Landsbankinn’s funding rests on three main pillars – deposits from customers, market funding and equity. The Bank’s credit rating is measured BBB/A-2 with stable 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 793bn at year-end 2020, mostly non-indexed and on demand. Deposits from customers increased by 86bn during the year 2020. Inflation-linked deposits amounted to ISK 126bn at year-end 2020, increasing by ISK 5bn from the previous year.

Market funding

EMTN issuance and other unsecured loans

International debt issuance is the most significant pillar of the Bank's market funding. The size of the Bank’s EMTN programme is EUR 2bn and was increased in size from 1.5bn in year 2017. The inaugural issuance under the programme was made in the fall of 2015, with continued issuance on a regular basis to date.

In February, the Bank issued a 4.25-year bond for EUR 300m against a buy-back of bonds maturing in March 2021 for EUR 300m. In October, the Bank issued 3-year bonds for SEK 500m and NOK 500m.

In November, bonds in the amount of SEK 2,600m and NOK 300m matured and the remaining outstanding principal was paid in full on the maturity date.

At year-end 2020 bond issuance in foreign currency amounted to ISK 212bn, increasing by ISK 2bn during the year. Other unsecured loans in foreign currency amounted to ISK 19bn at the same time.

Covered bonds

The size of the programme for covered bond issuance is ISK 250bn and was increased from ISK 200bn in 2020. 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 2020 where previously issued bonds were tapped and two new bond series issued, one non-indexed series, LBANK CB 25, and one inflation linked, LBANK CBI 26. No covered bond series matured in 2020. Agreements with market makers in the secondary market for covered bonds were renewed in the year. At year-end 2020, outstanding covered bonds issuance amounted to ISK 189bn, increasing by ISK 49bn during the year.

Commercial paper

No commercial paper auctions were held in 2020 under the Bank’s ISK 50bn debt issuance programme. Two series of commercial paper matured in 2020, in the total amount of ISK 3,605m. There was no outstanding issuance of commercial paper at year-end 2020.

Subordinated bond issuance

Subordinated bond issuance under the Bank’s debt issuance programme amounted to ISK 5.7bn at year-end and subordinated issuance under its EMTN programme amounted to EUR 100m at the same time. Both bond issues count as Tier 2 capital and amounted to ISK 21.4bn at year-end 2020, decreasing by ISK 2.3m from the previous year.


The Bank’s equity amounted to ISK 258.3bn at year-end 2020, increasing by ISK 11bn over the course of the year. Landsbankinn paid no dividends to its shareholders in 2020. Landsbankinn’s total capital ratio was 25.1% at year-end 2020.

Credit rating

Landsbankinn’s credit rating by international rating agency S&P Global Ratings from the beginning of 2014. In April 2020, the Bank’s credit rating was lowered to BBB/A-2 with stable outlook.


S&P Global Ratings
Long-term BBB
Short-term A-2
Outlookr Stable
Issue date April 2020

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