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

Landsbankinn's credit rating

Deposits from customers

The largest part of Landsbankinn’s funding is in the form of deposits from customers which amounted to ISK 900 billion at year-end 2021, mostly non-indexed and on demand. Deposits from customers increased by 107 billion during the year 2021. Inflation-linked deposits amounted to ISK 136 billion at year-end 2021, increasing by ISK 10 billion from the previous year.

Market funding

EMTN issuance

Bond issuance in foreign currencies is the most important pillar in the Bank’s market funding. The size of the Bank’s EMTN programme is EUR 2 billion and was increased in size from 1.5 billion in 2017. Inaugural issuance under the programme was made in fall 2015 with continued issuance on a regular basis to date. In 2021, the Bank published a Sustainable Finance Framework with a second-party opinion from Sustainalytics.

In February, the Bank completed its inaugural green bond issuance with reference to the Sustainable Finance Framework. The 4.25-year bond issuance amounted to EUR 300 million. Concurrent with the issuance, the Bank announced a tender offer of bonds maturing in March 2021 which led to a bond buy-back in the amount of EUR 48 million. The remaining outstanding principal was paid in full at maturity. In addition, the Bank issued 1.5-year bonds in February amounting to SEK 900 million.

In November, the Bank issued green 4.5-year bonds for the amount of EUR 300 million in conjunction with a tender offer resulting in a buy-back of bonds maturing in March 2022 amounting to EUR 156 million.

At year-end 2021, bond issuance in foreign currency amounted to ISK 248 billion, increasing by ISK 36 billion during the year.

Covered bonds

The size of the programme for covered bond issuance is ISK 250 billion and was increased from ISK 200 billion in 2020. Issuance of covered bonds is primarily intended to fund the Bank’s mortgage portfolio and to mitigate interest rate risk.

Regular auctions of covered bonds were held in 2021 where previously issued series were tapped. Non-indexed series LBANK CB 21 matured in 2021. Agreements with market makers in the secondary market for covered bonds were renewed in the year.

At year-end 2021, outstanding covered bonds amounted to ISK 218 billion, increasing by ISK 29 billion during the year.

Commercial paper

No commercial paper auctions were held in 2021 under the ISK 50 billion debt issuance programme. No series matured in 2021 and there was no outstanding issuance of commercial paper at year-end 2021.

Subordinated bond issuance

Subordinated bond issuance under the Bank’s debt issuance programme amounted to ISK 5.5 billion at year-end and subordinated issuance under the Bank’s EMTN programme amounted to EUR 100 million at the same time. Both bond issues count as tier 2 capital and amounted to ISK 21 billion at year-end 2021, unchanged from the previous year.


The Bank’s equity amounted to ISK 283 billion at year-end 2021, increasing by ISK 24 billion over the course of the year.

Landsbankinn paid ISK 4,489 million in dividends to shareholders in 2021, in line with directions from the Central Bank of Iceland.

Landsbankinn’s total capital ratio was 26.6% at year-end 2021.

Credit rating

Landsbankinn’s credit has been rated by international rating agency S&P Global Ratings since 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
Outlook Stable
Issue date April 2020

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