ISB Condensed Consolidated Interim Financial Statements First Half 2026
Íslandsbanki hf.: Financial results for second quarter 2026
Net profit amounted to ISK 7.1 billion in the second quarter of 2026, generating an annualised return on equity (ROE) of 13.3% for the quarter.
ÍSLANDSBANKI RESULTS HIGHLIGHTS
Second quarter 2026 (2Q26) financial highlights
- Net profit amounted to ISK 7.1 billion in the second quarter of 2026 (2Q25: ISK 7.2 billion), generating an annualised return on equity (ROE) of 13.3% (2Q25: 13.0%) for the quarter.
- Net interest income (NII) amounted to ISK 15.3 billion and increased by ISK 1.4 billion in 2Q26 compared to 2Q25.
- The net interest margin (NIM) was 3.4% in 2Q26 compared to 3.3% in 2Q25.
- Net fee and commission income (NFCI) was ISK 3.3 billion in 2Q26 compared to ISK 3.6 billion in 2Q25.
- Net financial expense was ISK 94 million in 2Q26, compared to an income of ISK 13 million in 2Q25.
- Administrative expenses in 2Q26 amounted to ISK 8.1 billion, having been ISK 7.3 billion in 2Q25.
- The cost-to-income ratio was 43.1% in 2Q26 compared to 41.0% in 2Q25.
- The net impairment on financial assets was ISK 454 million in 2Q26, compared to a reversal of ISK 402 million in 2Q25. The net impairment charge as a share of loans to customers, the annualised cost of risk, was 13bps in 2Q26, compared to -12bps in 2Q25.
- Loans to customers grew by ISK 14.8 billion during the second quarter of 2026, reaching a total of ISK 1,416 billion at the end of 2Q26.
- Deposits from customers grew by 2.4% in the second quarter and amounted to ISK 1,038 billion at the end of 2Q26.
- Total equity at the end of 2Q26 amounted to ISK 211.1 billion compared to ISK 225.4 billion at year-end 2025.
- The total capital ratio was 23.0% at the end of 2Q26 compared to 24.0% at year-end 2025. The corresponding CET1 ratio was 19.1% at the end of 2Q26 compared to 20.1% at year-end 2025. The CET1 ratio at the end of 2Q26 was 385bps above regulatory requirements, and above the Bank's financial target of having a 100-300bps buffer on top of CET1 regulatory requirements.
- Total payout capacity amounts to ISK 23.1 billion including uncompleted buybacks at the reporting date.
- The minimum requirement for own funds and eligible liabilities (MREL) for the Bank is 18.8% of the total risk exposure amount, in addition to the combined buffer requirement. Taking into account the Group's combined buffer requirement at 30 June 2026, the resulting MREL as a % of REA requirement was 28.5%. At the end of 2Q26, the Bank's MREL ratio was 43.9%. A new resolution plan is expected to be approved for the Bank in October, with an increase of MREL to 19.6% in line with the latest SREP results.
- Íslandsbanki bought 57.2 million own shares for ISK 8.2 billion during the second quarter.
| 2Q26 | 1Q26 | 4Q25 | 3Q25 | 2Q25 | ||
| PROFITABILITY | Profit for the period, ISKm | 7,069 | 7,456 | 5,947 | 6,901 | 7,192 |
| Return on equity | 13.3% | 13.6% | 10.5% | 12.2% | 13.0% | |
| Net interest margin (on total assets) | 3.4% | 3.9% | 2.9% | 3.1% | 3.3% | |
| Cost-to-income ratio1 | 43.1% | 38.5% | 43.5% | 38.2% | 41.0% | |
| Cost of risk2 | 0.13% | 0.35% | 0.32% | (0.00%) | (0.12%) | |
| 30.6.26 | 31.3.26 | 31.12.25 | 30.9.25 | 30.6.25 | ||
| BALANCE SHEET | Loans to customers, ISKm | 1,416,048 | 1,401,212 | 1,367,106 | 1,333,234 | 1,331,288 |
| Total assets, ISKm | 1,788,385 | 1,786,697 | 1,728,147 | 1,734,056 | 1,696,034 | |
| Risk exposure amount, ISKm | 1,043,713 | 1,049,435 | 1,033,788 | 1,084,527 | 1,084,492 | |
| Deposits from customers, ISKm | 1,038,206 | 1,013,431 | 968,695 | 1,008,919 | 966,075 | |
| Customer loans to customer deposits ratio | 136% | 138% | 141% | 132% | 138% | |
| Non-performing loans (NPL) ratio3 | 2.6% | 2.0% | 1.5% | 1.6% | 1.6% | |
| LIQUIDITY | Net stable funding ratio (NSFR), for all currencies | 126% | 123% | 127% | 129% | 125% |
| Liquidity coverage ratio (LCR), for all currencies | 188% | 177% | 203% | 207% | 185% | |
| CAPITAL | Total equity, ISKm | 211,095 | 212,718 | 225,359 | 226,974 | 224,725 |
| CET 1 ratio4 | 19.1% | 18.6% | 20.1% | 18.9% | 18.5% | |
| Tier 1 ratio4 | 20.7% | 20.2% | 21.7% | 19.8% | 19.4% | |
| Total capital ratio4 | 23.0% | 22.5% | 24.0% | 21.9% | 21.5% | |
| Leverage ratio4 | 11.7% | 11.5% | 12.5% | 11.9% | 12.0% | |
| MREL ratio5 | 43.9% | 40.3% | 44.0% | 36.8% | 36.7% |
1. C/I ratio for 4Q25 excludes salary expenses of ISK 804m due to early retirement of employees and an income of ISK 237m within net interest income (ISK 550m reversed from charge in 3Q25 due to provision for legal proceedings and a charge of ISK 313m due to correction from previous year). C/I ratio for 3Q25 excludes a charge of 550m within net interest income due to a provision for legal proceedings.
2. Negative cost of risk means that there is a net release of impairments.
3. Stage 3, loans to customers, gross carrying amount.
4. Including 1Q26 profit for 31.3.26 and 3Q25 profit for 30.9.25.
5. MREL ratio includes the CET1 capital held to meet the combined buffer requirement.
Jón Guðni Ómarsson, CEO of Íslandsbanki:
The quarter delivered a solid performance, broadly in line with expectations. Operating profit of Íslandsbanki amounted to ISK 7.1 billion in the second quarter and return on equity on an annualised basis was 13.3%. Both measures ahead of the same quarter last year while landing slightly below analyst consensus for the quarter. Net interest income increased by 10% for the second quarter compared to the same quarter last year. Net interest margin was 3.4% for the quarter. Performance from core operations shows that the fundamentals of the Bank's operations are strong. Uncertainty in the international environment, volatility in foreign markets and lower activity in the domestic capital markets affected fee income for the quarter.
Operationally, the Bank has continued to progress in line with its strategy. We welcomed a number of new client relationships during the period, while demand for our newly launched Loyalty Services continued to build. Activity in debt and equity brokerage was also healthy. These results demonstrate the strength of our client relationships and the breadth of our operations, and we look forward to building on this momentum in the period ahead.
There remains some uncertainty regarding the Government's stated intention to review the taxation of financial institutions, as no concrete proposals have yet been presented. The taxation of Icelandic financial institutions is already higher than that of our peers in other Nordic countries, and any further increase would risk weakening the competitiveness of the Icelandic financial system.
The Íslandsbanki Reykjavík Marathon is approaching and will take place on 22 August. As in previous years, there is great anticipation for the event. The most significant purpose of the Marathon is to enable charity collection as for many of the charity's this is the single most important collection of the year. Since 2006, a total of ISK 2 billion has been collected. It will be exciting to see downtown Reykjavík filled with runners of all ages trying to achieve their personal bests or enjoying their day.
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 Thursday 30 July 2026
Íslandsbanki will host a webcast in English for investors and market participants on Thursday 30 July 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 2026 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.
Further information is available through Íslandsbanki Investor Relations, ir@islandsbanki.is.
Financial calendar
Íslandsbanki plans to publish its financial statements according to the financial calendar below:
Third quarter 2026 results – 29 October 2026
Further 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 2026 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.