#1Investor Presentation May 2023 Arion Bank#22 Arion Bank at a glance Diversified financial institution in Iceland with strong market position Retail Banking (including insurance) Comprehensive financial services to individuals Around one-third market share in Iceland Large provider of residential mortgages in Iceland Domestic digital leader in retail banking with focus on customer experience First to introduce fully digitalized credit assessment for mortgages, car loans in 5 minutes, awarded for the best banking app in Iceland for the last 6 years and offers premium services for affluent clients 71% of core products sold digitally in 2022 Insurance service to retail customers Operating income 2022 (ISKbn) ISK 25.5bn ISK 26.5bn Corporate & Investment Banking (including insurance) Corporate banking, advisory and insurance service to corporate customers Partner to large corporates and SMEs in Iceland and internationally in the Arctic region Arctic loan book has more than doubled in the last two years Leader in credit origination, using own balance sheet, private and capital markets, for clients. Significant growth in managed products Advised and managed 75% of public equity offerings in 2022 and preferred advisor in private transactions Markets and STEFNIR Arion Bank the largest asset manager in the Icelandic market with EUR 8.8bn in assets under management – estimated around 40% of estimated domestic GDP 2022 Emphasis on institutional investors and high net worth clients Capital Markets had the highest market share in the domestic market, both in equities and bonds Stefnir Funds is among largest fund management companies in Iceland with a variety of domestic and international assets under management ISK 8.8bn Strategic focus Increase market share in target client segments Enhance business we do with our clients by cross-selling products and services from the group and partners Enhance overall customer journey through: Efficient and targeted customer acquisition Increased customer engagement Optimized monetization Loyalty Insurance vörður Insurance premium 2022: ISK 15.6bn Fastest growing insurance company in Iceland - around 18.2% market share Around 65,000 customers Full range of insurance products and services Continued focus on a fully integrated bancassurance model with the Bank Bancassurance ratio at YE 2022: Individuals 33.7% Corporates 22.9% I I I I I I I#33 Strong GDP growth amid global turbulence GDP increased by 6.4% in 2022, a result that was in line with Arion Bank's expectations. Growth was driven by exports, namely increased growth in tourism, and record-breaking private consumption. With tourism regaining its former strength, the current account finished the year smaller than expected, despite robust economic activity as reflected in a significant trade deficit. GDP growth in 2022 - YoY %-change Tourist arrivals via Keflavík International Airport 300.000 Current account balance - bn. ISK at constant exchange rate, 150 Portugal Iceland Greece Spain Slovenia Austria Poland Hungary Netherlands UK Italy Denmark Euro Area Canada Norway Belgium Sweden France Czech Republic US Switzerland Finland Latvia Lithuania Germany 0% 1% 2% 3% 4% 5% 6% 7% 8% 15% 10% 5% 0% -5% -10% Employment and GDP - YoY growth -15% 2018 2019 2020 2021 2022 2023 -Total hours worked -GDP 250.000 200.000 150.000 100.000 50.000 30% 20% 10% 0% -10% -20% -30% Sources: Eurostat, Statistics Iceland, Central Bank of Iceland, Icelandic Tourist Board, Arion Research 0 January February March April May June July August September October November December -2019 2020 -2021 -2022 2023 Payment card turnover - YoY growth, growth contributions of underlying components jan.20 mar.20 maí.20 júl.20 sep.20 nóv.20 jan.21 mar.21 maí.21 Domestic júl.21 sep.21 nóv.21 jan.22 mar.22 Abroad -Total maí.22 júl.22 sep.22 nóv.22 jan.23 mar.23 100 50 -50 -100 170 160 150 140 130 120 110 tuhatt 2020 Balance on goods Balance on primary income Current account balance 2021 2022 Balance on services Secondary income, net The ISK against major trade currencies Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 USD EUR#4Outpacing our main trading partners The Icelandic economy is set for strong growth in 2023, despite the rocky global recovery. The IMF expects Iceland to have one of the highest GDP growth rates in advanced Europe in 2023. Domestic analysts are even more optimistic, with the consensus at 3.3% GDP growth in 2023. Growth will be driven by exports, mainly tourism, and household consumption, which started the year strongly. The payment card turnover of Icelandic consumers increased by 8% between years in Q1, adjusted for inflation and exchange rate fluctuations, partly due to substantial wage increases in the private market and significant household savings. Tourism is well on its way to reaching previous heights, with tourist arrivals in Q1 reaching 91% of Q1 2019. Around 2.2 million tourists are expected to visit the country in 2023, a 30% increase YoY. 4 Sources: IMF, Central Bank of Iceland, Statistics Iceland, Icelandic Tourist Board, ISAVIA, Arion Research GDP growth - IMF's forecast 8 3,5 6 4 -2 -4 20 ~ +6 3 2.5 2 1,5 1 0,5 -6 0 -8 2018 2019 2020 2021 2022E 2023E 2024E 2025E Iceland - Other Nordics Euro area - - Consensus forecasts* Payment card turnover and private consumption - quarterly data, YoY-% growth, constant prices/exchange rate Tourist departures via Keflavik International Airport - millions annually 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 -Isavia Actuals -Arion CBI -Icelandic Tourist Board 25% 20% 15% 10% 160 140 20% 120 100 15% 5% 80 0% 10% 60 -5% 40 5% -10% 20 -15% 0 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 2018 Payment card turnover Private consumption Consumer confidence (r.axis) - Household savings % of disposable income 2019 Saving ratio 2022 2020 2021 ---Average saving ratio 2015-2019#55 CPI by expenditure groups Nominal wage index - YoY %-change 16% 14% 12% 10% 8% 6% 4% 2% 0% 2020 2021 2022 2023 Housing Imported goods Other -Inflation Inflation target Facing a familiar foe Inflation has proven to be much more persistent than expected and price increases are now widespread. Although the contribution of housing prices is still substantial, domestic goods and services have taken over as the main driving force behind inflation. Even though inflation is expected to subside in the coming months, inflationary pressures are still pronounced, particularly due to the new private sector wage agreements, which have been used as benchmarks for other agreements. Long-term inflation expectations are still rising on some measures and are well above the Central Bank's 2.5% inflation target. High inflation, fear over de-anchoring of inflation expectations, robust domestic demand and inflationary wage agreements compelled the Central Bank to raise rates by 150 bps in Q1. Further rate hikes are expected. 12% 10% 8% 6% 4% 2% 0% 7% 6% 5% 4% 3% 2% 1% Sources: Statistics Iceland, Central Bank of Iceland, BoE, ECB, Federal Reserve, Arion Research Long-term inflation expectations 8% 7% 6% 5% 4% 3% 2% 0% 1% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 0% Market agents - 5 years ahead Households - 5 years ahead Market agents - 10 years ahead Businesses - 5 years ahead CBI's inflation target 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Key interest rates 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 -US Euro Area UK -Iceland#6Cooling, not freezing The housing market is rapidly cooling, largely due to the Central Bank's actions. Not only has the Bank raised rates by 475 bps in the past twelve months, it has also implemented borrower-based measures. Still, the resilience of the housing market has come as a surprise to many, with the three-month price change turning positive again in March. One reason for the strong numbers could be the fact that households have responded to the rate hikes by increasingly moving to inflation-indexed mortgages, which have lower debt burden at the start of the credit period. Other important reason is population growth. In 2022 the population of Iceland increased by 3.1%, the largest increase since 1734 (as far back as the records go). Despite significant house price increases households' debt position has been developing favorably. Sources: Central Bank of Iceland, Statistics 6 Iceland, HMS, Arion Research 6% 5% 4% 3% 2% 1% 0% -1% -2% 30% 25% 20% 15% 10% 5% 0% -5% Jan-20 Housing price index in the Capital area - % change Mar-20 May-20 Jul-20 Sep-20 Nov-20 باللسسسلة Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 MoM -Past 3 months -Past 6 months Past 12 months Housing and population growth - % change between years, 15-64 year old 2006 2007 2008 2009 2010 2011 -Population 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -No. of dwellings 140 120 100 80 60 40 20 60 60 50 50 40 30 30 20 20 10 0 -10 -20 New mortgage loans less prepayments - bn. ISK 2020 2021 2022 -Unindexed residential mortgage loans-Indexed residential mortgage loans Private debt -% of GDP 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Iceland: Corporate debt Iceland: Household debt 000 - Other Nordics: Corporate debt - Other Nordics: Household debt#7-150% -200% -100% -50% 0% 50% 2000 2001 2002 2003 2004 2005 2006 2007 7 Sources: Central Bank of Iceland, Arion Research 400% 350% 300% 250% 200% 150% 100% 50% 0% 2008 Household and non-financial corporate debt - % of GDP The economy is built on stronger foundations than before Households ■Companies Net international investment position - % of GDP 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2016 2017 4 1 8 965 +3 2-0 - Ņ -1 -2 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 140% 120% 100% 80% 60% 40% 20% 0% 2012 -Total FX reserves 2013 2014 2015 • Iceland 2009 2010 2011 2012 2013 2016 2017 2018 Advanced Economies 2014 Net FX reserves CBI's FX reserves - bn. EUR General government debt - % of GDP Denmark, Finland & Sweden (average) m 2015 2016 2017 2018 2019 2020 2021 2022 IMF projections#8We are confident about the economy's ability to generate new exports IP-intensive and other new exports are a significant part of the economy Recent growth has been impressive Ambitious plans going forward 8 Composition of Iceland's exports in 2022 - % Exports of selected sectors in real terms - bn. ISK at 2022 prices* Other goods and services 23% Seafood Transport excl. tourism Buiness services ICT* Manufacturing goods 486 455 +5% CAGR 431 77 424 Aquaculture 402 388 382 346 335 26% Energy intensive industries 312 315 26% Travel & tourism 26% Other 2022 *Sources: Statistics Iceland, Central Bank of Iceland, Arion Research calculations. Other exports excluding airplanes and ships. ICT=Telecommunications, computer and information services 00 80 5557 51 39 23 114 105 </> 70 63 6 Great potential in biotech and other health related sectors Other IP intensive industries, such as tech, are reaping benefits of increased R&D activity Continued growth in aquaculture, both on land and offshore. 121 49 P Many exciting projects relating to renewables and fighting climate change, such as carbon capture 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -5-#9Key results in Q1 Key results 22 Strong quarter Return on equity - 13.7% ROE in the quarter - Key medium-term targets exceeded in the first quarter - - Driven by ongoing positive momentum in Core Income which increased 18% between years Strong liquidity and funding position and healthy deposit growth Core operating income / REA Insurance premium growth (YoY) Cost-to-core income ratio Robust capital position and prudent capital management - - - Conservative capital management in the near term given the volatile external industry landscape following recent events in Europe and US and the rapid change in the global and domestic interest rate environment Medium-term CET1 management buffer target retained but expected to operate above these targets in the near term Extraordinary shareholder distributions for the near term not anticipated CET1 ratio ¦ Dividend payout ratio³ 6 Medium term targets Q1 2023 Exceed 13% 13.7% Exceed 6.7% on core income Premium growth (net of reinsurance) to exceed the growth of the domestic market by more than 3%1 Below 48% on core income 150-250 bps management buffer22 50% 6.9% ✓ 11.6% 47.0% 270 bps 50% of net profit deducted from CET1 ! Medium-term targets are reviewed annually, and the underlying horizon is up to 3 years 1 Premium growth in the domestic insurance market in 2022 was 7.5% from 2021 2 Approx.17.3-18.3% based on current capital requirements. 3 Pay-out ratio of approximately 50% of net earnings attributable to shareholders through either dividends or buyback of the Bank's shares or a combination of both. Additional distributions will be considered when Arion Bank's capital levels are above the minimum requirements set by the regulators in addition to the Bank's management buffer#10Key takeaways in Q1 2023 10 Profitability Strong core income generation Strong quarter with net profit of ISK 6.3bn resulting in ROE of 13.7% Continued positive development in Core Income¹, increasing by 18.3% YoY and 1.0% from Q4 2022 Net interest income NIM robust in evolving market backdrop Net interest income increases by 15.6% YoY and 4.7% from Q4 2022 Robust net interest margin of 3.1% Loan growth in the quarter of 2.8% supported by continued solid deposit growth of 2.6% Net commissions Continued momentum Net commissions again strong in the quarter at ISK 4.4bn, growing by 22.6% YoY and 9.6% from Q4 2022 All key fee generating businesses delivering strong results, especially in CIB and Asset Management Balance sheet Robust position Liquidity position strong with an LCR of 174%. Average duration of liquidity bond portfolio within one year and no HTM accounting Wholesale maturity profile light over coming year which allows for optionality in funding plans Robust and diversified deposit base Capital position strong with a CET1 ratio of 18.6% or 270bps above regulatory minimum Prudent capital management near term with management buffer above medium-term target 1 Net interest income, net fee and commission income and net insurance income I I#11Income statement Q1 2023 Q1 2023 Q1 2022 Diff Q4 2022 Diff Net interest income 11,015 9,528 16% 10,524 5% Net profit of ISK 6.3bn resulting in ROE of 13.7% Core income (NII, NCI and net insurance income) increases 18.2% YoY Strong growth in NII YOY, mainly due to increased base rate and 14% growth in the loan book from Q1 2022 Continuing strong NCI performance across the Bank Strong growth in insurance premiums of 11.6% but with higher claim rate, which is seasonally high in Q1 Net financial income strong, both from equity and bond holdings Operating expense increased by 17% YoY, partly due to new labor agreements, increased number of FTE's and one-off projects in the quarter Effective income tax rate of 26.7% Net commission income Net financial income Bank levy Net impairment Income tax expense Net earnings from continuing operations Discontinued operations net of tax 4,353 3,552 23% 3,972 10% Net insurance income 118 5 833 (86%) 839 991 (15%) 157 Share of profit of associates (17) 203 3 Other operating income 36 235 (85%) 51 (29%) Operating income 16,344 14,514 13% 15,540 5% Salaries and related expense (4,099) (3,540) 16% (5,373) (24%) Other operating expenses (3,176) (2,661) 19% (2,878) 10% Operating expenses (7,275) (6,201) 17% (8,251) (12%) (449) (393) 14% (496) (9%) (52) (495) (89%) 411 Net earnings before taxes 8,568 7,425 15% 7,204 19% (2,287) (1,703) 34% (1,815) 26% 6,281 5,722 10% 5,389 17% 10 96 (366) 6,291 5,818 8% 5,023 25% 11 All amounts in ISK m Net earnings Return on equity 13.7% 12.7% 10.7%#12Net interest income Continued momentum but rate sensitivity slowing as expected Net interest income in Q1 increased by 16% from Q1 2022 and 5% between quarters from Q4 2022 Policy rate increased from 2.0% at the beginning of Q1 2022 to 7.5% at the end of Q1 2023. During the quarter there was a hike of 150 bps Rate sensitivity slowing as interest expense increasing on both deposits and wholesale funding. Forward guidance for NIM continues to be around 3% level Average interest-bearing assets increased in Q1 by 15.7% from Q1 2022 and by 3.1% from Q4 2022 Net interest income 11.0 10.4 10.5 9.5 9.8 3.1% 3.2% 3.1% 3.1% 3.1% Main interests* (%) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Net interest margin Q1 2023 Q1 2019 Q1 2020 Loans Q1 2021 Deposits Q1 2022 *Excluding net inflation effect Net interest income development (ISK m) 269 (847) 1,713 (802) 242 (768) 684 12 All amounts in ISK bn 10,524 NII Q4 2022 9,528 Q/Q development from Q4 2022 to Q1 2023 202 (5,180) 7,569 (1,993) (904) 544 1,249 Y/Y development from Q1 2022 to Q1 2023 NII Q1 2022 Loans to credit institutions and CB Loans to customers Securities Deposits Borrowings Subordinated and other Q1 2023 Borrowings 11,015 NII Q1 2023 11,015 Net inflation NII Q1 2023 effect#13Net fee and commission income Diversified fee generating operations support continued momentum Strong quarter in all fee generating businesses Very strong income from lending and guarantees with several large CIB projects in the quarter Continued strong and stable income from asset management, with one of the strongest historical quarters for the business Capital Markets had the highest market share in equities in the domestic market and third in bonds Total fee split in the quarter 73% from corporates and 27% from individuals 13 All amounts in ISK bn Net fee and commission income (ISK m) Net fee and commission income (ISK m) 4,539 4,353 4,353 343 3,076 3,277 3,552 4,002 3,971 2,218 364 630 3,552 787 839 330 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1 2023 286 314 1,461 386 351 Assets under management (ISK bn) 1,343 1,046 874 917 1,189 561 654 1,350 1,318 686 1,184 677 1,046 999 1,255 1,352 1,237 1,179 1,166 139 (17) 3 -21 44 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 I Cards and payment solution Lending and guarantees ■Asset management Collection and payment services 31.03.19 31.03.20 31.03.21 31.03.22 31.03.23 Net fee and commission income and net insurance income / Operating expenses (%) 65.3 61.5 57.6 57.4 Captial markets and corporate finance 36.0 Other Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1 2023#14Net insurance income Strong growth in premiums written during the quarter Strong 15.5% growth in premiums written YoY - - Corporate sales have increased considerably following the transition of the corporate insurance team to Arion Bank's CIB division Insurance products are now visible in the Arion app The first quarter of the year is normally a seasonal high in terms of claims and combined ratio Combined ratio was 116.3% in Q1 2023 compared to 115.3% in Q1 2022 Lower claims ratio but increase in cost ratio, mostly one- off cost due to changes in management and marketing cost Limited effects of IFRS 17 on income items but insurance liability and accounts receivables were impacted 14 All amounts in ISK m Combined ratio (%) 115.3 116.3 18.9 96.1 98.4 22.5 86.8 1.2 3.2 16.0 21.4 17.9 0.3 1.1 2.8 95.2 90.6 79.0 68.6 74.2 Net insurance income 5 1,086 833 690 118 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Cost ratio Reinsurance ratio Claims ratio Claims paid Premiums written +15.5% 5,400 4,675 744 415 669 322 326 257 +12.1% 2,889 2,577 271 2,630 198 332 2,331 287 50 132 94 89 1,004 1,195 1,603 1,594 1 11 642 346 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Life Accident Liability Motor Marine ■Property Life Accident Liability Motor Marine ■ Property#15Net financial income Improving market conditions support results Net financial income (ISK m) Solid performance both in equity and bond holdings Bond holdings fluctuate between quarters in line with changes in liquidity management No held-to-maturity (HTM) accounting within bond portfolio, with all market value changes incorporated in capital position Average duration of total ISK 123bn portfolio is 203 days, 98 days for ISK 77bn FX bond portfolio and 388 days for ISK 46bn portfolio Total investment portfolio of Vördur is ISK 26.3bn; ISK 18.5bn of bonds and ISK 7.8bn in equity instruments, yielding a profit of ISK 722m in the quarter Equity holdings in the market making business vary between quarters, increased slightly from year end 2022 to ISK 2.2bn Active reduction of unlisted equity holdings and expected to continue near term 15 All amounts in ISK bn Bond holdings 991 427 564 839 157.2 151.7 148.3 722 14.6 138.2 157 16.0 18.5 146 117 17.5 (802) 11 106.0 51.4 76.5 46.6 (1,966) 16.6 43.8 (530) (1,332) (945) (2,911) 50.7 82.4 77.1 72.4 60.8 32.8 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 5.3 1.9 5.9 31.12.20 31.12.21 31.03.22 4.5 6.1 31.12.22 31.03.23 ■Arion Bank and other subs. ■ Vördur ■Market making FX ISK ■ Vördur Net financial income by type Q1 2023 (ISK m) Equity holdings 26.7 25.1 8.7 18.6 8.8 17.8 17.2 2.3 6.7 2.0 7.8 7.8 0.8 7.4 425 336 9.4 0.7 0.2 4.5 2.2 6.1 5.8 2.7 2.2 6.1 1.5 1.2 3.9 74 4 2.7 1.7 2.2 Equity holdings Bond holdings Derivatives and FX difference 31.12.20 31.12.21 31.03.22 31.12.22 31.03.23 hedge ■Market making Listed accounting ■ Unlisted ■ Unlisted bond funds ■ Vördur#16Operating expenses Cost-to-Core income ratio (%) Total operating expenses Growth in total OPEX mainly due to new labor agreements and several projects in the quarter Ongoing focus on OPEX and efficiency Cost-to-core income for the Q1 2023 was 47.0% compared with 47.4% in Q1 2022 Core income per employee 19.7m vs 17.5m in Q1 2022 Salary expense increases between years mainly due to new labor agreements and increased number of FTE's, mostly in IT ISK 120m one-off charge related to back-dated impact of labor agreements Going forward impact of labor agreement is approx. 60m per quarter Other OPEX increases from Q4, partly due to general inflation but also several projects One-off projects accounted for mostly within professional services increase the cost for the quarter by approx. ISK 150m Additionally, a fine of ISK 80m from the Icelandic Competition Authority was expensed in March 47.4 43.1 38.4 Q1 2022 Q2 2022 Q3 2022 Other operating expenses (ISK m) 8.3 7.3 6.6 1.6 6.2 5.8 53.8 3.2 2.8 2.9 2.7 47.0 2.7 3.5 3.8 3.8 4.1 3.1 Q4 2022 Q1 2023 Q1 2022 Q2 2022 Incentive scheme Salaries and related expenses Q3 2022 Q4 2022 Q1 2023 ■Other operating expenses Core income per FTE 3,176 2,878 2,806 2,661 2,710 733 513 500 420 777 781 789 753 746 564 445 419 447 416 440 301 340 304 318 183 363 225 291 284 282 20.6 20.1 20.2 19.7 150 194 175 161 145 17.5 1,100 1,062 1,110 1,157 1,188 16 All amounts in ISK bn Q1 2022 Q2 2022 Q3 2022 IT cost Professional services Q4 2022 Q1 2023 ■ Housing cost ■Marketing cost Q1 2022 Q2 2022 Q3 2022 Q4 2022 Core income per FTE (ISK m) Q1 2023 ■Depreciation/amortization Other expenses#17Balance sheet Continued growth in deposits supports lending growth - Robust and simple balance sheet Loan growth supported by ongoing positive momentum in deposits - Loans to customers increased by 2.7% in Q1 Assets Cash & balances with CB Loans to credit institutions Loans to customers Financial assets Other assets - Deposits increased by 2.6% in Q1 Total Assets Liquidity position remains strong: Liquidity coverage ratio (LCR) of 174% (110% in ISK) Net stable funding ratio (NSFR) of 117% 17 All amounts in ISK bn 31.03.2023 31.12.2022 Diff. 31.03.2022 Diff. 80 114 (30%) 64 25% 63 46 38% 36 75% 1,114 1,085 3% 976 14% 205 193 6% 186 10% 39 32 22% 79 (51%) 1,501 1,470 2% 1,341 12% Liabilities and Equity Due to credit institutions & CB 24 12 107% 4 466% Deposits from customers 775 755 3% 680 14% Other liabilities 84 74 13% 80 5% Borrowings 391 393 (0%) 370 6% Subordinated liabilities 47 47 (1%) 34 39% Total Liabilities 1,321 1,281 3% 1,168 13% Equity 180 188 (4%) 173 4% Total Liabilities and Equity 1,501 1,470 2% 1,341 12%#18Loans to customers Growth in corporate lending in the quarter but expected to slow Loans to customers increased by ISK 29bn or 2.7% during the quarter - Loans to corporates 4.5% and loans to individuals 1.1% Total loans increased by ISK 4.8bn due to inflation, of which ISK 3.7bn mortgage lending. Loans. decreased by ISK 4.3bn during the quarter due to stronger ISK, primarily corporate loans. Lending activity starting to slow on the mortgage side and expected to slow on the corporate side as the rate increases start to impact economic activity. The Bank is agile and will continue to view growth opportunistically considering evolving risk/return dynamics Share of CPI linked (indexed) products expected to grow in current rate environment and with recent change in legislation Continued CIB strategy of capital velocity with corporate loans worth ISK 4bn sold to institutional investors during the quarter The diversification of the corporate loan book continues to be good and in line with the Bank's credit strategy 18 All amounts in ISK bn Loans to customers Loans to customers by sector (%) 1,114 1,085 976 936 823 11.4 12.0 3.8 3.8 7.8 8.4 525 502 8.4 8.0 442 410 5.1 5.5 9.7 9.4 390 69 69 63 65 55 Other sectors ■ Finance & Insurance ■Wholesale & Retail ■Fishing Construction 53.7 52.9 514 520 463 469 378 ■Real Estate activities ■Individuals 31.12.20 31.12.21 ■Individ. Mortgage 31.03.22 31.12.22 31.03.23 Individ. other ■Corporate Loan growth (%) 7.9 31.12.22 31.03.23 Loans to customers by interest rate type at year end 530 37 11 520 82 6.1 132 ■Floating indexed 4.5 2.8 1.5 4.3 4.0 2.7 1.9 1.1 ■Fixed indexed 471 155 ■Floating nominal ■Fixed nominal 150 11 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Corporates Mortgages ■Growth Individuals ■Growth Corporates#19Residential mortgages Low default rates and comfortable LTV levels, but increased risk due to rising costs for borrowers Macroprudential measures: Loan-to-value capped at 80% (85% for first-time buyers, which was already applied by Arion) Residential mortgages by interest rate type (ISK bn) Nominal rate loans are 59% of the mortgage portfolio at end of Q1 2023. Demand for indexed loans is picking up again. Interest rate reset profile for fixed rate mortgages (ISK bn) The bulk of fixed nominal rate loans are reset in 2024 and 2025. 514 520 464 90 77 82 80 64 -40% -41% 379 -36% 70 127 132 71 103 60 -49% 50 113 Debt service-to-income < 35% (40% for first-time buyers). In June 2022, the Central Bank introduced prescribed minimum interest rates for debt-service which primarily affects indexed loans. 159 155 40 166 30 -64% -60% -59% 127 20 -51% 151 150 130 10 67 0 31.12.2020 31.12.2021 31.12.2022 31.03.2023 2023 2024 2025 2026 2027 >2027 ■Fixed nominal ■Floating nominal Fixed indexed ■Floating indexed Nominal rates ■Indexed rates Affects mostly first time buyers and higher loan applications Furthermore, the Bank has adjusted its criteria for household expenditures in its payment assessment taking into account rising cost of living. Internal stress test of fixed nominal portfolio shows that if interest rates remain high into 2025, up to one third of borrowers need to seek lower monthly payments, e.g. through refinancing to indexed loans. In this stress test floating nominal rates reach a maximum of 10.7% Rate of defaults and payments past due Non-performing loans are 0.9% of the mortgage portfolio, the same level as before Covid-19. Loans past due are relatively stable. 1,2% 1,0% Loan to value distribution 1 Loan-to-value below 80% accounts for 86% of the mortgage portfolio. 40% 35% 34% 0,8% 30% 25% 0,6% The stress test reveals that, following refinancing to lower debt servicing, further measures may be needed for 0.5-1% of borrowers 20% 19% 18% 0,4% 16% 15% 13% 0,2% 10% 0,0% 09.2022 10.2022 11.2022 12.2022 01.2023 02.2023 03.2023 5% 30 days past due 90 days past due 60 days past due •Problem loans 0% Less than 50-60% 60-70% 70-80% 80-90% 50% 19 1. Total exposure of a loan is in one bracket 1% More than 90%#20Real Estate Sector Diversified portfolio Overall real estate related lending in the corporate loan book comprises a total of 105bn or around 9.4% of the loan book with an average LTV of 66%. The portfolio is highly diversified 52% of the portfolio comes from SME retail exposures (< ISK 600m per loan) The portfolio is mostly towards companies that lease properties to operating companies within the same group (parent, subsidiaries or sister companies). Exposure to office real estate is small or around 12bn or 1% of the loan book. More than half of financed office real estate is on long-term lease to government institutions Over the past couple of years, the portion of borrowers with CPI linked loans have decreased significantly. With the recent hikes in interest rates these companies have the option of moving back to CPI linked products to manage increased debt service levels. Loans to customers (ISK bn) Loans to real estate companies are approx. 9.4% of total loans to customers and 1.1% are against office buildings Total loan portfolio Borrower type The Bank is primarily focused on CRE exposures that are owned and occupied by operational companies that are customers of the Bank % of Total Loans to customers 28.0 2.5% 19.3 1.7% 11.9 1.1% Property management 39% 20.1 18.8 1.8% 1.7% OpCo/PropCo 61% 6.5 0.6% 104.6 9.4% ISK billions Residential Retail Office OLI Industrial Hotel Total loans to CRE 91% ISK 1.114bn 8% 1% NON Office CRE Office CRE Mixed Use NON CRE Development of indexed loans and 90 days past due It is highly likely that customers will revert back to indexed loans if interest rates remain high. Historically the portfolio's indexation ratio has exceeded 50%. The delinquency rate remains low 8% Debt servicing: Indexed vs. floating rate Companies have the option of moving into ISK indexed. The graph below shows the monthly debt service of ISK 1m debt in various form 20 70% 7% 60% 6% 50% 5% 40% 4% 30% 3% 20% 5.678 2% 10% 1% 0% 0% Q1 20Q2 20Q3 20Q4 20Q1 21Q2 21Q3 21Q4 21Q1 22Q2 22Q3 22Q4 22Q1 23 Indexation ratio of portfolio (right axis) 90 days past due ratio CBI policy rate 9.429 7.042 5.591 Floating, maturity 25 years,equal amortization, lowest interest rate 2021 Floating, maturity 25 years,equal amortization, current interest rate Indexed, maturity 25 years, equal principal payments, indexed rate Indexed, maturity 25 years, equal amortization, indexed rate#21Loss allowance by IFRS 9 stages On loans to customers total Loans to customers are 0.6% provisioned at period end 12.2 6.9 3.3 Thereof on loans to corporates Loans to corporates are 1.0% provisioned at period end IFRS9 economic scenarios and assumptions Worsening economic outlook is captured in a movement of weights from the optimistic case to the base and pessimistic case. It is also captured by a somewhat more negative view within the pessimistic scenario 9.7 5.6 5.7 5.1 5.2 IFRS9 scenario likelihood Optimistic Base case Pessimistic YE 2021 YE 2022 Q1 2023 20% 10% 10% 60% 65% 60% 20% 25% 30% 3.3 2.0 2.3 2.9 1.2 1.1 7.6 1.6 7.1 6.9 1.9 1.9 1.2 0.8 31.12.20 31.12.21 31.12.22 31.03.23 Changes to loss allowance on loans to customers in Q1 Included are FX changes and calculated interest on Stage 3 provision, which are not reflected in Net impairment line in the Income Statement. Off-balance impairments and effect of payments of loans previously written off are excluded from this analysis. 4.5 3.1 3.4 1.5 1.4 Thereof on loans to individuals Loans to individuals are 0.3% provisioned at period end 1.8 6,9 2.5 1.9 1.8 1.9 2.3 2.4 2.0 1.3 1.3 1.2 0.4 0.8 8:3 220 1.0 1.1 83 8:3 31.12.20 31.12.21 31.12.22 31.03.23 31.12.20 31.12.21 31.12.22 31.03.23 ■ Stage 1 ■ Stage 2 ■ Stage 3 21 All amounts in ISK bn 0,3 (0,3) (0,1) 0,5 (0,2) 7,1 Loss allowance 31.12.2022 New financial assets, originated or purchased Scenarios - worsening economic outlook Derecognitions and maturities Write offs Other Loss allowance 31.03.2023 * Included are FX changes and calculated interests on Stage 3 provision, which are not reflected in Net impairment line in the Income Statement. Off-balance impairments and effect of payments of loans previously written off are excluded from this analysis.#22Risk profile Strong credit quality indicators while a slight trend towards higher rate of payments past due observed Despite increased provisioning through management's forward looking macro-economic assumptions, risk indicators of credit quality remain at healthy levels. In Q1 2023, the problem loans ratio however increased for the first time since before Covid-19. The increase is primarily due to a single exposure which has been deemed unlikely to pay. In Q1, a slight increase to payments past due for consumer lending and SME loans is observed, indicating that the credit cycle is past an inflection point. Loans with moratoria and forbearance measures which are not in Stage 3 continue to decrease as the economy recovers from the effects of Covid-19. At the end of Q1 2023, they were 2.0% of total loans to customers. Total expected credit loss is expected to approach between 20-25bps in the long term based on current loan book composition. At the end of Q1 the expected 12 month credit loss ratio of 28bps reflects the current challenging conditions. Development of non-performing loans, moratoria and forbearance (% of total loan book) 1.8 2.7 4.1 3.2 4.3 3.2 2.9 2.3 2.0 0.03 2.6 2.8 1.9 1.4 1.4 1.2 1.4 31.12.20 30.06.21 31.12.21 30.06.22 30.09.22 31.12.22 31.03.2023 ■Stage 3 Non-performing Moratoria Forbearance 12-month expected credit loss for performing loans to customers (on balance sheet) (bps) 80 70 60 50 40 30 20 10 0 31.12.20 30.06.21 31.12.21 Corporates 46 bps 28 bps 5 bps 30.06.22 31.12.22 31.03.2023 • Total Individuals Mortgages - 22#23Deposits from customers Continuing growth in deposits Deposits represent 58.7% of the Bank's total liabilities Deposits Deposits by insurance scheme 775 335 755 35 34 680 655 74 70 72 25 40 45 568 66 45 53 33 21 28 155 52 150 127 56 115 Growth in deposits from customers during the first quarter of 2023 was 2.6% and 14.0% from the same quarter in 2022 77 130 131 155 113 121 131 74 265 Loans to deposits ratio of 144% at the end of the quarter and has been stable over the last few years 287 306 308 326 335 Higher rates and change in legislation regarding CPI linked products expected to retain competition in the deposit market Even split between savings and current accounts at the end of the quarter, was 47/53 at year-end 2022 Loans to deposits ratio (%) 74 92 137 45 35 74 39 45 35 31.12.20 31.12.21 31.03.22 31.12.22 31.03.23 Individuals ■Individuals ■SME's 18 SME's Corporates Pension Public funds sector ■Insured ■ Uninsured Other Corporates Sovereigns, CB and PSE ■Pension funds ■Other Total deposits by insurance scheme 23 All amounts in ISK bn 157 128 145 118 143 112 144 115 144 114 31.12.19 31.12.20 31.12.21 31.12.22 31.03.23 Loans-to-deposits ratio (without covered bonds) -Loans-to-deposits ratio Uninsured 58% Insured 42%#24Borrowings Balanced maturity profile with broad funding options Borrowings by type 393 391 370 357 Maturities of borrowings and call dates on subordinated liabilities 125.1 122.1 299 164 96.0 142 180 Q4 154 - Arion Bank issued private placements amounting to NOK 200 million and SEK 300 million in Senior Preferred in Q1 2023 145 - Total issuance of Covered Bond format ISK 32.9bn in Q1 2023 of which ISK 21.6bn for own use - - Positive spread development in early 2023 but now widening following US banking sector volatility and Credit Suisse/UBS merger The Bank will continue to regularly issue in the domestic market and opportunistically access the international markets 67 66 Q2 22 44 66 21.0 14.0 13.0 154 160 161 161 147 36.9 8.1 0.4 0.4 0.4 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 >2033 ■Covered bonds ISK Covered bonds EUR ■Subordinated liabilities ■Senior unsecured 31.12.20 31.12.21 31.03.22 31.12.22 31.03.23 Development of EUR funding spreads (bps) ■Covered bonds - ISK Covered bonds - EUR ■Senior unsecured 500 Bills and other 450 April 2023 400 350 Ratings 300 250 S&P 200 Long term BBB A 150 100 Covered bond A N/A 50 Short term A-2 A-1 0 30.9.21 31.3.22 30.9.22 31.3.23 Outlook Negative Stable Moody's Arion covered 26 Arion Senior 25 Deposits - long term A3 N/A Source: Bloomberg Issuer long term 24 All amounts in ISK bn Outlook Baa1 Positive A2 Stable#25The Bank received strong ESG ratings and the green asset pool grew by 16% in 2022 The Bank will continue to focus on sustainability in its operations and measure its impact. We aim to raise the ratio of green lending to 20% of the Bank's total loan portfolio by 2030 in line with our green financing framework. MORNINGSTAR SUSTAINALYTICS ESG INDUSTRY TOP RATED 2023 Sustainalytics places Arion Bank in the top 6th percentile of banks (around 1,000 banks globally) and the top 4th percentile of regional banks (around 400 banks). On a scale of 0-100, Arion Bank received 12 points, with fewer points signifying lower risk which places the Bank in the low-risk category. Reitun Arion Bank has achieved the score "outstanding" in Reitun's ESG rating, scoring 90 out of 100 possible points and placing it in category A3. The rating is based on the Bank's performance in environmental, social and governance (ESG) issues in its operations. This is the third year in row the Bank has achieved this score. Diversified pool of eligible green assets (total ISK 151bn) at YE 2022 14% Energy efficency 4% Pollution precention and control 3% Clean transportation Green bonds represent 24.7% of borrowings Arion Bank's emissions from loan portfolio in 2021 25 Fishing industry 9% Other sectors 2% Wholesale and retail trades 3% Transportation 9% Real estate and construction 3% Motor vehicle ✓ PCAF 4% Agriculture 28% Partnership for Carbon Accounting Financials Residential mortgages 0,4% Industry, energy and manufacturing 42% The Bank's total financed emissions in 2021 was 279.4ktCO₂e 92.5% of total loan portfolio has been measured Green deposits (ISK bn) 5 8 21 2020 2021 2022 36% Sustainable fishery and aquaculture 24.7% 43% Green buildings Green assets represent 12.5% of the Bank's loan book 12.5% O#26Own funds Strong capital ratios Total capital ratio (%) Capital position stable between quarters despite balance sheet growth and share buybacks REA increased by 2.6% in Q1. The increase is mainly in credit risk from lending activities Leverage ratio of 11.3% significantly above international competitors 27.0 26 All amounts in ISK bn Leverage ratio (%) 15.1 12.7 12.5 11.8 11.3 2.9 24.0 23.8 23.7 22.4 2.6 3.7 3.6 2.3 31.12.20 31.12.21 31.03.22 31.12.22 31.03.23 1.6 1.5 1.4 1.4 Risk-weighted exposure amount 907 871 884 813 89 89 96 746 11 9 96 27 22.3 88 14 19.6 22 18.6 18.8 18.6 65 64 62 60 60 60 786 806 747 703 636 31.12.20 31.12.21 31.03.22 31.12.22 31.03.23 31.12.20 31.12.21 31.03.22 31.12.22 31.03.23 ■CET 1 ratio ■ Additional Tier 1 ratio ■ Tier 2 ratio Credit risk Operational risk Market risk REA/Total assets (%)#27Own funds The capital ratios continue to be strong while capital optimization efforts are slowing Own funds and capital requirements (%) 27 Unaudited Q1 profits of ISK 6.3 bn and corresponding foreseeable dividends of ISK 3.1bn included in the capital ratios shown Also included is ISK 0.9 bn remaining of a buyback program approved on 8 February 2023 The Pillar 2 requirement is 3.5% as a result of the SREP process based on year-end 2021 financials. The countercyclical buffer in Iceland rose from 0% to 2% as of 29 September 2022 based on a decision of The Financial Stability Council from a year earlier. On 14 March 2023, the Central Bank of Iceland announced that the countercyclical buffer will rise to 2.5% on 15 March 2024. The medium-term capital management buffer target is 150-250bps CET1 capital of ISK 0.0 - ISK 9.0 bn in excess of target capital structure. However, since currently the Bank does not make the optimal use of the AT1 capital item, CET1 capital of ISK 6.6 bn is used to make up that shortfall. The solvency ratio of Vördur insurance is 138.5% 23,7 22,3 23.3 3,6 20,8 20,8 20,8 2,9 2,9 ISK 0.0-9.0bn 1,5 2,1 ISK 13.9-23.0bn 2,1 1.5-2.5 0,7 0.0-0.3 9,3 9,3 0,9 0,6 3,5 18,6 2,0 17,3-18.3 15,8 2,0 1,5 8,0 4,5 Capital tier Capital Capital requirement requirement by requirement by type of capital CET1 management buffer of 1.5- 2.5% CET1 Target capital Excess CET1 structure capital** Capital ratios 31.3.2023 Capital buffers* ■ Pillar 2 R ■ Pillar 1 T2 ■ AT1 ■CET1 * Capital buffers include the increase in the countercyclical buffer in Iceland to 2%, which took effect on 29 September 2022 A portion of the excess CET1 capital must be used to make up for the AT1 shortfall. This portion is shown in a chequered pattern **#28MREL requirement Comfortably exceeding MREL requirements 28 The BRRD I approach to MREL has been codified in Icelandic law MREL requirement as % of REA* 31,7% Senior unsecured debt is MREL eligible unless it is excluded from the scope of bail-in The Icelandic Resolution Authority (IRA) has published its MREL policy 23,0% 17.7% Both Loss Absorption Amount (LAA) and Recapitalization Amount (RCA) equal Pillar 1 plus Pillar 2, currently 11.5% of REA 11,5% No Market Confidence Charge (MCC) because of the high level of combined buffer requirement (CBR), currently 9.3% of REA No subordination requirement Iceland is obligated to introduce the BRRD II approach, the legislative process has started but the date of the application of the requirements is uncertain - The details of the implementation of the MREL requirement in accordance with BRRD II will be introduced in secondary legislation The Senior Non-Preferred (SNP) rank has been introduced into Icelandic law, but the Bank does not see a need to issue SNP debt in the coming year Arion Bank has updated the terms of senior unsecured borrowings so that new issuances will be MREL eligible (senior preferred, SP) according to BRRD II The graph shows - MREL requirement for Arion Bank 23.0% of REA in addition to the CBR - Own funds and MREL eligible senior borrowings (>1yr to maturity) 14,0% 11,5% 9.3% MREL requirement 9.3% Own funds and eligible liabilities The MREL policy indicates a subordination requirement of 13.5% of REA when BRRD II is adopted. This is currently fulfilled. Loss Absorption Amount (LAA) CET1 used for CBR ■MREL eligible senior borrowings ■Recapitalization Amount (RCA) ■Own funds not used for CBR *According to BRRD I, MREL requirement should be expressed in terms of total liabilities and own funds (TLOF) but % of REA is more relevant for determining the size of the requirement. Actual requirement is 14.7% TLOF which corresponds to 24.1% REA at 31.3.2023#2929 Going forward Strong momentum ན Strong operating momentum across our business has continued into 2023 The liquidity and funding position of the Group is strong and allows for flexibility when it comes to issuance plans near term I I The external environment continues to add complexity, but the Group is in a good position to navigate this and continue to drive results. Agility continues to be key in the current market and the Group benefits from strong diversification which allows for optionality in capital allocation The Icelandic economy is relatively robust and is set for healthy growth in 2023. However, persistent inflation combined with global market volatility continues to pose challenges. While the outlook for our operations remain strong, the Bank will continue to take a conservative view when managing growth, provisioning and capital positioning during the current external market volatility#30Appendix#31Recent management changes Björn Björnsson CIO From 2015, until joining the Bank, Björn worked for Boston Consulting Group (BCG) in Australia and the Nordics, with a focus on financial institutions, information technology strategy and transformation. Before joining BCG, he held several executive roles in the Icelandic financial services sector, including Chief Risk Officer at Byr Savings Bank. Board of Directors Internal Audit Anna Sif Jónsdóttir == CEO's Office HR/Communication and Sustainabilit Chief Credit Officer / General Counsel CEO Benedikt Gíslason Deputy CEO Ida Brá Benediktsdóttir Compliance Andrés Fjeldsted Guðbjörg Heiða Guðmundsdóttir CEO of Vörður Insurance From 2011, until joining Vörður, Guðbjörg worked for Marel, most recently as EVP for Marel fish and location manager for Marel Iceland. Prior to that she was innovation cluster manager for Marel in Iceland and the UK. Customer Experience Steinunn Hlíf Sigurdardóttir Information Technology Björn Björnsson Risk Management Úlfar Freyr Stefánsson Finance Ólafur Hrafn Höskuldsson Retail Banking Ida Brá Benediktsdóttir Corporate & Investment Banking Hákon Hrafn Gröndal Markets Jóhann Möller vörður Guðbjörg Heiða Guðmundsdóttir STEFNIR Jón Finnbogason#32Executive summary of impact of green financing 2022 Annual CO2 emissions avoided 4,049100 tCO2 Clean transportation 1,514 0 Number of green housing units 2,338 Annual emissions of greenhouse gases avoided with green financing corresponds to: 13,497 return flight tickets from Copenhagen 16 3 Number of MSC and ASC certified projects Number of waste handling projects Calculations are according to requirements set by Arion Bank's green financing framework Deloitte has provided limited assurance on Arion Bank's allocation of net proceeds from Green Financing Instruments and its allocation to loans for the year 2022.#33Green Financing Framework Impact and Allocation Report 2022 Executive summary for green financing 2022 Total committed green financing ISK bn 152 Arion Bank's green financing total - bond issues and deposits Investor breakdown of green bonds by region 2022 Region % U.K 28 Benelux 16 Nordics 15 118,7 Iberia 15 France 15 Ger/Aut 11 Other 4 Committed financing breakdown % 14% 4% 3% O 36% 43% 33 130 55,4 2021 2022 11% 2021 2022 Committed but not disbursed vs. disbursed 89% 0% 10% 20% 30% 40% 50% 60% ■Committed but not disbursed 70% ■Disbursed 80% 90% 100% Green buildings I Energy efficiency Clean transportation Sustainable fishery and aquaculture Pollution prevention and control Investor breakdown of green bonds by type 2022 Powered by ling 19% GeoNames, Micioso, OpenStreetMap, Tore Tors Number of green projects 3,873 Total committed green finance 151.5bn ISK Outstanding amount of green finance 33.3bn ISK Asset Management Green Financing Framework Impact and Allocation Report 2022 Deloitte has provided limited assurance on Arion Bank's allocation of net proceeds from Green Financing Instruments and its allocation to loans for the year 2022. 2% 8% -71% Central Banks/Official Institutions ■Banks/Private Banks Insurance Companies/Pension Funds#34- Key financial indicators quarter Return on equity (%) Cost-to-Core income ratio (%) 53.6 47.4 13.7 12.7 12.5 1 Q1-21 Q1-22 Q1-23 Q1-21 Q1-22 Loans-to-deposits ratio (%) (without loans financed by covered bonds) Core operating income / REA (%) Net interest margin (%) 3.1 47.0 2.7 Q1-23 Q1-21 Q1-22 Capital ratio (%) 3.1 Q1-23 26.9 2.8 141 144 144 6.9 22.9 2.3 23.7 3.6 6.0 6.2 115 110 114 24.1 20.6 20.1 31.03.2021 31.03.2022 31.03.2023 Q1-21 Q1-22 Q1-23 31.03.2021 31.03.2022 31.03.2023 ■Tier 1 ratio ■ Tier 2 ratio 34#35Key financial indicators - annual 0.6 6.5 Return on equity (%) Cost-to-Core income ratio (%) Net interest margin (%) 62.3 14.7 13.7 13.7 53.3 51.6 45.6 47.0 3.1 3.1 2.8 2.9 2.8 2019 2020 2021 2022 Q1 2023 2019 2020 2021 2022 Q1 2023 2019 2020 2021 2022 Q1 2023 CPI imbalance (ISK bn) 88.9 55.1 26.0 26.6 31.6 Core operating income / REA (%) Risk exposure amount / Total assets (%) 66.5 63.6 61.9 60.1 60.4 6.3 6.5 6.9 6.9 5.7 31.12.2019 31.12.2020 31.12.2021 31.12.2022 31.03.2023 2019 2020 2021 2022 Q1 2023 31.12.2019 31.12.2020 31.12.2021 31.12.2022 31.03.2023 35#36Key figures Operations Q1 2023 Q1 2022 Q1 2021 Q1 2020 Q1 2019 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Net interest income 11,015 9,528 7,342 7,253 7,434 11,015 10,524 10,421 9,804 9,528 Net commission income 4,353 3,552 3,277 3,076 2,218 4,353 3,972 4,002 4,539 3,552 Operating income 16,344 14,514 13,097 8,976 11,708 16,344 15,540 13,884 13,260 14,514 Operating expenses Net earnings Return on equity 7,275 6,201 6,048 6,207 6,862 7,275 8,251 5,810 6,649 6,201 6,291 5,818 6,041 (2,172) 1,018 6,291 5,023 4,863 9,712 5,818 13.7% 12.7% 12.5% (4.6%) 2.1% 13.7% 10.7% 10.5% 21.8% 12.7% Net interest margin 3.1% 3.1% 2.7% 2.8% 2.7% 3.1% 3.1% 3.2% 3.1% 3.1% Return on assets 1.7% 1.8% 2.1% (0.8%) 0.3% 1.7% 1.4% 1.4% 2.9% 1.8% Cost-to-core income ratio 47.0% 47.4% 53.6% 57.3% 69.3% 47.0% 53.8% 38.4% 43.1% 47.4% Cost-to-income ratio 44.5% 42.7% 46.2% 69.2% 58.6% 44.5% 53.1% 41.8% 50.1% 42.7% Cost-to-total assets 2.0% 1.9% 2.1% 2.2% 2.3% 2.0% 2.3% 1.7% 2.0% 1.9% Balance Sheet Total assets Loans to customers Mortgages 574,029 Share of stage 3 loans, gross 1.4% 1.2% 31.03.2023 31.12.2022 31.12.2021 31.12.2020 31.12.2019 1,500,645 1,469,557 1,313,864 1,172,706 1,081,854 1,114,128 1,084,757 936,237 822,941 773,955 576,861 504,877 333,406 2.7% 409,641 1.9% 2.6% 31.03.2023 31.12.2022 30.09.2022 30.06.2022 31.03.2022 1,500,645 1,469,557 1,427,886 1,383,362 1,341,014 1,114,128 1,084,757 1,045,152 1,010,666 576,861 574,029 562,617 1.4% 1.2% 1.4% 976,383 536,610 515,760 1.4% 1.6% REA/ Total assets 60.4% 60.1% 61.9% 63.6% 66.5% 60.4% 60.1% 60.8% 117.4% 64.9% CET 1 ratio 18.6% 18.8% 19.6% 22.3% 21.2% 18.6% 18.8% 19.3% 19.7% 18.6% Leverage ratio 11.3% 11.8% 12.7% 15.1% 14.1% 11.3% 11.8% 12.0% 12.7% 12.5% Liquidity coverage ratio 173.6% 158.5% 202.8% 188.5% 188.3% 173.6% 158.5% 189.3% 163.2% 195.4% Loans to deposits ratio 143.8% 143.6% 142.8% 144.8% 157.0% 143.8% 143.6% 141.2% 139.0% 143.6% 36 All amounts in ISK m#37Disclaimer 37 This document has been prepared for information purposes only and should not be relied upon, or form the basis of any action or decision, by any person. Nothing in this document is, nor shall be relied on as, a promise or representation as to the future. In supplying this document, Arion Bank does not undertake any obligation to provide the recipient with access to any additional information or to update this document or to correct any inaccuracies herein which may become apparent. The information relating to Arion Bank, its subsidiaries and associates and their respective businesses and assets contained in, or used in preparing, this document has not been verified or audited. Further, this document does not purport to provide a complete description of the matters to which it relates. Some information may be based on assumptions or market conditions and may change without notice. Accordingly, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, forecasts, opinions and expectations contained in this document and no reliance should be placed on such information, forecasts, opinions and expectations. To the extent permitted by law, none of Arion Bank or any of their affiliates or advisers, any of their respective directors, officers or employees, or any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. This presentation contains forward-looking statements that reflect management's current views with respect to certain future events and potential financial performance. The information in the presentation is based on company data available at the time of the presentation. Although Arion Bank believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of various factors. The most important factors that may cause such a difference for Arion Bank include but are not limited to: a) the macroeconomic development, b) change in inflation, interest rate and foreign exchange rate levels, c) change in the competitive environment and d) change in the regulatory environment and other government actions. This presentation does not imply that Arion Bank has undertaken to revise any forward-looking statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances arise that will lead to changes after the date when this presentation was made. Arion Bank assumes no responsibility or liability for any reliance on any of the information contained herein. It is prohibited to distribute or publish any information in this presentation without Arion Bank's prior written consent. Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. This document should not in any way be regarded or interpreted as investment advice by the Bank By accepting this document, you agree to be bound by the foregoing instructions and limitations.#38Empty