Arion Bank – Q2 2026 res­ults

Financial highlights for the second quarter of 2026

• Arion Bank reports net earnings* of ISK 8.1bn in Q2 2026, compared with ISK 9.8bn in Q2 2025

• Return on equity* was 15.5%, compared with 19.7% in Q2 2025

• Earnings per share were ISK 5.92, compared with ISK 6.59 in Q2 2025

• Net interest margin of 3.5%, the same as for Q2 2025

• Net commission income was ISK 4.0bn, compared with ISK 4.6bn in Q2 2025

• Vördur contributed a standalone profit of ISK 0.5bn in Q2 2026, compared with a profit of ISK 0.8bn in the previous year, and a combined ratio of 87.9% compared with 79.4% in Q2 2025

• Core income, defined as net interest income, net commission income and insurance service results (excluding opex of the insurance operation), increased by 0.8%, compared with Q2 2025

• Operating expenses increased by 10.9%, equivalent to ISK 732m, compared with Q2 2025

• The effective tax rate was 28.5% during the quarter

• Total cost-to-core income ratio was 40.4%, compared with 36.6% in Q2 2025

• Cost-to-income ratio was 37.2%, compared with 31.4% in Q2 2025

• The balance sheet increased by 3.6% during the quarter

• Loans to customers increased by ISK 65.4bn or 4.8% during the quarter

• The Bank’s capital ratio was 21.6%, and the CET1 ratio was 17.7% at the end of June. The ratios take into account the deduction of 50% of net earnings as foreseeable dividends in line with the Bank’s dividend policy and the remaining ISK 2.7bn buyback of own shares approved by the Board and FSA. These ratios comfortably exceed the requirements made by the FSA and Icelandic law

Financial highlights for the first 6 months of 2026

• Arion Bank reports net earnings* of ISK 15.4bn for 6M 2026, compared with ISK 16.2bn in 6M 2025

• Return on equity* was 14.6%, compared with 16.1% in 6M 2025

• Earnings per share in ISK of 11.25, compared with 11.22 in 6M 2025

• Net interest margin of 3.6%, compared with 3.3% 6M 2025

• Net commission income of ISK 7.9bn for the first half of the year, compared with ISK 9.1bn in 6M 2025

• Vördur contributed a standalone profit of ISK 0.4bn in 6M 2026, compared with a profit of ISK 0.2bn for the same period in the previous year and a combined ratio of 94.3%, compared with 89.4% for 6M 2025

• Core income, defined as net interest income, net commission income and insurance service results (excluding opex of the insurance operation), increased by 9.7%, compared with 6M 2025

• Operating expenses increased by 11.9%, equivalent to ISK 1.6bn, compared with 6M 2025, mainly affected by increase in salaries cost, professional services and IT expenses

• The effective tax rate was 31.1%

• Total cost-to-core income ratio was 40.2%, compared with 39.4% in 6M 2025

• Cost-to-income ratio was 37.8%, compared with 32.9% in 6M 2025

• The balance sheet increased by 5.3% from year-end 2025, mainly through loans to customers

• Dividend payment and share buybacks of ISK 23.0bn in total in 6M 2026

* Attributable to shareholders of Arion Bank

Benedikt Gíslason, CEO of Arion Bank

„The second quarter results were strong and we reached all our financial targets, including optimization of our CET1 ratio. The Arion Group offers customers a highly diverse range of financial and insurance services, and our core operations performed well during the quarter. As in recent quarters, deposits continued to grow, supporting lending growth, particularly to corporate customers. Vörður’s insurance operations and Stefnir’s fund management business also delivered solid performances. Our capital and liquidity positions remain strong, enabling us to continue investing in product development and expanding our market presence.

During the spring, Arion Bank and Vörður opened a new joint branch in Reykjanesbær. It is the first new branch Arion Bank has opened for many years. Vörður, however, has a long history in Reykjanesbær, having operated a branch in this thriving community since 1999. The opening of these new premises marks an important step in enhancing our services to residents of the Reykjanes region. All employees at the branch live in the area and therefore understand the needs of the local community.

Early last year, we launched Arion Rewards, a new and comprehensive loyalty programme designed to maximize the value Arion customers can derive from using our wide range of services. In the second quarter, we introduced a new feature, Arion Future, specifically tailored to young people aged 18 to 24. Through this initiative, we aim to support young adults as they take their first steps into the labour market and begin considering insurance, long-term savings and the purchase of their first home.

The Arion app was voted Iceland’s best banking app by bank customers in a survey conducted by Maskína – for the tenth consecutive year. The Arion app enables customers to manage all their day-to-day banking, trade shares, invest in Stefnir funds, and oversee their pensions and Vörður insurance policies. As always, we will use this recognition as motivation to make a great app even better, with the goal of meeting the financial and insurance needs of both our individual and corporate customers.

The Blikastadaland development area in Mosfellsbær has entered a sales process that is open exclusively to investors with experience in undertaking comparable projects and the financial capacity required to continue developing the site. Should the sales process prove successful, it will be the responsibility of the new owners, in cooperation with the Municipality of Mosfellsbær, to ensure high-quality development in accordance with the vision set out in the area’s new land use plan. In developing the plan, we have placed particular emphasis on the interaction between the built environment and nature, effective transport links, and a people-oriented environment that offers an excellent quality of life.”

Investor meeting / webcast in English on 30 July 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 30 July at 10:30 CEST (8:30 GMT) where Deputy CEO Ida Brá Benediktsdóttir and CFO Ólafur Hrafn Höskuldsson will present the results and 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