olivLaw · European equity research
Arion banki hf. ARION.IC
Iceland · Nasdaq Iceland · ISIN IS0000028157 · Vertical: Listed companies from Iceland
Arion banki hf. is an Icelandic bank offering lending to individuals and companies, along with insurance and fund management operations through its subsidiaries. In fiscal 2025 the bank reported net earnings of 32.507 billion ISK, and its annual report shows a well-capitalised bank with high liquidity, alongside a proposed merger with Kvika noted by Moody's.
At the close of 05 Nov 2026, Arion banki hf. (ARION.IC) stock was 173.00 ISK (−1.70% on the day), with market capitalisation 240.3 bn ISK, P/E 7.9 on diluted EPS of 21.86 ISK over the last 12 months, beta 0.34, 52-week range 171.50–205.00 ISK.
Data as of · AI analysis dated · Source: ESEF annual reports and closing prices, computed by olivLaw.
Price history
Loading chart…
Technical reading
- RSI (14)
- 36.2
- weak (30–45)
- Bollinger (20, 2)
- 171.67 – 181.77
- in the lower half of the band · %B 0.13 · band width 5.7%
- SMA 50 / 200
- 178.87 / 189.04
- downtrend (price < SMA50 < SMA200)
- MACD (12, 26, 9)
- -0.46 / -0.33
- MACD below signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | EURO STOXX 50 | vs EURO STOXX 50 | Vertical median | |
|---|---|---|---|---|
| 1 month | −1.4% | −0.6% | −0.8 pp | — |
| 3 months | −10.1% | −4.2% | −6.0 pp | — |
| 6 months | −11.3% | +4.3% | −15.6 pp | — |
| Year to date | −14.4% | +7.5% | −21.9 pp | — |
| 1 year | 0.0% | +9.9% | −9.9 pp | −7.8% |
| 3 years | +32.6% | +49.8% | −17.3 pp | +13.1% |
| 5 years | −9.9% | +42.8% | −52.7 pp | — |
Price returns, dividends excluded.
Quarterly results
ESEF annual reports carry no quarters: the results are annual (below).
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 0 percentile of its own 3-quarter history (min 9.0, median 9.2, max 9.2; quarters with earnings only).
Fiscal years
| Fiscal year | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | unavailable | unavailable | unavailable |
| Revenue YoY | unavailable | unavailable | unavailable |
| Net income | 25.8 bn | 26.1 bn | 30.6 bn |
| Net income YoY | unavailable | +1.4% | +17.3% |
| Diluted EPS | 16.89 | 18.09 | 21.86 |
| Diluted EPS YoY | unavailable | +7.1% | +20.8% |
| net % | unavailable | unavailable | unavailable |
| Free cash flow | -11.8 bn | 23.3 bn | 36.1 bn |
Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 138.5 bn ISK
- Financial debt
- unavailable ISK
- Net debt
- unavailable ISK
- Equity
- 217.4 bn ISK
- Total assets
- 1,755.8 bn ISK
- Debt / equity
- unavailable
- Current ratio
- unavailable
- ROE
- 14.4%
- ROA
- 1.8%
- FCF margin
- unavailable
Financial statements (source on every figure)
Revenue and net income (ISK)
Income statement · ISK
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Operating income | 64.2 bn | 66.5 bn | 78.4 bn | esef· 17 Feb 2026verified |
| Pre-tax income | 35.3 bn | 35.1 bn | 45.0 bn | esef· 17 Feb 2026verified |
| Income tax | 9.6 bn | 8.9 bn | 12.5 bn | esef· 17 Feb 2026verified |
| Net income | 25.8 bn | 26.1 bn | 30.6 bn | esef· 17 Feb 2026verified |
| Diluted EPS | 16.89 | 18.09 | 21.86 | esef· 17 Feb 2026verified |
Balance sheet · ISK
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Cash | 115.0 bn | 117.3 bn | 138.5 bn | esef· 17 Feb 2026verified |
| Total assets | 1,525.7 bn | 1,618.3 bn | 1,755.8 bn | esef· 17 Feb 2026verified |
| Total liabilities | 1,326.4 bn | 1,411.2 bn | 1,538.4 bn | esef· 17 Feb 2026verified |
| Equity | 199.3 bn | 207.1 bn | 217.4 bn | esef· 17 Feb 2026verified |
| Shares outstanding at year end | 1.4 bn | 1.4 bn | 1.4 bn | esef· 17 Feb 2026derived |
Cash flow · ISK
| Line | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|
| Operating cash flow | -11.4 bn | 23.6 bn | 36.5 bn | esef· 17 Feb 2026verified |
| Capex | 457.0 m | 325.0 m | 463.0 m | esef· 17 Feb 2026verified |
| Free cash flow | -11.8 bn ≈ | 23.3 bn ≈ | 36.1 bn ≈ | esef· 17 Feb 2026derived |
| Investing cash flow | -977.0 m | -1.2 bn | 3.9 bn | esef· 17 Feb 2026verified |
| Financing cash flow | -22.1 bn | -16.5 bn | -20.2 bn | esef· 17 Feb 2026verified |
| Share repurchases | 3.3 bn | 12.5 bn | 6.0 bn | esef· 17 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
- indicators available: 4 of at least 6
- score weight coverage: 31.2% of at least 60%
A scoring methodology on indicators and valuation, not investment advice.
Closing price
05 Nov 2026Source: olivLaw, closing series
Market cap: 240.3 bn ISK
Key indicators
Coverage and freshness
Score by group
31% · Insufficient data
Estimated value range
unavailable — no valuation assumptions for the reporting currency
Valuation assumptions are editorial choices, not measured; beta is not measured.
Valuation methods
Assumptions (illustrative, editorial)
- Risk-free rate
- 6.5%
- Equity risk premium
- 6.0%
- Beta (default)
- 1.00
- Cost of equity
- 12.5%
- Terminal growth
- 3.0%
Factor scorecard
Insufficient data
Minimum-evidence gate: indicators available: 4 of at least 6; score weight coverage: 31.2% of at least 60%
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | unavailable | unavailable | — |
| Net margin · Quality | unavailable | unavailable | — |
| FCF conversion · Quality | 117.7% | 100 (on a fixed band) | 20% |
| Revenue CAGR 3Y · Growth | unavailable | unavailable | — |
| EPS CAGR 3Y · Growth | unavailable | unavailable | — |
| Net debt / EBITDA · Balance sheet | unavailable | unavailable | — |
| Interest coverage · Balance sheet | unavailable | unavailable | — |
| Current ratio · Balance sheet | unavailable | unavailable | — |
| P/E (TTM) · Valuation | 7.9x | 83 (vs peers) | 33% |
| EV/EBITDA · Valuation | unavailable | unavailable | — |
| FCF yield · Valuation | 15.0% | 100 (on a fixed band) | 27% |
| Shareholder yield (distributions) · Returns | 2.5% | 35 (on a fixed band) | 20% |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet· partialunavailable · 0/3 factors with a value
- Growth· partialunavailable · 0/2 factors with a value
- Quality· partial100/100 · 1/3 factors with a value
- Returns· partial35/100 · 1/2 factors with a value
- Valuation91/100 · 2/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
Arion banki hf. (ARION.IC). Latest full fiscal year: 2025; data up to 2025-12-31.
Figures computed from the financial statements: ROE 14.4%.
The estimated value range is 378.33–448.98 ISK per share (median of 1 methods, agreement: single method); assumptions are illustrative. Against the central value of 380.03 ISK, the price of 173.00 ISK leaves a potential of 119.7% (value / price − 1) and a margin of safety of 54.5% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
Insufficient data for a verdict (indicators available: 4 of at least 6; score weight coverage: 31.2% of at least 60%).
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- FCF conversion: 117.7%
- P/E (TTM): 7.9x
- FCF yield: 15.0%
- The price is below the estimated value range
What contradicts it
No signal among the computed factors. That is not an absence of risk: factors without data were not assessed, and business risks (margins, inventory, demand) are in the source-based analysis.
Not assessed (insufficient data or a ratio without meaning): ROIC, Net margin, Revenue CAGR 3Y, EPS CAGR 3Y, Net debt / EBITDA, Interest coverage, Current ratio, EV/EBITDA, Payout ratio (FCF).
Versus the vertical median
Listed companies from Iceland · same country · compared with 11 companies
Multiples and returns vs the median
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| HAGA.ICHagar hf. | 133.6 bn | 20.5 | 18.2% | 3.8% | +9.3% | +8% / +83% |
| FESTI.ICFesti hf. | 90.9 bn | 22.8 | 10.1% | 2.6% | +13.4% | −8% / +67% |
| HEIMAR.ICHeimar hf. | 61.3 bn | 7.5 | 13.5% | 55.5% | +7.7% | −6% / +49% |
| BERA.ICÖlgerðin Egill Skallagríms hf. | 37.1 bn | 17.3 | 13.7% | 5.9% | +7.7% | −24% / +0% |
| NOVA.ICNova Klúbburinn hf | 12.0 bn | 14.8 | 8.5% | 6.1% | +2.8% | −26% / −16% |
| ALVO.ICAlvotech | — | — | — | 9.0% | +43.4% | −14% / −58% |
| ASAR.ICSíminn hf. | — | 17.4 | — | — | +3.0% | −19% / +27% |
| BRIM.ICBrim hf. | — | — | 11.9% | 14.6% | +5.2% | +19% / +13% |
| EIK.ICEik Fasteignafélag Hf. | — | — | 10.2% | 43.6% | +9.5% | +1% / +23% |
| EIM.ICEimskipafélag Íslands hf. | — | — | 3.2% | 1.2% | −4.7% | +6% / −35% |
| HAMP.ICHampiðjan hf | — | — | 1.7% | 1.2% | +15.7% | −26% / −37% |
1- and 3-year price returns: for ARION.IC from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Scenarios are not available. input data missing
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
In brief
Arion banki hf. is an Icelandic bank offering lending to individuals and companies, along with insurance and fund management operations through its subsidiaries. In fiscal 2025 the bank reported net earnings of 32.507 billion ISK, and its annual report shows a well-capitalised bank with high liquidity, alongside a proposed merger with Kvika noted by Moody's 1.
SWOT
Strengths
- The bank has solid regulatory capital and a comfortable liquidity position, with an A3 rating from Moody's.
- Diversification through insurance and fund management subsidiaries provides additional income sources.
- The bank has a clear dividend policy and a track record of distributing profit to shareholders.
Weaknesses
- Activity is concentrated in the Icelandic market, exposing the bank to local economic cycles.
- Interest income depends on rate levels and balance sheet structure, and a decline could weigh on profitability.
- Integration costs of a merger could temporarily compress profit margins.
Opportunities
- Capital relief from CRR3 could enable share buybacks or additional dividends.
- Green finance and sustainable lending could open new business lines in line with the bank's climate goals.
- A merger with Kvika could create an entity with a larger market share and scale economies.
Threats
- A deterioration in loan quality in a weaker economy could lead to further impairment charges.
- Changes in regulation or capital requirements could reduce financial flexibility.
- Competition from banks and non-bank operators could pressure lending margins and fees.
Risks
- Credit riskhigh
Loan portfolio quality depends on economic conditions, and expected credit loss models involve subjective management judgements, highlighted by the auditor as a key audit matter 1.
- Merger integration riskmedium
The proposed merger with Kvika could delay or complicate the integration of systems and teams if not executed in an orderly way 1.
- IT systems riskmedium
Financial reporting depends on a large number of complex IT systems, and accuracy errors could affect the reliability of the information 1.
- Regulatory and capital riskmedium
The phased application of CRR3 and future MREL requirements could reduce capital available for shareholder distributions 1.
- Shareholder concentrationlow
A large shareholder holds a significant stake, which could influence decisions at the general meeting 1.
Investment thesis
What would need to be true (bull case)
- If CRR3 capital relief translates into larger distributions to shareholders, earnings per share could sustain continued investor interest.
- A solid liquidity position and the A3 rating could lower funding costs and support lending growth.
- If the Kvika merger is completed in an orderly way, the bank could gain a larger market share and cost synergies.
What would break the thesis
- A rise in loan impairment charges could reduce profit and limit the capacity to pay dividends.
- Lower interest income in a falling rate environment could dilute return on assets.
- Merger integration and execution risks could outweigh the expected benefits if the process is delayed.
What to watch
- Outcome of the general meeting vote on the proposed dividend and share buyback2026
- Trend in net impairment charges and loan portfolio qualityQ1 2026
- Progress of the Kvika merger and regulatory approvals2026
- Final effect of CRR3 on capital requirements as transitional arrangements phase out2027
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
The business
The core activity remains financial intermediation: taking deposits and extending loans, supplemented by fee income and insurance services. The bank also issues covered bonds and subordinated bonds, which allows it to diversify its funding sources 1.
The governance structure includes a board of directors with five sub-committees, and the sustainability policy is integrated into operational decisions and the incentive system 1.
Segments
Retail and corporate banking
The core segment earns interest and fee income from lending and deposits, representing the group's main source of revenue 1.
Insurance through Vörður
The subsidiary Vörður conducts insurance activities, and insurance service results are reported separately in the income statement 1.
Fund management through Stefnir
Stefnir manages investment funds and applies a responsible investment framework, with an ESG committee that decides on ethical restrictions for the funds 1.
Market context
The bank operates in Iceland's banking market, where interest income and regulatory capital are sensitive to interest rate levels and to the CRR3 rules applied from December 2025 1. The capital adequacy ratio was 22.5% at 31 December 2025, and the CET1 ratio 18.3% 1.
The funding market has been open, and the bank issued senior preferred notes in euro, Norwegian and Swedish kronor in 2025, with multiple oversubscription 1.
Trends
- CRR3 regulationtailwind
The introduction of CRR3 in Iceland reduced risk-weighted assets by around 55 billion ISK, releasing capital, although part of the relief will be phased out over time 1.
- Deposit growth and liquiditytailwind
The bank reported a robust liquidity position and continued deposit growth, which supports its lending funding 1.
- Cost of credit riskheadwind
Net impairment charges rose compared with the prior year, indicating greater pressure on loan quality in a more difficult economic cycle 1.
- Proposed merger with Kvikamixed
The proposed merger with Kvika is viewed by Moody's as a factor that could affect the rating profile if integration is not orderly 1.
Competitive position
Arion banki competes with other Icelandic banks in lending and deposits, as well as with non-bank financial platforms in funds and insurance. The sources provided do not detail competitors' market shares.
The competitive position is supported by the A3 rating and solid capital, but competitive pressure could increase if sector mergers change the market structure 1.
- Íslandsbanki hf.
Icelandic bank competing in lending to individuals and companies; not US-listed.
- Landsbankinn hf.
Icelandic bank with similar retail and corporate activity; not US-listed.
- Kvika banki hf.
Icelandic bank with which Arion has proposed a merger, which could change the competitive structure.
- Non-bank fund and insurance operators
Fund management and insurance companies competing with the Stefnir and Vörður subsidiaries.
News & filings
In the press
No news in our archive over the last 180 days.
Annual reports (ESEF)
- Annual report 202517 Feb 2026
- Annual report 202425 Feb 2025
Sources
- [1] Annual report, fiscal year ended 2025-12-31 (ESEF) · SEC / Arion banki hf. · 31 Dec 2025
Figures computed by olivLaw from ESEF annual reports and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.