Net earnings
25.7
ISK bn.
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Brynjólfur Bjarnason
Chairman’s address
After a period of solid GDP growth the Icelandic economy began to slow down in 2023. One of the main tasks for the authorities during the year was to rein in inflation which seemed to be running out of control. The Central Bank of Iceland repeatedly hiked rates, and at year-end policy rates stood at 9.25%, creating a challenge for households and companies alike in Iceland. It was therefore a good sign when the economy began to lose momentum and private consumption and business activity in general began to decrease, in line with the Central Bank’s targets. Volcanic eruptions and seismic activity on the Reykjanes Peninsula also left their mark on the year – and indeed continue to do so. Seismic activity on the Reykjanes Peninsula will in all likelihood continue to be part our lives over the next few years and even decades, but fortunately our scientists have unrivalled expertise and experience in this field as volcanic eruptions have been fairly frequent in the last few decades. Muted economic activity and high interest rates have naturally had an impact on the Bank’s operations, but we nevertheless performed strongly during the year. The Bank ends the year on a firm footing with a capital ratio of 24.1% and a leverage ratio of 12.4%. Equity was ISK 199 billion at year-end and dividends to shareholders amounted to ISK 12.4 billion during the year. The CET 1 ratio was 19.7% at year-end.
Benedikt Gíslason
CEO’s address
Despite challenging economic conditions, Arion Bank performed well in 2023. The economy was beset by inflation and high interest rates as the Central Bank of Iceland did its utmost to slow economic growth and bring inflation under control. Many households are now considering refinancing their mortgages after having sheltered in the safe haven of fixed rates in the last few years, and this issue will continue to impact the Bank’s operations. During the year we worked on a whole range of different projects whose aim was to enhance our services and make us better able to meet the needs of our customers. We adopted a new strategy, new values and service standards which will shape the services we provide over the next few years. In 2023, the Bank reached all its key financial targets, reporting net earnings of ISK 25.7 billion and return on equity of 13.6%, above the Bank’s 13% target.
In a nutshell
Operating income
64.2
ISK bn.
Assets under management
1,383
ISK bn.
Return on equity
13.6%
Insurance revenue of Vörður
17.8
ISK bn.
Loans to customers
1,153
ISK bn.
Sustainability
Arion Bank wants to act as a role model by promoting responsible and profitable business practices, which take into account the environment, the economy and the society in which we work.
The Bank’s customers, shareholders, our human resources and society as a whole are of utmost importance to us. We place great importance on good corporate governance and effective internal controls.
AVERAGE LENGTH OF EMPLOYMENT AT ARION BANK IS APPROXIMATELY
10 years
TOTAL COMMITTED GREEN FINANCE
AMOUNTS TO
128.2
Isk bn.
REDUCTION OF GHG* EMISSIONS FROM OWN ACTIVITIES
75.5%
SINCE 2015
* GREENHOUSE GASES – SCOPE 1 AND 2
PAY EQUITY ANALYSIS INDICATES
0.2%
UNEXPLAINED GENDER PAY GAP
Customers' green savings
25
ISK bn.
THE BANK’S FINANCED EMISSIONS TOTALLED
153 ktCO2e
ACCORDING TO CALCULATIONS OF LENDING AND INVESTMENT EXCLUDING SOVEREIGN BONDS
Best banking app
seventh year in a row
By applying smart and reliable financial solutions we aim to enhance financial health and promote sustainable value creation.
We offer universal financial services and insurance to individuals, companies and investors who can get a comprehensive overview of all their finances in just one location. This is how we meet different needs and apply our expertise so that we can help the customer reach their full potential.
In 2023, the Arion app was voted the best banking app by bank customers for the seventh year in a row in a survey conducted by MMR. Various new features and updates were introduced during the year, including a new interface for payment cards, while other new fetures for debit and credit cards were enabled.
Retail customers and legal entities can now trade with equities and funds in the app and online banking.
