Personal Banking

An increasing number of individuals chose to bring their banking business to Landsbankinn in recent years and the Bank has held the largest market share in the retail market for five consecutive years. Landsbankinn scored highest in Gallup’s survey of customer satisfaction in the banking market in December 2018.*

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Landsbankinn's market share in the retail market measured 37.8% in Gallup surveys in 2018, up by 10 percentage points since 2018. Satisfaction with the Bank’s services has grown during the same period, as has confidence in the Bank. Landsbankinn’s customers are the most satisfied in the banking sector, according to a Gallup survey from December 2018.
Market share - Retail market
Source: Gallup

New digital service solutions

Landsbankinn introduced several new digital service solutions to the retail market in 2018, including a new Landsbankinn app, made credit assessments and housing loan applications accessible online, allowed international payments in online banking and made becoming a Landsbankinn customer possible both through online banking and via the app. More information about new digital service solutions is provided in the chapter Better Banking

Considerable increase in new housing loans

Landsbankinn granted new housing loans in the total amount of ISK 130 bn in 2018, as compared with ISK 98 bn in 2017. The scope of the Bank’s activity in the housing loan market was high, despite stiff competition. On the one hand, this can be explained by an increase in housing transactions, rising real estate prices and a rising trend to refinance housing mortgages. On the other hand, Landsbankinn emphasises providing customers with comprehensive advice and prompt and professional handling of matters related to credit.

Landsbankinn's market share in new housing loans was 26% in 2018 as compared with 27% in 2017.

Market share in new housing loans in 2018

New housing loans (ISKbn)

Rising demand for non-indexed loans

There was a marked increase in customer demand for non-indexed loans with 51% of all new housing loans in 2018 being non-indexed and 49% inflation-indexed. This is quite a change compared with 2017 when 74% of the Bank’s new housing loans were inflation-indexed and 26% non-indexed.

Supplementary loans important to first-time buyers

Landsbankinn lends up to 85% of the purchase price of residential housing. Loans for up to 70% of the purchase price with an up to 40-year term and a supplementary loan of 15% can be taken. The supplementary loan is primarily useful to first-time real estate buyers, mainly young people, as a down-payment on first housing can be quite a challenge.

Landsbankinn registered a total of around 8300 new housing loans in 2018, thereof 5200 to retail customers. This includes both new loans and refinanced loans.

Student and young adult housing issues

  • Umræðan includes a review of the housing situation of young adults, the relative merits of renting vs. buying, saving to purchase and supplementary pension savings.

More on students' housing issues

Popularity of Aukakrónur continues to grow

Landsbankinn’s benefit system, Aukakrónur, grows in popularity from year to year and 2018 was no exception. Customers with credit cards linked to the Aukakrónur system accrue Aukakrónur on all domestic turnover, both as a ratio of domestic use and in the form of a reimbursed discount from over 260 partners throughout Iceland. Over 66,000 customers currently take advantage of Aukakrónur and together they gathered over 383 million Aukakrónur in 2018.

The launch of the Landsbankinn app brought with it several changes to the user interface of Aukakrónur, all designed to facilitate use and ensure increased accessibility and visibility of the benefits to customers. The new interface can only be described as a success, as customers used a total of 313 million Aukakrónur to pay for various goods and services with the programme’s partners.

Customers are very satisfied with the benefit system and regular surveys show that Aukakrónur have a positive effect on the business relationship between Landsbankinn and its customers.

Collection of Aukakrónur in 2018

Collection of Aukakrónur
Aukakrónur usage in 2018

360° financial review and tailored report

Landsbankinn’s 360° financial review is a comprehensive financial consultation offered in the Bank’s branches. While customers have been offered the review since 2015, the consultation was changed in October of 2018 and is now based on a customer’s personal data, following consent. This allows the Bank to create a three-year report of a customer’s finances and to use graphic, tailored data in the financial review. This approach increases the review’s effectiveness, as well as its accuracy, and helps the customer gain a good overview of whether the current status is in line with financial goals and identify opportunities for improvement. At the end of a 360° financial review, customers are asked about their experience. Customers have been extremely satisfied with the review since the beginning. At year-end 2018, customers awarded the 360° financial review 4.63 out of 5.

Customer satisfaction with the 360° financial review

4.6 points out of 5

Strong in the vehicle loan market

Car sales contracted considerably in 2018, with data from the Icelandic Transport Authority showing that 17.974 new passenger cars were registered in 2018, a 15.6% decrease from the previous year. New registration of used passenger cars also decreased considerably, with over 3,200 used vehicles registered for the first time in Iceland in 2018.

In recent years, total lending for vehicle purchases increased in line with higher vehicle sales. Despite the contraction in the sale of passenger cars seen in 2018, loans granted by Landsbankinn Vehicle & Equipment Financing came to almost the same amount as in 2017, reflecting the Bank’s strong standing in this market.

Travel industry remains important

The Bank granted a total of ISK 8.3 bn in vehicle loans to individuals during the year, which is a similar amount as in 2017. New loans to companies in the vehicle and equipment market amounted to ISK 24.8 bn in 2018, which is also similar to 2017 figures, and with companies in the travel industry being most prominent among customers.

The book value of Landsbankinn’s Vehicle & Equipment Financing’s credit portfolio was ISK 52.7 bn at year-end 2018 as compared with ISK 48.4 bn at year-end 2017, an 8.9% YoY increase. Around one third of loans were issued to private individuals and two thirds to corporates.

Landsbankinn Vehicle & Equipment Financing assists individuals and companies in the financing of new and used vehicles, motorcycles, campers, machinery and equipment.

Market share in new vehicle loans in 2018

Source: Gallup survey from December 2018 and January 2019
*There was no significant difference between Landsbankinn and the second highest-scoring bank.