Arion Bank

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Iceland should outperform its European neighbours but high inflation and interest rates have increased macro uncertainty. We have trimmed our profit forecasts by 2% in 2023 and 8% in 2024. Our fair value estimate falls to ISK170 as a result. Upside r...

Arion is one of European banking’s best capital return stories, with cost and risk discipline rounding out the thesis. 2022: We see 2% revenue growth (weak investment income) but a 6% fall in headline profit fall (higher risk costs, taxes). 2023: Wea...

Lower than expected Q3 result on weak insurance and financial income, and higher taxes. The net interest margin widened. A more cautious CET1 target does not end the buy-back story, keeping in place this key investment case differentiator. The local....

We see ISK6,082mn net profit (-26% yoy), with core revenues rising 24% and operating costs up 10%. Buybacks are ongoing. Net financial income will once more be in the red, dragging on the bottom line and lifting the effective tax rate. Credit risk co...

Looking ahead to FY 22, loan growth is likely to slow from the current robust rate (20% yoy). A key driver of the current inflation spike is housing costs; property prices have increased by over 20% over the past year. The Valitor sale, which has fin...

Arion Bank has led its European and emerging market peers in returning capital to shareholders; the 2021 figure was ISK31.5bn buybacks and dividends, equivalent to 20% of market capitalisation at the beginning of that year. Arion has already made an ...