Islandsbanki Hf · OMXICE:ISB
Islandsbanki Hf — Q4 2025 Earnings Presentation
61 slides from Islandsbanki Hf's earnings presentation, Feb 12, 2026
Slide 1: 4Q25 Financial Results
4Q25 Financial Results 12 February 2026 Jón Guðni Ómarsson Chief Executive Officer Ellert Hlöðversson Chief Financial Officer
Slide 2: Core operating income for fourth quarter grew by 14.4% year-on-year
12 February 2026 2 Core operating income for fourth quarter grew by 14.4% year-on-year Strong growth in all revenue streams ROE in excess of financial targets C/I well below target of being <45% Considerable excess capital (ISK 32 ROE C/I ratio1,2 billion) in place Total capital ratio3 13.0% 47.6% 1
Slide 3: Updated medium term financial targets
12 February 2026 3 Updated medium term financial targets Solid performance and opportunities within the current operations support path to updated targets Employee incentive scheme Previous Changes to remuneration policy Updated Target 4Q25 2025 approved by shareholders in June Target 2025 allowing
Slide 4: GDP growth weak in 2026 but set to gain steam later on
12 February 2026 4 GDP growth weak in 2026 but set to gain steam later on Temporary period of sluggish growth due to export sector setbacks and high real interest rates New business cycle, subdued growth following contraction… ..and housing market still remains quite resilient in the face of high re
Slide 5: Strong performance across all business units
12 February 2026 5 Strong performance across all business units Personal Banking Business Banking Corporate & Investment Banking Growth in deposits ISK 38.5 Loan growth in 2025 was 7% Return on equity was 12.3% billion in 2025 or 8% from end and deposits increased by in 2025 and cost-to-income of 20
Slide 6: A balance between digital solutions and personalised services
12 February 2026 6 A balance between digital solutions and personalised services Personal Banking seeks to meet our customers' needs through proactive engagement Partnership with 2025 Statistics Higher ranking • Integrated financial solutions delivered to in App store 192,165 phone following custome
Slide 7: Our commitment to SMEs reinforced with increased product offering
12 February 2026 7 Our commitment to SMEs reinforced with increased product offering Acquiring services to further strengthen relationship with SMEs across the country Supporting our customers in more ways! Another excellent year for Business Banking Íslandsbanki to start offering acquiring services
Slide 8: The success of our customers is at the forefront
12 February 2026 8 The success of our customers is at the forefront Strong cross-functional culture within Corporate and Investment Banking ensures we meet our customers’ needs Lively market activity and robust results in CIB Largest share of Nasdaq Iceland combined equity and fixed income market tu
Slide 9: Íslandsbanki is at the forefront of implementing AI to everyday banking
12 February 2026 9 Íslandsbanki is at the forefront of implementing AI to everyday banking 2020 2022 2023 2024 2025 Roll-out of Microsoft Copilot Partnership with The launch of - 98% of employees have received Implementation of Fróði Miðeind, an SAM the copilot training Fróði, the gets a Icelandic A
Slide 10: Íslandsbanki is a force for good
12 February 2026 10 Íslandsbanki is a force for good Not only by participating in our customers’ journeys – but also for the greater good of society Íslandsbanki Reykjavík Infrastructure bank Successful partnerships Íslandsbanki's Financial educational Helping Hand initiative Marathon Financing of w
Slide 11: Íslandsbanki is a force for good
12 February 2026 11 Íslandsbanki is a force for good • Íslandsbanki continues its support to the blossoming start-up and entrepreneurial community in Iceland • Record number of applications in 2025 The fund offers support to projects that support the four ISK 60 million awarded UN Sustainable Develo
Slide 12: Íslandsbanki is a force for good
12 February 2026 12 Íslandsbanki is a force for good Sustainable journey continues with key focus areas for 2030 set and larger share of long-term debt being green or sustainable Classification of sustainable assets by 27% of long-term debt green or sustainable category in the Sustainable Funding Fr
Slide 13: A more favourable and diversified funding structure
12 February 2026 13 A more favourable and diversified funding structure Good diversification of funding sources and an even split between ISK and foreign currencies 2025 Funding highlights • Favourable market conditions in 2025 were Moody’s affirmed long term A3 utilised by Íslandsbanki with the iss
Slide 14: Merger discussions between Íslandsbanki and Skagi
12 February 2026 14 Merger discussions between Íslandsbanki and Skagi Good progress since signing of heads of terms in October 2025 1 2 3 4 5 Cross-selling Initial steps Due diligence and Competition Merger agreement Approval phase opportunities with Heads of terms synergy assessment matters Terms o
Slide 15: 2025 was an eventful year for Íslandsbanki as a listed company
12 February 2026 15 2025 was an eventful year for Íslandsbanki as a listed company Trading volumes rose significantly following FMO in May and stayed elevated throughout 2025 • FMO boosted market liquidity and average daily trades in Íslandsbanki's share price development in 2025 2025 were up 375% c
Slide 16: Capital optimisation an ongoing priority for the Bank
12 February 2026 16 Capital optimisation an ongoing priority for the Bank Combination of dividends and buybacks distribution to shareholders in 2025 amounted to >100% of 2024 profits Capital distribution 2021-2026E, ISKbn • Payment of ISK 12.6 billion to be proposed to 2026 AGM in accordance with di
Slide 17: Financial Overview
12 February 2026 17 Financial Overview Íslandsbanki 4Q25 & FY2025 Financial Results
Slide 18: 4Q25 improving year on year aside from one-off effects
12 February 2026 18 4Q25 improving year on year aside from one-off effects Higher quality of earnings as profits as higher portion of profits stems from core income Profit for the period – 4Q24 vs 4Q25 Profit for the year – 2024 vs 2025 Adjustments in 4Q25 ISKm ISKm • ISK 237m of net interest income
Slide 19: NIM uplift year-on-year as impact of imbalances reduces
12 February 2026 19 NIM uplift year-on-year as impact of imbalances reduces Inflationary ticks in 4Q25 close to zero adversely impacts both net interest income and margin Net interest income Net interest income – YoY comparison Highlights Business segments, ISKm ISKm • Net interest margin was 2.9% i
Slide 20: Net fee and commission income with a strong growth from previous year
12 February 2026 20 Net fee and commission income with a strong growth from previous year Increased activity in capital markets and card related performance fees provide considerable uplift year on year Net fee and commission income Net fee and commission income – YoY comparison Highlights Business
Slide 21: Fair value adjustments positively impacts other operating income
12 February 2026 21 Fair value adjustments positively impacts other operating income Market risk exposure remains a small part of the Bank's operations Net financial income (expense) Shares and equity instruments1 Highlights ISKm ISKbn • Net financial income of ISK 404 8.5 8.9 million was recorded i
Slide 22: Strong cost-to-income ratio during the quarter
12 February 2026 22 Strong cost-to-income ratio during the quarter Results continue to be within the Bank’s financial targets Administrative expenses Cost-to-income ratio1 Highlights ISKm 8,344 • One-off costs related to dismantling 7,396 47.6% 7,100 7,261 433 45.7% of early retirement scheme 248 32
Slide 23: Balance sheet reflects a balanced loan and funding profile
12 February 2026 23 Balance sheet reflects a balanced loan and funding profile Well diversified funding structure as well as loan book with limited market risk exposure Simplified balance sheet structure Assets 31.12.2025, ISK 1,728bn • Vast majority of assets consist of Deposits from credit lending
Slide 24: Growth in loan book on 4Q25 mainly attributable to international activities
12 February 2026 24 Growth in loan book on 4Q25mainly attributable to international activities Shift between mortgage products normalising – effect of fixed rate imbalance has subsided Loans to customers Loans to customers Highlights By business division, ISKbn By sector, with tourism as a separate
Slide 25: NPLs remain both strong and stable, consistent with historical quarters
12 February 2026 25 NPLs remain both strong and stable, consistent with historical quarters Increase in Stage 2 loans due to a handful of credit cases, mainly in the construction sector Net impairment on financial assets Loans to customers: Stage 2 and 3 (NPL) Highlights By period, ISKbn Development
Slide 26: Deposits growth moderates with lower rate environment
12 February 2026 26 Deposits growth moderates with lower rate environment Reduction in wholesale funding offset by growth in retail deposit base. Funding sources Customer loans to customer deposits ratio Highlights By type, % of total liabilities and equity Development, % • Overall deposits levels f
Slide 27: Strong liquidity position paves the way for growth and distributions
12 February 2026 27 Strong liquidity position paves the way for growth and distributions Liquid assets 18% of the total balance sheet and fully marked-to-market Total liquidity coverage ratio (LCR) Liquidity coverage ratio for ISK Highlights 300% 200% • All liquidity measures well above 203% regulat
Slide 28: Constructive funding markets in 2025
12 February 2026 28 Constructive funding markets in 2025 Good diversification of funding sources across products and maturities, as well as across investor types and locations Sources of borrowings Contractual maturity profile of borrowings ISKbn 31.12.25, ISKbn 199 Highlights 503 485 456 17 • The B
Slide 29: CRR 3 had a significant positive effect on REA
12 February 2026 29 CRR 3 had a significant positive effect on REA CET1 ratio boosted by 1.6 percentage points Changes in REA and capital ratios • CRR 3 was enacted into Icelandic law in December 2025 and has ISKbn had a notable impact on Íslandsbanki’s REA and capital ratios. CRR 3 CRR 2 Difference
Slide 30: Íslandsbanki's capital ratios well above target
12 February 2026 30 Íslandsbanki's capital ratios well above target The implementation of CRR 3 provided additional capital optimisation capacity as CET1 ratio was boosted by 1.6 percentage points Current regulatory requirements and minimum capital target Capital and leverage ratios Highlights 31.12
Slide 31: Updated Financial Targets
12 February 2026 31 Updated Financial Solid performance Opportunities Targets • ROE 11.2% for 2025 • Ample capital reserves • NII up 13.9% and NFCI up 16% • Capital optimisation still at forefront 10.9% 11.2% ROE Excess CET1 ROE >13% ISK 36 billion 2024 2025 Íslandsbanki 4Q25 & FY2025 Financial Resu
Slide 32: Q&A
12 February 2026 32 Q&A Íslandsbanki 4Q25 & FY2025 Financial Results
Slide 33: Appendix I
12 February 2026 33 Appendix I About Íslandsbanki and additional financial information Íslandsbanki 4Q25 & FY2025 Financial Results
Slide 34: This is Íslandsbanki
12 February 2026 34 Sustainability in 2025 Ratings and This is Íslandsbanki The share of ESG risk-assessed certifications credit risk remained stable between We empower our customers to be a force for good Sustainability risk years, at 88%3 integrated Sustainability into into risk integrated A3 Stab
Slide 35: Financial overview
12 February 2026 35 Financial overview Key figures & ratios 4Q25 3Q25 2Q25 1Q25 4Q24 PROFITABILITY Profit for the period, ISKm 5,947 6,901 7,192 5,209 6,283 Return on equity 10.5% 12.2% 13.0% 9.4% 11.2% Net interest margin (on total assets) 2.9% 3.1% 3.3% 3.2% 2.7% Cost-to-income ratio1 43.5% 38.2%
Slide 36: Income statement
12 February 2026 36 Income statement Income statement, ISKm 4Q25 4Q24 ∆% 2025 2024 ∆% Net interest income 12,391 10,875 14% 52,471 47,265 11% Net fee and commission income 4,183 3,607 16% 14,099 13,122 7% Net financial income (expense) 404 169 139% (922) (338) 173% Net foreign exchange gain 157 113
Slide 37: Íslandsbanki's MREL requirement
12 February 2026 37 Íslandsbanki’s MREL requirement A new resolution plan approved for the Bank on 17 October 2025 Minimum Requirement for Own Funds and Eligible MREL Development, % • The Icelandic Resolution Authority Liabilities (MREL), 31.12.2025 approves annually a resolution plan for the Bank.
Slide 38: Assets
12 February 2026 38 Assets Asset base mainly consists of loans and liquid assets Assets, ISKm 31.12.25 30.9.25 Δ Δ% 31.12.24 Δ Δ% Cash and balances with Central Bank 80,394 114,055 (33,661) (30%) 65,716 14,678 22% Loans to credit institutions 80,009 99,117 (19,108) (19%) 50,486 29,523 58% Bonds and
Slide 39: Growth in loan book mainly attributable to international activities
12 February 2026 39 Growth in loan book mainly attributable to international activities Outlook for a softer domestical loan growth in the short term as the economy cools Loans to customers Loans to customers Highlights By business division, ISKbn By sector, with tourism as a separate sector • Compo
Slide 40: NPLs remain both strong and stable, consistent with historical quarters
12 February 2026 40 NPLs remain both strong and stable, consistent with historical quarters Increase in Stage 2 loans due to a handful of credit cases, mainly in the construction sector Net impairment on financial assets Loans to customers: Stage 2 and 3 (NPL) Highlights By period, ISKbn Development
Slide 41: Shift between mortgage products normalising
12 February 2026 41 Shift between mortgage products normalising Adverse impact of fixed rate imbalance has subsided from the mortgage book, in line with expectations Mortgage portfolio Interest rate reset profile for NIL 3-5y fixed rate Highlights By interest rate type, gross carrying amount, ISKbn
Slide 42: Slower real estate market transpires into the construction portfolio
12 February 2026 42 Slower real estate market transpires into the construction portfolio Stage 2 portions growing between quarters while NPLs remain stable Development of exposure to real estate companies Development of construction exposure Highlights Gross carrying amount by period, ISKbn Gross ca
Slide 43: Liabilities and equity
12 February 2026 43 Liabilities and equity Deposits continue to be the largest source of funding Liabilities & Equity, ISKm 31.12.25 30.9.25 Δ Δ% 31.12.24 Δ Δ% Deposits from Central Bank and credit institutions 13,250 15,972 (2,722) (17%) 12,535 715 6% Deposits from customers 968,695 1,008,919 (40,2
Slide 44: Appendix II
12 February 2026 44 Appendix II Icelandic economy update Íslandsbanki 4Q25 & FY2025 Financial Results
Slide 45: GDP growth weak in 2026 but set to gain steam later on
12 February 2026 45 GDP growth weak in 2026 but set to gain steam later on Temporary period of sluggish growth due to export sector setbacks and high real interest rates New business cycle, subdued growth following contraction… ..and housing market still remains quite resilient in the face of high r
Slide 46: The Icelandic economy and society draw on many strengths
12 February 2026 46 The Icelandic economy and society draw on many strengths Icelanders enjoy high standards of living in a modern, open and egalitarian society Iceland ranks highly on a variety of global Income inequality is low compared to OECD peers Sustainable energy usage is prevalent developme
Slide 47: GDP growth weak in 2026 but set to gain steam later on
12 February 2026 47 GDP growth weak in 2026 but set to gain steam later on Temporary period of sluggish growth due to export sector setbacks and high real interest rates Highlights GDP and contribution of its subcomponents GDP and contribution of its subcomponents Volume change from prior year (%),
Slide 48: Tourism to languish while other export sectors blossom
12 February 2026 48 Tourism to languish while other export sectors blossom Intellectual property and aquaculture will drive export growth, with legacy export sectors lagging behind Highlights Export revenues, by key sector Exports and contribution from subcomponents ISKbn at current prices % change
Slide 49: Modest current account deficit over the forecast horizon
12 February 2026 49 Modest current account deficit over the forecast horizon Improving terms of trade offset the contraction in exports in 2026 Highlights Imports and contribution from subcomponents Current account balance % change % of GDP • Imports are projected to shrink by nearly 2% in 2026, rev
Slide 50: ISK likely to weaken gradually
12 February 2026 50 ISK likely to weaken gradually The high real exchange rate is a growing challenge, making ISK depreciation likely further ahead Highlights ISK exchange rate ISK exchange rate and real exchange rate Major currency exchange rates against the ISK and index values EURISK levels and i
Slide 51: Domestic balance sheets remain broadly healthy
12 February 2026 51 Domestic balance sheets remain broadly healthy Private sector debt ratios are stable and public debt is on a more favourable trajectory than major economies Private sector debt Corporate debt % of GDP % of GDP 400 300 350 250 300 200 250 200 150 150 100 100 75 50 50 71 0 0 2003 2
Slide 52: Investment to dip temporarily in 2026
12 February 2026 52 Investment to dip temporarily in 2026 Turning point in data centre development and a challenging environment impacts in the near term Highlights Investment, real change, and contribution of subcomponents Business investment and related indicators YoY change (%) and index • Invest
Slide 53: Unemployment to peak in 2026
12 February 2026 53 Unemployment to peak in 2026 Highlights Wage developments will be shaped by long-term contracts, and wage drift will be limited • The labour market has cooled after several years of tight conditions. Unemployment edged up in 2025, Wages, YoY change Unemployment1 averaging 3.9%, o
Slide 54: Private consumption growth to continue in 2026, but at a slower pace
12 February 2026 54 Private consumption growth to continue in 2026, but at a slower pace Real wage growth and sizeable savings will support household consumption in the coming term Highlights Personal vehicles, new registrations and imports Private consumption and related indicators • Private consum
Slide 55: The real estate market holds quite steady despite high interest rates
12 February 2026 55 The real estate market holds quite steady despite high interest rates Tighter monetary policy has cooled the market, but resilient demand and strong fundamentals keep it balanced Capital area house prices relative to macroeconomic fundamentals Residential house prices and turnove
Slide 56: The Icelandic housing market is flexible as conditions change
12 February 2026 56 The Icelandic housing market is flexible as conditions change Supply, demand, mortgage market factors combine to make a large price correction less likely Households are not highly indebted compared to peers Mortgage market is flexible w.r.t. loan types with different payment bur
Slide 57: Inflation remains stubbornly above target
12 February 2026 57 Inflation remains stubbornly above target Something will probably have to give in order to bring inflation back to target Inflation and the CBI inflation target* Inflation by type and source Highlights % % • Inflation remained stubborn in 2025, 11 hovering consistently around the
Slide 58: Central Bank needs to walk a fine line
12 February 2026 58 Central Bank needs to walk a fine line Interest rate cuts to resume in spring, with slow and gradual monetary easing Highlights Policy rate and inflation Key interest rates %, Real policy rate based on 12m forward forecast %, average per year • Following a 6 month pause in its ra
Slide 59: Iceland's credit rating on a secular upward path
12 February 2026 59 Iceland's credit rating on a secular upward path Rating companies acknowledge the flexibility of the economy and improving public debt metrics Development of sovereign credit rating Fitch in Dec-17: Moody’s in Nov-19: Moody’s in Sep-24: AAA/Aaa Rating upgrade to A on economic Upg
Slide 60: Disclaimer
12 February 2026 60 Disclaimer This presentation is for information purposes only and shall not be construed as an The forward-looking statements represent Íslandsbanki's current expectations, plans offer or solicitation for the subscription or purchase or sale of any financial or forecasts of its f
Slide 61: 12 February 2026 Íslandsbanki 4Q25 & FY2025 Financial Results
12 February 2026 61 Íslandsbanki 4Q25 & FY2025 Financial Results