Shares and shareholders

At the end of 2020 Arion Bank’s share capital amounted to ISK 1,730 million at nominal value. All of the company’s share capital is of a single class and each share is ISK 1 nominal value and entitles the owner to one vote. The shares are traded on Nasdaq Iceland and also on Nasdaq Stockholm in the form of Swedish depository receipts (SDRs) where one SDR equals one share. On 17 March 2020 the AGM of Arion Bank resolved to cancel 84 million shares amounting to ISK 84 million of the Bank’s share capital, reducing total share capital from ISK 1,814 million to ISK 1,730 million nominal value. The Bank’s share buyback programme ended at the same time. The cancellation of own shares was announced on 12 May. At year-end Arion Bank owned 11,858,184 of its own shares, equivalent to 0.69% of shares in the Bank. No voting rights are attached to the Bank’s own shares.

Major shareholders

The year saw some changes to ownership stakes. The shareholders which increased their stakes most in 2020 were the Pension Fund of Commerce (+3.79 percentage points), LSR Pension Fund (+2.56 points) and Birta Pension Fund (+1.51 points). The biggest selling shareholders this year were Lansdowne Partners, which reduced its stake by -3.91 percentage points, Goldman Sachs International (-3.72 points) and Sculptor Capital Management (-3.41 points).

At the end of December 2020 Taconic Capital was the largest shareholder in Arion Bank with a shareholding of 23.22%. Gildi Pension Fund was the second largest shareholder with a shareholding of 9.92%.

Largest shareholders - 31 December 2020

Number of shares

%

Taconic Capital Advisors UK LLP

401.711.052

23,22%

Gildi Pension Fund

171.583.919

9,92%

Live Pension Fund

129.054.941

7,46%

Sculptor Capital Management

105.841.058

6,12%

LSR Pension Fund

104.370.000

6,03%

Stoðir hf.

86.300.425

4,99%

Stapi Pension Fund

50.486.076

2,92%

Birta Pension Fund

48.938.738

2,83%

Frjálsi Pension Fund

47.209.198

2,73%

Stefnir Asset Management Company hf

36.917.960

2,13%

Eaton Vance

36.436.880

2,11%

Íslandsbanki hf.

26.674.625

1,54%

Hvalur hf.

26.245.034

1,52%

Lífsverk lífeyrissjóður

23.670.451

1,37%

MainFirst Bank AG

19.774.364

1,14%

Lífeyrissjóður Vestmannaeyja

19.563.676

1,13%

Lansdowne Partners

19.295.666

1,12%

Source: Modular Finance

At the end of 2020 approximately 62% of shareholders were Icelandic. Other shareholders were primarily from the United Kingdom, the United States, Germany and Sweden. At year-end there were 7,400 shareholders in the Bank.

Ownership – by country

   31.12.2020   31.12.2019 
 Iceland 62.4%  45.4% 
 United Kingdom 24.6%  29.7% 
 United States 8.9%  18.3% 
 Germany 1.1%  1.9% 
 Sweden 1.0%  1.4% 
 Other 1.9%  3.4% 

Source: Nasdaq

Trading and performance

The first quarter of 2020 saw the Bank’s share price drop sharply as uncertainty over the COVID-19 pandemic took hold. These losses were reversed as the year went on and the share price on Nasdaq Iceland ended the year more than 10% up, but SDRs on Nasdaq Stockholm were 8% down at year-end. This difference is mainly due to the depreciation of the Icelandic króna against the Swedish krona.

Arion shares
Source: Bloomberg

The average turnover with the Bank’s shares and SDRs was down on the previous year. The average daily turnover was 4.24 million shares and 650,000 SDRs, or 4.9 million in total, compared with 6.7 million in 2019.

Share price performance of Arion Bank and mid cap banks in Nordics and European banks

If Arion Bank’s share and SDR price is compared with selected banks of a similar size (mid cap), Arion Bank performed fairly well in 2020. Arion Bank shares on Nasdaq Iceland made the biggest gains, but it could be argued that the performance of the Bank’s SDRs in Sweden is a better indicator since their performance also factors in the depreciation of the Icelandic króna during the year. Arion Bank and its peer banks also far outperformed the STOXX EUROPE 600 Banks index.

Share/SDR development compared with Europe and Nordic indices
Source: Bloomberg

Dividend and share buy-back

In January 2020 the Financial Supervisory Authority of the Central Bank of Iceland granted Arion Bank further authorization to buy own shares for up to ISK 3.5 billion, in addition to the ISK 4.5 billion authorization granted the previous year. The Bank acted in accordance with an updated buyback scheme until the AGM in March 2020. From the beginning of the buyback scheme in 2019 until the AGM the Bank acquired 82.5 million of its own shares and 12.9 million SDRs. In 2020 the Bank bought approximately 50 million own shares and approximately 13 million SDRs.

The board of directors proposed that a dividend of ISK 10 billion be paid in 2020 in respect of the financial year 2019, corresponding to ISK 5.5 a share. The Bank’s AGM decided, however, to defer the distribution of dividends due to the uncertainty over the COVID-19 pandemic, a decision which was in line with the recommendation made by the Central Bank of Iceland. At an extended AGM of Arion Bank on 14 May a resolution was passed that no dividend would be paid in respect of 2019 and that the year’s earnings would be added to the Bank’s capital.

Arion Bank's shares and SDRs (since IPO)

2020

2019

2018

Earnings per share

7,24

0,61

3,86

Dividend per share ISK

0,00

5,00

5,00

P/E ratio

13,12

141,48

18,26

Market capitalisation shares, ISK billion

163

153

141

Market capitalisation SDRs, SEK billion

10,5

11,9

9,4

Share price, 31 December, ISK

95

86,3

70,5

SDR2 price, 31 December, SEK

6,12

6,69

5,18

Highest share price during year (close), ISK

95

86,3

93,6

Highest SDR2 price during year (close), SEK

6,85

6,69

8,07

Lowest share price during year (close), ISK

49,0

69,3

70,5

Lowest SDR2 price during year (close), SEK

3,49

5,25

5,18

Share price performance, ISK

10,1%

22,4%

-6,0%

SDR2 price performance, SEK

-8,5%

29,2%

-15,2%

Total shareholder return ISK, %

10,1%

29,5%

0,7%

Dividend yield ISK, %

0,0%

5,8%

7,1%

Average daily turnover on Nasdaq Iceland (no of shares)

4.244.811

5.226.166

1.206.679

Average daily turnover on Nasdaq Stockholm (no of SDRs)

648.087

1.535.434

1.289.180

Number of outstanding shares as of 31 December, millions

1.719

1.773

1.814

Number of outstanding SDRs2 as of 31 December, millions

265

265

685

Holding of repurchased own shares/SDRs as of 31 December, millions

41

41

186

Number of issued shares

1,730

1,814

2,000

* SDR = Swedish depository receipt, one SDR represents one share
Source: Nasdaq and Arion Bank, Modular Finance