Funding

Landsbankinn‘s funding rests on three pillars: Deposits from customers, borrowings and share capital.

Deposits from customers
Deposits from customers are the Bank‘s primary funding source. The deposits amounted to ISK 708 billion at year end 2019 and are for the most part non-indexed and available on demand. Indexed deposits amounted to ISK 121 billion at the end of year 2019.
Borrowing
EMTN-issuance in the foreign capital markets accounts for the majority of the Bank’s borrowings. The Bank plans ongoing issuance in the foreign capital markets. Furthermore, Landsbankinn issues covered bonds and commercial paper in the domestic market on a regular basis.
Share capital
The Bank’s equity amounted to ISK 248 billion at year end 2019 and the total capital ratio was 25.8%.

Borrowing

EMTN-issuance in the foreign capital markets accounts for the majority of the Bank’s borrowings. The Bank plans ongoing issuance in the foreign capital markets. Furthermore, Landsbankinn issues covered bonds and commercial paper in the domestic market on a regular basis.

1. EMTN programme
The Bank has in place an EMTN programme for EUR 2 billion with the first bond issuance completed in the second half of 2015. The inaugural subordinated bond issuance under the programme was in September 2018. At year end 2016 the bond issuances under the programme amounted to the equivalence of ISK 223 billion in EUR, NOK and SEK. The bonds are listed on Euronext Dublin.
2. Covered Bonds
The Bank has in place an ISK 200 billion programme for issuance of covered bonds which will primarily be used to finance the Bank’s mortgage loan portfolio and to mitigate the Bank’s fixed interest rate risk. The covered bonds issuance amounted to ISK 141 billion at year end 2019. The covered bonds are listed on Nasdaq Iceland.
3. Commercial Paper
Outstanding commercial paper under the bank’s debt securities programme at year end 2019 amounted to ISK 4 billion. The commercial paper is listed on Nasdaq Iceland. The bank’s inaugural subordinated bond issuance in ISK was issued in December in the amount of ISK 5,520 million. The bonds were issued under the bank’s debt securities programme.

1. EMTN programme

The base prospectus of Landsbankinn for the issue of foreign currency notes has been approved by the Dublin Stock Exchange in Ireland. The note programme allows Landsbankinn to issue notes in the equivalent amount of up to EUR 2.0 billion in various currencies and at fixed or floating rates.

Deutsche Bank served as arranger of the EMTN programme and the following banks are 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 no less frequently than on a quarterly basis.

Following series of the covered bonds are outstanding: LBANK CB 21, LBANK CB 23 and LBANK 25 which are non-indexed bullets, LBANK CBI 22, LBANK CBI 24, LBANK CBI 26 and LBANK CBI 28, which are indexed bullets.

Base prospectus and Supplements

Issue Description

Final Terms

Cover pool reports

3. Bills and bonds

Landsbankinn has set up ISK 50 billion debt issuance programme.

Issue Description

Final terms

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