The size of the programme for covered bond issuance is ISK 120 bn and was increased from ISK 100 bn in 2017. The covered bond issuance is primarily intended to fund the Bank’s mortgage portfolio and to mitigate interest rate risk. Regular auctions of covered bonds were held in 2017 with two new series being issued during the year, an inflation-linked 7.5-year covered bond and a non-indexed 6-year covered bond. One series matured in 2017. Agreements with market makers in the secondary market for covered bonds were renewed during the year. At year-end 2017, the outstanding covered bonds issuance amounted to ISK 70 bn, increasing by ISK 32 bn during the year.
Landsbankinn continued regular issuance of commercial paper in 2017 under the ISK 50 bn debt issuance programme. Outstanding issuance of commercial paper amounted to ISK 7 bn at year-end 2017 compared to ISK 12 bn at the end of 2016.
The Bank’s equity amounted to ISK 243 bn at year-end 2017, decreasing by ISK 8 bn over the course of the year. Landsbankinn paid ISK 25 bn in dividends to shareholders in 2017. The Bank also availed itself of the authorisation to offer shareholders to tender their shares for up to 2% of outstanding shares, less the shares already bought back in 2016. The scale of the buy-back in 2017 was insignificant. Landsbankinn’s total capital ratio was 26.7% at year-end 2017.