Slides
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Investor presentation 11 February 2026 Q4 and full - year results 2025
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Strong 14.9% ROE in 2025 and a dividend proposal of ISK 11.5 per share Continued delivery on financial targets ROE 14.9% ✓ Exceed 13% Cost-to-core income ratio1 CET1 ratio above regulatory capital requirements Core income2 / REA Dividend payout ratio5 42.3% ✓ Below 45% 308 bps 150-250 bps management buffer4 50% ✓ 50% 7.4% ✓ Exceed 7.2% Medium-term targets2025 Historical performance – selected metrics Cost-to-core income* ratio Return on Equity Core income4 / REA Insurance revenue growth (YoY) 3 Combined ratio Vördur 5.5% In excess of market growth 89.8% ✓ Below 95% Shareholder distributions (ISK bn)ISK 15.3bn proposed 1) Cost to core income ratio: Operating expenses, including opex from insurance operation / Core income 2) Core income: Net interest income, net fee and commission income and insurance service results (excluding opex) 3) Insurance revenue growth in the domestic insurance market in 9M 2025 was 5.7% 4) Approx.16.8-17.8% 5) Pay-o t r t o of pprox m t l % of t r gs ttr t l to sh r hol rs thro gh th r s or of th ’s sh r s or om t o of oth A t o l str t o s w ll o s r wh Ar o ’s p t l l ls r o th minimum r q r m ts s t th r g l tors t o to th ’s m g m t ff r 2
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Markets delivered 22% growth YoY and leading brand performance Strong momentum at Stefnir Funds Sale of Arnarland development asset successfully concluded Key milestones of the year ISK bn • Net earnings of ISK 2.0bn and 13.7% ROE despite challenging year for investment income • Combined ratio below 90% for the second year in a row • Bancassurance ratios: • Individuals 41.9% vs. 36.7% YE 2024 • Corporates 29.6% vs. 28.5% YE 2024 Continued growth and strong performance at Vördur insurance Merger discussion initiated between Arion and Kvika Retail bank drove loyalty and growth through customer rewards Record performance across Corporate & Investment Banking • Best year in terms of fee generation of ISK 6.8bn • 16.6% loan growth YoY • Strong acceleration in digital solutions Key corporate finance transactions in 2025 • Successful launch of Arion Rewards with over 45,000 customers joining Arion Rewards in under 10 months with insurance sale increasing 13.2% YoY • Arion Rewards savings accounts launched with significant early uptake, providing members exclusive top-tier interest paid weekly. Household deposits increased 14.7% YoY Sale of Arnarland development asset successfully concluded • Combined AuM and AuS approached the ISK 2,000bn milestone • Our affluent Premía service ranks highest in brand strength among Icelandic banks’ reward programs* *EMC Market Research, 2025 Stefnir Funds changed the game with customer-focused enhancements • Stefnir strengthened its value proposition with lower premium fund fees, no upfront fees, elimination of minimum investment amounts and digital automation • Number of clients increased by 11% • Monthly subscriptions to funds grew by 41% • Through increased digitalization, 89% of customer fund transactions were fully automated 3
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Merger discussions between Arion Bank and Kvika Bank continue Focus has been on pre-discussions with the ICA which are going according to schedule Discussions with the ICA regarding pre-notification are still in progress These discussions are expected to be completed in the first quarter of 2026 or early second quarter The outcome of these discussions will determine the next steps Letter of intent signed on 6 July 2025 Agreement on heads of terms, including exchange ratios Phase 1 CompletedOngoing Due diligence progress Pre-notification discussions with the ICA • Merger agreement signed • Merger notification sent to regulatory bodies • Conditions fulfilled (approval by regulatory bodies) • K ’s shareholders receive new Arion shares • Shareholder meetings of merging companies Not startedNot started Pending phase 2 Phase 2 Pending phase 3 Phase 3 Phase 4 4
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Arctic loan book ISK bn and % of Arctic loan book • Our Arctic region presence has been growing via Corporate Finance advisory and syndicated lending, with the Arctic loan book (outside Iceland) growing 24% annually since 2020 and is now the largest part of the foreign credit portfolio. • Largest exposure is in the Faroe Islands, with strong growth in recent years. • Pipeline remains robust, including promising projects in Greenland, as Arion continues to support emerging opportunities across Arctic communities. Arion Bank’s Arctic strategy and growing regional presence Our focus in the Arctic Arctic Investments Conference 2025 - fourth consecutive year % % % % % % % % % % % % % % % % % % % % % % % % % % % % % ro sl s r l orw Key sectors1 Fisheries 48% Transportation 16% Commerce and services 14% Financial and insurance 9% 1Percentage of Arctic loan book, end of year 2025 The Arctic region has gained increased attention amid heightened geopolitical interest due to its strategic location and resources 5
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The first phase of Blikastaðir due to be approved in Q2 2026 • Arion Bank and Mosfellsbær municipality signed a new development agreement for the land of Blikastadir in January • The main changes are earlier payments to fund infrastructure, including schools and preschools • Increase in payments from ISK 12bn to ISK 16bn, now fully in cash rather than a mix of assets and cash • Phase one was submitted to the planning committee in January, with open consultation underway and approval expected in Q2 2026 • The first phase includes 1,250 homes with a nature-based design that enhances public spaces, sustainability, and quality of life • The site offers a unique opportunity for investors and contractors to deliver large-scale projects and boost housing supply in the capital area 6
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Women Invest Initiative launched in January 2024 • Seminars and online resources providing accessible guidance on how to start investing • A m t r s g wom ’s participation in financial markets Broad reach Key sponsor and collaborator with the Center for Research on Gender Equality in the Economy and Business Sector Investment competition: 1,435 women participated. The highest turnout to date Broad participation and support across Arion, Stefnir and Vordur First two years 8,000 women have participated in 95 seminars • Women's subscription to funds increased by 67% • Women's transactions in funds increased by 45.5% • Women's assets on brokerage accounts increased by 27% 7
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Assets Liabilities Sustainability highlights 2025 8 57% 12% 11% 8% 5% 5% 1% 1% Committed sustainable finance by category Green buildings Affordable housing Sustainable marine value chains and marine ecosystem management Employment generation and alleviate unemployment Clean transportation Sustainable waste and wastewater management Education Other ISK 170.8bn Sustainable assets and liabilities as of 31.12.2025 ISK bn. 63.4 170.8 Social Green 37.5 133.4 24.8 38.6 Green deposits Green bonds Environmental Social Governance • Reduction of GHG emissions from own activities (scopes 1&2) by 64.7% in 2025 calculated from 2015 • Emission intensity for lending and investments (excluding sovereign bonds) decreased from 0.148 tCO₂e/ISKm to 0.146 tCO₂e/ISKm, a 1% reduction • Sustainable lending accounted for 12.86% of the loan book • The results of the equal pay certification indicated that the unexplained gender pay gap is 0.2% during the year 2025 • The 2025 average score on the Arion Index was 4.49 for the Bank and 4.44 for Vörður (on a scale of 1–5)* • L&D index is currently 99.2% • Th ’s r t pol mph s z s s st l t r q r g ESG factors to be assessed whenever a credit rating is needed or when a company falls under Article 66d of the Annual Accounts Act • 93% of new suppliers at Arion Bank underwent supplier assessment which appraises suppliers on their performance in terms of environmental and climate issues as well as equality and labor laws *The results for Stefnir are not published as the number of answers does not meet the minimum threshold for publication of data in order to ensure data protection. 8
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Strong ESG ratings Outstanding rating from Reitun, six years in a row 90/100 | A3 Arion Bank has achieved the score “outstanding” in R t ’s ESG rating, placing it t gor A Th r t g s s o th ’s p rform environmental, social and governance (ESG) issues in its operations. The Bank once again scored 90 out of a possible 100 points and thus met the stricter requirements made in this r’s ss ssm t po ts s th h gh st s or g Reitun, and the Bank is one of six issuers placed in category A3. Arion Bank ranks in the TOP 3% of regional banks globally rated by Morningstar Sustainalytics MSCI concludes that Arion Bank is now in category AA with a score of 8.4 (on a scale of 1–10). A score of 8.4 is in the upper range of AA and only 0.18 points away from reaching AAA. The Bank is classified as a “Leader”. Laggard Average Leader 9
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Sources: Statistics Iceland, Central Bank of Iceland, Icelandic Tourist Board, Arion Research. Economic conditions remain challenging GDP increased by 1.2% year-on-year in Q3, according to preliminary data. As in previous quarters, private consumption was the main driver behind economic growth, expanding by 4.2% between years. Subdued GDP growth stems from a sharp deterioration in net trade. Imports - mainly services and data center equipment - rose 8.6% year-on-year in Q3, while goods exports declined slightly A continued rise in payment card turnover in Q4 highlights the robustness of private consumption and is expected to offset bleaker exports outlook in 2026. Despite rising unemployment, household resilience remains strong overall; purchasing power is increasing, debt levels are moderate, and debt- servicing burdens remain manageable, as evidenced by low arrears Pre-s mm r o r s o t to r sm ’t materialize, but uncertainty for the coming months remains high. Meanwhile, fisheries face headwinds s xt r’s t h q ot s w ll r aluminium production has been significantly scaled back due to electrical equipment failure at one of the aluminium smelters. Nevertheless, positive news has emerged in recent weeks, including an increased capelin quota and strong booking status for the latter half of the year, not least in connection with the solar eclipse -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 2023 Q4 2024 Q1 2024 Q2 2024 Q3 2024 Q4 2025 Q1 2025 Q2 2025 Q3 Growth contributions of GDP components Private consumption Public consumption Investment Changes in inventory External trade GDP 50 60 70 80 90 100 110 120 130 140 150 -20% -15% -10% -5% 0% 5% 10% 15% 20% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Payment card turnover and private consumption - quarterly data, YoY-% growth, constant prices/exchange rate Private consumption Payment card turnover Consumer confidence (r.axis) -15% -10% -5% 0% 5% 10% 15% 20% 2024Q1 2024Q2 2024Q3 2024Q4 2025Q1 2025Q2 2025Q3 2025Q4 2026Q1 2026Q2 2026Q3 2026Q4 Card turnover, hotel overnight stays and number of tourists - YoY %-change Number of tourists through Keflavik Airport Hotel overnight stays of tourists Tourist card turnover at constant prices Arion Research's forecast -2% -1% 0% 1% 2% 3% 4% 5% 6% 2023 2024 2025 2026 2027 2028 CBI's GDP growth forecasts MB 2025/2 MB 2025/3 MB 2025/4 MB 2026/1 10
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Cooling economy, persistent inflation The labor market is showing signs of moderation. Private-sector employment has fallen year-on-year, pushing unemployment gradually higher. Unemployment is projected to continue rising in the coming months, as labor demand has weakened sharply and business sentiment, particularly among export-oriented firms, has deteriorated. Although the depreciation of the ISK in the final months of 2025 provided export sectors with temporary relief, the ISK remains strong by most measures The strength of the ISK has supported the Central of l ’s fl t o t rg t h lp g to s ppr ss imported inflation. Yet, headline inflation has proven persistent, climbing to 5.2% in January. Consequently, monetary policy is expected to remain firm While progress in curbing inflation and anchoring expectations has been slower than anticipated, the policy stance is beginning to show tangible effects – most notably in the housing market, where demand has softened and price growth has moderated. The tightening of access to inflation-indexed mortgages may accelerate the cooling of the housing market - potentially easing demand pressures, dampening inflation. While the tighter financial conditions, due to turbulence in the mortgage market, prompted the MPC to cut rates in November, rising inflation halted further rate cuts in February 120 125 130 135 140 145 150 155 160 2024 2025 2026 Exchange rate - daily average EUR USD 0% 1% 2% 3% 4% 5% 6% 2022 2023 2024 2025 Unemployment - share of workforce, 3 month moving average Registered unemployment Labor force survey unemployment 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 -10% -5% 0% 5% 10% 15% 20% 25% 30% 2021 2022 2023 2024 2025 2026 Housing prices and number of contracts -YoY change (%) Number of contracts (r.axis) Housing prices - nominal (l.axis) Housing prices - CPI adjusted (l.axis) -2% 0% 2% 4% 6% 8% 10% 12% 2021 2022 2023 2024 2025 2026 CPI by expenditure groups Housing Imported goods Other Inflation CB's key interest rates 11 Sources: Statistics Iceland, Central Bank of Iceland, Icelandic Tourist Board, Arion Research.
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Small economy, strong foundations o r s: t t st s l tr l of l Ar o R s r h *Ar o R s r h’s for st 0 20 40 60 80 100 120 140 160 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025* Total exports composition - index, total in 2012=100 Tourism Seafood (excl. aquaculture) Aluminium Fourth pillar (other) 0% 50% 100% 150% 200% 250% 300% 350% 400% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Q3 Household and non-financial corporate debt - % of GDP Households Companies 0% 20% 40% 60% 80% 100% 120% 140% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Debt of central government - % of GDP Gross debt Net debt -4 -2 0 2 4 6 8 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 CBI's FX reserves - bn. EUR Total FX reserves Net FX reserves -200% -150% -100% -50% 0% 50% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Net international investment position - % of GDP 0% 50% 100% 150% 200% 250% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Q3 Pension funds assets - % of GDP 12
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Core income Loan book Capital, funding and liquidity Operational performance ‣ Solid quarter with an ROE of 11.6% concluding a strong year for the Group, with an ROE of 14.9% ‣ Fourth quarter results include provisioning for annual employee incentive scheme ‣ Diversified pillars of the Group continue to support robust earnings momentum through the cycle ‣ Capital position strong with a CET1 ratio of 18.4% or 308bps above regulatory minimum ‣ Share buyback program of ISK 5bn ongoing and proposed ISK 15.3bn dividend payment ‣ Liquidity position very strong with ISK 151bn surplus in high quality liquid assets (HQLA), supported by successful funding activities and growth in stable deposits ‣ NIM in the quarter impacted by high real policy rate, while margin over the year and fluctuations are in line with guidance ‣ Solid quarter in insurance income concludes a strong year, driven by favourable trend in claims ‣ Continued stability in fee generating businesses despite evolving economic backdrop ‣ Continued robust growth in corporate lending opportunities, while mortgage book relatively stable ‣ Loan growth supported by continued growth in stable deposits ‣ Impairments in the quarter above longer-term guidance, primarily due to a single name exposure Key takeaways from Q4 2025 and for the full year 13
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All amounts in ISK million14 Income statement Q4 2025 − Net earnings attributable to shareholders of ISK 6.2bn, resulting in a return on equity (ROE) of 11.6% in the quarter − Core income* increased by 7.3% year-on-year driven by strong growth in net interest income, while net fee income remained stable − Other income for the quarter mainly reflects the sale of the Arnarland development asset − Operating expenses increased by 1.8% year-on- year, equivalent to ISK 155m − Results for the quarter were affected by specific items, primarily cost related to the merger process with Kvika of ISK 250m − A revised approach for the share-based incentive scheme resulted in a lower expense of ISK 400m offset by increased number of employees with corresponding salary increase − Net impairment charges were higher than in prior quarters, corresponding to 51bps on annualized basis, largely due to single name exposure *Core income: Net interest income, net fee and commission income and insurance service results (excluding opex) Q4 2025 Q4 2024 Diff Q3 2025 Diff Net interest income 12,350 11,246 10% 13,826 (11%) Net fee and commission income 4,055 4,136 (2%) 4,003 1% Insurance service results 446 326 37% 630 (29%) Net financial income 1,364 2,193 (38%) 483 182% Other operating income 826 3 - 45 - Operating income 19,041 17,904 6% 18,987 0% Operating expenses (8,756) (8,599) 2% (6,194) 41% Bank levy (547) (488) 12% (530) 3% Net impairment (1,694) 913 - (1,128) 50% Net earnings before taxes 8,044 9,730 (17%) 11,135 (28%) Income tax expense (1,820) (1,430) 27% (2,928) (38%) Net earnings from continuing operations 6,224 8,300 (25%) 8,207 (24%) Discontinued operations net of tax 0 (11) - 3 - Net earnings 6,224 8,289 (25%) 8,210 (24%) Non-controlling interest 2 1 - 19 - Net earnings attributable to shareholders 6,226 8,290 (25%) 8,229 (24%) Return on equity attributable to shareholders 11.6% 16.4% 16.0% Earnings per share 4.50 6.01 (25.2%) 5.95 (24.3%) Core income* 17,952 16,728 7.3% 19,266 (6.8%) Net interest margin 2.9% 2.9% 3.3% Total cost-to-core income ratio 54.9% 57.5% 36.3% Cost-to-income ratio 46.0% 48.0% 32.6%
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All amounts in ISK million15 Income statement 2025 − Net earnings attributable to shareholders of ISK 30.6bn, resulting in a return on equity (ROE) of 14.9% − Core income* increased by 12.3% year-on-year − Financial income lower compared to 2024 impacted by volatile markets − Other operating income derived from development assets, partially linked to non- controlling interests − Operating expenses have remained relatively stable, with fluctuations in underlying items (settlement fine and higher cost of incentive scheme in 2024 whereas 2025 is affected by revised approach regarding cost of incentive scheme and by the Kvika merger process) − Higher net impairment compared to recent years, calculated as 24bps on loans to customers for the year, in line with the 20-25bps guidance through the cycle − The effective tax rate is 27.7%, which is relatively high, primarily due to subdued performance of equity holdings *Core income: Net interest income, net fee and commission income and insurance service results (excluding opex) 2025 2024 Diff Net interest income 52,542 46,302 13% Net fee and commission income 17,147 15,360 12% Insurance service results 2,111 2,166 (3%) Net financial income 1,075 2,845 (62%) Other operating income 5,516 (222) - Operating income 78,391 66,451 18% Operating expenses (28,248) (28,328) (0%) Bank levy (2,106) (1,924) 9% Net impairment (3,053) (1,131) 170% Net earnings before taxes 44,984 35,068 28% Income tax expense (12,458) (8,919) 40% Net earnings from continuing operations 32,526 26,149 24% Discontinued operations net of tax (19) (37) (49%) Net earnings 32,507 26,112 24% Non-controlling interest (1,881) (2) - Net earnings attributable to shareholders 30,626 26,110 17% Return on equity attributable to shareholders 14.9% 13.2% Earnings per share 22.05 18.31 20.5% Core income* 75,459 67,219 12.3% Net interest margin 3.2% 3.1% Total cost-to-core income ratio 42.3% 47.2% Cost-to-income ratio 36.0% 42.6%
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16 Net interest income − In Q4, net interest income reached ISK 12.4bn, reflecting a 9.8% annual increase − NIM was 2.9% in Q4, the same as in Q4 2024 − The CPI imbalance was ISK 209bn at year- end and rose by ISK 41bn since year-end 2024 − Despite this, the effect from CPI changes is negative due to high real interest rate in the quarter with low inflation in Q4, calculated as 0.36% on annualized basis compared to 0.57% in Q4 2024 − With increased corporate lending, the net interest margin is likely to trend above 3%. However, the relative growth of mortgages versus corporate loans, along with CPI developments, will be key determinants in the near term − Net interest margin for 2025 was 3.2% with significant fluctuations between quarters, mainly due to inflation Fluctuations in net interest income mainly results from change in inflation between periods Net interest income (ISK bn) Credit risk (ISK bn) Net interest income development (ISK m) Y/Y development from Q4 2024 to Q4 2025 Q/Q development from Q3 2025 to Q4 2025 −The near-term guidance for the net interest margin remains around the 3% level, influenced by the evolution of real interest rates, which in turn affects the margin of CPI- linked mortgage lending, the primary driver of fluctuations
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17 Net fee and commission income − Diversified fee income delivered above ISK 4bn for every quarter in 2025 − Asset management fees remained strong. Assets under Management and Supervision grew by 22% during the year, reaching ISK 1,989bn at year-end, partly driven by the acquisition of Arion Financial Advisory Services Ltd. − The CIB operation remains strong, both in terms of fees generated from lending, service on loans, and as a result of the increased focus on fees in line with strategy − Retail Banking activities have shown stable income in recent quarters, with main fee income from cards and collection and payment services. Activities have been under pressure due to automation and change in regulation regarding foreign payments. Additional repayments in the new rewards system, Arion Rewards, is also included Fees remain diversified and robust Net fee and commission income (ISK m) Assets under Management and Supervision (ISK bn) Net fee and commission income (ISK m)
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18 Combined ratio below 90% for the second year in a row Insurance revenue (ISK m) ** Combined ratio (%) Change in combined ratio from Q3 2024 (%) Vördur net earnings (ISK m) * Figures based on Vördur standalone financial results, before elimination within the Group. ** Figures for 2022 have been restated in accordance with IFRS 17 while figures for 2021 have not CAGR * Insurance service result (ISK m) Insurance revenue by line of business (%) Q4 2025 − Profit from insurance operations in Q4 were ISK 395m compared with ISK 348m in Q4 2024 − Claims ratio was similar to the ratio in Q4 2024 whereas net reinsurance cost was lower in 2025 Full year 2025 − Vö ’ stand-alone operations resulted in a net profit of ISK 2,037m in 2025 compared with ISK 3,675m in 2024 − ROE of 13.7% in 2025 compared with 30.8% in 2024 − Combined ratio of 89.8% in 2025 compared with 88.9 % in 2024 − Income from investments was under par with negative results from equities while the fixed income market recovered somewhat
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19 Net financial income − Vördur's total investment portfolio stands at ISK 34.7bn, generating a profit of ISK 1,021m for the quarter, which includes adverse net impacts from insurance contracts − Bond holdings vary from quarter to quarter as part of liquidity management and funding strategies − The average duration of the liquidity portfolio is less than one year − The bond portfolio does not utilize held-to- maturity (HTM) accounting, and all changes in market value are reflected in the capital position Recovery in markets in the quarter following challenging first nine months Net financial income (ISK m) Bond holdings (ISK bn) Equity holdings (ISK bn)Net financial income by type Q4 2025 (ISK m) Vö Vö Vö
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20 Operating expenses* - Total operating expenses outlined here encompass costs associated with the insurance business which is reflected through insurance service results post IFRS 17 - Total operating expenses increased by ISK 237m, or 2.5%, compared with Q4 2024 - Salaries and related expenses increased by ISK 149m or 2.4%, despite revised approach of incentive scheme which is reflected in lower expenses of ISK 0.4bn in the quarter - Other operating expenses increased by 2.6% from Q4 2024, largely related to merger discussions between Arion and Kvika - ’ mainly in IT, internal controls and growth in subsidiaries Stable cost base Cost ratios (%) Total operating expenses (ISK bn) Number of FTEs Other operating expenses (ISK m) *Operating expenses from insurance operations are included in all figures for comparative purposes Total cost to core income: Operating expenses including opex from insurance operations / Core operating income excluding opex from insurance operations Cost to income ratio: Operating income / Operating expenses
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21 Balance sheet - Loans to customers increased by ISK 27bn or 2.1% in Q4 - Deposits increased by ISK 4bn or 0.4% in Q4 - Loans to deposits ratio of 144.3% and 118.5% without loans financed by covered bonds - Very strong liquidity position: - Liquidity coverage ratio (LCR) of 199% (166% in ISK) - Net stable funding ratio (NSFR) of 118% Solid growth in loans and deposits All amounts in ISK billion Assets 31.12.2025 30.09.2025 Diff. 31.12.2024 31.12.2023 31.12.2022 Cash & balances with CB 150 110 36% 124 102 114 Loans to credit institutions 23 26 (12%) 26 29 46 Loans to customers 1,329 1,302 2% 1,230 1,153 1,085 Financial assets 216 260 (17%) 206 206 193 Investment property 7 14 (47%) 9 9 8 Other assets 31 25 23% 23 27 20 Total Assets 1,756 1,737 1% 1,618 1,526 1,466 Liabilities and Equity Due to credit institutions & CB 12 9 36% 7 3 12 Deposits from customers 921 917 0% 857 793 755 Other liabilities 67 73 (8%) 69 69 71 Borrowings 495 482 3% 433 420 393 Subordinated liabilities 44 43 2% 45 41 47 Total Liabilities 1,538 1,524 1% 1,411 1,326 1,278 Shareholders equity 217 210 3% 207 199 187 Non-controlling interest 0 2 (97%) 1 1 1 Total equity 217 213 2% 207 199 188 Total Liabilities and Equity 1,756 1,737 1% 1,618 1,526 1,466
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22 Loans to customers - Loans to customers total ISK 1,329bn at the end of the year, increasing by ISK 99bn or 8.0% during the year. Loan growth is almost entirely due to loans to corporates which grew by 16.6% in 2025 while loans to individuals grew by 0.2% - Loan growth in Q4 was 2.1%; 5.4% in loans to corporates but 1.2% decrease in loans to individuals - Corporate loan growth is expected to slow down in the coming quarters - The diversification in terms of sector and single name concentration of the corporate loan book continues to be good and in line with the Bank’s credit strategy Balanced loan portfolio Loans to customers (ISK bn) Loans to corporates by sector (%) Loans to corporates by type (ISK bn)Loan growth (%) ndi id o tgage ndi iduals o o ate the n o ation and co unication technolog cco odation and ood se ice acti ities inancial and insu ance acti ities ndust ene g and anu actu ing o e ce and se ices ishing indust onst uction eal estate acti ities owth indi iduals owth co o ates linked non linked
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23 Residential mortgages Low default rates and comfortable LTV levels. Interest rate levels and recent legal uncertainty have impacted portfolio growth and composition Average loan to value (%) Residential mortgages by interest rate type (ISK bn) Rate of defaults and payments past due Household debt to GDP (%) loating inde ed i ed inde ed loating no inal i ed no inal - Monetary tightening has resulted in a significant shift towards indexed mortgages since 2022 - Towards the end of 2025, legal uncertainty in relation to variable rate terms resulted in a market-wide reduction of the supply of indexed mortgages - In December, the Supreme Court affirmed the alidit o ion’s loan te s u holding ea lie lower-court decisions - CPI-linked loans are now 66% of the mortgage portfolio, compared to 40% at year-end 2022 - Household debt to GDP is relatively low in international comparison - The average loan-to-value of the mortgage portfolio is 48.2%. More than 90% of mortgage exposures have LTV below 80% - The non-performing loan ratio is 1.6%, which is close to pre-Covid levels - The Bank periodically reviews its underwriting criteria and assessment of customer debt servicing capacity celand en a k weden o wa ethe lands Source: OECD, Statistics Iceland and Central Bank of Iceland Non-performing loans: Loans in Stage 3 according to IFRS 9 Non-performing loans 30 days past due 90 days past due 60 days past due
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24 Risk profile - The non-performing loans ratio has increased in correlation with interest rate levels and unemployment rate. Future development is likely to depend on the pace of monetary easing - Since 2023, the increase to corporate NPLs has to a large degree been concentrated in the construction sector, which is impacted by elevated funding costs amid a slowing housing market - NPLs generally have good collateral coverage, as reflected in a Stage 3 coverage ratio of 23.6% - Forborne exposures that are not in Stage 3 represent 1.9% of loans to customers at year-end - Total expected credit loss is expected to approach between 20-25bps in the long term based on current loan book composition. At the end of Q4 the 12-month expected credit loss ratio of 30b s e lects anage ent’s udent view given current economic conditions Strong credit quality indicators while the NPL ratio has recently trended upwards Development of non-performing loans, moratoria and forbearance (% of total loan book) 12-month expected credit loss for performing loans to customers (on balance sheet) (bps) Development of NPL ratio between segments (% of relevant loan book) NPL coverage breakdown* (ISK bn) o tgages indi iduals o tgages co o ates the loans co o ates the loans indi iduals onst uction co o ates on e o ing loans g oss ca ing a ount o e age atio ight a is e age co e age atio ight a is on e o ing loans o ato ia o bea ance esidential o tgages otal loan book o o ate loans e age ndi esidential o tgages o o ates *Residential property development or secured by residential real estate or land Non-performing loans: Loans in Stage 3 according to IFRS 9
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ite o s ac o econo ic scena ios dates to odels oss allowance oss allowance et o iginations hanges to scena io weights the including loan g owth act o net t ans e to tage the tage i acts 25 Changes to loss allowance on loans to customers YTD (ISK bn) Increase to Stage 3 impairment in Q4 mainly due to a single credit exposure. Included are FX changes and calculated interest on Stage 3 provision, which are not reflected in Net impairment line in the Income Statement. Off-balance impairments and effect of payments of loans previously written off are excluded from this analysis. IFRS9 scenario likelihood YE 2022 YE 2023 YE 2024 YE 2025 Optimistic 10% 10% 10% 15% Base case 65% 60% 60% 60% Pessimistic 25% 30% 30% 25% Expected normalization of economic conditions on the back of high real rates are reflected in the shift of scenario weights from pessimistic to optimistic. However, the weight assigned to the pessimistic scenario remains relatively high based on historical values, highlighting the continued uncertainty in the economic outlook IFRS 9 economic scenarios and assumptions 25 On loans to customers total (ISK bn) Loans to customers are 0.94% provisioned at 31.12.2025, was 0.75% at 31.12.2024 On loans to corporates (ISK bn) Loans to corporates are 1.43% provisioned at 31.12.2025 On loans to individuals (ISK bn) Loans to individuals are 0.40% provisioned at 31.12.2025 Loss allowance by IFRS 9 stages tage tage tage
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26 Deposits from customers - Deposits from customers of ISK 921bn represent o the Bank’s total liabilities - Stable deposits consist of deposits from individuals, E’s and co o ates with low out low weight stable deposits increased by 10.5% during the year - Deposits from individuals increased by 13.6% in 2025 and by 5.6% in Q4 - Successful launch of a new retail savings account within Arion Rewards led to a significant increase in deposits in Q4 - Corporate deposits generally decline in Q4 due to income tax payments - Loans to deposits ratio of 144% at the end of the year and has been relatively stable over the last few years Continued momentum in stable deposits Deposits from customers (ISK bn) Deposits by insurance scheme Loans to deposits ratio (%) ndi iduals E s o o ates o e eigns B and E ension unds the oans to de osits atio oans to de osits atio without co e ed bonds Deposit growth by LCR outflow category (ISK bn) ut low weight ut low weight ut low weight ninsu ed nsu ed
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27 Funding and rating - Refinance of 2026 maturities began in Q3 2025 - Refinance of EUR senior preferred bond maturing in 2026 was successfully completed - Successful issuance of green bonds denominated in SEK and NOK in January 2026 - Funding activities in 2026 will focus largely on refinancing the Q4 EUR 500m covered bond maturity - Total issuance of ISK covered bonds amounted to ISK 6bn in Q4 2025 and ISK 18.5bn for the full year - n June ood ’s a i ed ion Bank’s long term issuer rating with stable outlook following proposed merger announcement with Kvika Robust funding profile and stable ratings Borrowings by type (ISK bn) Maturities of borrowings and call dates on subordinated liabilities (ISK bn) Development of EUR funding spreads (bps)Ratings o e ed bonds enio e e ed o e ed bonds E ubo dinated liabilities MOODY’S Issuer - long term A3 A1 Covered bond Aa1 N/A Outlook Stable Stable o e ed bonds enio e e ed o e ed bonds E ion enio ion enio enio B inde 31.12.24 31.12.2530.09.2531.03.25
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28 Own funds Strong capital position Capital ratio (%) Leverage ratio (%) Risk-weighted exposure amount (ISK bn) E atio dditional ie atio ie atio edit isk a ket isk e ational isk E otal assets - CET1 position is 308bps above regulatory requirement - Net earnings 2025 of ISK 30.6bn and foreseeable dividends of 50% thereof are included in the capital ratios presented - A buy-back of ISK 5bn approved by the Board of Directors in 2025 and the FSA in 2026 is also accounted for in the ratios - Total risk-weighted exposure amount (REA) decreased by ISK 29bn or 2.8% during the quarter. The implementation of CRR3 resulted in a REA decrease of around ISK 55bn, which was partly offset by loan growth of ISK 27bn - Leverage ratio of 11.4%, significantly above most international peers and regulatory requirement
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29 Own funds The capital ratios continue to be strong Own funds and capital requirements (%) *** a ital atios a get ca ital st uctu e a ital e ui e ent a ital e ui e ent b tie a ital e ui e ent b t e o ca ital E E illa illa a ital bu e s and sho t all 21.2 – 22.2 16.9 - 17.9 - On 30 June, the FSA presented the Bank with a Pillar 2 requirement of 1.9% as a result of the SREP process based on year-end 2024 financials - The medium-term capital management buffer target is around 150-250bps over regulatory requirements which considers the capital benchmarks of credit rating agencies - CRR3 took effect in Iceland in December 2025. This resulted in a capital relief of around ISK 11bn. Some of the initial relief will decrease over time - REA relief for real estate backed loans will be reduced over time as revaluation of real estate collateral is restricted unless when loan is refinanced - REA for equity positions in the banking book to increase from 100% to 250% over 5 years - REA for off-balance sheet items will increase over 8 years or longer - It is unclear how and when changes to capital requirements for market risk (FRTB) will be implemented in the EEA - The solvency ratio of Vördur insurance is 155.2%
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Strategic development • Merger discussions with Kvika are on track • Potential merger will provide numerous opportunities to further strengthen our businesses and services to our clients External environment • Cautious stance as to evolving external rate and economic environment • he ent al Bank’s c cle o interest rate cuts has slowed, as inflation has proven more persistent than expected • Economic activity and growth have slowed, which has generally decreased demand for new loans Operational momentum • Strong operating performance for the year demonstrates good momentum in core earnings and the strategic direction of the Group • The Group continues to benefit from diversified and seasoned businesses and has demonstrated ability to deliver on targets through the cycle Going forward 30
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Key financial indicators - quarterly Return on equity (%) Capital ratio (%) Net interest margin (%) Core operating income / REA (%)Loans to deposits ratio (%) (without loans financed by covered bonds) Total cost-to-Core income ratio (%) ie atio ie atio 31
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Key financial indicators - annual Return on equity (%) Risk exposure amount / Total assets (%) Net interest margin (%) Core operating income / REA (%)CPI imbalance (ISK bn) Total cost-to-Core income ratio (%) 32
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Key figures* 33 Operations 2025 2024 2023 2022 2021 Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 Net interest income 52,542 46,302 44,685 40,201 32,063 12,350 13,826 14,200 12,166 11,246 Net commission income 17,147 15,360 16,389 16,449 14,673 4,055 4,003 4,553 4,536 4,136 Operating income 78,391 66,451 64,181 55,293 58,225 19,041 18,987 21,322 19,041 17,906 Operating expenses (28,248) (28,328) (25,701) (24,329) (18,008) (8,756) (6,194) (6,697) (6,601) (8,601) Net earnings attributable to shareholders 30,626 26,110 25,757 25,944 28,604 6,226 8,229 9,750 6,421 8,290 Return on equity** 14.9% 13.2% 13.7% 14.1% 14.8% 11.6% 16.0% 19.7% 12.8% 16.4% Net interest margin 3.2% 3.1% 3.1% 3.1% 2.8% 2.9% 3.3% 3.5% 3.1% 2.9% Return on assets 1.8% 1.7% 1.7% 1.9% 2.3% 1.4% 1.9% 2.4% 1.9% 2.1% Total cost-to-core income ratio 42.3% 47.2% 44.7% 45.0% 51.6% 54.9% 36.3% 36.6% 42.6% 57.5% Cost-to-income ratio 36.0% 42.6% 40.0% 44.0% 44.4% 46.0% 32.6% 31.4% 34.7% 48.0% Cost-to-total assets 1.7% 1.8% 1.7% 1.8% 2.1% 2.0% 1.4% 1.6% 1.6% 2.1% Balance Sheet 31.12.2025 31.12.2024 31.12.2023 31.12.2022 31.12.2021 31.12.2025 30.09.2025 30.06.2025 31.03.2025 31.12.2024 Total assets 1,755,765 1,618,267 1,525,672 1,465,609 1,310,710 1,755,765 1,736,535 1,713,145 1,686,655 1,618,267 Loans to customers 1,329,056 1,230,058 1,152,789 1,084,757 936,237 1,329,056 1,301,708 1,272,468 1,234,006 1,230,058 Mortgages 576,828 570,842 549,371 513,605 463,457 576,828 577,551 575,425 570,860 570,842 Share of stage 3 loans, gross 2.4% 2.3% 1.7% 1.2% 1.9% 2.4% 2.3% 2.4% 2.5% 2.3% REA/ Total assets 58.6% 61.0% 59.7% 60.1% 61.9% 58.6% 60.9% 60.1% 59.5% 61.0% CET 1 ratio 18.4% 18.2% 19.7% 18.8% 19.6% 18.4% 18.0% 18.0% 18.3% 18.2% Leverage ratio 11.4% 12.2% 12.4% 11.8% 12.7% 11.4% 11.4% 11.5% 11.4% 12.2% Liquidity coverage ratio 199.2% 180.6% 191.8% 158.5% 202.8% 199.2% 205.5% 156.4% 186.4% 180.6% Loans to deposits ratio 144.3% 143.5% 145.4% 143.6% 142.8% 144.3% 141.9% 141.5% 139.5% 143.5% *Figures for periods prior to 2022 have not been restated according to IFRS 17 **Attributable to shareholders of Arion Bank All amounts in ISK million
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34 Disclaimer - This document has been prepared for information purposes only and should not be relied upon, or form the basis of any action or decision, by any person. Nothing in this document is, nor shall be relied on as, a promise or representation as to the future. In supplying this document, Arion Bank does not undertake any obligation to provide the recipient with access to any additional information or to update this document or to correct any inaccuracies herein which may become apparent. - The information relating to Arion Bank, its subsidiaries and associates and their respective businesses and assets contained in, or used in preparing, this document has not been verified or audited. Further, this document does not purport to provide a complete description of the matters to which it relates. - Some information may be based on assumptions or market conditions and may change without notice. Accordingly, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, forecasts, opinions and expectations contained in this document and no reliance should be placed on such information, forecasts, opinions and expectations. To the extent permitted by law, none of Arion Bank or any of their affiliates or advisers, any of their respective directors, officers or employees, or any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. - This presentation contains forward-looking state ents that e lect anage ent’s cu ent iews with es ect to ce tain utu e e ents and potential financial performance. The information in the presentation is based on company data available at the time of the presentation. Although Arion Bank believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of various factors. The most important factors that may cause such a difference for Arion Bank include but are not limited to: a) the macroeconomic development, b) change in inflation, interest rate and foreign exchange rate levels, c) change in the competitive environment and d) change in the regulatory environment and other government actions. This presentation does not imply that Arion Bank has undertaken to revise any forward-looking statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances arise that will lead to changes after the date when this presentation was made. Arion Bank assumes no responsibility or liability for any reliance on any of the information contained herein. It is prohibited to distribute or publish any information in this presentation without Arion Bank’s prior written consent. - Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. - This document should not in any way be regarded or interpreted as investment advice by the Bank - By accepting this document, you agree to be bound by the foregoing instructions and limitations.