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Investor Presentaiton

24 Own funds Capital ratio at 27.5% is exceptionally strong as is the leverage ratio Capital ratio (%) . • The CET1 ratio is enhanced to 22.5% with the cancelation of ISK 10 billion dividend payment planned in Q1 Arion Bank filled the 3% Tier 2 bucket with issuance in 2018 and 2019 In February Arion Bank successfully 27.5 issued USD denominated Additional Tier 2.9 24.0 24.0 0.4 22.0 22.3 2.1 2.8 1.0 0.8 1 transaction for a total of $100 million. The bonds have a fixed coupon of 6.25%. The notes will have a standalone and consolidated 5.125% CET1 trigger with equity conversion The issuance strengthens the Bank's own funds and is a milestone towards reaching a more optimal capital structure in line with the Bank's medium-term targets REA reduces slightly despite a 9.8% increase in balance sheet Leverage ratio remains very strong in all respects All amounts in ISK billion Leverage ratio (%) 15.4 14.2 14.1 14.5 13.5 31.12.2017 31.12.2018 31.03.2019 31.12.2019 31.03.2020 Risk-weighted exposure amount 23.6 22.5 797 21.2 21.3 788 21.2 767 720 713 31.12.2017 31.12.2018 31.03.2019 31.12.2019 31.03.2020 ■CET 1 ratio Additional Tier 1 ratio ■Tier 2 ratio 31.12.2017 31.12.2018 31.03.2019 31.12.2019 31.03.2020 *
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