High leverage ratios and very strong capital, despite planned capital optimization. Stable franchise and market position across all domestic business lines. Concentrated in Iceland with limited risk diversification opportunities. Uncertainty related to eventual sale and change from 100% government ownership in the next few years. The stable outlook on Islandsbanki reflects that we expect the bank's risk-adjusted capital (RAC) ratio to remain sustainably above 15%. This is despite the bank preparing for an eventual sale or IPO over the next two years, and optimizing its capital base by distributing large dividend payouts and issuing capital instruments. We expect the bank's asset quality to improve only marginally from current levels, remaining in line with that of domestic peers. The stable outlook
