Investor Presentaiton

Cost of Risk Solid position Evolution of Cost of Risk Near term Cost of Risk outlook Strategic initiatives impacting Cost of Risk • . Current expected credit loss levels predict 30bps cost of risk in the near term, impacted by conservative IFRS 9 assumptions that reflect on current economic conditions Through-the-cycle cost of risk between 20-25bps given the current portfolio composition and risk profile High interest rates are a near term headwind for borrowers 22 1.50% 1.00%- 0.50% 0.00% -0.50% 2018 2019 2020 2021 - - Cost of risk (net impairment / LTC) Cost of risk-average 2018-2023 - Cost of risk average 2020-2023 Close dialogue with borrowers around mitigating options in current rate environment Expected reduction in policy rates and inflation will provide relief Impairments in 2024 are likely to be impacted by the seismic events near Grindavík, while exposure is limited. Ongoing evaluation and dialogue with borrowers • Exposure ISK 8.3bn to corporates and ISK 2.0bn to individuals ISK 6.0bn of corporate exposure is secured by fishing vessels and quotas not impacted by the events. The Bank is participating in government actions to assist the people of Grindavík Credit syndication as an important risk management tool, providing feedback from other credit participants Credit models are under continuous development. The models have been successfully applied for years for automatic credit-decisions for individuals and the Bank plans to develop similar solutions for SME lending Data initiative will further strengthen credit risk assessment Rolling out a cyber-security education program for customers. Frauds and cyber attacks 0.425% • 0.235% 2022 2023 Positive impact Negative impact

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