Highlights of 2021

Despite the continuing challenges posed by the Covid-19 pandemic, 2021 turned out to be an excellent year for Arion Bank. The partnership between Arion Bank and our customers generated a wide diversity of activities and projects during the year.

Solid investment returns

Arion Bank and the Bank’s subsidiary Stefnir are leading players on the Icelandic asset management market, with assets under management of ISK 1,352 billion. Investment returns in 2021 were solid, and assets under management grew by more than ISK 200 billion. Public interest in shares soared during the year and the equities turnover on Nasdaq Iceland was up 77% YoY. Domestic equities funds generated outstanding returns, both for the public and institutional investors.

Assets under management at the Bank’s Asset Management division increased by 30%. Asset Management offers a broad range of financial services for high net worth individuals, companies, funds and institutions. Assets under management at Institutional Asset Management grew by 19%. Nominal returns generated by pensions funds administered by Arion Bank were also solid, ranging from 4.8% to 21.0%. Assets under management grew 19.5% during the year.

Arion Bank had the largest market share in equities trading on the main list of Nasdaq Iceland for the sixth year in a row. The Bank also had the number one market share on the First North market and the second biggest share on the Nasdaq Iceland bond market.

Partnering dynamic companies on a diverse range of financing projects

Corporate Finance enjoyed a highly productive year. Arion Bank, DNB and Pareto advised on the NOK 600 million Arctic Fish IPO during the year, laying the groundwork for the company’s listing on the Euronext Growth market. Arion Bank also managed the ISK 3.4 billion Iceland Seafood International bond offering, the first unsecured corporate offering in over a decade. Arion Bank and Morgan Stanley managed a major bond transaction by Alvotech. The transaction involved the conversion of Alvotech bonds into equity which valued the company at ISK 300 billion.

June saw the IPO of Fly Pay hf. where Arion Bank and Arctica Finance acted as financial advisors. The ISK 4.3 billion offering was heavily oversubscribed, with demand eight times greater than the number of shares available. Arion Bank also advised on and managed the IPO of the computer game company Solid Clouds. The offering was four times oversubscribed and represented a milestone in the financing of growth companies in Iceland.

Mortgages and car loans

Mortgage lending amounted to ISK 211 billion, the largest sum the Bank has lent in a single year, with ISK 85 billion of this total representing new loans. During the year the Bank introduced a new loan feature, a mortgage payment holiday over the summer, where customers can choose to skip a repayment during the summer and have the amount added to loan principal.

The Bank’s vehicle financing division also had a record year, with new loans up 43% to ISK 8.9 billion over the 12 months. We welcomed more than 900 new customers with our competitive rates and flexible range of services.

Green Financing Framework

In July Arion Bank issued a Green Financing Framework which applies to the Bank’s funding and lending activities. The Framework sets out clearly and transparently the conditions which the Bank’s loans need to meet in order to be considered environmentally friendly. The Framework enables the Bank to lend to green projects.

Arion Bank granted Norðurál a green loan of ISK 16 billion, which the company will use to finance a new production line designed to result in 40% energy savings.

Partnership between Vörður and Arion Bank

The successful partnership between Arion Bank and the subsidiary Vörður went from strength to strength during the year. Vörður moved into Arion Bank’s headquarters in 2021, and customers can now get the financial and insurance advice they need at Borgartún 19 and the main Arion Bank branches. This partnership opens up numerous opportunities and enables the Bank to offer a unique range of products.

Best banking app in Iceland – invest in funds and shares with the app

The Arion app got even better during the year. Users can now use the app to invest in Stefnir funds and listed shares and view detailed information on the status of their investments. In the app customers can trade with shares on both the Main Market and First North on Nasdaq Iceland. This is the fifth year in a row in which bank customers have named the Arion app the best banking app in Iceland in MMR surveys.

Bringing the Bank to you

In 2021 Arion Bank began to offer video meetings with its advisors via Teams, and it has been a big hit with customers. We are able to offer a wide range of advisory services via video meetings, including advice on mortgages, savings and pension.

Over the last few years demand for banking services has evolved rapidly and customers are increasingly turning to digital services. Arion Bank has adapted its services to this shift in demand. As a result several changes were made to the Bank’s branch network, with the merger of the Blönduós and Sauðárkrókur branches in northern Iceland and in June the Kringlan Mall branch became self-service. Corporate and retail customers can now obtain a diverse range of financial and insurance services at the Bank’s headquarters.

New deposits and payment system

The launch of SOPRA, the Bank’s new deposits and payment system, was successfully completed in April 2021. It is one of the biggest IT projects the Bank has undertaken in recent years. SOPRA replaced an older system and it will bring enhanced efficiency and create new opportunities for product development.

Organizational changes – prioritizing customer experience

A new division was created at the Bank in 2021, Customer Experience. The aim is to further enhance customer experience through all the Bank’s service channels, and this change provides a platform to advance our service offering and customer experience to the next level.

All corporate services in the Reykjavík area were merged during the year, with the aim being to coordinate and enhance our service and to grow the Bank’s market share among SMEs.

Balance sheet

Arion Bank issued its first green bond under the Bank’s Green Financing Framework. It was a 4-year senior unsecured instrument amounting to €300 million. The Bank also issued its inaugural green bond in Icelandic krónur in the amount of ISK 3.6 billion. During the year Arion Bank also issued 5-year covered bonds in the amount of €300 million. The issue represented the first euro denominated covered bond issue by an Icelandic bank.

Capital optimization continues to be a focus for the Group and significant milestones are being achieved in this area. Share buybacks and dividends amounted to ISK 31.5 billion during the year.

Deposits increased by 13.8% from year-end 2020. Green deposits were up 61% during same period.

Arion Bank reached an agreement with Rapyd on the latter’s acquisition of Valitor, the Bank’s subsidiary, and a deal with Ferðaskrifstofa Íslands on its acquisition of Heimsferðir. Both agreements are subject to the approval of the Icelandic Competition Authority. The Bank also sold its holding in the Danish travel company Bravo Tours 1988.


Arion Bank was named 2021 Bank of the Year in Iceland by the Banker, a leading global finance news publication published by the Financial Times. The magazine highlighted the Bank’s performance in 2021 and its focus on ESG factors as reasons for its selection.

Arion Bank and Vörður received the FKA Equality Scale Award. This is the second year in a row which Arion Bank has been recognized in this way, and equality has long been central to the Bank’s ethos.

Arion Bank, Vörður and Stefnir were all recognized as model companies in good corporate governance. The award was given by Excellence Iceland, the Icelandic Chamber of Commerce, the Confederation of Icelandic Employers, and Nasdaq Iceland.

In December the business publication Viðskiptablaðið/Frjáls verslun announced that Arion Bank and CEO Benedikt Gíslason were winners of its annual business awards for 2021. The financial publication Markaðurinn also named Benedikt Gíslason as businessman of the year.

News in 2021