those changes, the Bank believes it has
done its part to eliminate uncertainty and ensuring that the mortgage market remains active, for the benefit of both customers and the
Bank itself. Further, related to the uncertainty following the ruling, the Bank recognised a provision amounting to ISK 550 million in its third
quarter results. As additional rulings by the Supreme Court of Iceland have been rendered, in cases relating to other lenders than the
Bank, the Bank has reassessed its position and, in the fourth quarter, reversed the previously recognised provision; resulting in no net
impact on profit for the year 2025.
At a shareholders' meeting on 19 January 2026, board elections took place. Seven board members were nominated by the Bank's
nomination committee, and no other candidates presented themselves. As a result, the current Board was elected unanimously.
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 45-61 to the Consolidated Financial Statements and in
the unaudited Pillar 3 Report.
Íslandsbanki hf. Consolidated Financial Statements 2025
8
Ownership
The shares of Íslandsbanki are listed on the Nasdaq Iceland stock exchange. The Bank has one of the largest shareholder bases of listed
companies in Iceland. At year-end the Bank had 25,302 shareholders (year-end 2024: 9,961), where 85.4% of the Bank's shares were
owned by domestic parties, and 14.6% by international investors. Following the sale of the Government of Iceland's remaining shares in
the Bank, pension funds are now the largest investor group, owning 42.2% of outstanding shares, while retail investors are the second
largest investor group, owning 28.0% of outstanding shares, both figures taking into consideration treasury shares. For further information
on the Bank's shareholders see Note 41.
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 specified as
a part of the Bank's purpose. The Bank's purpose is to empower its 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 Funding 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 five sustainability goals for its operations, to be completed
by 2030. 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 2025 includes key information on the environmental, social and governance criteria for Íslandsbanki.
The information in the report is in line with Nasdaq's ESG Guidelines. Additionally, the report is based on the applicable Global Reporting
Initiative (GRI) metrics, the UN Principles for Responsible Banking (UN PRB), and the SDGs. 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 2025.
In accordance with local regulation, Íslandsbanki publishes in an unaudited appendix to the Consolidated Financial Statements information
regarding the EU taxonomy and Green Asset Ratio (GAR). In 2023, the regulation entered into force for financial institutions and other
nonfinancial 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 2025 the GAR
was 0.33% based on turnover and 0.39% based on capital expenditure (CAPEX). The Bank gathers information on green assets through
external data vendors.
Sustainability risk has been more effectively integrated into key processes relating to lending, investments, and product development
during the year. More detailed coverage can be found in the Bank's Pillar 3 Report for 2025 which contains a dedicated section on
sustainability risk in line 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) 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.
Íslandsbanki hf. Consolidated Financial Statements 2025
9
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 2025 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. The Bank has published targets which account for 64%
of total lending and 78% of total emissions from the loan portfolio in 2019, which is the Bank’s base year for emissions. 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 is a complex task and 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 2025. According to the most recent equal
pay appraisal, the unexplained pay gap for jobs of equal value is 0.1%.
Governance
Íslandsbanki operates in accordance with the applicable legislation governing entities subject to the supervision of the Financial
Supervisory Authority of 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 2025, all 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 in place a Policy on Measures Against Money Laundering and Terrorist Financing,
as well as an Anti-Bribery and Corruption Policy, 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.
The 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.
Íslandsbanki hf. Consolidated Financial Statements 2025
10
A
t 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 Nomination Committee 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 its diversity policy.
Currently the Board consists of seven members, three women and four men, who are of various ages. Board members have a broad range
of education, e.g. in the fields of economics, engineering, law, finance, management, business administration, and securities trading. Board
members also have extensive industry experience in the areas of operations, banking, information technology management, legal practice,
auditing and consulting.
The Board appoints four sub-committees, each one comprising Board members along with one external committee member in the Board
Corporate Governance and Human Resource Committee and one 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 seven members, including the CEO, is composed of four women and three men. Members of the
Executive Committee are of various ages 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 financial statements 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 Board's Audit
Committee reviews the annual and interim financial statements before their submission for Board approval and endorsement. The Board's
Audit Committee regularly discusses the financial 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 external auditors audit the annual financial statements
for the parent company and the Group's consolidated financial statements, as well as those of main subsidiaries, and review the Group's
half year condensed consolidated interim financial statements. In 2025, the external auditors also reviewed the Condensed Consolidated
Interim Financial Statements for the first quarter in relation to the offering of the Government of Iceland's stake in the Bank.
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 2025
11
Statement by the Board of Directors and the CEO
The audited Consolidated Financial Statements for the year ended 31 December 2025 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 2025 and its financial position as of 31 December 2025. 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 2025 identified as "549300PZMFIQR79Q0T97-2025-
12-31-1-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 2025 Consolidated Financial Statements of Íslandsbanki.
Kópavogur, 12 February 2026
Board of Directors:
Heiðar Guðjónsson, Chairman
Stefán Pétursson, Vice-Chairman
Haukur Örn Birgisson
Helga Hlín Hákonardóttir
Margrét Pétursdóttir
Stefán Sigurðsson
Valgerður Hrund Skúladóttir
Chief Executive Officer:
Jón Guðni Ómarsson
Íslandsbanki hf. Consolidated Financial Statements 2025
12
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 2025, 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 2025, 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.
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 audits of the consolidated financial statements of public
interest entities 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. We have been re-appointed by resolutions passed
by the annual general meeting uninterrupted since then.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, 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 2025
13
Key Audit Matters How the matter was addressed in the audit
Impairment charges for loans to customers
Loans to customers represent ISK 1,367,106 million or 79% of total
assets at 31 December 2025. Expected credit losses (ECL) of
loans and off-balance sheet items at year end is ISK 8,613 million.
The ECL provisions in the Group's loan portfolio is based on the
Bank's IFRS 9 forecasting models and management's estimate.
Key areas of judgement include:
• Assumptions 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.
Management has provided information regarding loan impairment
charges and the ECL provision in notes 3, 14, 24, 25, 46-50 and
62.3.
Our 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.
In performing the audit procedures over the IT systems, we used
our IT specialists.
Íslandsbanki hf. Consolidated Financial Statements 2025
14
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.
Responsibilities 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.
The Board of Directors and CEO are responsible for overseeing the Company's financial reporting process.
Auditor'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 judgement 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 perform 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 the
circumstances, 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.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business units within the group as a basis for forming an opinion on the group financial statements. We are responsible for the direction,
supervision and review of the audit work performed for purposes of the group 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 2025
15
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 2025 with the file name "549300PZMFIQR79Q0T97-2025-12-
31-1-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 2025 with the file name "549300PZMFIQR79Q0T97-
2025-12-31-1-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, 12 February 2026
KPMG ehf.
H
rafnhildur Helgadóttir
Sigurjón Örn Arnarson
Íslandsbanki hf. Consolidated Financial Statements 2025
16
Notes 2025 2024
129,324 135,278
3,648 6,064
( 80,501) ( 94,077)
7 52,471 47,265
20,129 18,944
( 6,030) ( 5,822)
8 14,099 13,122
9 ( 922) ( 338)
10 427 607
11 1,165 2,401
670 2,670
67,240 63,057
12 ( 17,804) ( 16,329)
13 ( 11,676) ( 11,299)
- ( 470)
( 2,084) ( 1,900)
( 31,564) ( 29,998)
14 (
681) 645
34,995 33,704
15 ( 9,746) ( 9,458)
25,249 24,246
Earnings per share
16 13.62 12.53
The notes on pages 24 to 91 are an integral part of these Consolidated Financial Statements.
*Comparative figures have been changed. Income of ISK 119 million recognised in "Profit (loss) from non-current assets held for sale,
net of tax" in the 2024 Consolidated Financial Statements was restated in the line item "Other operating income" as "Net income
(expense) from repossessed collateral". The associated income tax expense of ISK 32 million was restated as part of "Income tax
expense".
Basic and diluted EPS attributable to shareholders of Íslandsbanki hf. (ISK) .........................................
Income tax expense* .............................................................................................................................
Profit for the year
Profit before net impairment on financial assets
Net financial 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 2025
17
Amounts are in ISK million
35,676 33,059
2025 2024
25,249 24,246
( 1,105) ( 746)
229 328
( 876) ( 418)
2 ( 2)
299 240
( 3)
1
1 22
(
78) ( 71)
221 190
( 655) ( 228)
24,594 24,018
The notes on pages 24 to 91 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 2025
18
Amounts are in ISK million
Notes 31.12.2025 31.12.2024
21 80,394 65,716
22 80,009 50,486
17 151,959 142,618
23 5,304 5,324
24 1,367,106 1,295,388
17 20,517 24,330
26 5,384 4,701
27 2,900 2,600
28 4,702 5,039
29 2,682 2,684
30 7,190 8,921
1,728,147 1,607,807
31 13,250 12,535
32 968,695 926,846
23 6,183 7,306
34 444,593 367,586
35 40,315 31,695
37 12,757 12,916
38 16,995 21,568
1,502,788 1,380,452
8,900 9,473
42,472 55,000
7,201 7,102
166,786 155,780
225,359 227,355
1,728,147 1,607,807
The notes on pages 24 to 91 are an integral part of these Consolidated Financial Statements.
*Comparative figures have been changed. The line item "Non-current assets held for sale" in the 2024 Consolidated Financial
Statements has been renamed as "Repossessed collateral". In the context of materiality, the Group has determined that this item does
not warrant separate presentation as a line item in the Consolidated Statement of Financial Position. Accordingly, "Repossessed
collateral" has been reclassified and is now included within "Other assets". "Non-current assets held for sale" amounted to ISK 1,617
million in the 2024 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* ..................................................................................................
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 2025
19
Amounts are in ISK million
Unrealised
FV changes
Reserve for
Liability Foreign
of financial Capitalised Unrealised
debt
credit currency
Share Share Statutory assets in the development gains in instruments risk translation Retained
Total
capital premium reserve banking book cost associates at FVOCI reserve reserve earnings
equity
Equity as at 1 January 2024 9,898 55,000 2,500 2,527 1,358 522 - ( 1,827) 3 154,712 224,693
Profit for the year ................................................................................ 24,246 24,246
Net changes in FV of fin. liab. due to changes in credit risk ................
2,115 ( 2,861) ( 746)
Tax on net changes in FV of fin. liab. due 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 inst. at FVOCI ........ 1 1
Changes in allowance for ECL of debt instruments at FVOCI .............
22 22
Tax related to debt instruments at FVOCI ........................................... ( 71) ( 71)
Total comprehensive income (expense) for the year
Div
idends ............................................................................................ ( 12,303) ( 12,303)
Purchase of treasury shares ............................................................... ( 425) ( 8,628) ( 9,053)
Other changes to restricted reserves .................................................. 302 ( 291) 126 ( 137) -
T
he notes on pages 24 to 91 are an integral part of these Consolidated Financial Statements.
Consolidated Statement of Changes in Equity
Reserves
Íslandsbanki hf. Consolidated Financial Statements 2025
20
Amounts are in ISK million
- - - - - - 192 1,692 ( 2) 22,136 24,018
Equity as at 31 December 2024 55,000 2,500 2,829 1,067 648 192 ( 135) 1 155,780 227,3559,473
Consolidated Statement of Changes in Equity
Unrealised
FV changes
Reserve for
Liability Foreign
of financial Capitalised Unrealised
debt
credit currency
Share Share Statutory assets in the development gains in instruments risk translation Retained
Total
capital premium reserve banking book cost associates at FVOCI reserve reserve earnings
equity
Equity as at 1 January 2025 9,473 55,000 2,500 2,829 1,067 648 192 ( 135) 1 155,780 227,355
Profit for the year ................................................................................ 25,249 25,249
Net changes in FV of fin. liab. due to changes in credit risk ................
( 972) ( 133) ( 1,105)
Tax on net changes in FV of fin. liab. due to changes in credit risk .....
194 35 229
Foreign currency translation ............................................................... 2 2
Net changes in fair value of debt instruments at FVOCI ..................... 299 299
Reclassification to the income statement of debt inst. at FVOCI ........ (3) ( 3)
Changes in allowance for ECL of debt instruments at FVOCI .............
1 1
Tax related to debt instruments at FVOCI ........................................... (78) ( 78)
Divi
dends ............................................................................................ ( 12,103) ( 12,103)
Purchase of treasury shares ............................................................... ( 573) ( 14,018) ( 14,591)
Reduction in share capital .................................................................. ( 12,528) ( 149) 12,677 -
Share option charge ........................................................................... 104 104
Other changes to restricted reserves .................................................. ( 122) ( 291) 1,218 ( 805) -
Equity as at 31 December 2025 8,900 42,472 2,351 2,707 776 1,866 411
The notes on pages 24 to 91 are an integral part of these Consolidated Financial Statements.
The Bank's authorised and issued share capital on 31 December 2025 consisted of 1,880,470,770 ordinary shares (year-end 2024: 2,000,000,000) with a par value of ISK 5 each. The Annual General
Meeting (AGM) for the 2024 operating year took place on 31 March 2025 where shareholders approved the Board's proposal to reduce the Bank's share capital by cancelling the Bank's own shares by ISK
597,646,150 nominal value, equivalent to 119,529,230 shares, from ISK 10,000,000,000 to ISK 9,402,353,850 nominal value.
Reserves
Upon derecognition (mainly repurchases) of financial liabilities designated at FVTPL the amount accumulated in liability credit risk reserve is transferred to retained earnings. In 2025 negative ISK 98 million
(2024: negative ISK 2,110 million) were transferred to retained earnings at derecognition of financial liabilities designated at FVTPL.
Íslandsbanki bought back 114.7 million own shares for ISK 14,591 million during 2025 (2024: 85.0 million own shares for ISK 9,053 million). As of 31 December 2025 the Bank owned 100.5 million own
shares (year-end 2024: 105.4 million).
During the AGM, shareholders approved the Board's proposal to distribute dividends of ISK 12,100 million, equivalent to ISK 6.46 per share (2024: ISK 6.26 per share). The dividends were paid on 10 April
2025.
Íslandsbanki hf. Consolidated Financial Statements 2025
21
Amounts are in ISK million
( 913) 3 166,786 225,359
( 778) 2 25,151 24,594 Total comprehensive income (expense) for the year - - - 219 - - -
2025 2024
25,249 24,246
( 40,026)
( 37,278)
( 31,546) 5,644
131,785 129,327
( 74,653) ( 94,687)
1,085 431
( 1,900) ( 1,871)
( 9,964) ( 9,414)
Net cash provided by operating activities 30 16,398
( 25) ( 96)
198 101
(
484) ( 426)
( 734) ( 501)
Net cash used in investing activities ( 1,045) ( 922)
143,535 103,756
( 70,582) ( 150,752)
( 589) ( 566)
( 12,103) ( 12,303)
( 14,591) ( 9,053)
Net cash provided by (used in) financing activities 45,670 ( 68,918)
44,655 ( 53,442)
( 2,306) ( 2,084)
83,548 139,074
Cash and cash equivalents at year-end 125,897 83,548
Reconciliation of cash and cash equivalents
Notes
21 3,270 3,621
21 43,414 31,163
22 72,762 36,686
20, 22 6,451 12,078
Cash and cash equivalents at year-end 125,897 83,548
The notes on pages 24 to 91 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.
Comparative figures have been changed. The Group's accounting policies regarding the definition of cash and cash equivalents have
been updated. This change was made to ensure a fairer presentation of the Consolidated Statement of Cash Flows. Previously, cash
and cash equivalents in the statement of cash flows consisted of cash on hand, unrestricted balances with the Central Bank, and
demand deposits with credit institutions. They now consist of cash on hand, unrestricted balances with the Central Bank, and loans to
credit institutions, excluding loans to credit institutions pledged as collateral against derivative instruments. As a result, ''Cash and cash
equivalents at the beginning of the year'' increase by ISK 34,964 million (2024: ISK 52,602 million) and ''Cash and cash equivalents at
year-end'' increase by ISK 71,966 million (2024: ISK 34,964 million). In addition, the change affects ''Changes in operating assets and
liabilities'' and therefore ''Net cash provided by operating activities'' and ''Net increase (decrease) in cash and cash equivalents''.
Comparative figures have also been changed to reflect an updated methodology for reporting interest received. As a result, ''Interest
received'' in 2024 increased by ISK 5,646 million, with a corresponding decrease in ''Changes in operating assets and liabilities''.
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 increase (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 .............................................................................
Money market loans and other loans to credit institutions ....................................................
Bank accounts not pledged as collateral against derivative instruments ..............................
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 2025
22
Amounts are in ISK million
Consolidated Statement of Cash Flows
The notes on pages 24 to 91 are an integral part of these Consolidated Financial Statements.
Changes in operating assets and liabilities2025 2024 Mandatory reserve and pledged balances with Central Bank ..................................................................( 2,778) ( 11,106)Loans to credit institutions pledged as collateral against derivative instruments .....................................1,031 208 Bonds and debt instruments ...................................................................................................................( 8,329) 18,673 Loans to customers ................................................................................................................................( 69,217) ( 68,563)Shares and equity instruments ...............................................................................................................3,115 ( 10,528)Other assets ...........................................................................................................................................1,715 ( 2,885)Deposits from Central Bank and credit institutions .................................................................................749 ( 3,563)Deposits from customers ........................................................................................................................45,055 78,098 Derivative instruments and short positions .............................................................................................1,461 426 Other liabilities ........................................................................................................................................( 4,348) 4,884 Total ( 31,546) 5,644
Non-cash items included in profit for the year2025 2024 Net interest income ................................................................................................................................( 52,471) ( 47,265)Unrealised fair value (gain) loss recognised in the income statement .....................................................( 582)190Foreign exchange gain ...........................................................................................................................( 427) ( 607)Fair value gain on investment property ...................................................................................................( 275) ( 1,310)Share of profit from associates ...............................................................................................................( 683) ( 688)Share-based payrment expenses ...........................................................................................................104 -Net gain from sales of property and equipment ......................................................................................( 136) ( 24)Depreciation, amortisation, and write-offs ...............................................................................................1,759 1,662 Bank tax .................................................................................................................................................2,084 1,900 Net impairment on financial assets .........................................................................................................820 ( 578)Income tax expense ...............................................................................................................................9,746 9,426 Other changes ........................................................................................................................................35 16 Total ( 40,026) ( 37,278)
Íslandsbanki hf. Consolidated Financial Statements 2025
23
Amounts are in ISK million
Notes to the Consolidated Financial Statements
Notes
Page
Notes
Page
General information
1 Corporate information ................................................. 25 29 Intangible assets ......................................................... 48
2 Basis of preparation .................................................... 25 30 Other assets ............................................................... 48
3 Significant accounting estimates and judgements ....... 25 31 Deposits from Central Bank and credit institutions ...... 49
4 Changes to accounting policies ................................... 26 32 Deposits from customers ............................................ 49
5 Operating segments .................................................... 27 33 Pledged assets ........................................................... 49
34 Debt issued and other borrowed funds ........................ 50
Notes to the Consolidated Income Statement 35 Subordinated loans ..................................................... 51
6 Quarterly statements - unaudited ................................ 31 36 Changes in liabilities arising from financing activities .. 51
7 Net interest income ..................................................... 32 37 Tax assets and tax liabilities ....................................... 52
8 Net fee and commission income ................................. 32 38 Other liabilities ............................................................ 53
9 Net financial expense .................................................. 33
10 Net foreign exchange gain .......................................... 33 Other Notes
11 Other operating income ............................................... 34 39 Custody assets ........................................................... 53
12 Personnel and salaries ................................................ 34 40 Leases ........................................................................ 53
13 Other operating expenses ........................................... 36 41 Íslandsbanki's shareholders ........................................ 54
14 Net impairment on financial assets ............................. 36 42 Related party .............................................................. 55
15 Income tax expense .................................................... 37 43 Legal proceedings ....................................................... 56
16 Earnings per share ...................................................... 37 44 Events after the reporting period ................................. 57
Notes to the Consolidated Statement of Financial Position Risk Management
17 Classification of financial assets and 45 Risk management ....................................................... 57
financial liabilities ........................................................ 38
46-50
Credit risk ................................................................... 58
18-19
Fair value information for financial instruments ........... 39
51-53
Liquidity risk ................................................................ 65
20 Offsetting financial assets and financial liabilities ........ 42
54-58
Market risk .................................................................. 69
21 Cash and balances with Central Bank ......................... 42 59 Operational risk ........................................................... 74
22 Loans to credit institutions .......................................... 42
60-61
Capital management ................................................... 75
23 Derivative instruments and short positions .................. 43
24 Loans to customers .................................................... 44 Accounting policies
25 Expected credit losses ................................................ 44 62 Material accounting policies ........................................ 77
26 Investments in associates ........................................... 46
27 Investment property .................................................... 46 Financial ratios
28 Property and equipment .............................................. 47 63 Financial ratios ............................................................ 90
Íslandsbanki hf. Consolidated Financial Statements 2025
24
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
registered office is at Hagasmári 3, 201 Kópavogur, Iceland.
The Consolidated Financial Statements for the year ended 2025 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.
The 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 12 February 2026. In case of discrepancy between the English version and the Icelandic translation, the
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 2025, the
exchange rate of the ISK against the USD was 125.20 and for the EUR 147.20 (at year-end 2024: USD 138.20 and EUR 143.90).
The 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.
Impairment of financial assets
The main assumptions used for calculating the allowance for credit losses include:
• 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 most closely related to credit
losses in the relevant portfolio. These include macroeconomic variables, demographic variables and variables related to past payment
history, among others. These variables are sourced both internally and externally. Significant judgements required for measuring
expected credit loss (ECL) include:
• 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
Íslandsbanki hf. Consolidated Financial Statements 2025
25
Notes to the Consolidated Financial Statements
3.
Significant accounting estimates and judgements (continued)
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 2025, as it has been for the past
few years, since 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 220 million, while a 5% shift from the baseline to the
optimistic scenario would decrease the allowance by ISK 90 million. Scenario weights can be scaled linearly, allowing a broader scope
of analysis on the impairment allowance.
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 is not appropriate, alternative ECL calculations, referred to as "manual impairment", are proposed by experts. Each
manual impairment is subsequently reviewed and approved or rejected by the Impairment Council. As of year-end 2025, exposure to a
few counterparties amounting to ISK 9.3 billion was subject to manual impairment, with the associated ECL totalling ISK 2.7 billion (year-
end 2024: ISK 7.5 billion and ISK 1.5 billion, respectively).
The allowance for credit losses is further discussed in Notes 24-25, in Notes 46-50 on risk management and in Note 62.3.
4.
Changes to accounting policies
The purpose of the following changes to accounting policies is to ensure a fairer presentation of the Consolidated Financial Statements.
The presentation of profit (loss) from non-current assets held for sale has been updated. Previously, it was presented in the line item
"Profit (loss) from non-current assets held for sale, net of tax". Now profit (loss) from non-current assets held for sale is presented as
part of the line item "Other operating income" as "Net income (expense) from repossessed collateral" and the income tax due to that net
income is presented as part of the line item "Income tax expense". In line with these changes, the name of "Non-current assets held for
sale" has been changed to "Repossessed collateral". In the context of materiality, the Group has determined that this item does not
warrant separate presentation as a line item in the Consolidated Statement of Financial Position. Accordingly, "Repossessed collateral"
has been reclassified and is now included within "Other assets".
The presentation of the Group's restricted reserves has been updated in the Consolidated Statement of Changes in Equity to provide a
more detailed breakdown. The presentation for the prior period has been updated accordingly.
The Group's accounting policies regarding the definition of cash and cash equivalents have been updated. Previously, cash and cash
equivalents in the statement of cash flows consisted of cash on hand, unrestricted balances with the Central Bank, and demand deposits
with credit institutions. They now consist of cash on hand, unrestricted balances with the Central Bank, and loans to credit institutions,
excluding loans to credit institutions pledged as collateral against derivative instruments.
The presentation of interest expenses has been updated to provide a more detailed breakdown of expenses, for further information see
Note 7.
Amendments to IFRS standards that became effective from 1 January 2025 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 disaggregation
Íslandsbanki hf. Consolidated Financial Statements 2025
26
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.
A
n 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
r
isk 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 operates 12 branches across Iceland, located in Reykjavík, Kópavogur, Hafnarfjörður, Reykjanesbær, Akranes, Ísafjörður,
Akureyri, Húsavík, Egilsstaðir, Reyðarfjörður, Selfoss, and Vestmannaeyjar.
T
he Group comprises the following operating segments:
P
ersonal 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
c
hat. Customers can also visit the Bank's efficient branch network for comprehensive consultancy services and contact the contact
centre.
B
usiness 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. Vi
a
online banking and the app, customers have a full overview of their business, making day-to-day operations easy to manage.
C
orporate & 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.
T
reasury 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.
C
ost centres
Cost centres comprise Digital & Data, Finance (excluding Treasury and Proprietary Trading), Risk Management, Compliance, CEO
Office, Human Resources & Internal Services, and Legal. Group Internal Audit is also a part of the cost centres; however, it operates
independently from the Bank, with the Chief Audit Executive reporting directly to the Bank's Board of Directors.
S
ubsidiaries, 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. Net interest income is presented
for the operating segments because interest constitutes the majority of segment revenues, and management assesses performance
primarily on a net interest basis.
Íslandsbanki hf. Consolidated Financial Statements 2025
27
Notes to the Consolidated Financial Statements
5.
Operating segments (continued)
Corporate & Treasury & Subsidiaries, 2025 Personal Business Investment Proprietary Cost The Bank eliminations & The GroupBanking Banking Banking Trading centres total adjustments total Net interest income (expense) ...................................................................... 17,991 19,586 13,697 1,421 ( 413) 52,282 189 52,471 Net fee and commission income (expense) .................................................. 4,299 2,051 5,126 ( 157) ( 7) 11,312 2,787 14,099 Other net operating income ........................................................................... 79 ( 19) 1,376 ( 262)317 1,491 ( 821)670Total operating income22,369 21,618 20,199 1,002 ( 103) 65,085 2,155 67,240 Salaries and related expenses ...................................................................... ( 2,772) ( 2,374) ( 2,304) ( 328) ( 8,874) ( 16,652) ( 1,152) ( 17,804)Other operating expenses ............................................................................. ( 2,666) ( 1,260) ( 1,260) ( 460) ( 5,823) ( 11,469) ( 207) ( 11,676)Bank tax ........................................................................................................ ( 920) ( 506) ( 564) ( 80) ( 14) ( 2,084)- ( 2,084)Net impairment on financial assets ............................................................... ( 239) ( 91) ( 339) ( 13)- ( 682) 1 ( 681)Cost allocation .............................................................................................. ( 5,996) ( 5,057) ( 4,308)566 14,795 - - -Profit (loss) before tax ................................................................................... 9,776 12,330 11,424 687 ( 19) 34,198 797 34,995 Income tax expense ...................................................................................... ( 2,781) ( 3,337) ( 3,115) ( 108)- ( 9,341) ( 405) ( 9,746)Profit (loss) for the year 6,995 8,993 8,309 579 ( 19) 24,857 392 25,249 Net segment revenue from external customers ............................................. 23,284 25,018 31,069 ( 14,546) 260 65,085 2,155 67,240 Net segment revenue from other segments .................................................. ( 915) ( 3,400) ( 10,870) 15,548 ( 363) - - -Fee and commission income ........................................................................8,689 2,311 5,513 304 - 16,817 3,312 20,129 Depreciation, amortisation, and write-offs ..................................................... ( 203) ( 51) ( 10)- ( 1,447) ( 1,711) ( 48) ( 1,759)At 31 December 2025Loans to customers ...................................................................................... 630,788 346,943 387,476 1,899 - 1,367,106 - 1,367,106Other assets ................................................................................................. 3,978 1,703 1,268 342,241 9,773 358,963 2,078 361,041Total segment assets 634,766 348,646 388,744 344,140 9,773 1,726,069 2,078 1,728,147 Deposits from customers .............................................................................. 524,781 288,142 148,732 10,160 - 971,815 ( 3,120) 968,695 Other liabilities .............................................................................................. 3,033 2,870 3,778 516,573 6,049 532,303 1,790 534,093 Total segment liabilities 527,814 291,012 152,510 526,733 6,049 1,504,118 ( 1,330) 1,502,788 Allocated equity ............................................................................................ 46,965 55,352 70,303 48,023 1,308 221,951 3,408 225,359 Risk exposure amount .................................................................................. 221,633 306,872 430,188 60,696 8,542 1,027,931 5,857 1,033,788 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 2025
28
Amounts are in ISK million
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* ......................................................................... ( 16) 63 1,433 1,539 232 3,251 ( 581) 2,670 Total operating income19,816 20,819 19,591 676 ( 279) 60,623 2,434 63,057 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 ................................................................................... 8,658 11,347 12,685 465 ( 652) 32,503 1,201 33,704 Income tax expense* .................................................................................... ( 2,577) ( 3,191) ( 3,556) 61 160 ( 9,103) ( 355) ( 9,458)Profit (loss) for the year 6,081 8,156 9,129 526 ( 492) 23,400 846 24,246 Net segment revenue from external customers ............................................. 20,453 23,859 30,153 ( 13,899) 57 60,623 2,434 63,057 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
*Comparative figures have been changed. Income of ISK 119 million recognised in "Profit (loss) from non-current assets held for sale, net of tax" in the 2024 Consolidated Financial Statements was
restated in the line item "Other operating income". The associated income tax expense of ISK 32 million was restated as part of "Income tax expense".
Íslandsbanki hf. Consolidated Financial Statements 2025
29
Amounts are in ISK million
Notes to the Consolidated Financial Statements
5.
Subsidiaries, eliminations & adjustments
2025 Íslands- Allianz Other Eliminations sjóðir hf. Ísland hf. subsidiaries & adjustments Total Net interest income .................................................................... 10 171 4 4 189 Net fee and commission income (expense) ............................... 1,438 1,369 - ( 20) 2,787 Other net operating income ....................................................... ( 53) ( 17) 542 ( 1,293) ( 821)Total operating income 1,395 1,523 546 ( 1,309) 2,155 Salaries and related expenses ................................................... ( 820) ( 265) ( 67) - ( 1,152)Other operating expenses .......................................................... ( 248) ( 240) ( 437) 718 ( 207)Net impairment on financial assets ............................................ 1 - - - 1 Profit (loss) before tax ................................................................ 328 1,018 42 ( 591) 797 Income tax ................................................................................. ( 66) ( 206) ( 9) ( 124) ( 405)Profit for the year before profit from non-current assets 262 812 33 ( 715) 392 Net segment revenue from external customers .......................... 1,742 1,347 11 ( 945) 2,155 Net segment revenue from other segments ............................... ( 347) 176 535 ( 364) -Fee and commission income ..................................................... 2,009 1,890 - ( 587) 3,312 Depreciation, amortisation, and write-offs .................................. - ( 33) ( 3) ( 12) ( 48)At 31 December 2025Total assets ............................................................................... 2,060 3,534 2,482 ( 5,998) 2,078 Total liabilities ............................................................................ 316 1,288 65 ( 2,999) ( 1,330)Total equity ................................................................................ 1,744 2,246 2,417 ( 2,999) 3,408 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
Operating segments (continued)
Íslandsbanki hf. Consolidated Financial Statements 2025
30
Amounts are in ISK million
Notes to the Consolidated Financial Statements
6. Quarterly statements - unaudited
*Comparative figures have been changed. Income of ISK 2 million for Q1, ISK 120 million for Q2, ISK 2 million for Q3, and expenses
of ISK 5 million for Q4 recognised in the line item "Profit (loss) from non-current assets held for sale" in the 2024 Consolidated
Financial Statements was restated as "Other operating income". The associated income tax expense was restated as part of "Income
tax expense".
2025Q1 Q2 Q3 Q4 TotalInterest income calculated using the effective interest rate method ..........32,869 34,609 32,507 29,339 129,324 Other interest income ...............................................................................1,081 1,048 839 680 3,648 Interest expense .......................................................................................(21,011) (21,776) (20,086) (17,628) ( 80,501)Fee and commission income ....................................................................4,627 4,979 4,706 5,817 20,129 Fee and commission expense ..................................................................(1,560) (1,359) (1,477) (1,634) ( 6,030)Net financial income (expense) .................................................................(986) 13 (353) 404 ( 922)Net foreign exchange gain ........................................................................47 71 152 157 427 Other operating income* ...........................................................................463 131 124 447 1,165 Salaries and related expenses ..................................................................(4,489) (4,412) (3,793) (5,110) ( 17,804)Other operating expenses .........................................................................(2,907) (2,849) (2,686) (3,234) ( 11,676)Bank tax ....................................................................................................(500) (513) (549) (522) ( 2,084)Net impairment on financial assets ...........................................................( 3) 402 7 ( 1,087) ( 681)Profit before tax ........................................................................................7,631 10,344 9,391 7,629 34,995 Income tax expense* ................................................................................( 2,422) ( 3,152) ( 2,490) ( 1,682) ( 9,746)Profit for the period 5,209 7,192 6,901 5,947 25,249
*Expenses of ISK 4 million for Q1, ISK 12 million for Q2, and income of ISK 9 million for Q3 recognised in the line item "Profit (loss)
from non-current assets held for sale" in the Group's Interim Financial Statements of 2025 was restated as "Other operating income".
The associated income tax expense was restated as part of "Income tax expense".
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* ...........................................................................1,100 165 359 777 2,401 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 ........................................................................................7,885 7,702 9,778 8,339 33,704 Income tax expense* ................................................................................( 2,468) ( 2,436) ( 2,498) ( 2,056) ( 9,458)Profit for the period 5,417 5,266 7,280 6,283 24,246
Íslandsbanki hf. Consolidated Financial Statements 2025
31
Amounts are in ISK million
Notes to the Consolidated Financial Statements
7.
Net interest income
5,895 million for the year 2024 recognised in the line item "Other liabilities" in the Consolidated Financial Statements for the year 2024,
have been reclassified to other line items, with ISK 4,882 million for the year 2024 reclassified as "Financial liabilities mandatorily at
fair value through profit or loss" and ISK 1,013 million for the year 2024 reclassified as "Debt issued and other borrowed funds at
amortised cost".
8. Net fee and commission income2025 2024 Asset management .........................................................................................................................................3,040 2,864 Investment banking and brokerage .................................................................................................................3,842 3,337 Payment processing ........................................................................................................................................8,706 8,390 Loans and guarantees .....................................................................................................................................2,257 2,009 Other fee and commission income ..................................................................................................................2,284 2,344 Fee and commission income 20,129 18,944 Brokerage ........................................................................................................................................................( 574) ( 536)Payment processing expenses ........................................................................................................................( 4,643) ( 4,564)Other fee and commission expense ................................................................................................................( 813) ( 722)Fee and commission expense ( 6,030) ( 5,822)Net fee and commission income 14,099 13,122 Fee and commission income by segment is disclosed in Note 5.
2025 2024 Cash and balances with Central Bank .............................................................................................................3,817 4,888 Loans to credit institutions ...............................................................................................................................2,609 3,042 Loans to customers .........................................................................................................................................116,039 121,730 Financial assets mandatorily at fair value through other comprehensive income .............................................6,859 5,618 Interest income calculated using the effective interest rate method 129,324 135,278 Financial assets mandatorily at fair value through profit or loss .......................................................................3,636 6,020 Other assets ....................................................................................................................................................12 44 Other interest income 3,648 6,064 Deposits from Central Bank and credit institutions ..........................................................................................( 299) ( 380)Deposits from customers .................................................................................................................................( 51,283) ( 60,587)Financial liabilites mandatorily at fair value through profit or loss* ...................................................................( 2,597) ( 4,882)Debt issued and other borrowed funds designated as at fair value through profit or loss .................................( 1,582) ( 1,912)Debt issued and other borrowed funds at amortised cost* ...............................................................................( 21,850) ( 22,780)Subordinated loans .........................................................................................................................................( 2,793) ( 3,357)Lease liabilities ................................................................................................................................................( 71) ( 76)Other liabilities* ...............................................................................................................................................( 26) ( 103)Interest expense ( 80,501) ( 94,077)Net interest income 52,471 47,265 *The presentation of interest expense has been updated, and comparative figures have been changed accordingly. Expenses of ISK
Íslandsbanki hf. Consolidated Financial Statements 2025
32
Amounts are in ISK million
Notes to the Consolidated Financial Statements
9.
Net financial expense
10. Net foreign exchange gain
2025 2024 Cash and balances with Central Bank .............................................................................................................( 60) ( 92)Loans at amortised cost ..................................................................................................................................( 1,174) ( 8,201)Financial assets mandatorily at fair value through profit or loss .......................................................................3,176 ( 3,673)Financial assets mandatorily at fair value through other comprehensive income .............................................1,127 ( 1,640)Other assets ....................................................................................................................................................( 19) 17 Net foreign exchange gain (loss) for assets 3,050 ( 13,589)Deposits ..........................................................................................................................................................3,288 2,512 Debt issued and other borrowed funds designated as at fair value through profit or loss .................................( 1,066) 1,943 Debt issued and other borrowed funds at amortised cost ................................................................................( 4,003) 8,853 Subordinated loans .........................................................................................................................................( 842) 888 Net foreign exchange gain (loss) for liabilities ( 2,623) 14,196 Net foreign exchange gain 427 607
2025 2024 Net gain (loss) on financial assets and financial liabilities mandatorily at FVTPL .............................................( 1,219) 166 Net gain (loss) on financial liabilities designated as at FVTPL .........................................................................422 ( 580)Net gain (loss) on fair value hedges ................................................................................................................( 44) 63 Net gain (loss) on derecognition of financial liabilities measured at amortised cost .........................................( 82) 103 Net loss on derecognition of financial assets measured at amortised cost ...................................................... - ( 89)Net gain (loss) on sale of debt instruments measured at FVOCI .....................................................................1 ( 1)Net financial expense ( 922) ( 338)The following table shows the categorisation of the net gain (loss) on fair value hedges.2025 2024 Fair value changes of the hedged items attributable to the hedged risk ..........................................................331 ( 1,175)Fair value changes of the hedging derivatives .................................................................................................( 375) 1,238 Net gain (loss) on fair value hedges ( 44) 63 The following table shows the categorisation of the net financial expense by type.2025 2024 Net gain (loss) on bonds and related derivatives .............................................................................................64 ( 304)Net gain (loss) on shares and related derivatives ............................................................................................( 1,589) 17 Dividend income ..............................................................................................................................................1,085 431 Net loss on debt issued and related derivatives ...............................................................................................( 300) ( 88)Net loss on economic hedging and other derivatives .......................................................................................( 183) ( 304)Net loss on derecognition of financial assets measured at amortised cost ...................................................... - ( 89)Net gain (loss) on sale of debt instruments measured at FVOCI .....................................................................1 ( 1)Net financial expense ( 922) ( 338)
Íslandsbanki hf. Consolidated Financial Statements 2025
33
Amounts are in ISK million
Notes to the Consolidated Financial Statements
12. Personnel and salaries
The Directorate of Internal Revenue approved the share option plan on 21 July 2025. At the beginning of August share option
agreements were concluded with employees in accordance with the approved plan. According to the plan, the share option applies to
all permanent employees of Íslandsbanki, except employees of Group Internal Audit.
An extraordinary shareholders' meeting of Íslandsbanki was held on 30 June 2025, where proposed amendments to the Bank's
Remuneration Policy were approved. Two provisions were introduced under Article 7: the authorisation to establish a special incentive
scheme for employees and the option to adopt a stock option plan in accordance with Article 10 of the Income Tax Act no. 90/2003.
*Financial activities tax calculated on salaries is 5.5% in 2025 (2024: 5.5%).
A total of 743 employees entered into option agreements for up to 8,817,181 shares per year based on 100% exercise of share
options. A total of 44,085,905 share options were granted during the year, of which 1,698,964 were forfeited during the year. A total of
42,386,941 share options were outstanding at the end of the year, with a weighted-average remaining contractual life of 4.6 years.
According to the plan, each option holder acquires the right to buy shares in Íslandsbanki of up to ISK 1,500,000 once a year for five
years, following the release of the Bank's half year results in 2026, 2027, 2028, 2029 and 2030, for the total maximum amount of ISK
7,500,000. The purchase price is the weighted average traded price in transactions with the Bank's shares during the 10 business days
prior to the agreement date, being ISK 126.4 per share.
2025 2024 Salaries ...........................................................................................................................................................13,736 12,590 Share-based payment expenses .....................................................................................................................104 -Contributions to pension funds ........................................................................................................................2,119 1,916 Social security charges and financial activities tax* .........................................................................................1,850 1,716 Other salary-related expenses .........................................................................................................................188 162 Capitalisation of salaries and related expenses in software development ........................................................( 193) ( 55)Salaries and related expenses 17,804 16,329
The fair value of the options was determined on the grant date using the Black-Scholes option pricing model and expensed as salary
cost in accordance with IFRS 2. Inputs used in the model include share price on grant date of ISK 126 per share, exercise price of ISK
126.4 a share, option life of 1, 2, 3, 4 and 5 years, expected volatility of 22.44% (based on historical volatility), expected dividends of
5.13%, and a risk-free interest rate in the range of 7.29-7.67%.
The total expense recognised in 2025 amounted to ISK 104 million. The Group estimates that remaining expenses related to the share
option plan until August 2030 will amount to ISK 478 million, with the expenses being front-loaded.
A variable remuneration incentive scheme was implemented in early February 2026 for all employees of the Group permitted under
Icelandic law. Employees in Risk Management, Group Internal Audit, and Compliance are excluded by law from participating in
variable remuneration incentive schemes.
In 2025 there were no paid performance-based salaries (2024: none) and there were no unpaid performance-based salaries at year-
end 2025. There were no share-based payments in either 2025 or 2024.
*Comparative figures have been changed. Income of ISK 119 million recognised in "Profit (loss) from non-current assets held for sale,
net of tax" in the 2024 Consolidated Financial Statements was restated in the line item "Other operating income" as "Net income
(expense) from repossessed collateral".
11.Other operating income2025 2024 Fair value changes on investment property .....................................................................................................275 1,310 Net gain from dissolution of subsidiary ............................................................................................................ - 38 Share of profit of associates, net of tax ...........................................................................................................683 650 Net income (expense) from repossessed collateral* ........................................................................................( 24) 119 Gain from sales of property and equipment .....................................................................................................136 24 Legal fees .......................................................................................................................................................68 68 Rental income .................................................................................................................................................16 41 Other net operating income .............................................................................................................................11 151 Other operating income 1,165 2,401
Íslandsbanki hf. Consolidated Financial Statements 2025
34
Amounts are in ISK million
Notes to the Consolidated Financial Statements
12. Personnel and salaries (continued)
Included in total salaries are non-monetary benefits such as the use of cars owned by the Group.
Total amount of paid compensation for the Board of Directors, the CEO, the Executive Committe, and other key employees is specified
as follows:
Contribution to pension funds for the Board of Directors amounted to ISK 14.1 million in 2025 (2024: ISK 10.9 million).
2025 2024 Linda Jónsdóttir, Chairman of the Board .........................................................................................................18.2 13.9 Stefán Pétursson, Vice-Chairman of the Board ...............................................................................................16.3 13.1 Agnar Tómas Möller, member of the Board .....................................................................................................10.9 9.3 Haukur Örn Birgisson, member of the Board ...................................................................................................13.8 10.0 Helga Hlín Hákonardóttir, member of the Board ..............................................................................................14.8 12.3 Stefán Sigurðsson, member of the Board ........................................................................................................15.4 7.0 Valgerður Hrund Skúladóttir, member of the Board .........................................................................................13.9 7.5 Páll Grétar Steingrímsson, former member of the Board ................................................................................1.0 2.8 Herdís Gunnarsdóttir, alternate member of the Board ....................................................................................2.0 0.5 Anna Þórðardóttir, former member of the Board .............................................................................................. - 2.4 Total salaries 106.3 78.8
2025 2024 The Bank The Group The Bank The Group Average number of full-time equivalent positions during the year ...............................755 796 759 799 Number of full-time equivalent positions at year-end ..................................................725 769 733 772
*Other members of the Executive Committee consist of: Chief Financial Officer, Chief Compliance Officer, Chief Risk Officer,
Managing Director of Corporate & Investment Banking, Managing Director of Personal Banking, Managing Director of Business
Banking. The Managing Director of Digital & Data stepped down from the position in November 2025.
Board members receive remuneration for their participation in Board committees. In 2025 the Board met 30 times (2024: 27) during the
year. The Board sub-committees met in 2025 as follows: The Board Audit Committee met 7 times (2024: 14), the Board Risk
Management Committee met 9 times (2024: 10), the Board Corporate Governance and Human Resource Committee met 11 times
(2024: 8), and the Board Innovation and Technology Committee met 5 times (the committee was formed in 2025). Members of the
Board of Directors receive 25% of their monthly board remuneration for each board meeting attended beyond 12 meetings between the
Bank's AGMs (effective from the 2025 AGM).
**Other key employees consisted of three employees for most of 2025 (2024: three). One key employee left their position in October,
included in total salaries is a settlement of accrued holiday pay.
2025 2024 Pension Pension Total funds Total funds salariescontrib.salariescontrib.Jón Guðni Ómarsson, CEO ........................................................................................57.9 8.4 58.0 8.4Other members of the Executive Committee* ............................................................346.6 50.2 328.6 48.2Other key employees** ..............................................................................................105.1 17.1 105.2 15.0Total 509.6 75.7 491.8 71.6
Íslandsbanki hf. Consolidated Financial Statements 2025
35
Amounts are in ISK million
Notes to the Consolidated Financial Statements
Auditors' fees
14. Net impairment on financial assets2025 2024 Net change in expected credit losses, on-balance sheet items ........................................................................( 625) 371 Net change in expected credit losses, off-balance sheet items ........................................................................( 56) 274 Net impairment on financial assets ( 681) 645
Audit of the financial statements ......................................................................................................................98 131 Review of interim financial statements ............................................................................................................24 25 Other services .................................................................................................................................................13 3 Auditors' fees 135 159
13.Other operating expenses2025 2024 Professional services ......................................................................................................................................1,863 1,816 Software and IT expenses ...............................................................................................................................5,077 4,839 Real estate and office equipment ....................................................................................................................680 678 Depreciation, amortisation, and write-offs ........................................................................................................1,759 1,662 Other administrative expenses ........................................................................................................................2,297 2,304 Other operating expenses 11,676 11,299
Íslandsbanki hf. Consolidated Financial Statements 2025
36
Amounts are in ISK million
Notes to the Consolidated Financial Statements
15.
Income tax expense
16. Earnings per share
The Bank is taxed jointly with its subsidiary Íslandssjóðir hf. (Iceland Funds).
*Comparative figures have been changed. Income tax expense amounting to ISK 32 million in the line item “Profit from non-current
assets held for sale, net of tax” in the 2024 Consolidated Financial Statements was restated to the line item “Income tax expense”.
The Group's basic and diluted earnings per share are the same as the Group has not issued any options, warrants, convertibles, or
other financial instruments that dilute earnings per share (2024: none). In August 2025, the Group entered into equity-settled share
option agreements. Although these options are outstanding, they do not dilute earnings per share as the average market price of the
Bank's shares during the period from 6 August to 31 December 2025 was below the adjusted exercise price (which includes the fair
value of services yet to be rendered under IFRS 2). For further information on the Group's stock option plan see Note 12.
2025 2024 Profit attributable to shareholders of the Bank .................................................................................................25,249 24,246 Weighted average number of outstanding shares ...........................................................................................1,854 1,934 Basic earnings per share (ISK) 13.62 12.53
Recognised income tax is based on applicable tax laws. The income tax rate for legal entities in 2025 is 20% (2024: 21%). 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 2025 is 27.8% (2024: 28.1%).
2025 2024*Current tax expense ........................................................................................................................................7,714 8,153 Special financial activities tax ..........................................................................................................................2,171 2,171 Adjustments in prior year's calculated income tax ...........................................................................................85 270 Changes in deferred tax assets and deferred tax liabilities ..............................................................................( 224) ( 1,136)Income tax recognised in the income statement9,746 9,458 Income tax recognised in other comprehensive income( 151) ( 257)
2025 2024*Profit before tax ..........................................................................................................34,995 33,704 Income tax calculated on the profit for the year ..........................................................6,999 20.0% 7,078 21.0% Special financial activities tax .....................................................................................2,171 6.2% 2,171 6.4% Adjustments in prior year's calculated income tax ......................................................85 0.2% 270 0.8% Income not subject to tax ...........................................................................................( 382) ( 1.1%) ( 1,059) ( 3.1%)Non-deductible expenses ...........................................................................................895 2.6% 762 2.3% Other differences .......................................................................................................( 22) ( 0.1%) 236 0.7% Effective income tax expense 9,746 27.8% 9,458 28.1%
Íslandsbanki hf. Consolidated Financial Statements 2025
37
Amounts are in ISK million
Notes to the Consolidated Financial Statements
17. Classification of financial assets and financial liabilities
At 31 December 2025 Mandatorily Hedge Mandatorily Amortised Carrying at FVTPL accounting* at FVOCI cost amount Cash and balances with Central Bank ......................................................... - - - 80,394 80,394 Loans to credit institutions ........................................................................... - - - 80,009 80,009 Listed bonds and debt instruments .............................................................11,149 - 132,559 - 143,708 Listed bonds and debt instruments used for economic hedging ..................6,123 - - - 6,123 Unlisted bonds and debt instruments ..........................................................2,128 - - - 2,128 Derivatives ..................................................................................................3,533 1,771 - - 5,304 Loans to customers ..................................................................................... - - - 1,367,106 1,367,106 Listed shares and equity instruments ..........................................................3,200 - - - 3,200 Listed shares and equity instruments used for economic hedging ...............14,518 - - - 14,518 Unlisted shares and equity instruments .......................................................2,799 - - - 2,799 Other financial assets ................................................................................. - - - 3,452 3,452 Total financial assets 43,450 1,771 132,559 1,530,961 1,708,741 Mandatorily Hedge Designated Amortised Carrying at FVTPL accounting* as at FVTPL cost amount Deposits from Central Bank and credit institutions ...................................... - - - 13,250 13,250 Deposits from customers ............................................................................ - - - 968,695 968,695 Derivative instruments and short positions ..................................................6,183 - - - 6,183 Debt issued and other borrowed funds ........................................................ - 90,607 89,416 264,570 444,593 Subordinated loans ..................................................................................... - - - 40,315 40,315 Other financial liabilities .............................................................................. - - - 10,309 10,309 Total financial liabilities 6,183 90,607 89,416 1,297,139 1,483,345
At 31 December 2024 Mandatorily 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 Total financial liabilities 7,306 88,831 21,419 1,241,942 1,359,498 *For further information on hedge accounting see Notes 23 and 34.
Íslandsbanki hf. Consolidated Financial Statements 2025
38
Amounts are in ISK million
Notes to the Consolidated Financial Statements
18. Fair value information for financial instruments
Level 3: Valuation techniques based on significant unobservable inputs, e.g. internal assumptions.
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). Financial instruments classfied as Level 2 contain only 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. Bond forwards and equity forwards are valued using standard models with key inputs observed from stock prices and
funding rates.
At 31 December 2025 Level 1 Level 2 Level 3 Total Bonds and debt instruments ...........................................................................................149,831 - 2,128 151,959 Derivatives ..................................................................................................................... - 5,304 - 5,304 Shares and equity instruments .......................................................................................17,718 - 2,799 20,517 Total financial assets167,549 5,304 4,927 177,780
Short positions ...............................................................................................................1,908 - - 1,908 Derivative instruments .................................................................................................... - 4,275 - 4,275 Debt issued and other borrowed funds designated as at FVTPL ....................................89,416 - - 89,416 Total financial liabilities91,324 4,275 - 95,599 At 31 December 2024 Level 1 Level 2 Level 3 TotalBonds 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
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 tables show financial instruments carried at fair value at 31 December 2025 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:
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. No transfers between levels took
place during the year.
Financial instruments carried at fair value
Íslandsbanki hf. Consolidated Financial Statements 2025
39
Amounts are in ISK million
Notes to the Consolidated Financial Statements
18.
Significant unobservable inputs used in the valuation of Level 3 bonds and debt instruments is the weighting of various scenarios regarding
the development of Grindavík in the coming years, the estimated value of Þórkatla's residential housing, estimated rental income of
Þórkatla's residential housing, and discount rates. All Level 3 bonds and debt instruments are included in the sensitivity analysis.
The sensitivity analysis for Level 3 shares and equity instruments is based on weighted scenarios reflecting potential developments in the
underlying assets. The sensitivity analysis for Level 3 shares and equity instruments includes only financial instruments that are highly
sensitive to changes in fair value measurement inputs. The fair value of Level 3 shares and equity instruments that are included in the
sensitivity analysis amounted to ISK 602 million at 31 December 2025 (year-end 2024: ISK 274 million).
The following tables illustrate 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.
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 2025 ..............................................................................................................2,020 2,417 4,437 Purchases and share capital increase ................................................................................................42 209 251 Net gain on financial instruments recognised in the income statement ...............................................66 173 239 Fair value at 31 December 2025 2,128 2,799 4,927
Bonds and Shares and debt equity instrumentsinstruments TotalFair 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 20242,020 2,417 4,437
Fair value information for financial instruments (continued)
Earned interest of level 3 bonds and debt instruments is not recognised since there is significant uncertainty regarding the recoverability of
interest.
At 31 December 2025 VeryVery Unfavour- unfavour-favourable FavourableableableLevel 3 bonds and debt instruments ...............................................................................1,386 1,088 ( 1,213) ( 1,544)Level 3 shares and equity instruments ...........................................................................1,085 315 ( 282) ( 580)At 31 December 2024 VeryVery Unfavour- unfavour-favourableFavourableableableLevel 3 bonds and debt instruments ...............................................................................1,260 592 ( 588) ( 1,464)Level 3 shares and equity instruments ...........................................................................1,698 1,056 ( 206) ( 236)
Íslandsbanki hf. Consolidated Financial Statements 2025
40
Amounts are in ISK million
Notes to the Consolidated Financial Statements
19.
The fair value of ''Loans to customers'' may differ from their net carrying amount because they may carry interest rates that differ from
current market rates. Fair value is estimated by discounting future cash flows using interest rates that reflect current lending conditions for
similar customers and products. These rates are derived from internal models, and therefore ''Loans to customers'' are classified as Level 3.
Financial instruments not carried at fair value
Assets
"Debt issued and other borrowed funds'' and ''Subordinated loans'' are measured at fair value based on quoted market prices when available
and are classified as Level 1. Where no market prices exist, fair value is estimated using current funding premiums on comparable
instruments, these are classified as Level 2. ''Other financial liabilities'', including unsettled transactions and lease-related payables, are
short-term in nature. Their carrying amount approximates fair value and they are classified as Level 2.
"Cash and balances with the Central Bank'', ''Loans to credit institutions'', and ''Other financial assets'' are short-term in nature. As such,
their fair value is considered to equal their carrying amount and they are classified as Level 2.
Liabilities
The following tables show 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 18.
Total fair CarryingAt 31 December 2024 Level 1 Level 2 Level 3 value amount DifferenceCash 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 ( 11,345)Other financial assets ............................................................. - 6,306 - 6,306 6,306 -Total financial assets - 122,508 1,284,043 1,406,551 1,417,896 ( 11,345)Deposits from Central Bank and credit institutions .................. - 12,535 - 12,535 12,535 -Deposits from customers ........................................................ - 926,805 - 926,805 926,846 ( 41)Debt issued and other borrowed funds ....................................240,465 11,918 - 252,383 257,336 ( 4,953)Subordinated loans .................................................................31,391 - - 31,391 31,695 ( 304)Other financial liabilities .......................................................... - 13,530 - 13,530 13,530 -Total financial liabilities 271,856 964,788 - 1,236,644 1,241,942 ( 5,298)
Total fair CarryingAt 31 December 2025 Level 1 Level 2 Level 3 value amount DifferenceCash and balances with Central Bank .................................... - 80,394 - 80,394 80,394 -Loans to credit institutions ...................................................... - 80,009 - 80,009 80,009 -Loans to customers ................................................................ - - 1,364,031 1,364,031 1,367,106 ( 3,075)Other financial assets ............................................................. - 3,452 - 3,452 3,452 -Total financial assets - 163,855 1,364,031 1,527,886 1,530,961 ( 3,075)Deposits from Central Bank and credit institutions .................. - 13,250 - 13,250 13,250 -Deposits from customers ........................................................ - 968,708 - 968,708 968,695 13 Debt issued and other borrowed funds ....................................249,144 10,691 - 259,835 264,570 ( 4,735)Subordinated loans .................................................................40,278 - - 40,278 40,315 ( 37)Other financial liabilities .......................................................... - 10,309 - 10,309 10,309 -Total financial liabilities 289,422 1,002,958 - 1,292,380 1,297,139 ( 4,759)
"Deposits from Central Bank and credit institutions'' and ''Deposits from customers'' generally carry floating interest rates or are repayable on
demand. Most deposits fall into these categories and their carrying amount is therefore considered a good approximation of fair value. These
instruments are classified as Level 2. For longer-term fixed rate deposits, fair value is estimated by discounting future cash flows using
current market interest rates for similar deposits. These are also classified as Level 2, as the valuation relies on observable market interest
rates.
Íslandsbanki hf. Consolidated Financial Statements 2025
41
Amounts are in ISK million
Notes to the Consolidated Financial Statements
20. Offsetting financial assets and financial liabilities
21. Cash and balances with Central Bank
22. Loans to credit institutions
The following tables show reconciliation of financial assets and financial liabilities which are subject to offsetting, enforceable master netting
agreements and similar agreements.
At 31 December 2025, and at year-end 2024, no netting occurred between financial assets and liabilities subject to enforceable master
netting agreements and comparable arrangements, resulting in no offsetting.
Derivatives31.12.2025 31.12.2024Financial assets .......................................................................................................................................................5,304 5,324 Amounts not set off but subject to master netting arrangements and similar agreements ........................................( 5,003) ( 4,701) - Financial liabilities .................................................................................................................................................( 1,553) ( 1,763) - Cash collateral received .......................................................................................................................................( 3,216) ( 2,937) - Financial instruments collateral received ..............................................................................................................( 234) ( 1)Net amount after consideration of potential effect of netting arrangements 301 623 Derivative instruments and short positions31.12.2025 31.12.2024Financial liabilities ....................................................................................................................................................6,183 7,306 Amounts not set off but subject to master netting arrangements and similar agreements ........................................( 2,349) ( 3,485) - Financial assets ....................................................................................................................................................( 1,553) ( 1,763) - Cash collateral pledged ........................................................................................................................................( 796) ( 1,722)Net amount after consideration of potential effect of netting arrangements 3,834 3,821
31.12.2025 31.12.2024Cash on hand ..........................................................................................................................................................3,270 3,621 Unrestricted balances with Central Bank ..................................................................................................................43,414 31,163 Cash and unrestricted balances with Central Bank 46,684 34,784 Balances pledged as collateral to Central Bank .......................................................................................................712 814 Mandatory reserve deposits with Central Bank ........................................................................................................32,998 30,118 Cash and balances with Central Bank80,394 65,716
31.12.2025 31.12.2024Money market loans ................................................................................................................................................69,660 33,828 Bank accounts .........................................................................................................................................................7,247 13,800 Other loans ..............................................................................................................................................................3,102 2,858 Loans to credit institutions 80,009 50,486
Íslandsbanki hf. Consolidated Financial Statements 2025
42
Amounts are in ISK million
Notes to the Consolidated Financial Statements
23. 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 34) arising from changes in EURIBOR interest rates. The Group applies fair value hedge
accounting to the hedging relationships. At 31 December 2025 the total fair value of the interest rate swaps in the hedging relationship was
positive and amounted to ISK 1,771 million (year-end 2024: ISK 2,101 million) and their total notional amount was ISK 88,320 million (year-
end 2024: ISK 86,340 million).
The Group uses derivatives to hedge currency exposure, interest rate risk in the banking book, and 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 bonds issued by the Government of Iceland 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 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
Notional Notional values values At 31 December 2025related to related to Assets assets liabilities Interest rate swaps .........................................................................................................3,198 194,846 1,820 100,269 Cross-currency interest rate swaps ................................................................................117 12,705 25 2,500 Equity forwards ..............................................................................................................1,239 6,522 1,231 8,223 Foreign exchange forwards ............................................................................................65 9,488 446 22,398 Foreign exchange swaps ................................................................................................490 44,409 712 30,602 Bond forwards ................................................................................................................195 3,537 41 5,821 Derivatives 5,304 271,507 4,275 169,813 Short positions in listed bonds ........................................................................................ - - 1,908 1,891 Total 5,304 271,507 6,183 171,704
Íslandsbanki hf. Consolidated Financial Statements 2025
43
Amounts are in ISK million
Notes to the Consolidated Financial Statements
24.
Loans to customers
carrying
25. Expected credit losses
Total allowances for expected credit lossesStage 1 Stage 2 Stage 3 Total Cash and balances with Central Bank ............................................................................17 - - 17 Loans to credit institutions ..............................................................................................57 - - 57 Loans to customers ........................................................................................................2,743 1,204 3,699 7,646 Other financial assets .....................................................................................................13 3 - 16 Off-balance sheet loan commitments and financial guarantees ......................................682 164 121 967 At 31 December 2025 3,512 1,371 3,820 8,703 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 20244,167 1,011 3,663 8,841
Net At 31 December 2024Gross carrying amount Expected credit losses carrying 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 2025 Gross carrying amount Expected credit losses Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 amount Individuals ..........................................................638,416 8,986 7,277 ( 739) ( 158) ( 491) 653,291 Commerce and services .....................................188,115 21,531 1,972 ( 729) ( 263) ( 385) 210,241 Construction .......................................................81,441 18,875 942 ( 522) ( 447) ( 299) 99,990 Energy ................................................................16,366 666 - ( 27) ( 4) - 17,001 Financial services ...............................................119 - - - - - 119 Industrial and transportation ...............................84,294 3,927 5,879 ( 201) ( 81) ( 1,800) 92,018 Investment companies .......................................42,866 3,669 383 ( 147) ( 114) ( 60) 46,597 Public sector and non-profit organisations ..........16,683 1 18 ( 25) - ( 4) 16,673 Real estate .........................................................133,465 4,903 3,935 ( 248) ( 134) ( 654) 141,267 Seafood ..............................................................89,519 485 19 ( 105) ( 3) ( 6) 89,909 Loans to customers 1,291,284 63,043 20,425 ( 2,743) ( 1,204) ( 3,699) 1,367,106
Íslandsbanki hf. Consolidated Financial Statements 2025
44
Amounts are in ISK million
Notes to the Consolidated Financial Statements
25.
Expected credit losses (continued)
*During the year financial assets amounting to ISK 560 million were written off but are still subject to enforcement activity.
*During the year financial assets amounting to ISK 1,116 million were written off but are still subject to enforcement activity.
Off-balance sheet loan commitments and financial guaranteesStage 1 Stage 2 Stage 3 Total At 1 January 2025 ..........................................................................................................565 32 314 911 Transfer to Stage 1 ........................................................................................................63 ( 35) ( 28) -Transfer to Stage 2 ........................................................................................................( 30) 51 ( 21) -Transfer to Stage 3 ........................................................................................................( 4) ( 4) 8 -Net remeasurement of loss allowance ............................................................................( 462) 122 ( 90) ( 430)New loan commitments and financial guarantees ..........................................................935 34 90 1,059 Derecognitions and maturities ........................................................................................( 385) ( 36)( 152) ( 573)At 31 December 2025 682 164 121 967 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 2024565 32 314 911
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.Loans to customersStage 1 Stage 2 Stage 3 Total At 1 January 2025 ..........................................................................................................3,496 975 3,349 7,820 Transfer to Stage 1 ........................................................................................................820 ( 663) ( 157) -Transfer to Stage 2 ........................................................................................................( 720) 866 ( 146) -Transfer to Stage 3 ........................................................................................................( 80) ( 360) 440 -Net remeasurement of loss allowance ............................................................................( 2,421) 378 888 ( 1,155)New financial assets originated or purchased ................................................................2,854 200 518 3,572 Derecognitions and maturities ........................................................................................( 1,206) ( 192) ( 633) ( 2,031)Write-offs* ...................................................................................................................... - - ( 1,008) ( 1,008)Recoveries of amounts previously written off ................................................................. - - 139 139 Foreign exchange ........................................................................................................... - - 4 4 Unwinding of interest ...................................................................................................... - - 305 305 At 31 December 2025 2,743 1,204 3,699 7,646
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 2025
45
Amounts are in ISK million
Notes to the Consolidated Financial Statements
26. Investments in associates
31.12.2025 31.12.2024
Iceland 32.4% 30.1%
Iceland 43.3% 43.3%
27. Investment property
2025 2024Investment property at the beginning of the year .....................................................................................................2,600 -Transfer from property and equipment ..................................................................................................................... - 1,194 Additions during the year .........................................................................................................................................25 96 Fair value changes ..................................................................................................................................................275 1,310 Investment property at year-end2,900 2,600
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.
Reiknistofa bankanna hf., an IT service centre company, Dalvegur 30, 201 Kópavogur .....................
Norðurturninn hf., a rental company of commercial real estate, Borgartún 26, 105 Reykjavík ............
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 3,923 million (CPI-linked, based on the CPI in December 2025). 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.
2025 2024Investments in associates at the beginning of the year ............................................................................................4,701 4,051 Share of profit of associates ....................................................................................................................................683 650 Investments in associates at year-end 5,384 4,701 Summarised financial information in respect of the Group's associates is set out below:Revenue ..................................................................................................................................................................7,073 6,786 Profit ........................................................................................................................................................................1,198 1,175 Assets ......................................................................................................................................................................19,571 18,404 Liabilities ..................................................................................................................................................................( 8,480) ( 9,028)Net assets ...............................................................................................................................................................11,091 9,376 Group's share of net assets of associates 5,384 4,701
Íslandsbanki hf. Consolidated Financial Statements 2025
46
Amounts are in ISK million
Notes to the Consolidated Financial Statements
28.
Property and equipment
Right-of-use Fixtures, At 31 December 2025 Land and assets: equipment buildings Buildings & vehicles Total Balance at the beginning of the year ..............................................................................703 6,009 3,412 10,124 Additions during the year ................................................................................................7 114 477 598 Disposals and write-offs during the year .........................................................................( 71) - ( 39) ( 110)Remeasurement ............................................................................................................ - 121 - 121 Historical cost 639 6,244 3,850 10,733 Balance at the beginning of the year ..............................................................................( 141) ( 2,765) ( 2,179) ( 5,085)Depreciation during the year ..........................................................................................( 13) ( 597) ( 377) ( 987)Disposals and write-offs during the year .........................................................................13 - 28 41 Accumulated depreciation ( 141) ( 3,362) ( 2,528) ( 6,031)Carrying amount 498 2,882 1,322 4,702 Depreciation rates ..........................................................................................................0-2% 8-50% 8-33%Official real estate value of land and buildings ................................................................781 Insurance value of buildings ...........................................................................................1,693 Insurance value of fixtures, equipment and vehicles ......................................................2,196
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 2025
47
Amounts are in ISK million
Notes to the Consolidated Financial Statements
29.
Intangible assets
30.Other assets31.12.202531.12.2024Receivables .............................................................................................................................................................2,363 2,250 Unsettled securities transactions .............................................................................................................................1,151 4,116 Prepaid expenses ....................................................................................................................................................1,655 648 Repossessed collateral* ..........................................................................................................................................1,749 1,617 Deferred tax assets ..................................................................................................................................................151 164 Other assets ............................................................................................................................................................121 126 Other assets 7,190 8,921 *Comparative figures have been changed. "Non-current assets held for sale" were restated within "Other assets" as "Repossessedcollateral".
Purchased Developed At 31 December 2025 software software Total Balance at the beginning of the year ..................................................................................................2,618 3,238 5,856 Additions during the year ....................................................................................................................541 193 734 Historical cost 3,159 3,431 6,590 Balance at the beginning of the year ..................................................................................................( 1,156) ( 2,016) ( 3,172)Amortisation during the year ...............................................................................................................( 410) ( 326) ( 736)Accumulated amortisation ( 1,566) ( 2,342) ( 3,908)Carrying amount 1,593 1,089 2,682 Amortisation rates ..............................................................................................................................10-33% 10-25%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%
Íslandsbanki hf. Consolidated Financial Statements 2025
48
Amounts are in ISK million
Notes to the Consolidated Financial Statements
31.
Deposits from Central Bank and credit institutions
32. Deposits from customers
Other financial assets pledged as collateral are pledged with the Central Bank to ensure the clearing of the Icelandic payment system as well
as collateral against contracts with the Government Debt Management.
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 2025 was ISK 131,212 million (year-end 2024: ISK 133,643 million).
33. Pledged assets31.12.2025 31.12.2024Loans to customers pledged as collateral against Covered Bonds ..........................................................................420,760 410,481 Cash and balances pledged as collateral against Covered Bonds ...........................................................................18,364 15,213 Loans to credit institutions and balances with Central Bank pledged as collateral against derivative instruments ....1,483 2,757 Other financial assets pledged as collateral .............................................................................................................7,229 7,674 Pledged assets against liabilities 447,836 436,125 Pledged assets against Covered Bonds held by the Bank .......................................................................................( 160,225) ( 160,665)Pledged assets against liabilities on balance 287,611 275,460
31.12.2025 31.12.2024Demand deposits and deposits with maturity up to 3 months ...................................................................................854,319 809,009 Term deposits with maturity of more than 3 months .................................................................................................114,376 117,837 Deposits from customers 968,695 926,846
31.12.202531.12.2024Deposits from customers specified by ownersAmount % of total Amount % of total Central government and state-owned enterprises ..........................................................10,556 1% 12,825 1%Municipalities .................................................................................................................7,611 1% 10,388 1%Companies .....................................................................................................................416,957 43% 408,994 44%Individuals ......................................................................................................................533,571 55% 494,639 54%Deposits from customers 968,695 100% 926,846 100%
31.12.2025 31.12.2024Deposits from credit institutions ...............................................................................................................................13,041 12,351 Repurchase agreements with Central Bank .............................................................................................................209 184 Deposits from Central Bank and credit institutions 13,250 12,535
Íslandsbanki hf. Consolidated Financial Statements 2025
49
Amounts are in ISK million
Notes to the Consolidated Financial Statements
34.
Debt issued and other borrowed funds
31.12.2025 31.12.2024
**These bond issuances are classified as being designated at fair value through profit or loss to eliminate accounting mismatch. At 31
December 2025 the total carrying amount of the bonds amounted to ISK 89,416 million and included in the amount are negative fair value
changes amounting to ISK 557 million.
*The Group applies hedge accounting to these bond issuances and uses certain EUR denominated interest rate swaps as hedging
instruments (see Note 23). 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 interest rates. The Group applies fair value hedge accounting to the hedging
relationships. At 31 December 2025 the total carrying amount of these bond issuances amounted to ISK 90,608 million and included in the
amount are negative fair value changes amounting to ISK 573 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.
First Maturity Currency and outstanding nominal issued Maturity type Interest ISB CBI 26 - ISK 19,860 million ..........................2015 07.05.2026 Bullet Fixed CPI, 3.37% 27,337 36,710 ISB CBF 27 - ISK 8,940 million ..........................2022 10.05.2027 Bullet REIBOR 1M + 0.40% 8,974 9,024 ISB CB 27 - ISK 13,069 million ...........................2020 16.09.2027 Amortising Fixed, 2.50% 12,270 18,911 ISB CB - EUR 300 million* .................................2022 20.09.2027 Bullet Fixed, 3.00% 44,531 43,563 ISB CBI 28 - ISK 13,472 million ..........................2019 11.08.2028 Amortising Fixed CPI, 2.20% 19,465 24,122 ISB CBI 29 - ISK 34,780 million ..........................2023 10.05.2029 Bullet Fixed CPI, 2.72% 39,441 37,758 ISB CBI 30 - ISK 23,040 million ..........................2017 30.05.2030 Bullet Fixed CPI, 3.00% 34,708 33,541 ISB CB 31 - ISK 7,960 million .............................2025 03.06.2031 Bullet Fixed, 7.39% 13,094 -ISB CBI 32 - ISK 10,560 million ..........................2024 03.12.2032 Bullet Fixed CPI, 3.44% 13,482 4,110 Covered bonds 213,302 207,739 EUR 0 million** ...................................................2022 25.03.2025 Bullet Fixed, 0.75% - 21,419 SEK 0 million ......................................................2021 26.03.2025 Bullet STIBOR 3M + 1.075% - 151 NOK 0 million .....................................................2021 26.03.2025 Bullet NIBOR 3M + 1.075% - 481 NOK 0 million .....................................................2022 18.11.2025 Bullet NIBOR 3M + 4.75% - 17,277 ISK 0 million .......................................................2020 26.11.2025 Bullet Fixed, 3.50% - 1,238 SEK 434 million ..................................................2023 13.04.2026 Bullet STIBOR 3M + 3.65% 5,975 6,344 SEK 500 million ..................................................2023 08.11.2026 Bullet STIBOR 3M + 2.70% 6,846 6,330 SEK 498 million ..................................................2024 25.01.2027 Bullet STIBOR 3M + 2.35% 6,823 6,336 NOK 498 million .................................................2024 25.01.2027 Bullet NIBOR 3M + 2.35% 6,265 6,177 NOK 200 million .................................................2024 02.07.2027 Bullet NIBOR 3M +1.20% 2,521 2,477 SEK 300 million ..................................................2024 02.07.2027 Bullet STIBOR 3M + 1.20% 4,111 3,807 NOK 200 million .................................................2025 16.07.2027 Bullet NIBOR 3M + 0.98% 2,515 -SEK 200 million ..................................................2025 16.07.2027 Bullet STIBOR 3M + 1.00% 2,737 -ISK 3,066 million ................................................2022 22.11.2027 Amortising REIBOR 1M + 1.25% 3,080 4,689 ISK 6,940 million ................................................2022 22.11.2027 Bullet Fixed, 7.70% 6,964 6,950 EUR 300 million* ................................................2024 27.03.2028 Bullet Fixed, 4.625% 46,077 45,268 NOK 100 million .................................................2025 17.07.2028 Bullet NIBOR 3M + 1.19% 1,258 -SEK 500 million ..................................................2025 17.07.2028 Bullet STIBOR 3M + 1.20% 6,843 -ISK 19,460 million ..............................................2023 21.12.2028 Bullet Fixed CPI, 4.48% 21,232 15,039 EUR 300 million** ...............................................2025 20.09.2030 Bullet Fixed, 3.875% 45,377 -EUR 300 million** ...............................................2025 11.11.2032 Bullet Fixed, 3.75% 44,039 -ISK 7,600 million ................................................2024 14.11.2036 Bullet Fixed CPI, 3.50% 7,746 3,904 Unsecured bonds 220,409 147,887 Other unsecured loans .............................................................................................................................................10,882 11,960 Other borrowed funds 10,882 11,960 Debt issued and other borrowed funds 444,593 367,586 The Group repurchased own bonds during the year amounting to ISK 14,042 million (2024: 89,348 million).
Íslandsbanki hf. Consolidated Financial Statements 2025
50
Amounts are in ISK million
Notes to the Consolidated Financial Statements
35.
Subordinated loans
31.12.2025 31.12.2024
1,526 1,526
10,797 10,410
10,776 10,388
5,262 9,371
9,472 -
2,482 -
36. Changes in liabilities arising from financing activities
Debt issued and other Subord- borrowed inated At 31 December 2025 funds loans Total Balance at the beginning of the year ..................................................................................................367,586 31,695 399,281 Proceeds from borrowings ..................................................................................................................132,063 11,472 143,535 Repayment and repurchases of borrowings ........................................................................................( 65,873) ( 4,709) ( 70,582)Interest expense .................................................................................................................................23,620 2,793 26,413 Interest paid .......................................................................................................................................( 18,226) ( 1,778) ( 20,004)The effect of changes in foreign exchange rates ................................................................................5,069 842 5,911 Fair value changes .............................................................................................................................354 - 354 Balance at year-end 444,593 40,315 484,908
First First Currency and outstanding nominal issued Maturity Callable Interest ISK 1,500 million ................................................2022 17.04.2033 17.04.2028 Fixed, 8.62%ISK 9,020 million ................................................2022 17.04.2033 17.04.2028 Fixed CPI, 4.86%ISK 9,600 million ................................................2023 12.09.2034 12.09.2029 Fixed CPI, 5.80%Tier 2 subordinated loans 23,099 22,324 SEK 388 million ..................................................2021 Perpetual 28.09.2026 STIBOR 3M + 4.75%SEK 700 million ..................................................2025 Perpetual 25.11.2030 STIBOR 3M + 3.50%NOK 200 million .................................................2025 Perpetual 25.11.2030 NIBOR 3M + 3.58%Additional Tier 1 subordinated loans 17,216 9,371 Subordinated loans 40,315 31,695
Debt issued and other Subord- borrowed inated At 31 December 2024 funds loans Total Balance at the beginning of the year ..................................................................................................417,573 38,155 455,728 Proceeds from borrowings ..................................................................................................................103,756 - 103,756 Repayment and repurchases of borrowings ........................................................................................( 144,149) ( 6,603) ( 150,752)Interest expense .................................................................................................................................23,679 3,357 27,036 Interest paid .......................................................................................................................................( 24,921) ( 2,326) ( 27,247)The effect of changes in foreign exchange rates ................................................................................( 10,796) ( 888) ( 11,684)Fair value changes .............................................................................................................................2,444 - 2,444 Balance at year-end 367,586 31,695 399,281
Íslandsbanki hf. Consolidated Financial Statements 2025
51
Amounts are in ISK million
Notes to the Consolidated Financial Statements
37.
Tax assets and tax liabilities
31.12.202531.12.2024Assets Liabilities Assets Liabilities Current tax ..................................................................................................................... - 11,823 - 11,622 Deferred tax assets and tax liabilities .............................................................................151 934 164 1,294 Tax in the balance sheet 151 12,757 164 12,916 Balance at 31 DecemberNetRecognised2025 balance at in profit or Recognised Deferred Deferred1 January loss in equity Net tax assets tax liabilities Investment property ................................................................ - ( 126) - ( 126) - ( 126)Property and equipment ..........................................................( 768) 95 - ( 673) - ( 673)Intangible assets .....................................................................( 297) 77 - ( 220) - ( 220)Assets and liabilities in foreign currency .................................( 324) ( 141) - ( 465) - ( 465)Deferred foreign exchange difference .....................................( 944) 999 - 55 55 -Derivatives ..............................................................................273 ( 426) - ( 153) - ( 153)Lease liabilities .......................................................................674 ( 70) - 604 604 -Debt issued and other borrowed funds ....................................126 ( 275) 194 45 45 -Other items .............................................................................130 20 - 150 150 -( 1,130) 153 194 ( 783) 854 ( 1,637)Set-off of deferred tax assets together with liabilities of the same taxable entities ...............................( 703) 703 Deferred tax assets and tax liabilities ( 1,130) 153 194 ( 783) 151 ( 934)Balance at 31 DecemberNetRecognised2024 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)
Íslandsbanki hf. Consolidated Financial Statements 2025
52
Amounts are in ISK million
Notes to the Consolidated Financial Statements
38.
Other liabilities
39.
Custody assets
40.
Leases
The Group as a lessee
The Group as a lessor
Net investment in finance lease receivables
At year-end 2025 the Group recognised ISK 2,882 million in right-of-use assets which are presented in the line item "Property and
equipment" and lease liabilities amounting to ISK 3,036 million which are presented in the line item "Other liabilities".
31.12.2025 31.12.2024Accruals ...................................................................................................................................................................3,655 2,741 Lease liabilities ........................................................................................................................................................3,036 3,391 Expected credit losses for off-balance sheet loan commitments and financial guarantees .......................................966 910 Withholding tax ........................................................................................................................................................5,064 6,302 Unsettled securities transactions .............................................................................................................................1,623 5,298 Sundry liabilities .......................................................................................................................................................2,651 2,926 Other liabilities 16,995 21,568
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 2025 the total expense for leases of low-value assets and short-term leases amounted to ISK 79 million (2024: ISK
68 million), the total cash outflow for leases amounted to ISK 741 million (2023: ISK 709 million) and total interest expense from lease
liabilities amounted to ISK 71 million (2024: ISK 76 million).
31.12.2025 31.12.2024Custody assets - not managed by the Group ...........................................................................................................3,802,565 3,873,964
31.12.2025 31.12.2024Due within 1 year .....................................................................................................................................................26,015 26,677 Due in 1-2 years ......................................................................................................................................................20,241 20,907 Due in 2-3 years ......................................................................................................................................................16,444 15,573 Due in 3-4 years ......................................................................................................................................................11,357 11,028 Due in 4-5 years ......................................................................................................................................................4,461 3,812 Due in more than 5 years .........................................................................................................................................1,542 2,222 Total gross investment in the lease 80,060 80,219 Due within 1 year .....................................................................................................................................................20,471 20,339 Due in 1-2 years ......................................................................................................................................................16,473 16,687 Due in 2-3 years ......................................................................................................................................................14,198 13,054 Due in 3-4 years ......................................................................................................................................................10,312 9,866 Due in 4-5 years ......................................................................................................................................................4,117 3,397 Due in more than 5 years .........................................................................................................................................1,405 1,937 Total present value of lease payments* 66,976 65,280 Unearned interest income 13,084 14,939 *The Group presents finance lease receivables in the line item "Loans to customers".Expected credit loss allowance ................................................................................................................................490 354 Interest income from finance lease receivables during the year ...............................................................................6,920 7,912
Íslandsbanki hf. Consolidated Financial Statements 2025
53
Amounts are in ISK million
Notes to the Consolidated Financial Statements
41.
Íslandsbanki's shareholders
Beneficial owners
At 31 December 2025 the number of shareholders of the Bank was 25,302 (year-end 2024: 9,961) where 85.4% of the Bank's shares were
owned by domestic parties (year-end 2024: 90.1%) and 14.6% by international investors (year-end 2024: 9.9%). As at 31 December 2025
the Group's employees and board members and related parties of those employees and board members, held 0.39% of the Bank's shares
(year-end 2024: 0.13%). Heiðar Guðjónsson was elected Chairman of the Board of Directors at a shareholders' meeting held on 19 January
2026. As at 31 December 2025, Heiðar Guðjónsson and related parties held 1.00% of shares in the Bank.
The following information takes into consideration treasury shares in the ownership calculation.
Treasury shares amounted to 100.5 million shares, representing 5.35% of the issued share capital (year-end 2024: 105.4 million shares, or
5.27% of the issued share capital). Shareholders approved the Board's proposal at the AGM on 31 March 2025 to reduce the Bank's share
capital, see further in the ''Consolidated Statement of Changes in Equity''.
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.
31.12.2025 31.12.2024LSR Pension Fund .............................................................................................................................Iceland 8.9% 8.0%Gildi Pension Fund .............................................................................................................................Iceland 8.0% 7.2%Live Pension Fund ..............................................................................................................................Iceland 6.9% 5.8%Capital Group .....................................................................................................................................USA 5.7% 5.3%Vanguard ............................................................................................................................................USA 4.5% 2.4%Brú Pension Fund ...............................................................................................................................Iceland 4.5% 3.9%Frjálsi Pension Fund ...........................................................................................................................Iceland 2.8% 1.5%Kvika Bank ........................................................................................................................................Iceland 2.1% 0.0%Stapi Pension Fund ............................................................................................................................Iceland 1.9% 1.1%Birta Pension Fund ............................................................................................................................Iceland 1.7% 1.6%Lífsverk Pension Fund* .....................................................................................................................Iceland 1.5% 1.2%Almenni Pension Fund* .....................................................................................................................Iceland 1.2% 1.1%Festa Pension Fund ...........................................................................................................................Iceland 1.1% 1.2%The Government of Iceland ................................................................................................................Iceland 0.0% 44.9%Other shareholders .............................................................................................................................49.2% 14.8%Total 100.0% 100.0%
*As of 1 January 2026, Lífsverk Pension Fund and Almenni Pension Fund merged under the name Almenni - Lífsverk Pension Fund.
Íslandsbanki hf. Consolidated Financial Statements 2025
54
Amounts are in ISK million
Notes to the Consolidated Financial Statements
42.
Related party
The Group's products and services were offered to the Government of Iceland and government-related entities in competition with other
vendors and under generally accepted commercial terms. In a similar manner the Group entities purchased 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 boards of directors, key management personnel, their close family members, and any legal entities controlled by these individuals of
each of the Bank, the Bank's subsidiaries, and the ISFI (until its dissolution), are defined as related parties.
As a result, the Government of Iceland and the ISFI (until its dissolution) were defined as related parties until the completion of the sell-
down. The Group applied the partial exemption for government-related entities, as described in IAS 24 for the period in which the
Government was a related party.
At 31 December 2025 a total of ISK 1 million (year-end 2024: ISK 1 million) was recognised as Stage 1 expected credit losses on balances
with related parties. The remuneration of related parties is disclosed in Note 12.
Íslandsbanki had a related party relationship with the Government of Iceland, which was the largest shareholder and had significant influence
over the Group until May 2025, when the Government of Iceland sold its remaining shareholding in the Bank. The shares were administered
by the Icelandic State Financial Investments (ISFI) until its dissolution on 1 January 2025. After which, the shares were administered by the
Ministry of Finance and Economic Affairs until the completion of the sell-down in May 2025.
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 2025 asset customers Liabilities balance mitmentsBoard of Directors, key management personnel and other related parties .. - 992 570 422 70 Associated companies ................................................................................2,476 3,459 2,783 3,152 155 Balances with related parties 2,476 4,451 3,353 3,574 225 Interest Interest Other Other2025 income expense income expenseBoard of Directors, key management personnel and other related parties .....................79 31 2 27 Associated companies ...................................................................................................456 21 2 2,023 Transactions with related parties 535 52 4 2,050 GuaranteesRight-of-use Loans to Net & loan com-At 31 December 2024 asset 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
Íslandsbanki hf. Consolidated Financial Statements 2025
55
Amounts are in ISK million
Notes to the Consolidated Financial Statements
43.
Legal proceedings
The Consumers' Association of Iceland
105 Miðborg slhf. – ÍAV hf.
EC Clear ehf.
In December 2021, three customers, supported by the Consumers' Association of Iceland, initiated legal proceedings against the Bank
regarding the validity of certain variable-rate provisions in their residential mortgage agreements. Two cases relate to CPI-linked mortgages
containing an interest-resetting clause previously deemed unlawful in a 2016 Supreme Court ruling. Following that ruling, the Bank refunded
affected customers and reinstated their original interest rates. The new claims argue that the loans should instead bear interest under Article
4 of Act No. 38/2001 on interest and indexation. One case has concluded with a judgement of the Court of Appeal on 13 February 2025, in
which all claims against the Bank were rejected, while proceedings in the other case will continue. On 22 December 2025, the Supreme
Court rendered a judgement in which another bank was acquitted of similar claims brought by borrowers, comparable to those made in the
present matter. As has been disclosed in the Group's previous financial statements, the Bank considers the claims to be unfounded and has
not recognised a provision in connection with the cases. In light of the aforementioned judgements of the Court of Appeal and the Supreme
Court, the Bank now considers the likelihood of an adverse outcome to be remote.
The third case concerned a non-index linked mortgage bearing variable interest rates, in which the plaintiffs argued that the terms on
interest rate changes were invalid. The monetary claims in the case were dismissed by both the District Court and the Supreme Court,
although the Supreme Court concluded that certain parts of the clause on interest
‑
rate changes were unclear and therefore invalid. Following
the Supreme Court's judgement, the Bank recognised a provision amounting to ISK 550 million in the Condensed Consolidated Interim
Financial Statements for the third quarter 2025, due to uncertainty regarding the legality of its past interest
‑
rate decisions. Subsequently, on
22 December 2025, the Supreme Court issued a judgement in a comparable case involving another bank, in which the court clarified that
even if a clause granting the bank authority to change interest rates has been found partially invalid, such that only the reference to the
Central Bank's policy rate remained valid as a benchmark, lenders are not required to follow changes to the Central Banks policy rate exactly
or immediately, provided that interest
‑
rate adjustments are based on legitimate reasons and fall within the latitude that the Supreme Court
held lenders to have in making such adjustments. Íslandsbanki has reviewed its decisions on changes to the variable rates of non-index
linked mortgages in recent years and considers that they fall within the margin of discretion available to the Bank according to the Supreme
Court judgements. In light of this, the uncertainty regarding the case no longer applies and, in the fourth quarter, the Bank has reversed the
provision recognised in respect of this matter in the Condensed Consolidated Interim Financial Statements for the third quarter 2025.
Although these Supreme Court rulings concern non-index linked mortgages with variable interest rates, they may influence how similar
clauses in CPI-linked mortgages and other consumer loans are interpreted. At this point in time no legal proceedings have been initiated on
such loans and it is not possible to reliably assess the likelihood or financial impact of any unfavourable outcomes relating to CPI-linked
loans. The Bank has not recognised a provision in relation to this matter.
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.
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.
Íslandsbanki hf. Consolidated Financial Statements 2025
56
Amounts are in ISK million
Notes to the Consolidated Financial Statements
43.
Legal proceedings (continued)
Borgun hf. – Landsbankinn hf.
44.
Events after the reporting period
45.
Risk management
Risk governance
No events have arisen after the reporting period that require amendments or additional disclosures in the Consolidated Financial Statements
for 2025.
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 Chief Executive Officer (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 (CRO), the Chief Compliance Officer (COO), 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). They are responsible for the approval of business proposals and proposals regarding the Bank's operational framework subject to
internal rules and guidelines issued by the Board, the Executive Board and the All Risk Committee. The members of the executive
committees and the business committees are appointed by the CEO, and their mandate and rules of procedure are documented in a charter.
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.
As has been disclosed in the Group's previous financial statements, Borgun hf. (currently Teya Iceland hf.), a former subsidiary of
Íslandsbanki, was involved in a legal dispute with Landsbankinn hf. regarding the sale of shares in Borgun hf. The matter concerned a claim
from Landsbankinn based on lack of information in Borgun's financial statements, that allegedly affected the value of Borgun during the sale
of Landsbankinn's shares in Borgun. The District Court of Reykjavík rejected Landsbankinn's claims, a decision upheld by the Court of
Appeal. The Supreme Court denied Landsbankinn's request for an appeal on 13 May 2025, thereby making the judgement of the Court of
Appeal final. Therefore, this matter is concluded.
Íslandsbanki hf. Consolidated Financial Statements 2025
57
Amounts are in ISK million
Notes to the Consolidated Financial Statements
45. Risk management (continued)
46. Credit risk
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.
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.
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 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.
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 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 2025 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 four 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.
The 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 CCO acts as the Bank's Money Laundering
Reporting Officer (MLRO).
Íslandsbanki hf. Consolidated Financial Statements 2025
58
Amounts are in ISK million
Notes to the Consolidated Financial Statements
47. 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. Covenants in loan agreements are
also an important credit enhancement but do not reduce maximum credit exposure.
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.
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.
In the case of Covered Bonds in Bonds and debt instruments, the collateral consists of cash flows from mortgage pools and is therefore
classified as other collateral.
Íslandsbanki hf. Consolidated Financial Statements 2025
59
Amounts are in ISK million
47.
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 2025Maximum 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 .........................................80,394 - - - - - - - 80,394 17 Loans to credit institutions ...........................................................80,009 - - - - - - - 80,009 57 Bonds and debt instruments ........................................................132,559 - - - - - 34,844 34,844 97,715 -Loans to customers: 1,367,106 698,066 314,558 66,424 43,835 82,152 77,806 1,282,841 84,265 7,646 Individuals ................................................................................653,291 588,786 5,586 4 155 19,890 131 614,552 38,739 1,388 - Thereof mortgages .............................................................584,723 584,165 - - 150 - - 584,315 408 246 Commerce and services ..........................................................210,241 15,741 79,270 824 20,153 50,597 31,001 197,586 12,655 1,377 Construction ............................................................................99,990 53,907 35,571 41 784 3,326 3,817 97,446 2,544 1,268 Energy .....................................................................................17,001 3 10,731 - 3,162 137 - 14,033 2,968 31 Financial services ....................................................................119 106 - - - - - 106 13 -Industrial and transportation .....................................................92,018 1,139 57,328 - 4,219 7,558 17,965 88,209 3,809 2,082 Investment companies .............................................................46,597 2,256 16,565 - 14,362 275 7,014 40,472 6,125 321 Public sector and non-profit organisations ...............................16,673 42 801 - - 21 11 875 15,798 29 Real estate ..............................................................................141,267 35,814 102,693 - 948 214 392 140,061 1,206 1,036 Seafood ...................................................................................89,909 272 6,013 65,555 52 134 17,475 89,501 408 114 Other financial assets ..................................................................3,452 - - - - - - - 3,452 16 Off-balance sheet items: 239,817 16,321 41,341 8,041 13,865 11 19,170 98,749 141,068 967 Financial guarantees ................................................................22,246 2,303 7,399 5 1,446 - 3,404 14,557 7,689 297 Loan commitments ..................................................................217,571 14,018 33,942 8,036 12,419 11 15,766 84,192 133,379 670 Total 1,903,337 714,387 355,899 74,465 57,700 82,163 131,820 1,416,434 486,903 8,703
Íslandsbanki hf. Consolidated Financial Statements 2025
60
Amounts are in ISK million
47.
Notes to the Consolidated Financial Statements
Maximum credit exposure and collateral (continued)
*Comparative figures have been changed. Covered Bonds, classified as bonds and debt instruments, contain collateral that consist of cash flow from mortgage pools. This collateral is now included as other
collateral.
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 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 - - - - - 29,925 29,925 81,983 -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 74,512 110,651 1,321,670 400,337 8,841
Íslandsbanki hf. Consolidated Financial Statements 2025
61
Amounts are in ISK million
Notes to the Consolidated Financial Statements
48. Credit quality of financial assets
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.
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 customers 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 3.1.2.2
of the unaudited Pillar 3 2025 Report.
At 31 December 2025Loans to customers: Stage 1 Stage 2 Stage 3 Total Risk class 1-4 .....................................................................................................................533,086 636 - 533,722 Risk class 5-6 .....................................................................................................................576,190 15,204 - 591,394 Risk class 7-8 .....................................................................................................................165,866 38,582 - 204,448 Risk class 9 ........................................................................................................................15,726 8,328 - 24,054 Risk class 10 ...................................................................................................................... - - 20,425 20,425 Unrated ...............................................................................................................................416 293 - 709 1,291,284 63,043 20,425 1,374,752 Expected credit losses ........................................................................................................( 2,743) ( 1,204) ( 3,699) ( 7,646)Net carrying amount 1,288,541 61,839 16,726 1,367,106 Off-balance sheet loan commitments and financial guarantees: Stage 1 Stage 2 Stage 3 Total Risk class 1-4 .....................................................................................................................112,979 14 - 112,993 Risk class 5-6 .....................................................................................................................86,892 1,104 - 87,996 Risk class 7-8 .....................................................................................................................34,834 2,099 - 36,933 Risk class 9 ........................................................................................................................1,454 248 - 1,702 Risk class 10 ...................................................................................................................... - - 698 698 Unrated ...............................................................................................................................461 1 - 462 236,620 3,466 698 240,784 Expected credit losses ........................................................................................................( 682) ( 164) ( 121) ( 967)Total 235,938 3,302 577 239,817
Íslandsbanki hf. Consolidated Financial Statements 2025
62
Amounts are in ISK million
Notes to the Consolidated Financial Statements
48.
Credit quality of financial assets (continued)
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 2025
63
Amounts are in ISK million
Notes to the Consolidated Financial Statements
49.
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 62.3.
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
period.
The following tables provide a summary of the Group's forborne assets.
At 31 December 2025Stage 1 Stage 2 Stage 3 TotalGross Expected Gross Expected Gross Expected Gross Expected carrying credit carrying credit carrying credit carrying credit amount losses amount losses amount losses amount losses Individuals ..................................................3,275 ( 9) 5,626 ( 40) 2,290 ( 117) 11,191 ( 166)Companies .................................................1,419 ( 7) 17,544 ( 347) 6,096 ( 1,285) 25,059 ( 1,639)Total 4,694 ( 16) 23,170 ( 387) 8,386 ( 1,402) 36,250 ( 1,805)At 31 December 2024Stage 1 Stage 2 Stage 3 TotalGross Expected Gross Expected Gross Expected Gross Expected carrying credit carrying credit carrying credit carrying credit amount losses amount losses amount losses amount losses Individuals ..................................................2,811 ( 13) 4,249 ( 44) 2,027 ( 131) 9,087 ( 188)Companies .................................................1,929 ( 33) 14,690 ( 220) 6,424 ( 1,157) 23,043 ( 1,410)Total 4,740 ( 46) 18,939 ( 264) 8,451 ( 1,288) 32,130 ( 1,598)
Íslandsbanki hf. Consolidated Financial Statements 2025
64
Amounts are in ISK million
Notes to the Consolidated Financial Statements
50.
51. Liquidity risk
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 one large exposure at 31 December 2025 (year-end 2024: two). No large exposure is above the maximum 25% large
exposure limit set by the law.
The Group's largest exposure before eligible credit risk mitigating effects is the Government of Iceland. Largest part of the exposure is due
to the Government of Iceland's bonds in the Group's liquidity portfolio.
At 31 December 2025Groups of connected clients:BeforeAfterGroup 1 .....................................................................................................................................................................78% 8%Group 2 .....................................................................................................................................................................11% 11%At 31 December 2024Groups of connected clients:Before AfterGroup 1 .....................................................................................................................................................................81% 6%Group 2 .....................................................................................................................................................................11% 11%Group 3 .....................................................................................................................................................................10% 10%
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.
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.
Íslandsbanki hf. Consolidated Financial Statements 2025
65
Amounts are in ISK million
Notes to the Consolidated Financial Statements
52. Liquidity coverage and net stable funding ratio
According to the rules, the minimum LCR ratio that the Group is required to maintain remains 100% for the total LCR. The 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.
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 liquidity coverage ratio
rules no. 1520/2022.
The following tables show the NSFR and the LCR for the Group at 31 December 2025 and 31 December 2024.
Net stable funding ratio31.12.2025 31.12.2024For all currencies .......................................................................................................................................................127% 125%Liquidity coverage ratio31.12.2025 31.12.2024For all currencies .......................................................................................................................................................203% 168%ISK ............................................................................................................................................................................129% 126%EUR ...........................................................................................................................................................................733% 449%The following tables show the composition of the Group's liquidity reserve.At 31 December 2025ISK EUR USD Other Total Cash and balances with Central Bank ..............................................................78,036 594 313 480 79,423 Foreign government bonds ............................................................................... - 27,832 - - 27,832 Domestic bonds eligible as collateral with Central Bank ...................................71,617 8,780 - 10,606 91,003 Level 2 liquid assets .........................................................................................37,302 3,916 1 225 41,444 High quality liquidity assets186,955 41,122 314 11,311 239,702 Balance with financial institutions .....................................................................2 42,069 24,969 2,663 69,703 Liquidity reserve186,957 83,191 25,283 13,974 309,405 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
Íslandsbanki hf. Consolidated Financial Statements 2025
66
Amounts are in ISK million
Notes to the Consolidated Financial Statements
53. Maturity analysis of financial assets and financial liabilities
The following tables show the maturity profile of the Group's financial assets and liabilities. The tables show the undiscounted contractual
payments of principal and interest of 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.
Bonds and debt instruments are based on contractual maturity and therefore do not represent their estimated liquidation time.
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 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 2025On 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 ........43,492 36,960 - - - - 80,452 80,394 Loans to credit institutions ..........................7,159 73,676 21 - - - 80,856 80,009 Bonds and debt instruments ....................... - 24,047 48,710 91,160 2,182 - 166,099 151,959 Derivatives ................................................. - 2,594 1,044 1,582 - - 5,220 5,304 - Net settled derivatives ............................. - 1,482 - - - - 1,482 1,482 - Inflow ...................................................... - 49,365 29,214 9,051 - - 87,630 79,115 - Outflow .................................................... - ( 48,253) ( 28,170) ( 7,469) - - ( 83,892) ( 75,293)Loans to customers ....................................1,776 118,721 206,590 719,870 1,976,562 - 3,023,519 1,367,106 Shares and equity instruments ................... - - - - - 20,517 20,517 20,517 Other financial assets .................................3,016 369 67 - - - 3,452 3,452 Total financial assets 55,443 256,367 256,432 812,612 1,978,744 20,517 3,380,115 1,708,741 Deposits from CB and credit institutions .....10,667 2,585 - - - - 13,252 13,250 Deposits from customers ............................807,263 61,169 76,850 15,584 53,253 - 1,014,119 968,695 Derivative instruments and short positions . - 1,649 1,511 343 3,260 - 6,763 6,183 - Net settled derivatives ............................. - 1,259 - - - - 1,259 1,259 - Inflow ...................................................... - ( 36,466) ( 28,918) ( 6,382) ( 2,663) - ( 74,429) ( 65,795) - Outflow .................................................... - 36,745 30,426 6,234 3,075 - 76,480 68,812 - Short positions ........................................ - 111 3 491 2,848 - 3,453 1,907 Debt issued and other borrowed funds ....... - 10,064 62,658 381,865 105,986 - 560,573 444,593 Subordinated loans .................................... - 347 7,470 23,348 34,289 - 65,454 40,315 Other financial liabilities ..............................3,772 1,990 2,102 2,160 472 - 10,496 10,309 - Lease liabilities ........................................ - 162 462 2,127 472 - 3,223 3,036 - Other liabilities ........................................3,772 1,828 1,640 33 - - 7,273 7,273 Total financial liabilities 821,702 77,804 150,591 423,300 197,260 - 1,670,657 1,483,345 Net financial assets and financial liab. ( 766,259) 178,563 105,841 389,312 1,781,484 20,517 1,709,458 225,396
Íslandsbanki hf. Consolidated Financial Statements 2025
67
Amounts are in ISK million
Notes to the Consolidated Financial Statements
53.
Maturity analysis of financial assets and financial liabilities (continued)
Note 47 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.
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 81,202 3,977 - 160,496 142,618 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 62,589 232,460 222,921 776,889 1,916,163 24,330 3,235,352 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 38,179 332,359 52,024 - 455,972 367,586 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 789,554 101,338 114,779 379,357 136,448 - 1,521,476 1,359,498 Net financial assets and financial liab. ( 726,965) 131,122 108,142 397,532 1,779,715 24,330 1,713,876 230,670
Off-balance sheet liabilities
*Comparative figures have been changed to reflect an updated methodology for reporting the maturity profile of the Group's "Bonds and
debt instruments" and "Debt issued and other borrowed funds".
Íslandsbanki hf. Consolidated Financial Statements 2025
68
Amounts are in ISK million
Notes to the Consolidated Financial Statements
54.
Market risk
55. Interest rate risk
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 23).
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
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.
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 is 20% for taxable income in 2025, 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.
31.12.202531.12.2024Sensitivity analysis for trading bonds and debt instrumentsEffect on profit before taxDownwardUpwardDownwardUpwardCurrencyshiftshift shiftshift ISK, indexed .......................................................................................................................61 ( 61) 73 ( 73)ISK, non-indexed ................................................................................................................60 ( 60) 83 ( 83)Total121 ( 121) 156 ( 156)
Íslandsbanki hf. Consolidated Financial Statements 2025
69
Amounts are in ISK million
Notes to the Consolidated Financial Statements
55.
Interest rate risk (continued)
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 tables show 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.
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 is 20% for taxable income in 2025, 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.
Sensitivity analysis for interest rate risk in the banking book
At 31 December 20250-3 3-12 1-2 2-5 5-10 Over 10Currency months months years years years years Total ISK, indexed .................................................................16 ( 83) ( 724) ( 723) 1,095 378 (41)ISK, non-indexed ..........................................................139 ( 106) ( 394) ( 530) 463 ( 2)(430)EUR .............................................................................257 ( 120) 23 ( 125) ( 6) -29SEK ..............................................................................141 - ( 14) ( 150) - -(23)NOK .............................................................................193 ( 2) ( 20) ( 35) - -136USD .............................................................................6 - - ( 1) - -5Other ............................................................................2 ( 11) - - - -(9)Total 754 ( 322) ( 1,129) ( 1,564) 1,552 376 ( 333)At 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
Íslandsbanki hf. Consolidated Financial Statements 2025
70
Amounts are in ISK million
Notes to the Consolidated Financial Statements
56. Currency risk
At 31 December 2025Other foreign Total foreign EUR USD GBP CHF JPY SEK NOK DKK CAD currencies currencies Cash and balances with Central Bank ..................... 594 313 125 - - 40 116 - - 198 1,386 Loans to credit institutions ....................................... 46,594 27,557 1,491 79 17 261 340 159 17 294 76,809 Bonds and debt instruments .................................... 42,698 331 - - - 8,256 7,022 - - - 58,307 Loans to customers ................................................. 134,067 24,914 1 532 780 4,918 1,893 1,711 4,370 6,302 179,488 Shares and equity instruments ................................ 38 1,754 387 - - 1,094 190 - - - 3,463 Other assets ............................................................ 83 114 - - - - - - - - 197 Total assets 224,074 54,983 2,004 611 797 14,569 9,561 1,870 4,387 6,794 319,650 Deposits from credit institutions .............................. 2,121 1,354 38 1 - 6 60 6 7 - 3,593 Deposits from customers ........................................ 47,569 42,668 5,098 408 205 1,071 5,120 4,509 122 551 107,321 Debt issued and other borrowed funds .................... 180,530 10,903 - - - 33,340 12,545 - - - 237,318 Subordinated loans ................................................. - - - - - 14,734 2,482 - - - 17,216 Other liabilities ......................................................... -51 - - - 31 - 315 - - 397 Total liabilities 230,220 54,976 5,136 409 205 49,182 20,207 4,830 129 551 365,845 Net on-balance sheet position ( 6,146) 7 ( 3,132) 202 592 ( 34,613) ( 10,646) ( 2,960) 4,258 6,243 ( 46,195)Net off-balance sheet position 7,282 ( 1,088) 3,405 ( 148) ( 535) 34,847 10,561 2,941 ( 4,226) ( 6,268) 46,771 Net position 1,136 ( 1,081) 273 54 57 234 ( 85) ( 19) 32 ( 25) 576
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. Debt issued measured at fair value is presented at fair value
instead of the nominal amount plus accrued interest. 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.
Íslandsbanki hf. Consolidated Financial Statements 2025
71
Amounts are in ISK million
Notes to the Consolidated Financial Statements
56.
Currency risk (continued)
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 position 1,665 1,051 75 22 12 ( 122) 35 54 64 6 2,862
Íslandsbanki hf. Consolidated Financial Statements 2025
72
Amounts are in ISK million
Notes to the Consolidated Financial Statements
56. Currency risk (continued)
57. Shares and equity instruments
Upward
shift
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.
Sensitivity analysis for shares and equity instruments31.12.202531.12.2024Effect on profitDownward Upward Downward Portfolio shiftshift shiftTrading book ...............................................................................................................( 164) 164 ( 442) 442 Banking book ..............................................................................................................( 436) 436 ( 228) 228 Total ( 600) 600 ( 670) 670
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.
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 is 20% for taxable income in 2025, in addition the Group pays a special financial activities tax of 6% on taxable profit
exceeding ISK 1,000 million.
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 2025 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 currency risk31.12.202531.12.2024Effect on profit before taxCurrency-10% 10% -10% 10%EUR ............................................................................................................................( 114) 114 ( 167) 167 USD ............................................................................................................................108 ( 108) ( 105) 105 GBP ............................................................................................................................( 27) 27 ( 8) 8 CHF ............................................................................................................................( 5) 5 ( 2) 2 JPY .............................................................................................................................( 6) 6 ( 1) 1 SEK .............................................................................................................................( 23) 23 12 ( 12)NOK ............................................................................................................................9 ( 9) ( 4) 4 DKK ............................................................................................................................2 ( 2) ( 5) 5 CAD ............................................................................................................................( 3) 3 ( 6) 6 Other foreign currencies ..............................................................................................3 ( 3) ( 1) 1 Total ( 56) 56 ( 287) 287
Íslandsbanki hf. Consolidated Financial Statements 2025
73
Amounts are in ISK million
Notes to the Consolidated Financial Statements
58.
Inflation risk
59. Operational risk
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, ICT and security risk, and compliance risk
among other risk factors.
The Board of Directors is the Bank's supreme governing body and has the final word over risk management within the Bank. The Board
determines the overall structure of the Bank's operational risk management and internal control framework, as set out in the Bank's
Operational Risk Policy, which the Board of Directors has approved. Risk Management is responsible for implementing the Bank's
operational risk framework, developing and maintaining the Operational Risk Policy, and communicating the policy to the Bank's employees.
The Group considers inflation risk to be the most significant market risk factor. 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 1,996 million increase in profit before
tax and a 1% decrease would lead to a corresponding decrease, other risk factors held constant.
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 is 20% for taxable income in 2025, in addition the Group pays a special financial activities tax of 6% of taxable profit exceeding ISK
1,000 million.
31.12.2025 31.12.2024Bonds and debt instruments ..................................................................................................................................2,277 3,905 Loans to customers ...............................................................................................................................................507,694 501,595 Total CPI-linked assets 509,971 505,500 Deposits from customers ......................................................................................................................................120,742 119,588 Debt issued and other borrowed funds ..................................................................................................................163,411 155,184 Subordinated loans ...............................................................................................................................................21,573 20,798 Off-balance sheet exposures .................................................................................................................................4,493 16,521 Short positions ......................................................................................................................................................180 47 Total CPI-linked liabilities 310,399 312,138 CPI imbalance 199,572 193,362
Íslandsbanki hf. Consolidated Financial Statements 2025
74
Amounts are in ISK million
Notes to the Consolidated Financial Statements
60.
Capital management
The minimum leverage ratio for Icelandic financial institutions is 3%.
Capital requirement calculations for credit risk, market risk and operational risk are based on the standardised approach, the simplified
standardised approach is used for counterparty credit risk, and the reduced basic approach is used for the credit valuation adjustment.
According to the latest SREP report from the FSA, the Group shall as of 30 June 2025 maintain an additional capital requirement of 1.4% of
the REA. The Group's overall capital requirement, taking into account capital buffers, is 19.1%. The Group's capital target includes a 1-3%
management buffer on top of the overall capital requirement.
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 2025 and 31 December 2024.
The Group's regulatory capital requirement is calculated according to EU regulation no. 575/2013 as implemented into Icelandic law through
the Act on Financial Undertakings no. 161/2002.
CRR 3 was implemented in Iceland in December 2025 and had a significant impact on the Group's risk exposure amount (REA) and capital
ratios. The implementation led to a ISK 88 billion (7.8%) decrease in REA, driven mainly by a reduction in REA due to credit risk. The
reduction in REA led to an increase in capital ratios with CET1 increasing from 18.5% to 20.1%, Tier 1 ratio increasing from 20.0% to 21.7%
and the total capital ratio increasing from 22.1% to 24.0%.
31.12.2025 31.12.2024Own fundsOrdinary share capital ...........................................................................................................................................8,900 9,473Share premium .....................................................................................................................................................42,472 55,000Reserves ...............................................................................................................................................................7,201 7,102Retained earnings .................................................................................................................................................166,786 155,780Fair value changes due to own credit standing ......................................................................................................913 135 Foreseeable dividend payment and approved buyback* ........................................................................................( 16,671) ( 15,760)Tax assets .............................................................................................................................................................( 151) ( 164)Intangible assets ...................................................................................................................................................( 1,822) ( 2,070)Insufficient coverage for non-performing exposures ..............................................................................................( 52) ( 17)CET1 capital 207,576 209,479 Additional Tier 1 capital .........................................................................................................................................17,216 9,371 Tier 1 capital 224,792 218,850 Tier 2 capital .........................................................................................................................................................23,099 22,324 Total capital base 247,891 241,174
*The Bank's AGM held on 31 March 2025 authorises the Board of Directors to acquire on behalf of the Bank up to 10% of issued share
capital of the Bank. Furthermore, the Central Bank has granted the Bank permission to buy back own shares and reduce its share capital. As
of now, ISK 4.0 billion has been allocated to uncompleted share buybacks and is therefore deducted from the CET1 capital.
Íslandsbanki hf. Consolidated Financial Statements 2025
75
Amounts are in ISK million
Notes to the Consolidated Financial Statements
60. Capital management (continued)
61.
Minimum requirement for own funds and eligible liabilities (MREL)
The Group is required to meet the minimum requirement for own funds and eligible liabilities (MREL) at all times in accordance with Directive
2014/59/EU and Directive (EU) 2019/879 as implemented into Icelandic law by Act No. 70/2020 on the Resolution of Credit Institutions and
Investment Firms. The Resolution Authority of the Central Bank of Iceland (the Resolution Authority) is responsible for determining the
Group's MREL.
In the annual MREL decision from the Resolution Authority, the Group's MREL was set at 18.8% of the risk exposure amount (REA) and
6.0% of the total exposure measure (TEM). The decision further requires that from 4 October 2027 a portion of the Group's MREL must be
met with subordinated instruments. The subordination portion of the MREL will be set at 13.5% of REA from 4 October 2027. At 31
December 2025 the Group exceeds the future required subordination portion of the MREL.
The MREL is published irrespective of the value of the combined buffer requirement, which must be met in parallel with the MREL as a % of
REA. Taking into account the Group's combined buffer requirement as at 31 December 2025, the resulting MREL as a % of REA
requirement at 31 December 2025 was 28.5%.
31.12.2025 31.12.2024Risk exposure amountDue to credit risk ...................................................................................................................................................939,768 922,533 Due to market risk .................................................................................................................................................4,093 10,606 Due to credit valuation adjustment ........................................................................................................................1,375 714 Due to operational risk ..........................................................................................................................................88,552 107,119 Total risk exposure amount (REA) 1,033,788 1,040,972 Capital ratiosCET1 ratio .............................................................................................................................................................20.1% 20.1%Tier 1 ratio .............................................................................................................................................................21.7% 21.0%Total capital ratio ...................................................................................................................................................24.0% 23.2%Leverage ratioExposure amountOn-balance sheet exposures .................................................................................................................................1,718,921 1,594,192 Off-balance sheet exposures .................................................................................................................................68,948 57,583 Derivative exposures .............................................................................................................................................9,852 9,223 Total exposure measure (TEM) 1,797,721 1,660,998 Tier 1 capital .........................................................................................................................................................224,792 218,850 Leverage ratio 12.5% 13.2%
31.12.2025 31.12.2024Own funds and eligible liabilitiesOwn funds ............................................................................................................................................................. 247,891 241,174 Eligible liabilities .................................................................................................................................................... 207,145 106,878 Own funds and eligible liabilities 455,036 348,052 Ratios of own funds and eligible liabilitiesOwn funds and eligible liabilities as a % of REA ....................................................................................................44.0% 33.4%Own funds and eligible liabilities as a % of TEM ...................................................................................................25.3% 21.0%
Íslandsbanki hf. Consolidated Financial Statements 2025
76
Amounts are in ISK million
Notes to the Consolidated Financial Statements
62. 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
62.1 Basis of consolidation ................................................................................................................................................................. 78
62.2 Investments in associates ........................................................................................................................................................... 78
62.3 Financial assets and financial liabilities ....................................................................................................................................... 78
62.4 Cash and cash equivalents ......................................................................................................................................................... 84
62.5 Derivative financial instruments .................................................................................................................................................. 84
62.6 Hedge accounting ....................................................................................................................................................................... 85
62.7 Leases ........................................................................................................................................................................................ 85
62.8 Loan commitments ..................................................................................................................................................................... 86
62.9 Provisions ................................................................................................................................................................................... 86
62.10 Employee benefits .................................................................................................................................................................... 86
62.11 Equity ....................................................................................................................................................................................... 86
62.12 Interest income and interest expense........................................................................................................................................ 87
62.13 Net fee and commission income ............................................................................................................................................... 88
62.14 Net financial income (expense) ................................................................................................................................................. 88
62.15 Taxes........................................................................................................................................................................................ 89
Íslandsbanki hf. Consolidated Financial Statements 2025
77
Notes to the Consolidated Financial Statements
62.1 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 at fair value 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.
62.2 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".
62.3 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 the loan is paid out.
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 2025
78
Notes to the Consolidated Financial Statements
62.3 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".
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Notes to the Consolidated Financial Statements
62.3 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 reclassified
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 62.6).
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 (see Note 62.8) and financial guarantees:
• 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 62.6).
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)".
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62.3 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 62.6).
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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62.3 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 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, documentation, approval, implementation and 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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62.3 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 factors.
The effect of the economy on the PD is accounted for using scaling factors that map through-the-cycle PD values to point-in-time PD
values. The Group has a model to predict these scaling factors in Iceland 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 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 2025, as it has been for
the past few years.
The table below shows macroeconomic indicators of the Group's Chief Economist's macroeconomic forecast used for all cases in
ECL calculations 31.12.2025. Estimate Forecast Forecast Forecast Forecast Change in economic indicators %2025 2026 2027 2028 2029 Economic growth (YoY real GDP change)2.2 0.8 2.4 2.4 2.4 5.1 4.3 4.6 3.5 3.5 Housing prices in Iceland (average YoY change)3.8 1.9 1.6 1.2 1.4 Purchasing power (average YoY change)(4.3) (0.1) 1.8 1.0 1.0 ISK exchange rate index (YoY change in average)Policy rate, Central Bank of Iceland (average per year)7.7 6.3 5.8 5.8 5.8 4.0 3.4 3.3 3.3 3.1 Inflation (average per year)6.0 (3.6) 2.0 3.0 3.0 Capital formation (YoY real change) 8.2 (6.8) 0.8 2.8 2.8 - thereof capital formation in industry
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62.3 Financial assets and financial liabilities (continued)
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.
Estimate Forecast Forecast Forecast Forecast Change in economic indicators % 2024 2025 2026 2027 2028 0.3 1.2 2.5 2.5 2.4 Economic growth (YoY real GDP change) Housing prices in Iceland (average YoY change) 10.7 7.0 6.1 3.5 3.5 (0.2) 1.8 1.9 1.5 1.4 Purchasing power (average YoY change) 0.0 0.2 (1.5) 1.0 1.0 ISK exchange rate index (YoY change in average) 9.1 7.5 5.7 5.5 5.0 Policy rate, Central Bank of Iceland (average per year) Inflation (average per year) 5.9 3.3 2.8 2.7 3.1 2.3 0.2 3.8 2.9 2.9 Capital formation (YoY real change) 2.6 (0.9) 4.0 2.8 2.8 - thereof capital formation in industry
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.
Write-off policy
When the Group has no reasonable expectations of recovering a credit exposure or when pursuing legal collection is uneconomical,
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.
62.4 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
loans to credit institutions, excluding loans to credit institutions pledged as collateral against derivative instruments.
Cash and cash equivalents comprise balances with less than three months maturity from the date of acquisition.
62.5 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 62.3 and Note 62.6).
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62.6 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%.
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.
62.7 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 53. 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 on a straight-line
basis.
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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62.8 Loan commitments
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
62.3) 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".
62.9 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.
62.10 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. The Group does not have a defined benefit pension plan.
Equity-settled share-based payments to employees are measured at the fair value of the equity instruments at the grant date. The fair
value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting
period, based on the Group's estimate of the number of equity instruments that will eventually vest. Share-based payment expenses
are recognised in the income statement in the line item "Salaries and related expenses".
62.11 Equity
Share capital
The share capital disclosed in the Consolidated Financial Statements comprises of ordinary shares authorised and issued by the
Bank, with a par value of ISK 5 each. 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.
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.
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62.11 Equity (continued)
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.
Restricted reserve due to unrealised fair value changes of financial assets in the banking book
The Group transfers unrealised fair value changes of financial assets in the banking book 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 to retained earnings
upon sale of the financial asset.
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 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.
Restricted reserve for debt instruments at fair value through other comprehensive income
Restricted reserve for debt instruments at fair value through other comprehensive income consist of the fair value changes of those
debt instruments, net of tax. On derecognition the fair value changes are reclassified to profit or loss.
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.
62.12 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 62.3).
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.
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 62.6), is recognised in profit
or loss as an adjustment to the interest expense recognised for the bonds.
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62.13 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.
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.
62.14 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, interest 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 62.6).
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.
Íslandsbanki hf. Consolidated Financial Statements 2025
88
Notes to the Consolidated Financial Statements
62.15 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 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% (2024: 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.
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 2025
89
Notes to the Consolidated Financial Statements
63. Financial ratios
20252024ProfitabiltyReturn on equity ........................................................................................................................................................11.2%10.9%Return on assets .......................................................................................................................................................1.5%1.5%Earnings per share ....................................................................................................................................................13.6212.53Core income / Total operating income ......................................................................................................................99.0% 95.9%Net interest margin Net interest margin on total assets ............................................................................................................................3.1% 2.9%Net interest margin on interest bearing assets ..........................................................................................................3.2% 3.0%EfficiencyCost-to-income ratio* ................................................................................................................................................42.4% 43.8%Cost-to-core income ratio* ........................................................................................................................................42.9% 45.8%Cost-to-total assets ratio* ..........................................................................................................................................1.70% 1.72% Cost of risk ................................................................................................................................................................0.05% (0.05%)*Ratios for 2025 exclude salary expenses of ISK 804 million due to early retirement of employees and a charge of ISK 313 million within netinterest income due to correction from previous years. Ratios for 2024 exclude a charge of ISK 470 million due to an administrative fine.31.12.2025 31.12.2024Asset qualityAverage LTV for mortgages to individuals .................................................................................................................54.0% 54.0%REA ratio ..................................................................................................................................................................59.8% 64.7%Non-performing loans (NPL) ratio .............................................................................................................................1.5% 1.6%Asset encumbrance ratio ..........................................................................................................................................18.6% 19.0%Financial strengthEquity as % of total assets ........................................................................................................................................13.0% 14.1%LiquidityLiquidity coverage ratio (LCR) ..................................................................................................................................203% 168% Net stable funding ratio (NSFR) ................................................................................................................................127% 125% Term deposits ratio ...................................................................................................................................................17.0% 18.1%Loan-to-deposit ratio .................................................................................................................................................141% 140% Loan-to-deposit ratio (adjusted for covered bonds) ...................................................................................................119% 117% CaptialCET1 ratio ................................................................................................................................................................20.1% 20.1%Tier 1 ratio ................................................................................................................................................................21.7% 21.0%Total capital ratio ......................................................................................................................................................24.0% 23.2%Leverage ratio ...........................................................................................................................................................12.5% 13.2%MREL ratio ................................................................................................................................................................44.0% 33.4%
Íslandsbanki hf. Consolidated Financial Statements 2025
90
Notes to the Consolidated Financial Statements
63.
Financial ratios (continued)
Average balances are calculated as the average of the opening balance for the applicable period and closing balance for each quarter of the
applicable period.
Definition of financial ratiosProfitabilityReturn on equity Profit for the year / Average equityReturn on assets Profit for the year / Average assetsEarnings per share Profit for the year / Average number of outstanding sharesCore income / Total operating income (Net interest income + Net fee & commission income) / Total operating incomeNet interest margin Net interest margin on total assets Net interest income / Average assetsNet interest margin on intr.bearing assets Net interest income / Average interest-bearing assetsEfficiencyCost-to-income ratio (Administrative expenses – One-off expenses ) / (Total operating income – One-off income)Cost-to-core income ratio (Administrative expenses – One-off expenses ) / (NII + NFCI – One-off income)Cost-to-total assets ratio (Administrative expenses – One-off expenses) / Average assetsCost of risk Net impairment on financial assets / Average gross carrying amount of loans to customersAsset qualityAverage LTV for mortgages to individualsThe cumulative loan-to-value (LTV) ratio for an individual mortgage is calculated by adding theoutstanding balance of the loan and the outstanding balances of any prior liens on the sameproperty, and dividing that total by the value of the residential real estate securing the loan. Theaverage LTV for the portfolio of mortgages to individuals is derived as a weighted average. Theweight for each property is Íslandsbanki's total outstanding amount secured on that property, andthe LTV applied is the highest LTV of all Íslandsbanki loans on that property.REA ratio Risk exposure amount / Total assetsNon-performing loans (NPL) ratioGross carrying amount of loans to customers in default (Stage 3) / Gross carrying amount of loansto customersAsset encumbrance ratio(Carrying amount of encumbered assets + collateral received re-used) / (Total assets + collateralreceived available for encumbrance)Financial strengthEquity as % of total assets Total equity / Total assetsLiquidityLiquidity coverage ratio (LCR) Liquidity buffer / Net liquid outflows over the coming 30 daysNet stable funding ratio (NSFR) Available stable funding / Required stable fundingTerm deposits ratio Term deposits maturing within 30 days / Total depositsLoan-to-deposit ratio Loans to customers / Deposits from customersLoan-to-deposit ratio (adj.Cov.Bonds) (Loans to customers - Loans funded by Covered Bonds) / Deposits from customersCapitalCET1 ratio Common equity Tier 1 capital / Total risk exposure amountTier 1 ratio (CET1 capital + Additional Tier 1 capital) / Total risk exposure amountTotal capital ratio (Tier 1 capital + Tier 2 capital) / Total risk exposure amountLeverage ratioTier 1 capital / (On-balance sheet exposures + Off-balance sheet exposures + Derivative exposures)MREL ratio (Total capital base + Eligible liabilities) / Total risk exposure amount
Íslandsbanki hf. Consolidated Financial Statements 2025
91
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 Digital Operational Resilience of
the Financial Market no. 78/2025, the Act on
Mortgage Credit 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.
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 has
also issued bonds on the regulated securities
market in Iceland, Ireland and Sweden. 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.
Compliance with Guidelines on Corporate
Governance
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 are available on
corporategovernance.is. The Guidelines provide
that companies are to disclose any deviations from
the Guidelines and explain the reasons for such
deviations.
Consolidated Financial Statements
Íslandsbanki's Corporate
Governance Statement 2025
Unaudited
92
islandsbanki.is
Íslandsbanki complies with the provisions of the
guidelines with the exception of provision 1.5.12,
which states that the nomination committee's
proposals shall be presented together with the
notice of a shareholders' meeting where the
election of the board takes place. A shareholders'
meeting was convened on 22 December 2025
at the request of shareholders holding 1/20 of
the Bank's share capital, with the election of the
Board on the agenda. The request was received by
the Bank's board on 8 December 2025. In order
to present proposals together with the meeting
notice, the Nomination Committee would have
needed to complete its work within 14 days,
which is an insucient amount of time to full the
Committee's role in an adequate manner. In view
of the above, this provision was deviated from,
and the committee's proposals were published
ve days before the shareholders' meeting, on 14
January 2026.
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.
93
islandsbanki.is
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. 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 nancial statements 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 Board's Audit Committee
reviews the annual and interim nancial
statements before their submission for Board
approval and endorsement. The Board's Audit
Committee regularly discusses the 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 each year 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 2024 AGM, following the Bank's
tender for audit services, and has since audited
the annual nancial statements for the parent
company and the Group's consolidated nancial
statements, as well as those of main subsidiaries. In
addition, the external auditors review the Group's
half year condensed consolidated interim nancial
statements. In 2025, the external auditors also
reviewed the Condensed Consolidated Interim
Financial Statements for the rst quarter in relation
to the oering of the Government of Iceland's
stake in the Bank.
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 serves as the Bank's
compliance ocer as an issuer of nancial
instruments in accordance with the FSA Rules no.
44/2013 on the Role and Status of Compliance
Ocers and the Recording of Communications
under the Act on Measures against Market Abuse.
Anti–Money Laundering Measures
Íslandsbanki is an obliged entity under the Act on
Measures against Money Laundering and Terrorist
Financing no. 140/2018 and has established a
governance framework for this policy area. The
Bank's Executive Director of Business Surveillance,
who reports to the Chief Financial Ocer, acts
as the Bank's Money Laundering Reporting
Ocer (MLRO). The Bank's Executive Director
of anti-Financial Crime, who reports to the CCO,
serves as the compliance ocer for this area and
94
islandsbanki.is
is responsible for overseeing the eectiveness of
the Bank's anti–money laundering and counter
terrorist nancing controls.
Íslandsbanki Values, Sustainability and Code of
Conduct
The Bank's purpose is to empower our 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 rules are
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 has decided to focus particularly on
four of the UN Sustainable Development Goals
(SDGs) in its course of business: quality education;
gender equality; climate action; industry,
innovation and infrastructure. Annually the Bank
publishes an Annual and Sustainability Report. The
information in the report is in line with Nasdaq's
ESG Guidelines. Additionally, the report is based
on the applicable Global Reporting Initiative
(GRI) metrics, the UN Principles for Responsible
Banking, 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 for a term of one year. The Chairman of
the Board is elected separately at the AGM or
at shareholders' meetings. In December 2025,
Linda Jónsdóttir, Chairman of the Board of
Íslandsbanki, announced that she would not seek
re-election to the Bank's Board at the next Annual
General Meeting. Following the announcement,
the Board of Íslandsbanki received a request
from shareholders who control more than 1/20
of the Bank's share capital, that a shareholders'
meeting be convened with election of the
Board of Directors on the agenda. The Board of
Íslandsbanki convened a shareholders' meeting on
19 January 2026, with election of Board members
on the agenda. The Board election resulted in
changes to the composition of the Bank’s Board.
Heiðar Guðjónsson was elected Chairman of the
Board, Margrét Pétursdóttir was elected as Board
member, replacing Agnar Tómas Möller, and
Magnús E. Björnsson was elected as an alternate
member of the Board, replacing Páll Grétar
Steingrímsson.
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 thirty times in 2025, 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
95
islandsbanki.is
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 four 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 chairmen.
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 composed of members of the
Board, in addition to one external committee
member in the Board Corporate Governance
and Human Resource Committee and one 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
seven times in 2025, each time constituting a
quorum.
The Board Risk Management Committee, comprising
three Board members, serves an advisory and
supervisory role for the Board, inter alia 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 nine times in 2025, each time
constituting a quorum.
The Board Corporate Governance and Human
Resource Committee,
comprising three Board
members and one external committee member,
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 with assessing the Bank's Remuneration
Policy, its implementation, and incentives for
managing risk and capital and liquidity positions.
Additionally, the committee supports the Board
in monitoring and addressing the implementation
of the Bank's Sustainability Policy and issues
concerning human resources. The committee met
eleven times in 2025, each time constituting a
quorum.
The Board Innovation and Technology Committee,
comprising three Board members, assists the
Board with strategy development and the analysis
of opportunities related to innovation, technology,
information security and digital innovation. The
committee advises the Board on matters including
technological development, data security, and the
implementation of technological solutions within
the Bank. The committee met ve times in 2025,
each time constituting a quorum.
The structure and composition of Board sub-
committees is illustrated below.
96
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 Funding, Treasurer and CFO at Landsvirkjun
(1993-2010).
Other directorships: Landsnet (Board member). 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. Stefán's spouse holds 28,153 shares in
Íslandsbanki. Stefán 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 and Chairman of
the Board Audit Committee.
Heiðar Guðjónsson
(b. 1972)
Joined the Board as
Chairman in
January 2026
Main occupation: Owner and Managing Director of Ursus
ehf. and Ursus Capital AG, Switzerland.
Work experience: CEO of Sýn hf. (2019–2022). Executive
Director of Novator Partners in London (2005-2009).
Specialist at Íslandsbanki in London (2003–2005).
Specialist at Kaupthing Bank in New York (2000–2003).
Head of Securities Brokerage at Íslandsbanki (1998–2000).
Other directorships: HS Veitur (Board member). Innviða
fjárfestingar slhf. (Board member). Arctic Chamber of
Commerce (as Chairman).
Education: B.Sc. in Economics from the University of
Iceland.
Shareholding and independence: Heiðar holds 147,120
shares and 17,458,679 shares through his company Ursus
ehf. in Íslandsbanki. Heiðar's spouse holds 197,684 shares
in Íslandsbanki. Heiðar 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.
Members of the Board
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 Reparations Settlement Committee
(2023-2024). 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: The Open Championship (member
of the Executive Committee). Has been on the boards of
the Golf Union of Iceland (as President), the European
Golf Association (as President), the International Golf
Federation and GAM Management hf.
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: The Board Innovation and Technology
Committee and Chairman of the Board Corporate
Governance and Human Resource Committee.
97
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. (as Chairman) 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.
Margrét
Pétursdóttir
(b. 1968)
Joined the Board in
January 2026
Main Occupation: Board memberships and independent
consultant.
Work experience: Partner at KPMG (2024-2026). CEO
of Ernst & Young (2019-2023). Head of Audit at Ernst &
Young (2010-2019). Head of Internal Audit at Ernst & Young
(2005-2023, intermittently).
Other directorships: Has been on the boards of the
International Federation of Accountants, the Institute
of State Authorized Public Accountants, the Nordic
Federation of Accountants, and the Iceland Chamber of
Commerce.
Education: Cand. oecon from the University of Iceland.
Certied Public Accountant.
Shareholding and independence: Margrét holds no shares
in Íslandsbanki and has no interest ties with the Bank's
main customers or competitors. Margrét is considered
independent of the Bank's major shareholders but not
independent of the Bank due to her former position as
a partner at KPMG, which serves as the Bank's external
auditor.
Sub-Committees: Board Audit 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 ehf. (2002-2003). Managing Director and
co-founder at Inntak almannatengsl (2000-2002). Senior
Trader at Íslandsbanki hf. (1998-2000) and Landsbankinn
hf. (1997-1998).
Other directorships: Isavia ANS ehf. (as Chairman). Fólk
Reykjavík ehf. (Board member). Nordic Development ehf.
(Board member). Eimskipafélag Íslands (as Alternate).
Has been on the boards of the Iceland's Chamber of
Commerce, Verðbréfamiðstöð Íslands hf. and Island Fund
S.A. in Luxembourg.
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 and the Board Innovation
and Technology Committee.
98
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
Valgerður Hrund
Skúladóttir
(b. 1963)
Joined the board in
March 2024
Main occupation: Consultancy, board memberships, and
volunteer work on community projects.
Work Experience: CEO and founder of Sensa ehf. (2002-
2025). 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: Sensa ehf. (Board member).
Memento ehf. (Board member). Reykjavík Forest Society
(Board member). Isavia ANS (Board member) and serves on
the University Council of Reykjavík University. Has been on
the boards of Confederation of Icelandic Employers, Orb
ehf., Staki Automation ehf., Talenta ehf., Siminn DK, Sensa
A/S, the Federation of Icelandic Industries, its Intellectual
Property Council and 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: Board Audit Committee and Chairman
of the Board Innovation and Technology Committee.
The alternate members of the Board are Herdís Gunnarsdóttir, since April 2016, and Magnús E. Björnsson,
since January 2026.
The Rules of Procedure of the Board set out measures to prevent conflicts of interests in the Board's
activities.
Heiðar Guðjónsson
Stefán Pétursson
Haukur Örn Birgisson
Helga Hlín Hákonardóttir
Margrét Pétursdóttir
Stefán Sigurðsson
Valgerður Skúladóttir
Herdís Gunnarsdóttir
Páll Grétar Steingrímsson
Board Risk Management
Committee
Board
Audit Committee
Board Corporate Gover-
nance and HR Committee
Board Innovation and
Technology Committee
Chair Member
External Committee
Member
99
islandsbanki.is
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.
Following the Bank's AGM in 2025, Agnar
Tómas Möller, Board Member, was appointed
by the Board to the Nomination Committee. In
December of the same year, Linda Jónsdóttir,
Chairman of the Board, succeeded him on
the committee. Heiðar Guðjónsson joined the
Nomination Committee following the Bank's
shareholders' meeting in January 2026.
The Rules of Procedure of the Bank's Nomination
Committee are published on the Bank's website.
The Nomination Committee consists of:
- Helga Valfells, Chairman
- Hilmar Garðar Hjaltason
- Heiðar Guðjónsson, Chairman of the Board of
Íslandsbanki
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 collectively, 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 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 2025. 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.
Jón Guðni
Ómarsson (b. 1976)
CEO since 28 June
2023
Work experience:
CFO of Íslandsbanki hf. (2011-2023).
Head of Treasury at Íslandsbanki hf. (2008-2011).
Education: M.Sc. in Quantitative and Computational
Finance (QCF) from Georgia Institute of Technology. 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: Chairman of the Board of Finance
Iceland (SFF).
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's major shareholders. No interest
ties with main customers or competitors of the Bank. There
is a stock option agreement in eect between the Bank
and Jón Guðni under the stock option plan approved at the
Bank's shareholder's meeting in 2025. The plan complies
with the Act on Income Tax no. 90/2003 and applies to all
permanent employees of the Bank.
100
islandsbanki.is
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.
The Executive Committee
The Executive Committee consists of seven
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 and Una Steinsdóttir,
Managing Director of Business Banking since May
2017. Riaan Dreyer served as Managing Director
of Digital & Data from September 2019 until
November 2025, when he stepped down.
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 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 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.
101
islandsbanki.is
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 in accordance with the
Bank's Disclosure and Communication Policy. The
Bank also organises quarterly meetings for market
participants where, among others, 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
No 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
12 February 2026.
102
In accordance with Regulation (EU) 2020/852
on the establishment of a framework to
facilitate sustainable investment (the Taxonomy
Regulation), the Group provides disclosures
on its Green Asset Ratio (GAR). The Taxonomy
Regulation was transposed into Icelandic law by
Act no. 25/2023 on sustainability disclosure in
the nancial service sector and a classication
system for sustainable investments. Regulations
no. 10/2024 and no. 1207/2024 implemented
Delegated Regulations (EU) 2021/2178, 2022/1214,
2023/2485 and 2023/2486, which dene the
technical screening criteria and templates for
disclosures. The Taxonomy Regulation establishes
a harmonised classication system with denitions
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:
1. Climate change mitigation;
2. Climate change adaptation;
3. Sustainable use and protection of water
and marine resources;
4. Transition to a circular economy;
5. Pollution prevention and control; and
6. Protection and restoration of biodiversity
and ecosystems.
The GAR is calculated as the proportion of assets
that nance economic activities considered
sustainable under the classication system, in
accordance with the denitions in Article 3 of
Regulation (EU) 2020/852 and the applicable
screening criteria. In 2024, disclosures covered
only the rst two environmental objectives of
the Taxonomy Regulation, i.e., climate change
mitigation and climate change adaptation, as the
technical screening criteria for objectives 3-6 did
not enter into force in Iceland until 1 January 2025.
Following the entry into force of the remaining
four environmental objectives, the Group now
provides disclosures covering all environmental
objectives set out in the Taxonomy Regulation,
instead of providing disclosures only on the rst
two as in previous GAR reporting.
The Group's disclosures are based on data
from Icelandic companies that are required to
disclose non-nancial information according
to Article 66 d. of Act no. 3/2006 on annual
accounts. The GAR is disclosed based on data on
environmentally sustainable economic activities
for non-nancial undertakings for the nancial
year 2024, for reporting with reference dates
at year-end 2025. Loans to small and medium-
sized enterprises (SMEs) cannot be classied
as green assets, as these companies fall outside
the scope of the Taxonomy Regulation and,
as a result, insucient data are available to
determine whether the loans meet the Taxonomy
Regulation's criteria. Additionally, mortgages and
car loans to households cannot be categorised as
green assets, even though a portion of them meet
the environmental objectives of the Taxonomy
Regulation. Due to a lack of data, it is impossible to
conrm that they meet the Taxonomy Regulation's
criteria of „do no signicant harm“.
The Group's GAR based on turnover at year-
end 2025 was 0.33% (year-end 2024: 0.20%).
The Group's GAR based on capital expenditure
(CAPEX) at year-end 2025 was 0.39% (year-end
2024: 0.26%).
Green Asset Ratio
Unaudited
Consolidated Financial Statements
103
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 4,996 0.33% 0.39% 88.43% 31.49% 11.57%
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) -
0.00% 0.09% 87.45% 35.12% 12.55%
Trading book*
Financial guarantees - 16.82% 0.00%
Assets under management 2,114 3.23% 0.85%
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.
104
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
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
1,051,664 644,599 4,996 - - - - - - - - - - - - - - - - - - - - - - - 644,599 4,996 - - -
2 Financial undertakings 169,753 6 - - - - - - - - - - - - - - - - - - - - - - - - 6 - - - -
3 Credit institutions 113,956 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
4 Loans and advances 72,810 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
5 Debt securities, including UoP 41,146 - - - -
-
- - - - - - - - - - - - - - - - - - - - - - - - -
6 Equity instruments - - - -
-
- - - - - - - - - - - - - - - - - - -
7 Other financial corporations 55,797 6 - - -
-
- - - - - - - - - - - - - - - - - - - - 6 - - - -
8 of which investment firms 855 - - - -
-
- - - - - - - - - - - - - - - - - - - - - - - - -
9 Loans and advances 331 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
10 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
11 Equity instruments 524 - - - - - - - - - - - - - - - - - - - - - - -
12 of which management companies 3 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
13 Loans and advances 3 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
14 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
15 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - -
16 of which insurance undertakings 4 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
17 Loans and advances 4 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
18 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
19 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - -
20 Non-financial undertakings 205,246 57,258 4,996 - - - - - - - - - - - - - - - - - - - - - - - 57,258 4,996 - - -
21 Loans and advances 202,295 54,319 2,057 - - - - - - - - - - - - - - - - - - - - - - - 54,319 2,057 - - -
22 Debt securities, including UoP 2,952 2,939 2,939 - - - - - - - - - - - - - - - - - - - - - - - 2,939 2,939 - - -
23 Equity instruments - 1 - - - - - - - - - - - - - - - - - - - - - - -
24 Households 656,535 587,335 - - - - - - - - - - - - - - - - - - - - - - - - 587,335 - - - -
25
of which loans collateralised by
residential immovable property
589,345 587,335 - - - - - - - - - - - - - - - - - - - - - - - - 587,335 - - - -
26 of which building renovation loans - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
27 of which motor vehicle loans 21,029 21,029 - - - - - - - - 21,029 - - - -
28 Local governments financing 18,632 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
29 Housing financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
30 Other local government financing 18,632 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
1,498 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
32
Assets excluded from the numerator for
GAR calculation (covered in the
denominator)
483,301 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
33 Financial and Non-financial undertakings
446,079
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
419,496
35 Loans and advances 416,982
36
of which loans collateralised by
commercial immovable property
192,306
37 of which building renovation loans -
38 Debt securities 2,129
39 Equity instruments 385
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
26,583
41 Loans and advances 26,331
42 Debt securities -
43 Equity instruments 252
44 Derivatives 5,304
45 On demand interbank loans 7,260
46 Cash and cash-related assets 3,284
47
Other categories of assets (e.g. Goodwill,
commodities etc.)
21,374
48 Total GAR assets 1,534,965 644,599 4,996 - - - - - - - - - - - - - - - - - - - - - - - 644,599 4,996 - - -
49 Assets not covered for GAR calculation 200,918
50
Central governments and
Supranational issuers
96,745
51 Central banks exposure 77,125
52 Trading book 27,048
53 Total assets 1,735,883 644,599 4,996 - - - - - - - - - - - - - - - - - - - - - - - 644,599 4,996 - - -
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54 Financial guarantees 22,542 3,791 - - - - - - - - - - - - - - - - - - - - - - - - 3,791 - - - -
55 Assets under management 248,300 8,032 2,114 - - - - - - - - - - - - - - - - - - - - - - - 8,032 2,114 - - -
56 Of which debt securities 97,529 4,523 2,111 - - - - - - - - - - - - - - - - - - - - - - - 4,523 2,111 - - -
57 Of which equity instruments 64,552 3,509 3 - - - - - - - - - - - - - - - - - - - - - - - 3,509 3 - - -
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Of which environmentally sustainable (Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
Million ISK
Disclosure reference date 31.12.2025
Total [gross]
carrying
amount
Total (CCA + CCM + WTR + CE + PPC + BIO)
Of which environmentally sustainable (Taxonomy-aligned)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Biodiversity and Ecosystems (BIO)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
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 towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
105
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
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
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 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
32
Assets excluded from the numerator for
GAR calculation (covered in the
denominator)
441,120 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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 1,415,303 629,960 2,874 - - - - - - - - - - - - - - - - - - - - - - - - 629,960 2,874 - - -
49 Assets not covered for GAR calculation
50
Central governments and
Supranational issuers
51 Central banks exposure
52 Trading book
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 towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-aligned)
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
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 [gross]
carrying
amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
Water and marine resources (WTR)
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
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
Total (CCA + CCM + WTR + CE + PPC + BIO)
106
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
(CCA)
Mn ISK
Of which
environmentally
sustainable
(CCA)
Mn ISK
Of which
environmentally
sustainable
(CCA)
Mn ISK
Of which
environmentally
sustainable
(CCA)
Mn ISK
Of which
environmentally
sustainable
(CCA)
Mn ISK
Of which
environmentally
sustainable
(CCA)
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,
166
- 1,
166
- 1,
166
- 1,
166
- 1,
166
- 1,
166
- 1,
166
-
2 0321 Marine aquaculture
4 - 4 - 4 - 4 - 4 - 4 - 4 -
3 0990 Support activities for other mining and quarrying
- - - - - - - - - - - - - -
4
1013 Production of meat and poultry meat products 1 - 1 - 1 - 1 - 1 - 1 - 1 -
5 1020 Processing and preserving of fish, crustaceans and molluscs
28
,176
- 28
,176
- 28
,176
- 28
,176
- 28
,176
- 28
,176
- 28
,176
-
6 1051 Operation of dairies and cheese making
2 - 2 - 2 - 2 - 2 - 2 - 2 -
7 1091 Manufacture of prepared feeds for farm animals
6,
389
- 6,
389
- 6,
389
- 6,
389
- 6,
389
- 6,
389
- 6,
389
-
8
1107 Manufacture of soft drinks; production of mineral waters and other bottled waters
8,508 - 8,508 - 8,508 - 8,508 - 8,508 - 8,508 - 8,508 -
9 2361 Manufacture of concrete products for construction purposes
1 - 1 - 1 - 1 - 1 - 1 - 1 -
10 2363 Manufacture of ready-mixed concrete
462 - 462 - 462 - 4
62
- 4
62
- 4
62
- 4
62
-
11 2399 Manufacture of other non-metallic mineral products n.e.c.
77 - 77 - 77 - 77 - 77 - 77 - 77 -
12
2651 Manufacture of instruments and appliances for measuring, testing and navigatio
1
- 1 - 1 - 1 - 1 - 1 - 1 -
13 3250 Manufacture of medical and dental instruments and supplies
8 - 8 - 8 - 8 - 8 - 8 - 8 -
14 3312 Repair of machinery
181 - 181 - 181 - 1
81
- 1
81
- 1
81
- 1
81
-
15 3511 Production of electricity
2,
954
2,
939
2,
954
- 2,
954
- 2,
954
- 2,
954
- 2,
954
- 2,
954
2,
939
16 3512 Transmission of electricity
- - - - - - - - - - - - - -
17 3530 Steam and air conditioning supply
2,
714
2,
058
2,
714
- 2,
714
- 2,
714
- 2,
714
- 2,
714
- 2,
714
2,
058
18
3821 Treatment and disposal of non-hazardous waste
132 - 132 - 132 - 1
32
- 1
32
- 1
32
- 1
32
-
19 4120 Construction of residential and non-residential buildings
6,
366
- 6,
366
- 6,
366
- 6,
366
- 6,
366
- 6,
366
- 6,
366
-
20 4511 Sale of cars and light motor vehicles
10
,777
- 10
,777
- 10
,777
- 10
,777
- 10
,777
- 10
,777
- 10
,777
-
21 4639 Non-specialised wholesale of food, beverages and tobacco
656 - 656 - 656 - 6
56
- 6
56
- 6
56
- 6
56
-
22 4643 Wholesale of electrical household appliances
292 - 292 - 292 - 2
92
- 2
92
- 2
92
- 2
92
-
23 4646 Wholesale of pharmaceutical goods
659 - 659 - 659 - 6
59
- 6
59
- 6
59
- 6
59
-
24 4671 Wholesale of solid, liquid and gaseous fuels and related products
3,
783
- 3,
783
- 3,
783
- 3,
783
- 3,
783
- 3,
783
- 3,
783
-
25 4690 Non-specialised wholesale trade
2 - 2 - 2 - 2 - 2 - 2 - 2 -
26
4711 Retail sale in non-specialised stores with food, beverages or tobacco predominat
4,116
- 4,116 - 4,116 - 4,116 - 4,116 - 4,116 - 4,116 -
27 4719 Other retail sale in nonspecialised stores
2,
908
- 2,
908
- 2,
908
- 2,
908
- 2,
908
- 2,
908
- 2,
908
-
28 4730 Retail sale of automotive fuel in specialised stores
10
,240
- 10
,240
- 10
,240
- 10
,240
- 10
,240
- 10
,240
- 10
,240
-
29 4773 Dispensing chemist in specialised stores
1,
419
- 1,
419
- 1,
419
- 1,
419
- 1,
419
- 1,
419
- 1,
419
-
30 5020 Sea and coastal freight water transport
1,
365
- 1,
365
- 1,
365
- 1,
365
- 1,
365
- 1,
365
- 1,
365
-
31 5110 Passenger air transport
- - - - - - - - - - - - - -
32 5223 Service activities incidental to air transportation
15
,830
- 15
,830
- 15
,830
- 15
,830
- 15
,830
- 15
,830
- 15
,830
-
33 5310 Postal activity
20
,220
- 20
,220
- 20
,220
- 20
,220
- 20
,220
- 20
,220
- 20
,220
-
34 5510 Hotels and similar accommodation
5 - 5 - 5 - 5 - 5 - 5 - 5 -
35 6110 Wired telecommunications activities
- - - - - - - - - - - - - -
36 6120 Wireless telecommunications activities
4 - 4 - 4 - 4 - 4 - 4 - 4 -
37 6201 Computer programming activities
803 - 803 - 803 - 8
03
- 8
03
- 8
03
- 8
03
-
38 6202 Computer consultancy activities
42
,515
- 42
,515
- 42
,515
- 42
,515
- 42
,515
- 42
,515
- 42
,515
-
39 6820 Renting and operating of own or leased real estate
1 - 1 - 1 - 1 - 1 - 1 - 1 -
40 6920 Accounting, bookkeeping and auditing activities; tax consultancy
1 - 1 - 1 - 1 - 1 - 1 - 1 -
41 7022 Business and other management consultancy activities
3 - 3 - 3 - 3 - 3 - 3 - 3 -
42 7112 Engineering activities and related technical consultancy
32
,168
- 32
,168
- 32
,168
- 32
,168
- 32
,168
- 32
,168
- 32
,168
-
43 7711 Renting and leasing of cars and light motor vehicles
- - - - - - - - - - - - - -
44 7990 Other reservation service and related activities
94 - 94 - 94 - 94 - 94 - 94 - 94 -
45 8020 Security systems service activities
249 - 249 - 249 - 2
49
- 2
49
- 2
49
- 2
49
-
46 8121 General cleaning of buildings
- - - - - - - - - - - - - -
[Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount
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
Biodiversity and Ecosystems (BIO)
Total (CCA + CCM + WTR + CE + PPC + BIO)
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
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
Pollution (PPC)
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
Breakdown by sector - NACE 4 digits level (code and label)
Climate Change Mitigation (CCM)
Climate Change Adaption (CCA)
Water and marine resources (WTR) Circular economy (CE)
[Gross] carrying amount [Gross] carrying amount[Gross] carrying amount[Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount
107
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
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
61.29% 0.48% - - - - - - -
- - - - - - - - - - - - - - - -
61.29% 0.48% - - - 60.58%
2 Financial undertakings 0.00% - - - - - - - - - - - - - - - - - - - - - - - - 0.00% - - - - 9.78%
3 Credit institutions - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6.56%
4
Loans and advances - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4.19%
5 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2.37%
6 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - - -
7 Other financial corporations 0.01% - - - - - - - - - - - - - - - - - - - - - - - - 0.01% - - - - 3.21%
8 of which investment firms - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.05%
9 Loans and advances - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.02%
10 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
11 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - - 0.03%
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 27.90% 2.43% - - - - - - - - - - - - - - - - - - - - - - - 27.90% 2.43% - - - 11.82%
21 Loans and advances 26.85% 1.02% - - - - - - - - - - - - - - - - - - - - - - - 26.85% 1.02% - - - 11.65%
22 Debt securities, including UoP 99.56% 99.56% - - - - - - - - - - - - - - - - - - - - - - - 99.56% 99.56% - - - 0.17%
23 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - - - 0.00%
24 Households 89.46% - - - - - - - - - - - - - - - - - - - - - - - - 89.46% - - - - 37.82%
25
of which loans collateralised by
residential immovable property
99.66% - - - - - - - - - - - - - - - - - - - - - - - - 99.66% - - - -
33.95%
26 of which building renovation loans - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
27 of which motor vehicle loans 100.00% - - - - - - - - - - - - - - - - - - - - - - - - 100.00% - - - - 1.21%
28 Local governments financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1.07%
29 Housing financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
30 Other local government financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1.07%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
- - - - - - - - - - - -
-
- - -
-
- - -
-
- - -
-
- - - - - 0.09%
32 Total GAR assets 41.99% 0.33% - - - - - - - - - - - - - - - - - - - - - - - 41.99% 0.33% - - - 88.43%
Of which environmentally sustainable (Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-aligned)
Proportion of
total assets
covered
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 towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2025
Climate Change Mitigation (CCM)
Climate Change Adaption (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
108
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
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%
Of which environmentally sustainable (Taxonomy-
aligned)
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)
Of which environmentally sustainable (Taxonomy-
aligned)
Circular economy (CE)
Of which environmentally sustainable (Taxonomy-aligned)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Proportion of
total assets
covered
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) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Climate Change Mitigation (CCM)
Climate Change Adaption (CCA)
Water and marine resources (WTR)
Pollution (PPC)
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2024
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Biodiversity and Ecosystems (BIO)
Total (CCA + CCM + WTR + CE + PPC + BIO)
109
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
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
39.23% - - - - - - - - - - - - - - - - - - - - - - - - 39.23% - - - -
56.74%
2 Financial undertakings - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 16.60%
3 Credit institutions - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 13.06%
4 Loans and advances - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 12.48%
5 Debt securities, including UoP -
-
-
-
- - -
- -
- -
- -
- -
- -
- -
- -
- -
- - -
- - - -
0.58%
6 Equity instruments -
-
-
-
-
-
-
- -
- -
-
- -
-
-
-
-
- -
- -
-
-
- -
-
7
Other financial corporations -
-
- - - - -
- -
- -
- -
-
-
- -
- -
- -
-
-
- - -
-
- - -
3.54%
8 of which investment firms - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.05%
9 Loans and advances - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.05%
10 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
11 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - - - - -
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 13.34% - - - - - - - - - - - - - - - - - - - - - - - - 13.34% - - - - 13.81%
21 Loans and advances 13.34% - - - - - - - - - - - - - - - - - - - - - - - - 13.34% - - - - 13.81%
22 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
23 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - - - - -
24 Households 78.56% - - - - - - - - - - - - - - - - - - - - - - - - 78.56% - - - - 25.99%
25
of which loans collateralised by
residential immovable property
100.00% - - - - - - - - - - - - - - - - - - - - - - - - 100.00% - - - -
20.42%
26 of which building renovation loans - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
27 of which motor vehicle loans 0.34% - - - - - - - - - - - - - - - - - - - - - - - - 0.34% - - - - 2.07%
28 Local governments financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.34%
29 Housing financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
30 Other local government financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.34%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
32 Total GAR assets 25.45% - - - - - - - - - - - - - - - - - - - - - - - - 25.45% - - - - 87.45%
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)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2025
Climate Change Mitigation (CCM) Climate Change Adaption (CCA) Water and marine resources (WTR) Circular economy (CE) Pollution (PPC) Biodiversity and Ecosystems (BIO) Total (CCA + CCM + WTR + CE + PPC + BIO)
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 environmentally sustainable
(Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
110
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
1
Financial guarantees (FinGuar KPI) 16.82% -
- -
- - - - - - - - - - - - - - - - - - - - - 16.82% - - - -
2
Assets under management (AuM KPI) 3.23% 0.85%
- -
- - - - - - - - - - - - - - - - - - - - - 3.23% 0.85% - - -
Of which environmentally sustainable (Taxonomy-aligned)Of which environmentally sustainable (Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
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)
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31.12.2025
Climate Change Mitigation (CCM) Climate Change Adaption (CCA) Water and marine resources (WTR) Circular economy (CE) Pollution (PPC) Biodiversity and Ecosystems (BIO) Total (CCA + CCM + WTR + CE + PPC + BIO)
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 towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
111
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
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
1,051,664 668,151 5,916 - - - - - - - - - - - - - - - - - - - - - - - - 668,151 5,916 - - -
2
Financial undertakings 169,753 52 - - - - - - - - - - - - - - - - - - - - - - - - - 52 - - - -
3 Credit institutions 113,956 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
4 Loans and advances 72,810 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
5 Debt securities, including UoP 41,146 - - - -
-
- - - - - - - - - - - - - - - - - - - - - - - - - -
6 Equity instruments - - - -
-
- - - - - - - - - - - - - - - - - - - -
7 Other financial corporations 55,797 52 - - -
-
- - - - - - - - - - - - - - - - - - - - - 52 - - - -
8 of which investment firms 855 - - - -
-
- - - - - - - - - - - - - - - - - - - - - - - - - -
9 Loans and advances 331 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
10
Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
11 Equity instruments 524 - - - - - - - - - - - - - - - - - - - - - - - -
12 of which management companies 3 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
13 Loans and advances 3 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
14 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
15 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - - -
16 of which insurance undertakings 4 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
17 Loans and advances 4 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
18 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
19 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - - -
20 Non-financial undertakings 205,246 80,764 5,916 - - - - - - - - - - - - - - - - - - - - - - - - 80,764 5,916 - - -
21 Loans and advances 202,295 78,079 3,231 - - - - - - - - - - - - - - - - - - - - - - - - 78,079 3,231 - - -
22 Debt securities, including UoP 2,952 2,685 2,685 - - - - - - - - - - - - - - - - - - - - - - - - 2,685 2,685 - - -
23 Equity instruments - 1 - - - - - - - - - - - - - - - - - - - - - - - -
24 Households 656,535 587,335 - - - - - - - - - - - - - - - - - - - - - - - - - 587,335 - - - -
25
of which loans collateralised by
residential immovable property
589,345 587,335 - - - - - - - - - - - - - - - - - - - - - - - - - 587,335 - - - -
26 of which building renovation loans - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
27 of which motor vehicle loans 21,029 21,029 - - - - - - - - - 21,029 - - - -
28 Local governments financing 18,632 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
29 Housing financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
30 Other local government financing 18,632 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
31
Collateral obtained by taking possession:
residential and commercial immovable
1,498 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
32
Assets excluded from the numerator for
GAR calculation (covered in the
denominator)
483,301 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
33 Financial and Non-financial undertakings
446,079
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
419,496
35
Loans and advances 416,982
36
of which loans collateralised by
commercial immovable property
192,306
37 of which building renovation loans -
38 Debt securities 2,129
39 Equity instruments 385
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
26,583
41 Loans and advances 26,331
42 Debt securities -
43 Equity instruments 252
44 Derivatives 5,304
45 On demand interbank loans 7,260
46 Cash and cash-related assets 3,284
47
Other categories of assets (e.g. Goodwill,
commodities etc.)
21,374
48 Total GAR assets 1,534,965 668,151 5,916 - - - - - - - - - - - - - - - - - - - - - - - - 668,151 5,916 - - -
49 Assets not covered for GAR calculation 200,918
50
Central governments and
Supranational issuers
96,745
51 Central banks exposure 77,125
52 Trading book 27,048
53 Total assets 1,735,883 668,151 5,916 - - - - - - - - - - - - - - - - - - - - - - - - 668,151 5,916 - - -
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations
54 Financial guarantees 22,542 2,265 - - - - - - - - - - - - - - - - - - - - - - - - - 2,265 - - - -
55 Assets under management 248,300 9,678 2,278 - - - - - - - - - - - - - - - - - - - - - - - - 9,678 2,278 - - -
56 Of which debt securities 97,529 4,793 2,229 - - - - - - - - - - - - - - - - - - - - - - - - 4,793 2,229 - - -
57 Of which equity instruments 64,552 4,885 50 - - - - - - - - - - - - - - - - - - - - - - - - 4,885 50 - - -
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)
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
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 + WTR + CE + PPC + BIO)
Of which environmentally sustainable (Taxonomy-aligned)
Biodiversity and Ecosystems (BIO)
Million ISK
Disclosure reference date 31.12.2025
Total [gross]
carrying
amount
Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Water and marine resources (WTR) Circular economy (CE) Pollution (PPC)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
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
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 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
32
Assets excluded from the numerator for
GAR calculation (covered in the
denominator)
441,120 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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 1,415,303 658,069 3,656 - - - - - - - - - - - - - - - - - - - - - - - - 658,069 3,656 - - -
49 Assets not covered for GAR calculation
50
Central governments and
Supranational issuers
51 Central banks exposure
52 Trading book
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
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
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 towards taxonomy relevant sectors (Taxonomy-eligible)Of which towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Þar af umhverfissjálfbær (falla að
flokkunarkerfinu)
Of which environmentally sustainable (Taxonomy-aligned)
Total [gross]
carrying
amount
Climate Change Mitigation (CCM) Climate Change Adaptation (CCA) Water and marine resources (WTR)
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
Circular economy (CE) Pollution (PPC) Biodiversity and Ecosystems (BIO) Total (CCA + CCM + WTR + CE + PPC + BIO)
113
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
(CCA)
Mn ISK
Of which
environmentally
sustainable
(CCA)
Mn ISK
Of which
environmentally
sustainable
(CCA)
Mn ISK
Of which
environmentally
sustainable
(CCA)
Mn ISK
Of which
environmentally
sustainable
(CCA)
Mn ISK
Of which
environmentally
sustainable
(CCA)
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
1,166 - 1,166 - 1,166 - 1,166 - 1,166 - 1,166 - 1,166 -
2 0321 Marine aquaculture
4 - 4 - 4 - 4 - 4 - 4 - 4 -
3 0990 Support activities for other mining and quarrying
- - - - - - - - - - - - - -
4 1013 Production of meat and poultry meat products
1 - 1 - 1 - 1 - 1 - 1 - 1 -
5 1020 Processing and preserving of fish, crustaceans and molluscs
28,176 - 28,176 - 28,176 - 28,176 - 28,176 - 28,176 - 28,176 -
6 1051 Operation of dairies and cheese making
2 - 2 - 2 - 2 - 2 - 2 - 2 -
7 1091 Manufacture of prepared feeds for farm animals
6,389 - 6,389 - 6,389 - 6,389 - 6,389 - 6,389 - 6,389 -
8
1107 Manufacture of soft drinks; production of mineral waters and other bottled waters
8,508 - 8,508 - 8,508 - 8,508 - 8,508 - 8,508 - 8,508 -
9 2361 Manufacture of concrete products for construction purposes
1 - 1 - 1 - 1 - 1 - 1 - 1 -
10 2363 Manufacture of ready-mixed concrete
462 - 462 - 462 - 462 - 462 - 462 - 462 -
11 2399 Manufacture of other non-metallic mineral products n.e.c.
77 - 77 - 77 - 77 - 77 - 77 - 77 -
12
2651 Manufacture of instruments and appliances for measuring, testing and navigatio
1
- 1 - 1 - 1 - 1 - 1 - 1 -
13 3250 Manufacture of medical and dental instruments and supplies
8 - 8 - 8 - 8 - 8 - 8 - 8 -
14 3312 Repair of machinery
181 - 181 - 181 - 181 - 181 - 181 - 181 -
15 3511 Production of electricity
2,954 2,939 2,954 - 2,954 - 2,954 - 2,954 - 2,954 - 2,954 2,939
16 3512 Transmission of electricity
- - - - - - - - - - - - - -
17 3530 Steam and air conditioning supply
2,714 2,058 2,714 - 2,714 - 2,714 - 2,714 - 2,714 - 2,714 2,058
18
3821 Treatment and disposal of non-hazardous waste
132 - 132 - 132 - 132 - 132 - 132 - 132 -
19 4120 Construction of residential and non-residential buildings
6,366 - 6,366 - 6,366 - 6,366 - 6,366 - 6,366 - 6,366 -
20 4511 Sale of cars and light motor vehicles
10,777 - 10,777 - 10,777 - 10,777 - 10,777 - 10,777 - 10,777 -
21 4639 Non-specialised wholesale of food, beverages and tobacco
656 - 656 - 656 - 656 - 656 - 656 - 656 -
22 4643 Wholesale of electrical household appliances
292 - 292 - 292 - 292 - 292 - 292 - 292 -
23 4646 Wholesale of pharmaceutical goods
659 - 659 - 659 - 659 - 659 - 659 - 659 -
24 4671 Wholesale of solid, liquid and gaseous fuels and related products
3,783 - 3,783 - 3,783 - 3,783 - 3,783 - 3,783 - 3,783 -
25 4690 Non-specialised wholesale trade
2 - 2 - 2 - 2 - 2 - 2 - 2 -
26
4711 Retail sale in non-specialised stores with food, beverages or tobacco predominat
4,116
- 4,116 - 4,116 - 4,116 - 4,116 - 4,116 - 4,116 -
27 4719 Other retail sale in nonspecialised stores
2,908 - 2,908 - 2,908 - 2,908 - 2,908 - 2,908 - 2,908 -
28 4730 Retail sale of automotive fuel in specialised stores
10,240 - 10,240 - 10,240 - 10,240 - 10,240 - 10,240 - 10,240 -
29 4773 Dispensing chemist in specialised stores
1,419 - 1,419 - 1,419 - 1,419 - 1,419 - 1,419 - 1,419 -
30 5020 Sea and coastal freight water transport
1,365 - 1,365 - 1,365 - 1,365 - 1,365 - 1,365 - 1,365 -
31 5110 Passenger air transport
- - - - - - - - - - - - - -
32 5223 Service activities incidental to air transportation
15,830 - 15,830 - 15,830 - 15,830 - 15,830 - 15,830 - 15,830 -
33 5310 Postal activity
20,220 - 20,220 - 20,220 - 20,220 - 20,220 - 20,220 - 20,220 -
34 5510 Hotels and similar accommodation
5 - 5 - 5 - 5 - 5 - 5 - 5 -
35 6110 Wired telecommunications activities
- - - - - - - - - - - - - -
36 6120 Wireless telecommunications activities
4 - 4 - 4 - 4 - 4 - 4 - 4 -
37 6201 Computer programming activities
803 - 803 - 803 - 803 - 803 - 803 - 803 -
38 6202 Computer consultancy activities
42,515 - 42,515 - 42,515 - 42,515 - 42,515 - 42,515 - 42,515 -
39 6820 Renting and operating of own or leased real estate
1 - 1 - 1 - 1 - 1 - 1 - 1 -
40 6920 Accounting, bookkeeping and auditing activities; tax consultancy
1 - 1 - 1 - 1 - 1 - 1 - 1 -
41 7022 Business and other management consultancy activities
3 - 3 - 3 - 3 - 3 - 3 - 3 -
42 7112 Engineering activities and related technical consultancy
32,168 - 32,168 - 32,168 - 32,168 - 32,168 - 32,168 - 32,168 -
43 7711 Renting and leasing of cars and light motor vehicles
- - - - - - - - - - - - - -
44 7990 Other reservation service and related activities
94 - 94 - 94 - 94 - 94 - 94 - 94 -
45 8020 Security systems service activities
249 - 249 - 249 - 249 - 249 - 249 - 249 -
46 8121 General cleaning of buildings
- - - - - - - - - - - - - -
[Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount
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
Biodiversity and Ecosystems (BIO)
Total (CCA + CCM + WTR + CE + PPC + BIO)
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
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
Pollution (PPC)
Non-Financial corporates (Subject to
NFRD)
SMEs and other NFC not subject to
NFRD
Breakdown by sector - NACE 4 digits level (code and label)
Climate Change Mitigation (CCM)
Climate Change Adaption (CCA)
Water and marine resources (WTR) Circular economy (CE)
[Gross] carrying amount [Gross] carrying amount[Gross] carrying amount[Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount [Gross] carrying amount
114
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
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
63.53% 0.56% - - - - - - -
- - - - - - - - - - - - - - - -
63.53% 0.56% - - - 60.58%
2 Financial undertakings 0.03% - - - - - - - - - - - - - - - - - - - - - - - - 0.03% - - - - 9.78%
3 Credit institutions - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6.56%
4
Loans and advances - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4.19%
5 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2.37%
6 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - - - - -
7 Other financial corporations 0.09% - - - - - - - - - - - - - - - - - - - - - - - - 0.09% - - - - 3.21%
8 of which investment firms - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.05%
9 Loans and advances - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.02%
10 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
11 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - - - - 0.03%
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 39.35% 2.88% - - - - - - - - - - - - - - - - - - - - - - - 39.35% 2.88% - - - 11.82%
21 Loans and advances 38.60% 1.60% - - - - - - - - - - - - - - - - - - - - - - - 38.60% 1.60% - - - 11.65%
22 Debt securities, including UoP 90.96% 90.96% - - - - - - - - - - - - - - - - - - - - - - - 90.96% 90.96% - - - 0.17%
23 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.00%
24 Households 89.46% - - - - - - - - - - - - - - - - - - - - - - - - 89.46% - - - - 37.82%
25
of which loans collateralised by
residential immovable property
99.66% - - - - - - - - - - - - - - - - - - - - - - - - 99.66% - - - -
33.95%
26 of which building renovation loans - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
27 of which motor vehicle loans 100.00% - - - - - - - - - - - - - - - - - - - - - - - - 100.00% - - - - 1.21%
28 Local governments financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1.07%
29 Housing financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
30 Other local government financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1.07%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
- - - - - - - - - - - -
-
- - -
-
- - -
-
- - -
-
- - - - - 0.09%
32 Total GAR assets 43.53% 0.39% - - - - - - - - - - - - - - - - - - - - - - - 43.53% 0.39% - - - 88.43%
Of which environmentally sustainable (Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-aligned)
Proportion of
total assets
covered
Total (CCA + CCM + WTR + CE + PPC + BIO)
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 towards taxonomy relevant sectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2025
Climate Change Mitigation (CCM)
Climate Change Adaption (CCA)
Water and marine resources (WTR)
Circular economy (CE)
Pollution (PPC)
Biodiversity and Ecosystems (BIO)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
115
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
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%
Of which environmentally sustainable (Taxonomy-
aligned)
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)
Of which environmentally sustainable (Taxonomy-
aligned)
Circular economy (CE)
Of which environmentally sustainable (Taxonomy-aligned)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Proportion of
total assets
covered
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) Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Climate Change Mitigation (CCM)
Climate Change Adaption (CCA)
Water and marine resources (WTR)
Pollution (PPC)
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2024
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Biodiversity and Ecosystems (BIO)
Total (CCA + CCM + WTR + CE + PPC + BIO)
116
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
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
39.51% 0.15% - - - - - - - - - - - - - - - - - - - - - - - 39.51% 0.15% - - - 56.74%
2 Financial undertakings - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 16.60%
3 Credit institutions - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 13.06%
4 Loans and advances - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 12.48%
5
Debt securities, including UoP -
-
- - - - -
- -
- -
- -
-
-
- -
- -
- -
-
-
- - - - - - - 0.58%
6 Equity instruments -
-
- - - -
-
- -
-
- -
-
- -
-
-
-
- - - - - -
7 Other financial corporations -
-
-
- - - -
- -
- -
- -
-
-
- -
- -
- -
- -
- - - - - - - 3.54%
8 of which investment firms - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.05%
9 Loans and advances - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.05%
10 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
11 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - -
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 14.50% 0.60% - - - - - - - - - - - - - - - - - - - - - - - 14.50% 0.60% - - - 13.81%
21 Loans and advances 14.50% 0.60% - - - - - - - - - - - - - - - - - - - - - - - 14.50% 0.60% - - - 13.81%
22 Debt securities, including UoP - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
23 Equity instruments - - - - - - - - - - - - - - - - - - - - - - - -
24 Households 78.56% - - - - - - - - - - - - - - - - - - - - - - - - 78.56% - - - - 25.99%
25
of which loans collateralised by
residential immovable property
100.00% - - - - - - - - - - - - - - - - - - - - - - - - 100.00% - - - - 20.42%
26 of which building renovation loans - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
27 of which motor vehicle loans 0.34% - - - - - - - - - - - - - - - - - - - - - - - - 0.34% - - - - 2.07%
28 Local governments financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.34%
29 Housing financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
30 Other local government financing - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.34%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
32 Total GAR assets 25.64% 0.09% - - - - - - - - - - - - - - - - - - - - - - - 25.64% 0.09% - - - 87.45%
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)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
% (compared to total covered assets in the
denominator)
Disclosure reference date 31.12.2025
Climate Change Mitigation (CCM) Climate Change Adaption (CCA) Water and marine resources (WTR) Circular economy (CE) Pollution (PPC) Biodiversity and Ecosystems (BIO) Total (CCA + CCM + WTR + CE + PPC + BIO)
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 environmentally sustainable
(Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
117
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
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
enabling
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
1
Financial guarantees (FinGuar KPI) 10.05% -
- -
- - - - - - - - - - - - - - - - - - - - - - 10.05% - - - -
2
Assets under management (AuM KPI) 3.90% 0.92%
- -
- - - - - - - - - - - - - - - - - - - - - - 3.90% 0.92% - - -
Of which environmentally sustainable (Taxonomy-aligned)Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
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)
% (compared to total eligible off-balance
sheet assets)
Disclosure reference date 31.12.2025
Climate Change Mitigation (CCM) Climate Change Adaption (CCA) Water and marine resources (WTR) Circular economy (CE) Pollution (PPC) Biodiversity and Ecosystems (BIO) Total (CCA + CCM + WTR + CE + PPC + BIO)
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 towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors (Taxonomy-
eligible)
118
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
119
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
4,996 0.33% 4,996 0.33% - -
8.
Total applicable KPI
4,996 0.33% 4,996 0.33% - -
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)
120
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
4,996 100.00% 4,996 100.00% - -
8.
Total amount and proportion of taxonomy-
aligned economic activities in the
numerator of the applicable KPI
4,996 100.00% 4,996 100.00% - -
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
121
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
639,603 100.00% 639,603 100.00% - -
8.
Total amount and proportion of taxonomy-
eligible but not taxonomy-aligned economic
activities in the denominator of the
applicable KPI
639,603 100.00% 639,603 100.00% - -
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
122
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
1,091,284 62.87%
8.
Total amount and proportion of taxonomy-
non-eligible economic activities in the
denominator of the applicable KPI
1,091,284 62.87%
123
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
5,916 0.39% 5,916 0.39% - -
8.
Total applicable KPI
5,916 0.39% 5,916 0.39% - -
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)
124
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
5,916 100.00% 5,916 100.00% - -
8.
Total amount and proportion of taxonomy-
aligned economic activities in the
numerator of the applicable KPI
5,916 100.00% 5,916 100.00% - -
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
125
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
662,235 100.00% 662,235 100.00% - -
8.
Total amount and proportion of taxonomy-
eligible but not taxonomyaligned
economic activities in the denominator of
the applicable KPI
662,235 100.00% 662,235 100.00% - -
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
126
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
1,067,732 61.51%
8.
Total amount and proportion of taxonomy-
non-eligible economic activities in the
denominator of the applicable KPI
1,067,732 61.51%
Template 5 Taxonomy non-eligible economic activities based on CapEx
127
Íslandsbanki hf.
•
Hagasmári 3
•
201 Kópavogur
•
Iceland
•
Reg.no. 491008-0160
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