Second quarter 2025 (2Q25) financial highlights
- Net profit amounted to ISK 7.2 billion in the second quarter of 2025 (2Q24: ISK 5.3 billion), generating an annualised return on equity (ROE) of 13.0% (2Q24: 9.7%).
- Net interest income (NII) amounted to ISK 13.9 billion and increased by ISK 1,390 million in 2Q25 compared to 2Q24.
- The net interest margin (NIM) was 3.3% in 2Q25 compared to 3.1% in 2Q24.
- Net fee and commission income (NFCI) grew by 12.8% compared to 2Q24 and amounted to ISK 3.6 billion in 2Q25.
- Net financial income was ISK 13 million in 2Q25, compared to an expense of ISK 499 million in 2Q24.
- Other operating income was ISK 143 million in 2Q25, compared to ISK 45 million in 2Q24.
- Administrative expenses in 2Q25 amounted to ISK 7.3 billion, having been ISK 7.0 billion in 2Q24 when an administrative fine of ISK 470 million charged in 2Q24 is excluded.
- The cost-to-income ratio was 41.0% in 2Q25 compared to 45.7% in 2Q24, which excludes an administrative fine of ISK 470 millioncharged in 2Q24.
- The net impairment on financial assets was a reversal of ISK 402 million in 2Q25, compared to a reversal of ISK 137 million in 2Q24. The net impairment charge as a share of loans to customers, the annualised cost of risk, was -12bps in 2Q25, compared to -4bps in 2Q24.
- Loans to customers grew by ISK 32.4 billion during the second quarter of 2025, reaching a total of ISK 1,331 billion at the end of the second quarter of 2025.
- Deposits from customers grew by 3.1% in the quarter and amounted to ISK 966 billion at the end of 2Q25.
- Total equity at period-end amounted to ISK 224.7 billion compared to ISK 227.4 billion at year-end 2024.
- The total capital ratio was 21.5% at the end of 2Q25, compared to 23.2% at year-end 2024. The corresponding CET1 ratio was 18.5% at the end of 2Q25, compared to 20.1% at year-end 2024. The CET1 ratio at the end of 2Q25 was 330bps above regulatory requirements, and above the Bank's financial target of having a 100-300 bps capital buffer on top of CET1 regulatory requirements.
- The minimum requirement for own funds and eligible liabilities (MREL) for Íslandsbanki is 19.6% of the total risk exposure amount, in addition to the combined buffer requirement. At the end of second quarter 2025, the Bank's MREL ratio was 36.7%, 720 bps on top of requirements.
First half 2025 (1H25) financial highlights
- Íslandsbanki's net profit for the first half of 2025 was ISK 12.4 billion (1H24: ISK 10.7 billion), with an annualised return on equity for 1H25 of 11.1%, compared to 9.8% in 1H24. The Bank is guiding towards an ROE of 10-11% for the year as a whole, assumingnormalised level of impairments.
- Net interest income totalled ISK 26.8 billion in 1H25, an increase of 9% YoY.
- Net fee and commission income (NFCI) amounted to ISK 6.7 billion in 1H25 which is an increase of 7.5% from first half of 2024, when it amounted to ISK 6.2 billion.
- Net financial expense was ISK 973 million in 1H25 compared to an expense of ISK 735 million in 1H24.
- Administrative expenses were ISK 14.7 billion in 1H25, having been ISK 14.2 billion in 1H24, when a charge for an administrativefine in the amount of ISK 470 million charge in 2Q24 is excluded.
- Cost-to-income ratio fell YoY from 44.8% in 1H24 to 44.1% in 1H25. Cost-to-income ratio for 1H24 excluded an administrative fine of ISK 470 million charged in the second quarter of 2024.
- Net impairment on financial assets was a reversal of ISK 399 million in the first half of 2025, as compared to an impairment of ISK 567 million for the first half of 2024.