The largest part of Landsbankinn’s funding is in the form of deposits from customers which amounted to ISK 693 billion at year-end 2018. The Bank reached a milestone in 2018 with its inaugural Tier 2 market funding.

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Landsbankinn's funding rests on three main pillars – deposits from customers, market funding and equity. The Bank’s credit rating is measured as BBB+/A-2 with stable outlook by S&P Global Ratings.

Deposits from customers

The largest part of Landsbankinn's funding is in the form of deposits from customers which amounted to ISK 693 bn at year-end 2018, mostly non-indexed and on demand. Deposits from customers increased by 88 bn during the year 2018. Inflation-linked deposits amounted to ISK 114 bn at year-end 2018, increasing by ISK 8 bn from previous year.

EMTN issuance and other unsecured loans

The size of the Bank’s EMTN programme is EUR 2 bn and was increased in size from 1.5 bn in 2017. The inaugural issuance under the programme was made in fall 2015 with continued issuance on a regular basis to date. In 2018, the Bank reached a milestone with its inaugural Tier 2 market funding.

In August 2018, the Bank sold its inaugural Tier 2 issuance of EUR 100 m with a 10NC5 structure. The issuance is rated BBB- by S&P Global Ratings. The issuance is a step towards further optimising the Bank’s capital structure, supporting long-term return-on-equity targets.

In October 2018, the Bank signed its third loan agreement with the Nordic Investment Bank (NIB) whereby Landsbankinn borrows USD 75 m for seven years to finance small and medium sized enterprises (SMEs) and environmental projects in Iceland.

The Bank’s first bond issuance under the EMTN programme matured in October 2018. In November 2017, the Bank pre-paid EUR 150 m, representing half of the outstanding bond series. The remainder of the bond was paid in full in October 2018.

At year-end 2018, bond issuance in foreign currency amounted to ISK 199 bn, increasing by ISK 8 bn during the year. Other unsecured loans in foreign currency amounted to ISK 20 bn at the same time.

Funding pillars (ISKm)
Debt repayment profile (ISKm)

Covered bonds

The size of the programme for covered bond issuance is ISK 120 bn and was increased from ISK 100 bn in 2017. The covered bond issuance is primarily intended to fund the Bank’s mortgage portfolio and to mitigate interest rate risk. Regular auctions of covered bonds were held in 2018 where previously issued bonds were tapped. No covered bond series matured during the year 2018. Agreements with market makers in the secondary market for covered bonds were renewed in the year. At year-end, outstanding covered bonds issuance amounted to ISK 106 bn, increasing by ISK 36 bn during the year 2018.

Commercial paper

Landsbankinn continued regular issuance of commercial paper in 2018 under its ISK 50 bn debt issuance programme. Outstanding issuance of commercial paper amounted to ISK 3 bn at year-end 2018 compared to ISK 7 bn at the end of 2017.


The Bank’s equity amounted to ISK 240 bn at year-end 2018, decreasing by ISK 6 bn over the course of the year. Landsbankinn paid ISK 24.8 bn in dividends to shareholders in 2018. The Bank availed itself of an authorisation to buy back own shares, offering shareholders to purchase up to 72.5 million shares, or up to 0.3% of all issued shares. Participation was limited and the Bank purchased around 15 million own shares during the repurchase period. Landsbankinn’s total capital ratio was 24.9% at year-end 2018.

Credit rating

Landsbankinn’s credit has been rated by the international rating agency S&P Global Ratings since the beginning of 2014. In October 2017, the Bank's credit rating was raised by one notch and is currently BBB+/A-2 with a stable outlook. In July 2018, S&P Global Ratings confirmed the Bank's short and long-term credit rating, maintaining a stable outlook.

Capital ratio


Standard & Poor's

Long-term BBB+
Short-term A-2
Outlook Stable
Issue date October 2017