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Universal services to enterprises of all sizes

Landsbankinn is the country’s largest corporate bank, with an approximately 40% share of total lending to companies within the Icelandic banking system and around half of all lending in key industries such as fisheries and construction. Corporate lending continued to grow during the year and is expected to surpass the ISK 1,000 billion mark in the near future.

The Bank’s market share in the corporate market is 33.0% based on companies who have submitted annual financial statements.

Rapid growth in Landsbankinn’s merchant acquiring services continued and we began offering TM insurance products to corporate customers. Companies can now access all the financial services they need through us.

Leading in lending to the fisheries sector

Landsbankinn aims to be a leader in funding to Icelandic fisheries and seafood. We aim to increase lending to the industry in line with rising investment levels.

Loans to the fisheries sector account for around 20% of the Bank’s total corporate loan portfolio and the intention is to increase this share; such lending stood at ISK 190 billion at year-end 2025. Landsbankinn holds a strong market share in the fisheries sector and leverages its strengths—namely high flexibility and rapid responsiveness—to maintain its position despite increased competition from foreign financial institutions, which, due to their size and lower tax burden, are able to offer more favourable terms.

The year 2025 was a relatively good year for the Icelandic fisheries sector and considerably better than 2024. Improved performance can be attributed to generally successful fishing and processing operations, allocation of capelin quota during the year and fish prices reaching record highs.

The increase in fishing fees is expected to have a significant impact on the fisheries sector next year. Companies are likely to seek ways to improve efficiency and it is foreseeable that new investments will be postponed. In addition, the status of shared pelagic stocks such as mackerel and blue whiting is unfavourable and a contraction in catches can be expected. Both factors are likely to reduce demand for lending, at least temporarily.

Sea-based aquaculture continues to face major challenges. Most companies have largely brought production under control, but salmon prices have been low and for much of 2025 they were below production costs. Total production in 2025 amounted to approximately 50,000 tonnes, similar to the previous year. The focus in the coming months must be on achieving stability in production rather than increasing volumes. Development in land-based aquaculture continues, with very substantial investments.

Growing alongside the tourism sector

Landsbankinn is significantly involved in lending to the tourism sector. The book value of loans stood at ISK 110 billion at year-end 2025 and remained stable year-on-year. We aim to grow alongside the sector in the coming years, keeping in mind that steps to expansion must by slow and steady as the sector is subject to fluctuations.

In 2025, there was a slight decline in the number of foreign visitors to Iceland. This can be attributed, on the one hand, to the strong real exchange rate, which weakens Iceland’s competitive position relative to key competitor countries such as Norway and Finland. On the other hand, the collapse of the airline Play had an impact, as it reduced the supply of flights to Iceland in the latter part of the year. In addition, high interest costs and rising labour costs have further squeezed the sector.

The number of tourists in 2025 is estimated at 2.25 million, in good alignment with the forecast of Landsbankinn Economic Research. Despite the decline in visitor numbers, performance in the tourism sector is generally good. Mergers and increased integration have led to lower costs and have made companies better equipped to handle change and heightened competition.

Investment in the sector was substantial in 2025, primarily involving the construction of new hotels in the capital area and South Iceland, as well as investments in nature baths and geothermal lagoons. As before, Landsbankinn was a reliable financial partner in many exciting projects during the year.

Tourist numbers and forecast development leading up to 2028
2022	1,696,785
2023	2,224,036
2024	2,287,341
2025	2,250,000
2026	2,270,000*
2027	2,300,000*
2028	2,330,000*
*Forecast by Landsbankinn Economic Research

Universal corporate services

Landsbankinn’s offering of services to companies is highly diverse and in 2025, around 3,500 existing customers added new service solutions to their relationship with the Bank. Approximately 2,000 new companies began banking with Landsbankinn, in addition to a large number of sole proprietors across the country. Nearly half of new customers in merchant acquiring are also entirely new customers of the Bank. TM, a subsidiary of Landsbankinn, is a significant player in the insurance market and in 2025 we began offering TM insurance products to our corporate customers.

Corporate customers make extensive use of digital self-service solutions. Overall, the self-service ratio is close to 90% and it is almost as high or higher for the following services:

New deposit accounts

80.9%

International payments

98.1%

Credit card applications

83.1%

Onboarding of customers

91.0%

A leading force in merchant acquiring

In a short period of time, Landsbankinn has become a leading force in merchant acquiring in Iceland, with an approximately 25% market share at year-end 2025. Through the use of cutting-edge technology, outstanding service, and strong sales and marketing efforts, growth in merchant acquiring has exceeded even the most optimistic expectations.

In 2025, the number of transactions processed through the Bank’s systems tripled compared with the previous year and turnover in Landsbankinn’s merchant acquiring operations also tripled. Approximately 7,227 transactions were processed through the Bank’s systems every hour, around the clock, equivalent to about 120 transactions per minute. At the same time, the number of POS terminals operated through Landsbankinn’s acquiring services has grown to 3,300 across the country.

Data related to merchant acquiring is increasingly accessed via APIs that enable settlements to be booked directly into companies’ accounting systems. Further development of acquiring services is well under way, and we will continue to make card payments more efficient, convenient and effective by enhancing existing solutions and introducing new ones.

Higher lending to real estate companies

During the early part of 2025, activity in the real estate and construction markets was very strong, but momentum slowed as the year progressed. The main reasons include high interest rates, tighter borrowing conditions for property buyers and uncertainty stemming from court cases concerning interest rate change clauses in residential mortgages to consumers. As a result, sales have declined and the real estate market has effectively been at a standstill. The sharp drop in sales combined with a high interest rate environment has put construction contractors under pressure. It is important that this uncertainty does not persist unduly.

Real estate companies have grown significantly in recent years, both organically and through acquisitions. High interest rates and challenging conditions in bond markets have shifted the financing of real estate companies toward financial institutions, at least temporarily. Financial institutions, including Landsbankinn, have benefited from this development. At year-end 2025, loans to real estate companies amounted to ISK 260 billion, the highest level ever recorded. Lending can be expected to remain fairly stable in the coming 1-2 years and then to decrease alongside falling interest rates.

As in previous years, Landsbankinn’s largest projects in the construction industry involve financing major residential developments in the capital region, nearby municipalities and in Akureyri. In addition, the Bank finances the construction of commercial properties, which are often sold before construction begins or have long-term lease agreements in place for their use.

At year-end, the book value of loans to this sector stood at ISK 190 billion and had increased significantly compared with the previous year.

Large construction projects

projects

Smaller construction projects

projects

Apartments financed by us

3,520

apartments

Strong position in retail and services

The Bank’s position in retail and services is strong, with lending to these industries amounting to approximately ISK 135 billion at year-end 2025. Over the past four years, lending has increased by ISK 35 billion, and a significant number of new customers have been added during that period. The retail and service sector includes a wide range of customers in retail, transport, IT and other services.

The Bank’s expanded product offering, including insurance and merchant acquiring services, presents significant opportunities to further increase its market share in this segment, particularly among small and medium-sized enterprises.

Retail and service companies banking with Landsbankinn generally performed well in 2025, although several challenges are anticipated in the coming year. Consumer behaviour and purchasing patterns will continue to evolve, requiring retail and service companies to adapt. In addition, temporary difficulties in the industrial sector related to the shutdown of PCC at Bakki and a malfunction at Norðurál in Grundartangi are expected to have an impact on companies that have provided services to these entities.

High activity in vehicle and equipment financing

There was a significant increase in the sale of new passenger cars in 2025 compared with the previous year; however, it should be borne in mind that sales in 2024 were low across the board. Year-on-year growth amounted to 42.3% and sales in the final months of the year were well above the average. This development can largely be attributed to changes in vehicle excise duties that took effect on 1 January 2026. These changes led to a substantial increase in the retail prices of most petrol and diesel-powered vehicles, including both conventional cars and plug-in hybrids. Many buyers therefore chose to secure the purchase of a new vehicle before year-end, particularly car rental companies, which account for around 40% of all new passenger car sales in Iceland.

Despite this increase in passenger car sales, lending to companies for vehicle and equipment financing declined slightly. The contraction amounted to 5.4% over the year, with the loan portfolio totalling ISK 44.4 billion at year-end 2025.

Advisor on large business transactions

The year was busy and interesting at Corporate Finance. Corporate Finance acted as advisor on many of the year’s largest transactions, involving both listed and unlisted equity. Corporate Finance advised the Ministry of Finance and Economic Affairs in the structuring of a market-based offering of the state’s remaining stake (45.2%) in Íslandsbanki. Corporate Finance also served as sales adviser in Amaroq’s capital increase to both foreign and domestic investors, in addition to acting as listing manager for the admission of the shares to trading on the stock exchange. Furthermore, Landsbankinn Corporate Finance advised Landsbankinn on the Bank’s acquisition of TM.

The project pipeline for Corporate Finance has been very strong. A number of transactions are expected to be completed in the coming months, with considerable activity evident in the unlisted equity market. Corporate Finance is also working on preparations for the listing of two companies on the stock exchange: Stoðir fjárfestingarfélag and the Blue Lagoon. If market conditions allow, the year ahead is also expected to be a busy one for listings.

Exciting projects in the pipeline

"I began as Head of Corporate Finance at the end of 2024. In 2025, emphasis was placed on shaping and implementing a clear vision and strategy for Corporate Finance, with a focus on strengthening market outreach as well as sharpening organizational structure and operations. With an experienced and cohesive team of 12 people, these efforts have proceeded according to plan; the project pipeline is strong and activity levels at Corporate Finance are expected to be substantial in 2026.

Landsbankinn Corporate Finance assists the country’s larger companies and their shareholders with the largest and most complex matters that arise over the life cycle of a business. These include mergers and acquisitions, divestments, capital increases, stock exchange listings, bond sales and issuances, and other major transactions.

A significant strength lies in the fact that Corporate Finance is part of Landsbankinn. Customers benefit from integrated advisory services, with Corporate Finance working closely with other divisions of the bank, such as lending, capital markets, foreign exchange and equity trading, asset management, legal services, back-office operations and now also insurance services through TM.

In the unlisted company market, there has been considerable activity in recent years. Private equity funds have become increasingly important players in the market, creating more sale opportunities for owners of larger unlisted companies. However, during a period of modest economic growth and persistent inflation in recent years, some sellers have chosen to wait for a more favourable time to sell. Now, as inflation is expected to ease later in the year and expectations of policy rate cuts increase, this is a good time to begin careful preparation of sale processes.

Listings of companies on the stock exchange have also been waiting for improved market conditions. It is clear that a large portion of Icelanders’ savings has been held in deposit accounts offering high interest rates. In line with developments in interest rates, there are expectations that these funds will increasingly flow into the equity market. Corporate Finance is currently working on preparations for the listing of two companies on the stock exchange, and expectations are for even more listings in 2027."

Emphasis on cultivating relationships

As before, we place strong emphasis on the continued development of solutions for our customers. Many innovations that benefit customers were introduced during the year, for example in card solutions, and several exciting new developments are expected in the coming year.

The corporate service centre handled a large number of inquiries in 2025. In total, the service centre processed nearly 66,000 cases.

37,425

phone calls

18,250

emails

3,127

chats online

Customers made active use of various communication channels and greatly appreciate being able to reach us in the way and at the time that suits them best. In addition, we place strong emphasis on proactively engaging with both existing and new customers, through phone calls as well as in-person visits.

New online banking

During the year, a new corporate online banking platform was launched. A number of new features were introduced, including a shared workspace where company staff can collaborate in real time. These were extensive changes and through a coordinated effort by staff and valuable feedback from customers, the new features were implemented in record time. More details on the new corporate online banking platform can be found in the section on continuous development.

Well-attended corporate finance forum

This autumn, we hosted a well-attended Financial Forum at Reykjastræti, where owners and executives from four companies discussed how they use data to improve their operations. The forum is part of our efforts to host events where customers can share knowledge and experience with other customers. Arnheiður Klausen Gísladóttir, Head of Corporate Banking, also presented how Landsbankinn shares data with its customers and how the Bank leverages data to develop new customer solutions as well as to improve its own operations.

YAY and Landsbankinn create new company - Yayland

In June, Landsbankinn and fintech company YAY created a new company, Yayland ehf., which will specialise in the development, sale, issuance and operation of both digital and physical prepaid cards, gift certificates and loyalty cards. Yayland took over the entire gift card operation of YAY in Iceland as well as all issuance and operation of prepaid cards for Landsbankinn.

The company will meet the needs of companies of all sizes with both traditional and cutting-edge digital solutions. The solutions are scalable, secure and based on longstanding insight into the needs of the market and consumers.