Great and growing interest in securities

Transactions in equities and funds multiplied between years, and asset management, Landsbréf’s funds and securities and FX brokerage achieved good results. Customers were very interested in our investment objectives and clearly appreciate how simple it is to trade in equities and funds independently.


The pandemic has restricted our access to travel and other services, leading to a build-up of savings. At the same time, interest rate decreases drove both individuals and legal entities to look for new options to invest their savings. These changes, coupled with interesting stock offerings in 2021, greatly increased interest in securities trading. The number of new custody accounts, that is accounts that hold securities, multiplied between years. We saw a great increase in transactions involving funds and equities in online banking and growth in asset management. Transactions in funds have grown by 40% between years and trade with equities has doubled in volume.

Simple to buy and monitor

Around 80% of all transactions with funds and equities at the Bank are carried out independently by customers. It is really simple to buy in funds and equities online and to monitor your asset portfolio in online banking and the app. A custody account can be created in a matter of minutes and it is easy to trade in funds and equities or set up regular savings. We can clearly see that our customers appreciate being able to trade in Landsbréf’s funds or in individual equities anytime and anywhere.

Frá ráðstefnu um mikilvægi eignadreifingar

Engaging articles and meetings on securities trading

We are focused on providing sound and reliable information and, in 2021, we published several articles on securities trading. We wrote about the importance of asset diversification and key points to keep in mind when buying equities or in funds. We hosted a mini-conference in Harpa on the importance of asset diversification under the headline Do markets just go up?

Increased activity and profits

Landsbankinn’s Asset Management achieved good results in 2021. Assets under management by the Group grew by 31% and portfolio management agreements increased by 25% from 2020. Income from asset management and capital markets grew considerably between years, including from increased turnover in the equity market, good reception by investors of our new products and successful bond and stock offerings. Since the abolition of capital controls, corporates and investors increasingly take advantage of currency hedges and our new securities derivative products have also yielded good results.

Issuance of initial sustainability bond

Landsbankinn and Landsbréf adopted a clear policy on sustainable investment in 2013 and we are leading in the field. We are convinced that responsible investment positively impacts long-term returns and reduces operational risk. In recent years, we have presented several new approaches in this field which customers and investors have responded positively to.

Among the projects we worked on in 2021 was the issuance of the first Icelandic sustainability bond by Árborg municipality in June. A sustainability bond differs from a green bond. Green bonds are issued to finance a specific project or investment. Sustainability bonds are issued to finance a company that has committed to obtain specified improvements or goals defined in the company’s sustainable finance framework. The Bank coordinated the process from start to finish, from consulting on the development of a sustainable finance framework to the sale of the bonds and their admittance to trading. Investors responded very positively to this new product.

Íslensk náttúra

Have to stay on our toes

“My work as an Account Manager in Private Banking is varied and exciting. Private Banking, a department in Asset Management & Capital Markets, is a premium service the Bank offers high net worth customers and I belong to a team that takes care of high net worth individuals. In addition to portfolio management, these customers are assigned a dedicated account manager who they can contact to discuss their investments and for advice, as well as all other general banking services. Once a person has become our customer, it is important to main the relationship, provide professional and personal information and of course ensure that the portfolios under management yield acceptable returns. 

Good performance at Landsbréf

Landsbréf hf., the Bank’s subsidiary, performed very well in 2021. Returns from the company’s funds were generally very good and operating results significantly outpaced 2020 results. Three new funds were launched in the year, all well received by investors. Other funds under management grew considerably, both in terms of new customers and returns. Landsbréf currently manages around 40 funds.

Landsbréf has in recent years created several venture capital funds which have invested successfully as conversion and strategic investors in domestic companies. The winding-up process of private equity fund Horn II, established in 2013, began in 2021. Return on the fund was very good, achieving around 25% annual return. The initial investment of investors, who were mainly pension funds, has tripled.

New and exciting funds

We launched new funds in 2021: Horn IV, Brunnur vaxtarsjóður II and Eignadreifing sjálfbær.

Horn IV is an ISK 15 billion private equity fund. This is a closed fund of 30 institutional investors with an investment strategy focused on unlisted domestic equities. The fund’s investment period is to the end of July 2025 and scheduled lifetime is to year-end 2031.

Brunnur vaxtarsjóður II slhf. is a venture capital fund that began operation in 2021 and is ISK 8.3 billion in size. The fund is a limited partnership managed by Landsbréf in collaboration with the fund’s controller, Brunnur Ventures GP ehf. In addition to the controller, 11 institutional investors hold shares in the fund. The fund’s investment period is to 2024 with an authorisation to extend to 2026 and scheduled lifetime is to April 2031.

Eignadreifing sjálfbær hs. is a specialised asset allocation fund for general investors. The fund's objective is to achieve a good rate of return and risk diversification, guided by sustainability. We consider companies with a high sustainability rating more likely to yield good returns on our customers’ investments. With this new fund, we go even further and invest only in financial instruments issued by entities who excel in sustainability and have received high sustainability ratings from independent rating agencies.

Frá Vestmannaeyjum

Importance of asset diversification and active management

The success of Landsbréf and funds under its management reflects the confidence customers have in the company, favourable market conditions and the principles of asset management and active management guided by the methodology of responsible and sustainable investments.

The past two years have been uniquely educational. In general, Landsbréf’s funds have performed well during the pandemic, despite significant market fluctuations and historically low interest rates. Ahead are interesting times where both opportunities and challenges abound. Landsbréf will continue to focus on investing the funds entrusted to the company in a sensible and responsible manner, offering the products our customers desire.

Pension savings increased by ISK 29 billion

We offer a wide array of pension savings plans and services. We offer varied investment options for private pension savings. Pension fund Íslenski lífeyrissjóðurinn invests both mandatory and private pension savings for our customers. Landsbankinn manages daily operation of the fund.

At year-end 2021, pension savings under management by Landsbankinn amounted to ISK 222 billion, growing by ISK 29 billion in the year. The assets of Íslenski lífeyrissjóðurinn were ISK 140 billion thereof. In total, the assets on Landsbankinn Lífeyrisbók pension savings account amounted to ISK 70 billion and assets on pension savings plan Lífeyrissparnaður - erlend verðbréf (non-domestic securities) amounted to ISK 4 billion. Landsbankinn also manages the pension fund of the Icelandic Dental Association (Lífeyrissjóður Tannlæknafélags Íslands), the assets of which amounted to ISK 9 billion at year-end 2021.

Good returns on Landsbankinn pension savings

We achieved good returns on pension savings in 2021. Nominal returns of pension fund Íslenski lífeyrissjóðurinn was up to 15.3%, according to unaudited results. The nominal return of the mutual insurance division was 12.9% and the nominal return of Líf I, the fund’s largest private pension scheme, was 15.3% in 2021.

Sustainability and responsible investment

Pension fund Íslenski lífeyrissjóðurinn renewed its policy on sustainability and responsible investment in the year. Íslenski lífeyrissjóðurinn’s policy on sustainability and responsible investment sets out a clear intention to place increased emphasis on sustainability, environmental and climate issues, to positively impact society and enact good corporate governance practices in the fund’s operation and in investment decisions. Íslenski lífeyrissjóðurinn emphasises responsible investment, including by ensuring that members’ funds are invested to achieve a positive impact on the environment and society, and limit as much as possible the negative impact of investment.

The policy also emphasises disclosure about the pension fund’s operation, including information about sustainability and financials. Alongside its new policy, Íslenski lífeyrissjóðurinn has greatly increased disclosure on its asset portfolio, publishing ESG ratings of individual issuers and funds. The fund also publishes information about the carbon footprint of its asset portfolio. In recent years, the fund has increased its investment in green objective and around 25% of its non-domestic assets are now in funds that disclose ESG information.


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