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Landsbankinn hf.: Financial results of Landsbankinn for 2020

Landsbankinn hf.
·6-min read
  • Landsbankinn's after-tax profit in 2020 was ISK 10.5 billion.

  • Return on equity (ROE) was 4.3% in 2020, as compared with 7.5% in 2019. The Bank’s target is 10% minimum ROE.

  • Return on equity (ROE) was 15.5% in Q4 2020 as compared with 6,3% for the same period the previous year.

  • The cost-income ratio grew between years, was 47.4% in 2020 as compared with 42.6% in 2019.

  • Landsbankinn’s credit portfolio grew by ISK 133.2 billion. The default ratio at year-end 2020 was 0.8%, the same number as at year-end 2019.

  • Landsbankinn's equity amounted to ISK 258.3 billion at year-end 2020 and its capital ratio was 25.1% of risk-weighted assets.

  • A proposal will be made to the AGM to pay an ISK 4.5 billion dividend to shareholders for the year 2020, the equivalent of ISK 0.19 per share.

  • Landsbankinn's annual and ESG report, and Pillar III risk report for 2020 are published alongside its Annual Financial Statements.

The profit of Landsbankinn hf. in 2020 was ISK 10.5 billion after taxes, as compared with ISK 18.2 billion in 2019. After-tax ROE was 4.3% in 2020, as compared with 7.5% in 2018. Net interest income amounted to ISK 38.1 billion in 2020, as compared with ISK 39.7 billion in 2018. Landsbankinn's net fee and commission income was ISK 7.6 billion in 2020, as compared with ISK 8.2 billion in 2019. Other operating income was negative by ISK 7.5 billion in 2020, as compared with ISK 3.6 billion in 2019. The decrease is mainly the result of an ISK 12 billion impairment of financial assets as compared with impairment in the amount of ISK 4.8 billion in 2019. Increased impairment of financial assets is more or less directly attributable to Covid-19.

Total defaults by corporates and households remained stable between years at 0.8%. Temporary Covid-19 relief measures led to lower values for loans 90 days in arrears.

The Bank's operating profit for 2020 amounted to ISK 38.3 billion, as compared to ISK 51.5 billion the previous year. The net interest margin on assets and liabilities was 2.5% as compared with 2.8% the previous year.

Operating expenses amounted to ISK 25.6 billion in 2020, as compared with ISK 28.2 billion in 2019. Wages and related expenses amounted to ISK 14.8 billion as compared with ISK 14.5 billion the previous year. Other operating expenses were ISK 9.1 billion in 2020, as compared with ISK 9.5 billion in 2019.

Pre-tax profit in 2020 amounted to ISK 12.6 billion, as compared with ISK 23.3 billion in 2019. Imputed taxes, including a special financial management tax on wages, amount to ISK 4.6 billion in 2020 as compared with ISK 10 billion in 2019.

Landsbankinn's total assets grew by ISK 137.8 billion between years and amounted to ISK 1,564 billion at year-end 2020. Lending increased by 12% between years, or by just over ISK 133 billion. The growth in lending is due mostly to an increase in loans to private persons. At the end of 2020, deposits from customers amounted to ISK 793 billion as compared with ISK 708 billion at year-end 2019.

Landsbankinn’s equity at year-end 2020 was ISK 258.3 billion, as compared with ISK 247.7 billion at year-end 2019. No dividend was paid to shareholders in 2020. Landsbankinn’s CAR at year-end 2020 was 25.1%, as compared with 25.8% at year-end 2019. The Financial Supervisory Authority of the Central Bank of Iceland (FSA), sets Landsbankinn’s total capital requirement at 18.8%.

The Board of Directors of Landsbankinn will propose to the AGM on 24 March 2021 that shareholders be paid a dividend of ISK 0.19 per share for the year 2020, a total amount of ISK 4.5 billion. The dividend is equivalent to 43% of the Group’s 2020 profit.

Lilja Björk Einarsdóttir, CEO of Landsbankinn:

“The 2020 results are a reflection of sound, effective and stable operations. The Bank’s profit in 2020 was ISK 10.5 billion, ROE was 4.3% for the year and the Bank’s performance was good across the entire operation. Results were good, especially bearing in mind that the Bank made an ISK 12 billion provision for loan impairment, largely to cover the possibility of a credit loss that has not materialised. These results demonstrate that the Bank is strongly placed to support the economic recovery as well as to support customers who have suffered a significant loss of income as a consequence of the pandemic.

Emphasis on operational efficiencies have helped to keep costs stable. The cost-income ratio changes slightly and was 47.7% for the year 2020. Operating costs remained more or less the same, as has been the case for several years. At the same time, we are investing a great deal in digital development. Over the past three years, the Bank has introduced around 40 innovative digital solutions to customers.

Never before has Landsbankinn granted more mortgages, both for buyers as well as for refinancing purposes. The Bank lowered interest rates six times and, despite significant challenges associated with the pandemic, we were able to meet a significant increase in demand for mortgages and ensure very good and competitive terms for our customers. Over 10,000 individuals and families took out a mortgage with us in 2020 and the Bank’s overall share in the mortgage market grew to 26.3%.

My first thoughts are expressing gratitude to our loyal customers for their business in a year where all previous plans were turned upside down. We provide customers around the country with financial services, including around 700 companies in the travel sector. We have supported our customers, providing moratorium and assistance, and we all hope to see economic recovery in the autumn. The Bank’s employees have risen to the challenge, showing a great deal of resourcefulness and adaptability. We maintained virtually unchanged service levels through our robust digital service platform, supported by our excellent staff. Customers responded well to the changes in service and were quick to adopt new solutions, they knew that Landsbankinn was there for them.

In 2021, Landsbankinn will operate under a new strategy - Landsbankinn, an ever-smarter bank. Our enthusiastic engagement with new technology is fuelled by our drive to achieve success, which strengthens operations and boosts initiative. Our aim is to simplify the life for our customers. We kick off the year with the publication of a new sustainable finance framework and intend to continue to lead the field in sustainability. That’s Landsbankinn, an ever-smarter bank.”

Teleconference to present results

On Friday 12 February, at 10:00, the Bank will host a teleconference on its results in English. Please register by email to

Landsbankinn's financial calendar

Annual General Meeting, 24 March 2021

Q1 2021 results 6 May 2021

Q2 2021 results 22 July 2021

Q3 2021 results 28 October 2021

Annual Results 2021 3 February 2022

For further information contact:

Rúnar Pálmason, Public Relations,

Hanna Kristín Thoroddsen, Investor Relations,