Personal Banking

Landsbankinn held a 37.9% market share in the retail market in 2017, according to a Gallup survey. This is a record high. The survey also shows increasing satisfaction among the Bank's customers.

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The number of private individuals who choose to bank with Landsbankinn has increased steadily year from year and the Bank has held the largest share of the retail market for the past four consecutive years. Since 2008, the Bank’s market share has increased by just under 10 percentage points.
Market share - Retail market
Source: Gallup

Continued robust presence in the housing loan market

Landsbankinn continued to be an active player in the housing loan market in 2017, despite stiff competition. In total, the Bank issued ISK 98 bn in new housing loans in 2017. Around 74% of that amount was lent as inflation-indexed housing loans and 26% were non-indexed. The ratio of non-index loans increased by 9 percentage points between years - non-indexed loans were 17% of new housing loans in 2016.

There are two reasons for the Bank's high activity on the housing loan market in 2017. On the one hand, the transaction volume in real estate increased with higher prices and it has become more common for individuals to refinance their mortgages. On the other hand, and even more importantly, Landsbankinn emphasises providing customers with comprehensive advice and prompt and professional handling of matters related to loan applications, such as credit scoring. Landsbankinn's market share in new housing loans was 27% in 2017 as compared with 28% in 2016.

Market share in new housing loans in 2017

New housing loans (ISKbn)

Landsbankinn lends up to 85% of the purchase price of residential housing. Loans for up to 70% of the purchase price with an up to 40-year term and an additional loan of 15% can be taken. The additional loan is useful primarily for those purchasing their first home, not least young people.

The Bank registered a total of 6,900 new housing loans to around 4,213 individuals in its books in 2017. These figures include both new housing loans and refinancing.

Housing loan insurance - new type of life insurance

In 2017, Landsbankinn, in collaboration with insurance company Sjóvá, began offering customers with housing mortgages from the Bank housing loan insurance. This is a type of life insurance intended to provide next of kin with financial security upon the death of the borrower. Compensation is paid directly toward lowering the housing loan upon the death of the borrower. This lightens the repayment burden on the loan by the amount of the insurance. This insurance can amount to up to ISK 20 million.

Implementation of Act on Housing Loans

In 2017, a new law on housing loans to consumers was enacted. The objective of the Act is to ensure consumer protection in the presentation, advice, granting and brokerage of housing loans to consumers. A further aim of the Act is to promote responsible lending practices and counteract excessive borrowing by consumers. In general, the impact of the new Act on consumers is positive. The Act stipulates that borrowing charges on all housing loans be a set ISK-denominated figure and tightens the framework for payback penalties on fixed-rate loans. Both provisions should in most cases result in lower costs to consumers and allow them to refinance loans at more favourable terms than before.

Landsbankinn Vehicle & Equipment Financing assists individuals and companies in the financing of new and used vehicles, motorcycles, campers, machinery and equipment.

The Bank's market share in vehicle loans in the new car market

Source: Gallup survey from December 2017

Strong presence in vehicle and equipment financing

Landsbankinn continued to be very active in the vehicle loan market in 2017. The Bank granted a total of ISK 8.5 bn in loans to individuals during the year, which is a 15.3% increase YoY. New lending to companies in the vehicle and equipment market amounted to ISK 24.4 bn in 2017, which is similar to 2016 figures, and with companies in the travel industry being most prominent among customers.

The total loan portfolio of Landsbankinn Vehicle & Equipment Financing amounted to ISK 48 bn at year-end 2017 as compared with ISK 42 bn at the beginning of 2016. The YoY increase is around 14.7%. Around one third of loans are issued to private individuals and two thirds to corporates.

Total lending has increased in line with growing car sales in 2017. According to information from the Icelandic Transport Authority, 21,287 new cars were registered in 2017, which is a 15% increase from 2016. New registration of used passenger cars also increased considerably, with over 4.400 used vehicles registered for the first time in Iceland in 2017.

Ten-year anniversary of ever popular Aukakrónur

Landsbankinn's benefits system Aukakrónur is expanding rapidly. Over 60,000 customers now have cards linked to Aukakrónur collection and that number has grown by 10,000 since 2016. In 2017, Landsbankinn's customers accrued over 326 million Aukakrónur. Credit card holders who link their cards to the Aukakrónur system collect Aukakrónur, both as a ratio of domestic turnover and in the form of a reimbursed discount from partners.

Surveys show that customers who take advantage of Aukakrónur are more satisfied with the Bank's services and more loyal than other customers.

A great number of companies have joined the Aukakrónur partnership this year, with 77 different retailers and service providers joining as partners. Aukakrónur can now be collected and used with over 260 partners throughout Iceland. The use of Aukakrónur has never been as common, with customers purchasing goods and services from partners for just under ISK 268 million Aukakrónur in 2017.

According to Gallup polls from September 2016 and 2017, customers are very satisfied with the Aukakrónur system.
Collection of Aukakrónur

Landsbankinn's new debit card

Satisfied customers

Source: Gallup survey from November 2017

New contactless credit card

In the second half of 2017, Landsbankinn began issuing new VISA credit cards with a contactless function. The contactless credit cards allow customers to pay amounts of up to ISK 5000 by holding the card up to a card reader without inserting it and entering a PIN. From time to time, card holders will be asked to insert the card and enter their PIN even when making contactless payment and this is for the sake of security.

Customers happy with 360° advice

In 2015, Landsbankinn began offering customers 360° advice, a comprehensive financial advisory service that covers all main aspects of personal finances, from savings to loans to insurance etc.

Customers have responded positively to the advisory service from the start. In 2017, 7.402 customers received 360° advice, with around 20.500 customers participating since 2015.

Following an interview with a financial advisor, customers receive a link to an online survey that includes questions about their level of satisfaction. The results show that customer satisfaction has consistently increased to reach 4.5 out of 5 in 2017. The surveys also show that customers who have received 360° advice are more satisfied than other Landsbankinn customers.

Increased satisfaction with branch services

Landsbankinn's customers are very satisfied with the services provided through branches and outlets. In a Gallup survey undertaken in November 2017, 98% of customers said that they were satisfied with the service. Of that number, 91% said they were very or perfectly satisfied and 7% were fairly satisfied.