Arion Bank Reports ISK 8.7bn Q3 2026 Net Earnings and Flags ISK 1.7bn Bank Levy Cost

Arion Bank reported net earnings of ISK 8.7bn for the third quarter of 2026, up from ISK 8.2bn a year earlier, with return on equity of 16.3%. The Icelandic lender announced the results on October 28, 2026, according to TradingView. Arion Bank is one of three systemically important universal banks in Iceland, serving retail, SME and corporate customers.

Arion Bank's Third-Quarter Earnings Detail

Earnings per share were ISK 6.42, compared with ISK 5.95 in the third quarter of 2025. The net interest margin rose to 3.5% from 3.3%, and net commission income was ISK 3.8bn, down from ISK 4.0bn. Core income increased by 10.6% year on year.

Operating expenses rose by 13.0%, equivalent to ISK 809m, including one-off items of approximately ISK 480m. The cost-to-income ratio was 34.3%, compared with 32.6% a year earlier. The bank's capital ratio was 22.4% and its CET1 ratio 18.5% at the end of September.

Vördur, the group's insurance arm, contributed a standalone profit of ISK 0.4bn, compared with ISK 0.7bn a year earlier, on a combined ratio of 85.7%, according to akta.pro company records. For the first nine months of 2026, net earnings were ISK 24.1bn, compared with ISK 24.4bn in the same period of 2025, and return on equity was 15.1%.

CEO Benedikt Gíslason said: "Arion Bank's financial results in the third quarter were good and in line with our targets." He said deposits continue to grow strongly while lending growth has slowed, reflecting persistently high interest rates.

Arion Bank's Proposed Bank Levy Increase

The bank said a proposed bank levy increase from 0.145% to 0.254% would, if enacted, add approximately ISK 1.7bn in expenses in the fourth quarter of 2026. Gíslason said the government is planning to increase the bank levy by more than 75%, and that the levy is charged on the liabilities of financial institutions, mostly customer deposits.

"We estimate that the proposed tax increase will amount to approximately ISK 1.7 billion a year for Arion Bank," he said, adding that under the government's plans the increase would be retroactive to the current year.

Arion Bank's Settlement With the Financial Supervisory Authority

On October 27, 2026, Arion Bank reached a settlement with Iceland's Financial Supervisory Authority after a review of its compliance with market abuse and financial instruments laws, TradingView reported. The bank's third-quarter report also cited an increased levy and cooling Icelandic demand as key uncertainties.

Arion Bank's October 29 Investor Webcast

Arion Bank will hold an investor meeting at its headquarters in Borgartún 19, Reykjavík, on October 29 at 9:30 CET (8:30 GMT). Gíslason and CFO Ólafur Hrafn Höskuldsson will present the results, and Chief Economist Erna Björg Sverrisdóttir will give an update on the economic environment. The meeting will be streamed live.