Key Financial Indicators and Balance Sheet Analysis Q1 2023
Own 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
**View entire presentation