News - About the Bank - Arion bank

Arion Bank has assessed the Supreme Court judgement on exchange-rate linked car loans and its possible effects on the Bank’s capital base.

Should the bank’s mortgage loans to individuals be deemed illegal, it would have a negative effect on the bank's capital base but it would not pose a threat to the bank's financial position.

The Bank has a strong capital ratio which comfortably meets not only the statutory requirements but also FME’s stringent requirements.

If all mortgage loans to individuals denominated in foreign currencies would be deemed illegal, the nominal value of the loans would sharply decrease. Arion Bank’s capital ratio would nevertheless be well above the statutory requirements.

Arion Bank wishes to point out that if the Supreme Court subsequently issues a judgment which is more favourable to borrowers with loans denominated in foreign currencies, these borrowers are entitled to benefit from that judgment even if they have converted their loans into Icelandic krónur.