Landsbankinn hf.: Financial results of Landsbankinn for the year 2025

• Landsbankinn's profit in 2025 was ISK 38.0 billion after taxes, as compared with ISK 37.5 billion the previous year.
• Return on equity (ROE) in 2025 was 11.6%, compared with 12.1% in 2024.
• Profit in the fourth quarter of 2025 was ISK 8.6 billion and return on equity 10.1%.
• The Board of Directors intends to propose that the Annual General Meeting approve a dividend payment in the amount of nearly ISK 19 billion for the year 2025, corresponding to around 50% of the year's profit. The Board of Directors is also considering proposing a special dividend payment to the AGM.
• Total taxes paid by the Bank, both income tax and special taxes on financial institutions, amounted to ISK 19 billion.
• The cost-income ratio increases slightly between years yet remains low, or 34.3%.
• Lending grew by ISK 76.9 billion during the year, or 4.3%. At the same time, customer deposits increased by ISK 20.9 billion, or 1.7%.
• Increased activity and new services contributed to a higher fee and commission income, resulting in a net increase of 10.1%
• Net interest income amounted to ISK 62.1 billion and net commission income was ISK 12.6 billion.
• The net interest margin as a ratio of average total asset position was 2.7% in 2025, unchanged between years.
• Net impairment charges were ISK 1.2 billion.
• The Bank’s total capital ratio at year-end was 24,8%. The Financial Supervisory Authority of the Central Bank of Iceland, sets Landsbankinn’s total capital requirement at 20.3%.
• TM’s performance from insurance contracts in the period 28 February to 31 December 2025 was ISK 1.7 million. The combined ratio of TM, 92.7%, is the combined claims ratio, cost-income ratio and reinsurance ratio calculated based on income from insurance contracts during the period.
• Towards the end of July, Landsbankinn accepted the offer of Landsbyggð ehf. for the Bank’s buildings at Austurstræti 11 and Hafnarstræti 10, 12 and 14. The sale price of the buildings is ISK 2.85 billion.
• The Bank publishes its detailed sustainability disclosure today, including calculation of the carbon emissions, which are almost entirely from its credit portfolio and have contracted by 27% from the reference year 2019. The Bank also publishes its initial disclosure on the impact of its operation in nature, prepared in accordance with guidelines from the Taskforce on Nature-related Financial Disclosure.
• The Pillar III risk report for 2025 is published alongside the annual financial statements.
• Landsbankinn’s Annual Report will be published 12 February 2026.

Lilja Björk Einarsdóttir, CEO of Landsbankinn:

“The operating results of Landsbankinn in 2025 were good and reflect solid and stable operations in a challenging operating environment. Return on equity was 11.6%, in line with objectives, and the cost-income ratio was 34.3%, which is among the lowest seen among comparable banks on a global level. Profit amounted to ISK 38 billion. In accordance with the Bank’s dividend policy, the Board of Directors will propose to the Annual General Meeting that approximately 50% of that amount be paid to shareholders as dividends, or around ISK 19 billion. The Board is also considering a special dividend payment to shareholders later in the year.

Despite an economy that is regrettably characterised by persistent inflation and high interest-rate levels, we see that the financial position of both retail and corporate customers is generally strong. Our aim is to have a positive impact on Icelandic society and for the Bank’s sound operation to return permanent value for customers and shareholders for the future.

It is a testament to the Bank’s sound financial position that international credit rating agency S&P upgraded the Bank’s credit rating to A- with a stable outlook last spring. An improved credit rating is particularly important in international capital markets and supports the Bank’s competitiveness. During the year, we took advantage of favourable market conditions to issue FX bonds equivalent to approximately ISK 135 billion, based on current exchange rates. The issuances were used to refinance older and less efficient funding, as well as to strengthen credit ratings and increase lending capacity.

Following the Bank’s completion of the acquisition of TM in February, we have worked systematically to integrate insurance into the Bank’s service platform. Insurance products are now available in Landsbankinn’s app and customers can earn Aukakrónur when paying for their TM insurance. These are the first steps toward an integrated banking and insurance service platform and in the near future we will step up our efforts further in the insurance market. TM performed well and the company paid ISK 2.5 billion in dividends to Landsbankinn during the year.

In these changes to the Bank’s operations, it is of great importance that Landsbankinn has an exceptionally strong and extensive service network. The Bank’s decision to maintain and develop its branch network, which in total comprises 34 branches and service outlets, and to link it with other services - most notably our strong customer service centre - means that the Bank has greater reach and is in a stronger position to provide outstanding service across the entire country. Experience shows that customers value this approach and make extensive use of the services. For example, we recorded a total of approximately 863,000 branch visits last year and the Customer Service Centre answered more than 250,000 phone calls and over 100,000 emails. Our emphasis on first-rate service has resulted in increased customer satisfaction, as borne out by the fact that Landsbankinn remains the top commercial bank in the Icelandic Customer Satisfaction Index, even rising between years.

Landsbankinn has supported the development of business and industry throughout the country through lending and strong services to companies of all sizes and types. The focus on developing digital corporate banking services resulted in increased use of the Bank’s technological solutions last year, particularly following the renewal of the corporate online banking platform and the implementation of new solutions. The success of Landsbankinn’s payment acquiring segment, which was launched in 2023, shows that we are able to enter new service areas with good results. Service innovation and increased activity in other areas led to a 10% increase in the Bank’s fee and commission income last year. Net fee and commission income has now increased for five consecutive years, reflecting in particular the breadth of the Bank’s service offering and confirming the value of strong customer relationships.

Toward the end of last year, the Supreme Court delivered rulings in interest rate cases, including two cases concerning Landsbankinn’s interest rate clauses. We placed emphasis on responding quickly to reduce uncertainty in the lending market and were the first lender to introduce new loan products, including a new version of non-indexed loans with one-year fixed rates. We saw no alternative but to limit the availability of inflation-indexed residential mortgages to first-time buyers and to shorter loan terms. As a result, in cases where the debt-service burden is the most important factor for borrowers, we are not as competitive as previously. We do, however, offer very competitive terms on non-indexed loans and access to quality advisory service around the country.

It is important to achieve a better balance in the economy, to get inflation under control in order to lower domestic interest rates. Hopefully the conditions to achieve this will transpire soon. It would be a welcome relief to the Bank’s borrowers and would give businesses increased scope to invest and contribute to both more economic growth and opportunities for the future.”

Landsbankinn's financial calendar

• Annual General Meeting 18 March 2026 

• Q1 2026 30 April 2026 

• Q2 2026 23 July 2026 

• Q3 2026 22 October 2026 

• Annual results 2026 4 February 2027 

For further information contact:

Public Relations, pr@landsbankinn.is

Investor Relations, ir@landsbankinn.is

Attachments

• Landsbankinn_results_presentation_2025
• Landsbankinn_news_release_2025
• Landsbankinn_Consolidated_Financial _Statement_2025