Funding

Funding

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.

Funding Plan
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. Inflation-linked deposits amounted to ISK 136 billion at year-end 2021.
Market funding
The Bank has in place issuance programmes for EMTN-issuance in the foreign capital markets, covered bonds and debt securities.
Equity
The Bank’s equity amounted to ISK 283 billion at year-end 2021 and the total capital ratio was 26.6%.

Market funding

Landsbankinn is a regular issuer both in domestic capital markets and internationally. EMTN-issuance and covered bonds account for the majority of the Bank’s borrowings.

1. EMTN issuance
The Bank has in place an EMTN programme for EUR 2 billion. The inaugural bond issuance was completed in 2015 and the Bank has been a regular issuer ever since. The inaugural green bond issuance under the programme with a reference to the Bank’s Sustainable Finance Framework was done in 2021. At year-end 2021, senior unsecured bond issuance in EUR, SEK and NOK under the programme amounted to ISK 248 billion and Tier 2 bond issuance in EUR amounted to ISK 15 billion. The bonds are listed on Euronext Dublin.
2. Covered bonds
Landsbankinn issues covered bonds under the ISK 250 billion Covered bond programme. The inaugural bond issuance was made in 2013 with regular issuance to date. Outstanding covered bond issuance amounted to ISK 218 billion at year-end 2021. The bonds are listed on Nasdaq Iceland.
3. Debt securities issuance
Commercial paper and subordinated bond issuance in the domestic market are issued under the Bank’s ISK 50 billion Debt issuance programme. At year-end 2021 there was no outstanding issuance of commercial paper and ISK 6 billion of subordinated debt. The bonds are listed on Nasdaq Iceland.

1. EMTN issuance

Landsbankinn issues bonds in the foreign capital markets under the EMTN programme which allows for bond issuance for up to EUR 2 billion in various currencies, senior and subordinated, at fixed and floating rate and with a sustainable label.

Deutsche Bank is the arranger of the EMTN programme with the following banks listed as dealers:

  • Barclays
  • BofA Merrill Lynch
  • Citigroup
  • Deutsche Bank
  • Goldman Sachs International
  • J.P. Morgan
  • Morgan Stanley
  • Nomura
  • UBS Investment Bank

Final Terms and Base prospectus

2. Covered bonds

Landsbankinn has set up an ISK 250 billion programme for the issuance of covered bonds.

On 29 April 2013, Landsbankinn was licenced by the Icelandic Financial Supervisory Authority to issue covered bonds in accordance with the Icelandic Act on Covered Bonds, No. 11/2008, and Rules on Covered Bonds, No. 528/2008.

Landsbankinn is obliged to perform stress tests and calculate the present value of the cover pool on a weekly basis and inform bondholders of key figures regarding the issue at least on a quarterly basis.

Following series of the covered bonds are outstanding: LBANK CB 23, LBANK CB 25 and LBANK 27 which are non-indexed bonds and LBANK CBI 24, LBANK CBI 26 and LBANK CBI 28, which are inflation-linked bonds.

Base prospectus and Supplements

Issue Description

Final Terms

Cover pool reports

3. Commercial paper and bonds

Landsbankinn has set up ISK 50 billion debt issuance programme.

Base prospectus and Supplements

Issue Description

Final terms

Credit rating

International rating agency S&P Global Ratings evaluates Landsbankinn's creditworthiness

Reports and financials

Annual and interim financial statements, risk reports and other information

Articles of Association

Articles of Association Landsbankinn hf.

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