Arion Bank hf.: Arion Bank: Q1 2025 results

Arion Bank reports net earnings attributable to shareholders of Arion Bank of ISK 6.4bn in Q1 2025. Investor meeting and webcast in English on 8 May at 10:30 CEST (8:30 GMT)

Financial highlights for the first quarter 2025

• Arion Bank reports net earnings attributable to shareholders of Arion Bank of ISK 6.4bn in Q1 2025, compared with ISK 4.4bn in Q1 2024
• Return on equity attributable to shareholders of Arion Bank was 12.8%, compared with 9.1% in Q1 2024
• Earnings per share in ISK of 4.59, compared with 3.07 in Q1 2024
• Net interest margin of 3.1%, the same as in Q1 2024
• Net commission income was ISK 4.5bn, compared with ISK 3.4bn in Q1 2024, making it the best quarter in terms of fees since 2022
• Operation of Vördur improved from the first quarter in the previous year, contributing a standalone net loss of ISK 0.6bn in the first quarter of 2025
• Other operating income was ISK 3.3bn due to a valuation increase in development assets
• Core income, defined as net interest income, net commission income and insurance service results (excluding opex of the insurance operation), increased by 15.4%, compared with Q1 2024
• Operating expenses increased by 0.7%, compared with Q1 2024
• Effective tax rate was 32.2%
• Total cost-to-core income ratio was 42.6%, compared with 48.4% in Q1 2024
• Cost-to-income ratio was 34.7%, compared with 45.3% Q1 2024
• The balance sheet increased by 4.2% during the quarter
• Loans to customers increased by ISK 3.9bn or 0.3% during the quarter
• Share buybacks and dividend payments totalled ISK 19.1bn in the quarter
• The Bank's capital ratio was 21.5% and the CET1 ratio was 18.3% at the end of March. The ratios are determined on the basis of the unaudited net earnings in the quarter and take into account the deduction of 50% of net earnings as foreseeable divided in line with the Bank's dividend policy. The Group's capital ratio, as calculated under the Financial Undertakings Act No. 161/2002, was 21.2% and the CET1 ratio was 17.9%. These ratios comfortably exceed the requirements made by the FSA and Icelandic law.

Benedikt Gíslason, CEO of Arion Bank
"Arion Bank's financial results for the first quarter are in line with our targets despite certain challenges in the external environment. We enjoyed solid momentum throughout almost the entire business, underlining the fact that one of Arion's key strengths lies in the diversity of services which cover virtually all areas of finance for households, companies and investors. Our revenue streams are highly diverse, engendering greater stability and helping risk distribution in our operations. The Group remains financially robust and the capital and liquidity positions are strong, which allows us to enhance our services and to deal with the various challenges posed by our external environment.

Indeed, developing and consolidating our range of services has been a key priority in recent months and will continue to be so. This applies equally to our digital channels and the personal services we provide at our branches and in the call centre. The results of these efforts can clearly be seen in the popularity of the Arion app. New features launched at the beginning of the year include a new customer rewards scheme in the Arion app. Rewards are determined by how many services customers obtain from the Arion Group, whether this be banking services from Arion Bank, such as deposits, payment cards and mortgages, home insurance from Vörður or investments in Stefnir funds. These services also include pensions, both those options offered by Arion Bank under the Lífeyrisauki name, and the supplementary savings which people have entrusted to Frjalsi Pension Fund, which itself is administered and asset managed by Arion Bank. We have ambitious plans to evolve the scheme, where we reward our customers for choosing us as partners to help manage their household finances.

An important milestone was reached in the quarter when the town of Garðabær approved the land use plan for the Arnarland development site. The objective of the new land use plan is to create a vibrant neighbourhood with homes, services and commercial activity. It will be a diverse neighbourhood, with plans to construct 450 homes, local services and a health cluster focused on companies in the health and hi-tech sectors. Landey, a property development company owned by Arion Bank, has a 51% interest in Arnarland and this new phase therefore has a positive impact on Arion's results this quarter. Other assets owned by Landey include land, property and industrial property at two other locations in south-west Iceland. Landey's objective is to increase the value of its assets through the continued development of these sites."

Investor meeting / webcast in English on 8 May at 10:30 CEST (8:30 GMT)
Arion Bank will be hosting a meeting at the Bank's headquarters in Borgartún 19, Reykjavík, on Thursday 8 May at 10:30 CEST (8:30 GMT) where CEO Benedikt Gíslason will present the results and Chief Economist Erna Björg Sverrisdóttir will give an update on the economic environment. The meeting will take place in English and will also be streamed live.

The webcast will be accessible live on Lumiconnect and a link is also available on the Bank's website under Investor Relations.

Participants attending virtually will be able to ask questions during the meeting through a message board on the same site. Answers will be provided by presenters at the end of the webcast.

Financial calendar
Arion Bank's financial calendar is available on the Bank's website.

For further information please contact:

Theodór Friðbertsson, Investor Relations at Arion Bank, [e-mail], tel. [phone] or Haraldur Guðni Eiðsson, Head of Corporate Communications, [e-mail], tel. [phone].

This information is information that Arion Bank is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2025-05-07 15:31 GMT.