The largest part of Landsbankinn's funding is in the form of customer deposits, which amounted to ISK 708 bn at year-end 2019. The Bank issued ISK-denominated subordinated bonds in 2019, its first subordinated issuance in Icelandic króna.

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Landsbankinn’s funding rests on three main pillars: deposits from customers, market funding and equity. The Bank’s credit rating is BBB+/A-2 with negative outlook by S&P Global Ratings.

Deposits from customers

The largest part of Landsbankinn’s funding is in the form of deposits from customers which amounted to ISK 708 bn at year-end 2019, mostly non-indexed and on demand. Deposits from customers increased by 15 bn during the year 2019. Inflation-linked deposits amounted to ISK 121 bn at year-end 2019, increasing by ISK 7 bn from the previous year.

EMTN issuance and other unsecured loans

The size of the Bank’s EMTN programme is EUR 2 bn and was increased in size from EUR 1.5 bn in 2017. The inaugural issuance under the programme was made in fall 2015, followed by continued issuance on a regular basis to date.

In February, the Bank issued 3-year bonds for SEK 500 m and NOK 1,000 m. In May, the Bank issued 1.5-year bonds for SEK 600 m and NOK 300 m.

Bonds in the amount of SEK 350 m and NOK 500 m matured in June and the remaining outstanding principal was paid in full on the maturity date.

At year-end 2019, bond issuance in foreign currency amounted to ISK 223 bn, increasing by ISK 24 bn during the year. Other unsecured loans in foreign currency amounted to ISK 19 bn at the same time.

Funding pillars (ISKm)
Debt repayment profile (ISKm)

Covered bonds

The size of the programme for covered bond issuance is ISK 200 bn and was increased from ISK 120 bn in 2019. The covered bond issuance is primarily intended to fund the Bank’s mortgage portfolio and to mitigate interest rate risk. Regular auctions of covered bonds were held in 2019 where previously issued bonds were tapped. One non-indexed series, LBANK CB 19, matured in 2019. Agreements with market makers in the secondary market for covered bonds were renewed in the year. At year-end, outstanding covered bonds issuance amounted to ISK 141 bn, increasing by ISK 34 bn during the year 2019.

Commercial paper

Three auctions of commercial paper were held in 2019 with commercial paper issued under the ISK 50 bn debt issuance programme. Outstanding issuance of commercial paper amounted to ISK 4 bn at year-end 2019 compared to ISK 3 bn at the end of 2018.

Subordinated bond issuance

In December, the Bank issued subordinated bonds for ISK 5.5 bn under the ISK 50 bn debt issuance programme. The bonds are inflation-linked and with a 10NC5 structure. The bond issuance was the Bank’s inaugural subordinated bond issuance in the domestic market.


The Bank’s equity amounted to ISK 248 bn at year-end 2019, increasing by ISK 8.1 bn over the course of the year. Landsbankinn paid ISK 9,922 m in dividends to shareholders in 2019. Landsbankinn’s total capital ratio was 25.8% at year-end 2019.

Credit rating

Landsbankinn’s credit has been rated by international rating agency S&P Global Ratings since early 2014. In July 2019, the outlook of the credit rating was changed from stable to negative and the credit rating is currently estimated as BBB+/A-2 with negative outlook.

Capital ratio


Standard & Poor's

Long-term BBB+
Short-term A-2
Outlook Negative
Issue date July 2019