Íslandsbanki hf.: Financial results for second quarter 2025
31 juli, 17:50
Íslandsbanki reported a net profit of ISK 7.2 billion in the second quarter of 2025 and ISK 12.4 billion for the first half of 2025.
Second quarter 2025 (2Q25) financial highlights
- Net profit amounted to ISK 7.2 billion in the second quarter of 2025 (2Q24: ISK 5.3 billion), generating an annualised return on equity (ROE) of 13.0% (2Q24: 9.7%).
- Net interest income (NII) amounted to ISK 13.9 billion and increased by ISK 1,390 million in 2Q25 compared to 2Q24.
- The net interest margin (NIM) was 3.3% in 2Q25 compared to 3.1% in 2Q24.
- Net fee and commission income (NFCI) grew by 12.8% compared to 2Q24 and amounted to ISK 3.6 billion in 2Q25.
- Net financial income was ISK 13 million in 2Q25, compared to an expense of ISK 499 million in 2Q24.
- Other operating income was ISK 143 million in 2Q25, compared to ISK 45 million in 2Q24.
- Administrative expenses in 2Q25 amounted to ISK 7.3 billion, having been ISK 7.0 billion in 2Q24 when an administrative fine of ISK 470 million charged in 2Q24 is excluded.
- The cost-to-income ratio was 41.0% in 2Q25 compared to 45.7% in 2Q24, which excludes an administrative fine of ISK 470 million charged in 2Q24.
- The net impairment on financial assets was a reversal of ISK 402 million in 2Q25, compared to a reversal of ISK 137 million in 2Q24. The net impairment charge as a share of loans to customers, the annualised cost of risk, was -12bps in 2Q25, compared to -4bps in 2Q24.
- Loans to customers grew by ISK 32.4 billion during the second quarter of 2025, reaching a total of ISK 1,331 billion at the end of the second quarter of 2025.
- Deposits from customers grew by 3.1% in the quarter and amounted to ISK 966 billion at the end of 2Q25.
- Total equity at period-end amounted to ISK 224.7 billion compared to ISK 227.4 billion at year-end 2024.
- The total capital ratio was 21.5% at the end of 2Q25, compared to 23.2% at year-end 2024. The corresponding CET1 ratio was 18.5% at the end of 2Q25, compared to 20.1% at year-end 2024. The CET1 ratio at the end of 2Q25 was 330bps above regulatory requirements, and above the Bank's financial target of having a 100-300 bps capital buffer on top of CET1 regulatory requirements.
- The minimum requirement for own funds and eligible liabilities (MREL) for Íslandsbanki is 19.6% of the total risk exposure amount, in addition to the combined buffer requirement. At the end of second quarter 2025, the Bank's MREL ratio was 36.7%, 720 bps on top of requirements.
First half 2025 (1H25) financial highlights
- Íslandsbanki's net profit for the first half of 2025 was ISK 12.4 billion (1H24: ISK 10.7 billion), with an annualised return on equity for 1H25 of 11.1%, compared to 9.8% in 1H24. The Bank is guiding towards an ROE of 10-11% for the year as a whole, assuming normalised level of impairments.
- Net interest income totalled ISK 26.8 billion in 1H25, an increase of 9% YoY.
- Net fee and commission income (NFCI) amounted to ISK 6.7 billion in 1H25 which is an increase of 7.5% from first half of 2024, when it amounted to ISK 6.2 billion.
- Net financial expense was ISK 973 million in 1H25 compared to an expense of ISK 735 million in 1H24.
- Administrative expenses were ISK 14.7 billion in 1H25, having been ISK 14.2 billion in 1H24, when a charge for an administrative fine in the amount of ISK 470 million charge in 2Q24 is excluded.
- Cost-to-income ratio fell YoY from 44.8% in 1H24 to 44.1% in 1H25. Cost-to-income ratio for 1H24 excluded an administrative fine of ISK 470 million charged in the second quarter of 2024.
- Net impairment on financial assets was a reversal of ISK 399 million in the first half of 2025, as compared to an impairment of ISK 567 million for the first half of 2024.
Key figures and ratios
2Q25 | 1Q25 | 4Q24 | 3Q24 | 2Q24 | ||
PROFITABILITY | Profit for the period, ISKm | 7,192 | 5,209 | 6,283 | 7,280 | 5,266 |
Return on equity | 13.0% | 9.4% | 11.2% | 13.2% | 9.7% | |
Net interest margin (of total assets) | 3.3% | 3.2% | 2.7% | 2.9% | 3.1% | |
Cost-to-income ratio1,2 | 41.0% | 47.6% | 45.7% | 40.4% | 45.7% | |
Cost of risk[3] | (0.12%) | 0.00% | (0.11%) | (0.27%) | (0.04%) | |
30.6.25 | 31.3.25 | 31.12.24 | 30.9.24 | 30.6.24 | ||
BALANCE SHEET | Loans to customers, ISKm | 1,331,288 | 1,298,849 | 1,295,388 | 1,274,094 | 1,276,608 |
Total assets, ISKm | 1,696,034 | 1,667,429 | 1,607,807 | 1,622,458 | 1,595,896 | |
Risk exposure amount, ISKm | 1,084,492 | 1,061,903 | 1,040,972 | 1,021,243 | 1,019,494 | |
Deposits from customers, ISKm | 966,075 | 936,779 | 926,846 | 927,011 | 916,127 | |
Customer loans to customer deposits ratio | 138% | 139% | 140% | 137% | 139% | |
Non-performing loans (NPL) ratio[4] | 1.6% | 1.8% | 1.6% | 1.6% | 1.8% | |
LIQUIDITY | Net stable funding ratio (NSFR), for all currencies | 125% | 128% | 125% | 126% | 123% |
Liquidity coverage ratio (LCR), for all currencies | 185% | 202% | 168% | 223% | 190% | |
CAPITAL | Total equity, ISKm | 224,725 | 217,894 | 227,355 | 223,388 | 216,501 |
CET1 ratio[5] | 18.5% | 18.6% | 20.1% | 20.2% | 19.9% | |
Tier 1 ratio[5] | 19.4% | 19.5% | 21.0% | 21.2% | 20.9% | |
Total capital ratio[5] | 21.5% | 21.6% | 23.2% | 23.4% | 23.1% | |
Leverage ratio | 12.0% | 12.1% | 13.2% | 13.0% | 13.0% | |
MREL ratio[6] | 36.7% | 37.8% | 33.4% | 35.6% | 35.6% |
1. Calculated as (Administrative expenses – One-off expenses) / (Total operating income – One-off income).
2. C/I ratio for 2Q24 excludes a charge of ISK 470m related to an administrative fine.
3. Negative cost of risk means that there is a net release of impairments.
4. Stage 3, loans to customers, gross carrying amount.
5. In 1Q25 the Central Bank granted the Bank permission to buy back own shares and reduce its share capital, as a result capital ratios at 31.3.25 and 30.6.25 declined from year-end 2024.
6. MREL ratio includes the CET1 capital held to meet the combined buffer requirement.
Jón Guðni Ómarsson, CEO of Íslandsbanki:
The second quarter of 2025 was an eventful one for Íslandsbanki. The Government of Iceland's sale of its remaining stake in Íslandsbanki last May was a success. The sale itself marked a milestone for the Bank, and there are exciting opportunities that arise at such points. It was particularly gratifying to see private individuals taking part in the offering in a very significant way. Active participation by retail investors in the stock market is a significant step towards increasing the activity and depth of the market domestically, and is a development that is very much welcomed.
Profit from Íslandsbanki's operations during the second quarter of 2025 amounted to ISK 7.2 billion, which is around 18% above analyst consensus. The profit for the first half of 2025 amounted to ISK 12.4 billion. Core operations are doing very well and interest income increased by more than 11% for the second quarter, compared to the same quarter last year and fee and commission income increased by almost 13%. Net interest margin for the second quarter was 3.3%. Annualised return on equity for the second quarter was 13.0% and cost-to-income ratio was 41.0%. The same ratios for the first half of 2025 were 11.1% and 44.1%, respectively, in line with the Bank's financial targets.
The Bank's services to companies around the country has been vast, and the Bank is proud of its longstanding relationship with them and its participation in diverse projects. Íslandsbanki's Corporate Finance unit has recently concluded important projects and the project pipeline remains strong for the coming months. The Business Banking division continues to soar and now receives the highest net promoter score, NPS, in Iceland amongst SMEs and enjoys a strong market share. The collaboration between Íslandsbanki and VÍS insurance company is off to a great start and customers of both companies enjoy added benefits due to the partnership.
The road ahead looks promising and Íslandsbanki's position is strong. The Bank's excess capital (CET1) amounted to around ISK 40 billion at the end of second quarter and the Bank is looking towards growth opportunities, both internal and external. The Bank resumed its share buybacks in early July, having paused near the end of the first quarter of 2025, with the aim of acquiring up to a market value of ISK 15 billion.
The Íslandsbanki Reykjavík Marathon will take place on 23 August and there is, as in previous years, great anticipation for the event this year. Runners' charity collection is going well, and it will be exciting to see downtown Reykjavík filled with runners of all ages reaping the rewards after weeks and months of preparation.
Investor Material
In the event of discrepancy between the Icelandic and English version of the Press Release the English version prevails.
Disclaimer
This press release may contain "forward-looking statements" involving uncertainty and risks that could cause actual results to differ materially from results expressed or implied by the statements. Íslandsbanki hf. undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. It is the investor's responsibility to not place undue reliance on these forward-looking statements which only reflect the date of this press release. Forward-looking statements should not be considered as guarantees or predictions of future events and all forward-looking statements are qualified in their entirety by this cautionary statement.
INVESTOR RELATIONS
An earnings conference call and webcast will take place on Friday 1 August 2025
Íslandsbanki will host a webcast in English for investors and market participants on Friday 1 August at 8.30 Reykjavík/GMT, 9.30 London/BST, 10.30 CET. Jón Guðni Ómarsson, CEO, and Ellert Hlöðversson, CFO, will give an overview of the second quarter of 2025 financial results and operational highlights.
The webcast will be accessible live through a link on the Bank's Investor Relations website where a recording will also be available after the meeting. For participation and the ability to send in written questions please register via this link. To participate in the webcast via teleconference and for the option to ask questions verbally, please register via this link here. Information regarding the webcast is available here.
Further information is available through Íslandsbanki Investor Relations, ir@islandsbanki.is.
Financial calendar
Information on the Bank's financial calendar is available here. Please note that the dates are subject to change.
Additional investor material
All investor material will subsequently be available and archived on the Bank's Investor Relations website, where other information on the Bank's financial calendar and silent periods can also be found.
This announcement is released by Íslandsbanki hf. and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), encompassing information relating to the second quarter 2025 financial results described above. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Ellert Hlöðversson, CFO of Íslandsbanki hf.
Attachments
ISB Condensed Consolidated Interim Financial Statements First Half 2025
ISB 2Q25 PressRelease
ISB 2Q25 Investor Presentation
2Q25 Factsheet
2Q25 Factbook
Íslandsbanki hf.: Financial results for second quarter 2025
31 juli, 17:50
Íslandsbanki reported a net profit of ISK 7.2 billion in the second quarter of 2025 and ISK 12.4 billion for the first half of 2025.
Second quarter 2025 (2Q25) financial highlights
- Net profit amounted to ISK 7.2 billion in the second quarter of 2025 (2Q24: ISK 5.3 billion), generating an annualised return on equity (ROE) of 13.0% (2Q24: 9.7%).
- Net interest income (NII) amounted to ISK 13.9 billion and increased by ISK 1,390 million in 2Q25 compared to 2Q24.
- The net interest margin (NIM) was 3.3% in 2Q25 compared to 3.1% in 2Q24.
- Net fee and commission income (NFCI) grew by 12.8% compared to 2Q24 and amounted to ISK 3.6 billion in 2Q25.
- Net financial income was ISK 13 million in 2Q25, compared to an expense of ISK 499 million in 2Q24.
- Other operating income was ISK 143 million in 2Q25, compared to ISK 45 million in 2Q24.
- Administrative expenses in 2Q25 amounted to ISK 7.3 billion, having been ISK 7.0 billion in 2Q24 when an administrative fine of ISK 470 million charged in 2Q24 is excluded.
- The cost-to-income ratio was 41.0% in 2Q25 compared to 45.7% in 2Q24, which excludes an administrative fine of ISK 470 million charged in 2Q24.
- The net impairment on financial assets was a reversal of ISK 402 million in 2Q25, compared to a reversal of ISK 137 million in 2Q24. The net impairment charge as a share of loans to customers, the annualised cost of risk, was -12bps in 2Q25, compared to -4bps in 2Q24.
- Loans to customers grew by ISK 32.4 billion during the second quarter of 2025, reaching a total of ISK 1,331 billion at the end of the second quarter of 2025.
- Deposits from customers grew by 3.1% in the quarter and amounted to ISK 966 billion at the end of 2Q25.
- Total equity at period-end amounted to ISK 224.7 billion compared to ISK 227.4 billion at year-end 2024.
- The total capital ratio was 21.5% at the end of 2Q25, compared to 23.2% at year-end 2024. The corresponding CET1 ratio was 18.5% at the end of 2Q25, compared to 20.1% at year-end 2024. The CET1 ratio at the end of 2Q25 was 330bps above regulatory requirements, and above the Bank's financial target of having a 100-300 bps capital buffer on top of CET1 regulatory requirements.
- The minimum requirement for own funds and eligible liabilities (MREL) for Íslandsbanki is 19.6% of the total risk exposure amount, in addition to the combined buffer requirement. At the end of second quarter 2025, the Bank's MREL ratio was 36.7%, 720 bps on top of requirements.
First half 2025 (1H25) financial highlights
- Íslandsbanki's net profit for the first half of 2025 was ISK 12.4 billion (1H24: ISK 10.7 billion), with an annualised return on equity for 1H25 of 11.1%, compared to 9.8% in 1H24. The Bank is guiding towards an ROE of 10-11% for the year as a whole, assuming normalised level of impairments.
- Net interest income totalled ISK 26.8 billion in 1H25, an increase of 9% YoY.
- Net fee and commission income (NFCI) amounted to ISK 6.7 billion in 1H25 which is an increase of 7.5% from first half of 2024, when it amounted to ISK 6.2 billion.
- Net financial expense was ISK 973 million in 1H25 compared to an expense of ISK 735 million in 1H24.
- Administrative expenses were ISK 14.7 billion in 1H25, having been ISK 14.2 billion in 1H24, when a charge for an administrative fine in the amount of ISK 470 million charge in 2Q24 is excluded.
- Cost-to-income ratio fell YoY from 44.8% in 1H24 to 44.1% in 1H25. Cost-to-income ratio for 1H24 excluded an administrative fine of ISK 470 million charged in the second quarter of 2024.
- Net impairment on financial assets was a reversal of ISK 399 million in the first half of 2025, as compared to an impairment of ISK 567 million for the first half of 2024.
Key figures and ratios
2Q25 | 1Q25 | 4Q24 | 3Q24 | 2Q24 | ||
PROFITABILITY | Profit for the period, ISKm | 7,192 | 5,209 | 6,283 | 7,280 | 5,266 |
Return on equity | 13.0% | 9.4% | 11.2% | 13.2% | 9.7% | |
Net interest margin (of total assets) | 3.3% | 3.2% | 2.7% | 2.9% | 3.1% | |
Cost-to-income ratio1,2 | 41.0% | 47.6% | 45.7% | 40.4% | 45.7% | |
Cost of risk[3] | (0.12%) | 0.00% | (0.11%) | (0.27%) | (0.04%) | |
30.6.25 | 31.3.25 | 31.12.24 | 30.9.24 | 30.6.24 | ||
BALANCE SHEET | Loans to customers, ISKm | 1,331,288 | 1,298,849 | 1,295,388 | 1,274,094 | 1,276,608 |
Total assets, ISKm | 1,696,034 | 1,667,429 | 1,607,807 | 1,622,458 | 1,595,896 | |
Risk exposure amount, ISKm | 1,084,492 | 1,061,903 | 1,040,972 | 1,021,243 | 1,019,494 | |
Deposits from customers, ISKm | 966,075 | 936,779 | 926,846 | 927,011 | 916,127 | |
Customer loans to customer deposits ratio | 138% | 139% | 140% | 137% | 139% | |
Non-performing loans (NPL) ratio[4] | 1.6% | 1.8% | 1.6% | 1.6% | 1.8% | |
LIQUIDITY | Net stable funding ratio (NSFR), for all currencies | 125% | 128% | 125% | 126% | 123% |
Liquidity coverage ratio (LCR), for all currencies | 185% | 202% | 168% | 223% | 190% | |
CAPITAL | Total equity, ISKm | 224,725 | 217,894 | 227,355 | 223,388 | 216,501 |
CET1 ratio[5] | 18.5% | 18.6% | 20.1% | 20.2% | 19.9% | |
Tier 1 ratio[5] | 19.4% | 19.5% | 21.0% | 21.2% | 20.9% | |
Total capital ratio[5] | 21.5% | 21.6% | 23.2% | 23.4% | 23.1% | |
Leverage ratio | 12.0% | 12.1% | 13.2% | 13.0% | 13.0% | |
MREL ratio[6] | 36.7% | 37.8% | 33.4% | 35.6% | 35.6% |
1. Calculated as (Administrative expenses – One-off expenses) / (Total operating income – One-off income).
2. C/I ratio for 2Q24 excludes a charge of ISK 470m related to an administrative fine.
3. Negative cost of risk means that there is a net release of impairments.
4. Stage 3, loans to customers, gross carrying amount.
5. In 1Q25 the Central Bank granted the Bank permission to buy back own shares and reduce its share capital, as a result capital ratios at 31.3.25 and 30.6.25 declined from year-end 2024.
6. MREL ratio includes the CET1 capital held to meet the combined buffer requirement.
Jón Guðni Ómarsson, CEO of Íslandsbanki:
The second quarter of 2025 was an eventful one for Íslandsbanki. The Government of Iceland's sale of its remaining stake in Íslandsbanki last May was a success. The sale itself marked a milestone for the Bank, and there are exciting opportunities that arise at such points. It was particularly gratifying to see private individuals taking part in the offering in a very significant way. Active participation by retail investors in the stock market is a significant step towards increasing the activity and depth of the market domestically, and is a development that is very much welcomed.
Profit from Íslandsbanki's operations during the second quarter of 2025 amounted to ISK 7.2 billion, which is around 18% above analyst consensus. The profit for the first half of 2025 amounted to ISK 12.4 billion. Core operations are doing very well and interest income increased by more than 11% for the second quarter, compared to the same quarter last year and fee and commission income increased by almost 13%. Net interest margin for the second quarter was 3.3%. Annualised return on equity for the second quarter was 13.0% and cost-to-income ratio was 41.0%. The same ratios for the first half of 2025 were 11.1% and 44.1%, respectively, in line with the Bank's financial targets.
The Bank's services to companies around the country has been vast, and the Bank is proud of its longstanding relationship with them and its participation in diverse projects. Íslandsbanki's Corporate Finance unit has recently concluded important projects and the project pipeline remains strong for the coming months. The Business Banking division continues to soar and now receives the highest net promoter score, NPS, in Iceland amongst SMEs and enjoys a strong market share. The collaboration between Íslandsbanki and VÍS insurance company is off to a great start and customers of both companies enjoy added benefits due to the partnership.
The road ahead looks promising and Íslandsbanki's position is strong. The Bank's excess capital (CET1) amounted to around ISK 40 billion at the end of second quarter and the Bank is looking towards growth opportunities, both internal and external. The Bank resumed its share buybacks in early July, having paused near the end of the first quarter of 2025, with the aim of acquiring up to a market value of ISK 15 billion.
The Íslandsbanki Reykjavík Marathon will take place on 23 August and there is, as in previous years, great anticipation for the event this year. Runners' charity collection is going well, and it will be exciting to see downtown Reykjavík filled with runners of all ages reaping the rewards after weeks and months of preparation.
Investor Material
In the event of discrepancy between the Icelandic and English version of the Press Release the English version prevails.
Disclaimer
This press release may contain "forward-looking statements" involving uncertainty and risks that could cause actual results to differ materially from results expressed or implied by the statements. Íslandsbanki hf. undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. It is the investor's responsibility to not place undue reliance on these forward-looking statements which only reflect the date of this press release. Forward-looking statements should not be considered as guarantees or predictions of future events and all forward-looking statements are qualified in their entirety by this cautionary statement.
INVESTOR RELATIONS
An earnings conference call and webcast will take place on Friday 1 August 2025
Íslandsbanki will host a webcast in English for investors and market participants on Friday 1 August at 8.30 Reykjavík/GMT, 9.30 London/BST, 10.30 CET. Jón Guðni Ómarsson, CEO, and Ellert Hlöðversson, CFO, will give an overview of the second quarter of 2025 financial results and operational highlights.
The webcast will be accessible live through a link on the Bank's Investor Relations website where a recording will also be available after the meeting. For participation and the ability to send in written questions please register via this link. To participate in the webcast via teleconference and for the option to ask questions verbally, please register via this link here. Information regarding the webcast is available here.
Further information is available through Íslandsbanki Investor Relations, ir@islandsbanki.is.
Financial calendar
Information on the Bank's financial calendar is available here. Please note that the dates are subject to change.
Additional investor material
All investor material will subsequently be available and archived on the Bank's Investor Relations website, where other information on the Bank's financial calendar and silent periods can also be found.
This announcement is released by Íslandsbanki hf. and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), encompassing information relating to the second quarter 2025 financial results described above. For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Ellert Hlöðversson, CFO of Íslandsbanki hf.
Attachments
ISB Condensed Consolidated Interim Financial Statements First Half 2025
ISB 2Q25 PressRelease
ISB 2Q25 Investor Presentation
2Q25 Factsheet
2Q25 Factbook
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