Medium term financial targets
Arion Bank operates according to clear financial targets which the Bank releases publicly. The Bank’s financial targets were updated during the first quarter of 2024 and apply for the next three years.
The presentation at Arion CMD 2024 covered the Bank’s strategy, key tasks and operating environment, focuses in the Bank’s funding and capital structure, the Bank’s credit ratings, the progress of development projects, the financial outlook and updated financial targets.
Medium term financial targets
| Return on equity | Exceed 13% |
|---|---|
| Core income / REA | Exceed 7.2% |
| Cost-to-core income ratio | Below 45% |
| CET1 ratio above regulatory capital requirements |
150-250 bps management buffer |
| Insurance revenue growth | Exceed the growth of the domestic market by more than 3 percentage points |
| Insurance combined ratio of Vörður | Below 95% |
| Dividend payout ratio* | 50% |
Medium term targets are reviewed annually and the underlying horizon is up to 3 years. Updated March 2024.
*Pay-out ratio of approximately 50% of net earnings attributable to shareholders through either dividends or buyback of the Bank’s shares or a combination of both. Additional distributions will be considered when Arion Bank’s capital levels are above the minimum requirements set by the regulators in addition to the Bank’s management buffer.
Return on equity
Cost-to-core income ratio
Insurance combined ratio of Vörður
Core income / REA
CET1 ratio
Dividend payout ratio*
Disclaimer
This notification should not be relied upon, or form the basis of any action or decision, by any person and is not an investment advice in any shape or form. Nothing in this notification is, nor shall be relied on as, a promise or representation as to the future. 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 notification or its contents.