Investor Presentaiton

Capital and credit rating Medium term capital target unchanged S&P Global Issuer rating Covered bond Outlook 24 Target capital structure over the medium term 24.1% 2.9% 1.5% c. ISK 20bn 2.5% 19.7% 1.9% 2.5% 1.9% Tier 2 AT1 CET1 19.7% C. 17-18% 15.3% Capital ratios 31.12.2023 Surplus capital Structure assuming Capital requirement 150-250bp mgmt buffer Historical capital distribution to shareholders (ISK bn) Net earnings 12.4 12.5 1.1 2019 4.4 2020 Source: Moody's, S&P global 31.5 32.3 28.6 26.0 25.7 • Capital distribution 15.6 2021 2022 2023 BBB A+ Stable Ongoing strategic review on Arion's optimal credit rating coverage • The agency's increasingly constructive view on the economic risks facing Icelandic banks means that the temporary capital constraint could be resolved to converge to management buffer over regulatory requirements This is potentially supportive of a one-notch upgrade once S&P concludes its ongoing review MOODY'S Issuer rating Covered bond Outlook A3 Aa2 Stable Upgraded by one notch in September in recognition of robust financial performance and strong balance sheet fundamentals Comfortable headroom to current ratings across key credit metrics, including asset quality and capital The agency's constructive view on the Icelandic sovereign is also indirectly supportive of future rating trajectory Arion is currently undertaking a review of the appropriate number of credit rating agencies going forward. This review will consider among other factors: Strategic fit given our size and business model . . The issuance plan and quality of market access Ensuring that Arion's investors continue to have access to quality and independent credit assessments from highly credible credit global rating agencies We will communicate the outcome of this review and any potential impact it might have on the Group's capital flexibility and targets in the near term The Bank is committed to maintaining the required capital levels of the current ratings and regulatory thresholds

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