Shares and shareholders
Arion Bank’s share capital amounts to ISK 1,814 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. At the Annual General Meeting of Arion Bank hf. on 20 March 2019 a motion was passed to reduce the company’s share capital by ISK 186,000,000 at nominal value by cancelling the company’s own shares. The Bank launched a buy-back program at the end of October and at year-end 2019 the Bank owned a total of 41,241,120 of its own shares and SDRs, representing 2.27% of the company's share capital. No voting rights are attached to the Bank’s own shares.
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Major shareholders
There were considerable changes to the Bank’s shareholders in 2019. Kaupskil, which for many years was by far the largest shareholder in the Bank, sold its remaining shareholding in July. Numerous investors acquired these shares, most notably Taconic Capital and Icelandic pension funds. At the end of December 2019 Taconic Capital was the largest shareholder in Arion Bank with a shareholding of 23.53%. Sculptor Capital Management was the second largest shareholder with a shareholding of 9.53%.
| Largest shareholders - 31 December 2019 | Number of shares | % |
|---|---|---|
| Taconic Capital Advisors UK LLP | 426,749,999 | 23.53% |
| Sculptor Capital Management | 172,802,115 | 9.53% |
| Gildi Pension Fund |
159,424,358 | 8.79% |
| Lansdowne Partners |
91,083,601 | 5.02% |
| Stoðir hf. | 90,000,000 | 4.96% |
| Goldman Sachs International | 67,400,000 | 3.72% |
| The Pension Fund of Commerce | 66,630,969 | 3.67% |
| LSR Pension Fund | 63,000,000 | 3.47% |
| Eaton Vance | 58,571,092 | 3.23% |
| Stefnir hf. | 44,699,870 | 2.46% |
| Arion Bank hf. | 41,241,120 | 2.27% |
| Frjálsi Pension Fund |
39,496,480 |
2.18% |
At year-end just under half of shareholders were Icelandic and the remaining shareholders are mainly from the United Kingdom, the United States, Germany and Sweden. The total number of shareholders is more than 6,500.
| 31.12.2018 | 31.12.2019 | |
|---|---|---|
| Iceland | 45.7% | 52.0% |
| United Kingdom | 29.7% | 22.9% |
| United States | 18.3% | 14.1% |
| Germany | 1.9% | 2.0% |
| Sweden | 1.4% | 1.7% |
| Other | 3.4% | 1.4% |
Trading and performance
The Bank’s share price was subject to considerable volatility in the first and second quarters, mainly due to economic uncertainty before and after the collapse of WOW air in March 2019. Over the whole year, however, the Bank’s share price performed well, up 22.4% on Nasdaq Iceland and the Bank’s SDRs gained 29.2% on Nasdaq Stockholm. Furthermore, the Bank paid a dividend of ISK 5 per share in the first quarter and initiated a share buy-back program in the fourth quarter.
Over the whole year, however, the Bank’s share price performed well, up 22.4% on Nasdaq Iceland and the Bank’s SDRs gained 29.2% on Nasdaq Stockholm.
The average daily turnover more than doubled from the previous year, averaging 5.2 million shares and 1.5 million SDRs (around 6.7 million in total).
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), it can be seen that Arion Bank was one of the better performers in 2019. Only Ringkjöbing Landbobank outperformed Arion Bank, with its share price up 50% in 2019. Arion Bank also performed better than all the large cap Nordic banks and far better the STOXX Europe 600 Banks index.
Share/SDR development compared with Europe and Nordic indices
Dividends and share buy-back
In March the Annual General Meeting approved a dividend payment of ISK 10 billion, or ISK 5 per share. The Bank’s share buy-back program, which was initiated in October, authorized the purchase of up to 3.2% of issued shares or a maximum of 59 million shares. At year-end the Bank had bought 41 million own shares and SDRs (approximately 2.27% of issued shares) for ISK 3.3 billion. The dividends and share buy-back in 2019 therefore totalled ISK 12.4 billion taking into account the Bank's own shares.
The Bank’s current target states that dividends to shareholders will be 50% of the annual net earnings. The Bank may also decide to pay extraordinary dividends if there is sufficient capital.
Arion Bank’s shares and SDR’s - key figures
| 2018 |
2019 |
|
|---|---|---|
| 2019 Earnings per share | 3.89 | 0.61 |
| Dividend per share, ISK |
5.00 | 5.00 |
| P/E ratio |
18.46 | 142.32 |
| Market capitalization shares, ISK billion | 141 | 157 |
| Market capitalization SDRs, SEK billion |
10.4 |
12.1 |
| Share price, 31 December, ISK |
70.5 |
86.3 |
| SDR2 price, 31 December, SEK |
5.18 |
6.69 |
| Highest share price during year (close), ISK1 |
93.6 |
86.3 |
| Highest SDR2 price during year (close), SEK1 |
8.07 | 6.69 |
| Lowest share price during year (close), ISK1 |
70.5 |
69.3 |
| Lowest SDR2 price during year (close), SEK1 |
5.18 |
5.25 |
| Share price performance, ISK1 |
-6.0% |
22.4% |
| SDR2 price performance, SEK1 |
-15.2% |
29.2% |
| Total shareholder return ISK, % |
0.7% |
29.5% |
| Dividend yield ISK, % |
7.1% |
5.8% |
| Average daily turnover on Nasdaq Iceland (no. of shares)1 |
1,206,679 |
5,226,166 |
| Average daily turnover on Nasdaq Stockholm (no. of SDRs)1 |
1,289,180 |
1,535,166 |
| Number of outstanding shares as of 31 December, millions |
2,000 |
1,8141 |
| Number of outstanding SDRs2 as of 31 December, millions |
685 |
265 |
| Holding of repurchased own shares as of 31 December, millions |
186 |
41 |
1) Since the date of the IPO, June 15 2018
2) SDR = Swedish depository receipt, one SDR represents one share