Slides
Page 1
Kvika banki hf. Q3 2025 Financial Results 6 November 2025
Page 2
Q3 2025 Net interest income ISK 2,953 million compared to ISK 2,429 million in Q3 2024 Increasing by ISK 524 million from previous year or 21.6% Net fee and commission income ISK 1,571 million compared to ISK 1,552 million in Q3 2024 Increasing by ISK 19 million from previous year or 1.2% Administrative expenses ISK 2,740 million compared to ISK 2,344 million in Q3 2024 Increasing by ISK 396 million from previous year or 16.9% Merger discussions with Arion banki hf. continue Pre discussions with ICA in progress alongside mutual due diligence, milestones anticipated before end of year ISK 1,472 m. Profit after tax 17.8% Pre-tax RoTE 23.0% CAR Profit before tax ISK 1,969 million compared to ISK 1,813 million in Q3 2024 Increasing by ISK 156 million from previous year or 8.6% ISK 1,969 m. Profit before tax
Page 3
Commercial Banking Segment highlights Auður heima success driving continued NII growth • Strong performance from Auður heima: The Auður heima mortgage portfolio reached over ISK 19 billion by the end of Q3. Together with growing deposits, this has supported a 6.6% year-on-year increase in Net Interest Income (NII) for the Commercial Bank • Broad-based balance sheet growth: After a temporary contraction in Q2 related to the ISK 90 billion Íslandsbanki retail offering, deposits returned to a growth trajectory in Q3. Lending growth was seen across all parts of the portfolio, with the loan book excluding Auður heima up 3.8% year-on-year, reflecting steady momentum across the portfolio and brands • Netgíró updated its customer app ahead of the key holiday shopping season, focusing on performance and usability improvements • Straumur migration on track: Straumur is nearing completion of merchant migration from Rapyd to Adyen, with the remaining transfers to be finalized in Q4
Page 4
Investment Banking Segment highlights Solid quarterly performance with continued improvement in Corporate Finance • Market activity in the securities and FX markets declined slightly during Q3, falling below the year - to-date average. The króna remained relatively stable against major currencies, ending the quarter near its strongest levels against the euro since September 2022. The bond market exhibited moderate improvement, with nominal yields declining by 20–30 basis points. Toward the end of September, the airline Play entered receivership, adding further pressure on the Central Bank to reconsider its monetary policy stance • Lending activity remained robust in Q3, resulting in a net increase of 7% for the period. Looking ahead to Q4, there are emerging signs of a potential slowdown in overall economic activity • Corporate Finance achieved a strong performance in Q3, successfully closing several projects that had been in progress
Page 5
Asset Management Segment highlights Assets under management continue to grow in Q3 but outlook uncertain • Equity markets initially experienced volatility during the third quarter, influenced by uncertainty surrounding U.S. trade policy. However, sentiment improved as the quarter progressed, contributing to a recovery in global equity indices • Assets under management amounted to ISK 459 billion at end of September 2025, increasing by ISK 6 billion from the end of the second quarter, mainly driven by market appreciation • Strong equity market performance earlier in the year, alongside some progress towards lower interest rates, but growing concerns towards asset markets going into the final quarter
Page 6
UK Segment highlights Record quarter with increased activity across UK operations • Q3 delivered another period of strong performance across both lending and Private Equity, with total profits from the UK segment of ISK 563 million, the highest quarterly profits ever • Net Interest Margin remains healthy, supported by disciplined portfolio management, stable pricing, and a balanced funding mix • The loan book was stable in the quarter, but due to record levels of origination and a growing pipeline substantial loan growth is expected in Q4 • Harpa has signed a second transaction with closing expected in Q4 2025 or Q1 2026
Page 7
Financials
Page 8
Income Statement Q3 2025 Revenue Composition ISK m. • Solid quarterly performance driven by strong net interest income, with pre-tax profit from continuing operations increasing by 8.6% YoY • Net interest income grew 21.6% YoY, supported by loan book growth and a stable funding cost • Net fee and commission income amounted to ISK 1,571 million, broadly in line with the same period last year, following elevated investment-banking activity in Q2 • Net operating ISK 4,862 million up 9.1% YoY • Administrative expenses ISK 2,740 million up 16.9% YoY. Increase YoY partly due to discontinuation of services provided to TM insurance that were offset against costs in Q3 2024 Income Statement ISK m. Q3 2025 Q3 2024 Diff. Q2 2025 Diff. Net interest income 2.953 2.429 524 2,962 (9) Net fees and commissions 1.571 1.552 19 1,935 (364) Other net operating income 338 474 (136) 231 107 Net operating income 4.862 4.455 407 5,128 (266) Administrative expenses (2.740) (2.344) (396) (2,981) 241 Net impairment (153) (261) 109 (122) (31) Revaluation 0 (36) 36 0 0 Pre-tax profit 1.969 1.813 156 2,025 (56) Income tax (351) (288) 124 (424) 73 Special bank taxes (145) (127) (42) (162) 16 After-tax profit 1.472 1.398 74 1,439 33 Profit after tax from discontinued operations 0 965 -965 0 0 Profit for the period 1.472 2.363 -891 1,439 33 338 474 2,9531,571 2,4291,351 4,862 4,455 Other net operating income Net interest income Net fee and commission income Q3 2025 Q3 2024
Page 9
Income Statement 9M 2025 Revenue Composition ISK m. • Net interest income increased by 23.0% year-on-year to ISK 8.8 billion, supported by continued loan book growth • Net fee and commission income rose 10.8% YoY, reflecting solid Investment Banking performance and stable Asset Management flows • Other net operating income amounted to ISK 581 million • Net operating income grew 15.3% YoY to ISK 14.4 billion • Administrative expenses rose by 13.8% YoY to ISK 8.8 billion. The increase was partly driven by one-off costs incurred earlier in the year and the discontinuation of services to TM, which had previously been offset against expenses • Pre tax profit is up 1,366 million YoY or 32% when accounting for one off charges in Q1 2025 due to the TM divestment and the purchase of the remaining share of Ortus Secured Finance Income Statement ISK m. 9M 2025 9M 2024 Diff. Net interest income 8.831 7.183 1.649 Net fees and commissions 5.026 4.536 490 Other net operating income 581 800 (219) Net operating income 14.439 12.519 1.920 Administrative expenses (8.811) (7.744) (1.067) Net impairment (340) (514) 174 Revaluation (593) (44) (549) Pre-tax profit 4.695 4.217 478 Income tax (1,213) (721) (492) Special bank taxes (385) (333) (52) After-tax profit 3.097 3.162 (66) Profit after tax from discontinued operations 1.901 1.541 360 Profit for the period 4.998 4.704 294 581 800 8,8315,026 7,1834,536 14,439 12,519 Other net operating income Net interest income Net fee and commission income 9M 2025 9M 2024
Page 10
Net Interest Income Sustained momentum in retail lending and strong margin resilience Net interest income development (NII) ISK m. • Net interest income increased by 21.6% from Q3 2024 to ISK 2,953 million in Q3 2025 • NII growth was partly driven by strong loan book expansion through mortgage lending under the Auður heima retail brand, coupled with reduced funding costs • Net interest margin held firm at 4.0%, underscoring Kvika’s resilient funding mix and focus on profitable balance-sheet growth despite a competitive market environment Net interest income Net interest margin development Q3 2024 to Q3 2025 / ISK m. (%) / net interest income divided by total average interest-bearing assets Note that single-digit figures may be omitted from certain graphs to improve readability. 606 Q3 2024 Lending volume Lending rates Deposits volume Deposits rates Other interest Q3 2025 2,429 1,517 (664) (182) (753) 2,953 3.7% Q3 24 3.8% Q4 24 4.4% Q1 25 4.0% Q2 2025 4.0% Q3 25 484 517 570 628 756 394 556 535 576 630339 643 495 1,214 Q3 2024 1,201 235 Q4 2024 1,177 Q1 2025 1,272 Q2 2025 1,294 281 Q3 2025 2,429 2,498 2,917 2,962 2,953 Commercial Banking Investment Banking Asset Management UK Treasury Supporting units
Page 11
Net Fee and Commission Income Fee income broadly in line with year-to-date trend • Net fee and commission income totalled ISK 1,571 million in Q3 2025, remaining broadly consistent with the same period last year and recent quarters. • The strong performance in Q2 2025 was primarily driven by elevated Investment Banking activity, following the state’s divestment of its stake in Íslandsbanki Note that single-digit figures may be omitted from certain graphs to improve readability. Net fee and commission income development ISK m. Net fee and commission income Net fee and commission income Q3 2024 to Q3 2025 / ISK m. ISK m. 90 37 Q3 2024 Asset man. Capital markets and corp. finance Cards and payments Loans and guarantees Other Expense Q3 2025 1,552 (39) 1,571 (26) (8) (35) 578 659 622 581 552 330 394 334 643 323 590 464 459 526 555 138 161 70 (178) Q3 2024 159 89 (164) Q4 2024 117 (149) Q1 2025 127 201 (143) Q2 2025 1,552 1,601 1,520 1,935 Q3 2025 1,571 122 160 (141) Asset Management Capital markets and corporate finance Cards and payments Loans and guarantees Other Expense 405 426 361 385 424 334 358 543 601 416 590 648 614 564 594 207 244 28 Q3 2024 120 47 Q4 2024 133 47 -178 Q1 2025 118 Q2 2025 1,552 1,601 1,520 1,935 Q3 2025 1,571 97 46 Commercial Banking Investment Banking Asset Management UK Treasury Supporting units
Page 12
Other Net Operating Income Stable contribution, primarily from net financial income • Other net operating income totaled ISK 338 million in Q3 2025, broadly in line with the same period last year and up from Q2 • Strong net financial income, mainly attributable to strong performance in the UK and Treasury Note that single-digit figures may be omitted from certain graphs to improve readability. Other net operating income development ISK m. Other net operating income Other net operating income Q3 2024 to Q3 2025 / ISK m. Composition / ISK m. 403 507 187 305 (48) 70 Q3 2024 44 Q4 2024 60 Q1 2025 22 Q2 2025 474 567 12 231 Q3 2025 338 33 Net financial income Profit from associates Other operating income474 338 Q3 2024 Net financial income Profit from associates Other operating income Q3 2025 (37) (98) 104 131 253 255 307 83 112 163 (166) 57 24 31 Q3 2024 29 1750 Q4 2024 52 (25) 22 Q1 2025 19 37 63 Q2 2025 474 567 12 231 Q3 2025 27 338 25 Commercial Banking Investment Banking Asset Management UK Treasury Supporting units
Page 13
Operating Expenses Cost efficiency maintained with disciplined expense control • Operating expenses amounted to ISK 2,740 million in Q3 2025 up 16.9% YoY. The increase was partly driven by the discontinuation of services to TM, which had previously been offset against expenses • Cost-to-core income held steady at 60.1%, highlighting stable and improving operating leverage • Headcount declined modestly quarter-on-quarter • Management remains focused on cost discipline and operational efficiency Core income is defined as net operating income excluding net financial income Administrative expenses ISK m. Employee development Cost to core income Full time employees at the end of each period (%) 702 1,373 Q3 2024 871 1,705 Q4 2024 480 906 1,703 Q1 2025 267 924 1,750 Q2 2025 2,344 2,864 3,090 2,981 Q3 2025 2,740 239 890 1,573 Salaries and related exp. Other operating expenses Depreciation and amortisation Depr. of right of use asset 57.9% Q3 2024 68.9% Q4 2024 69.5% 64.4% Q1 2025 60.3% Q2 2025 Q3 2025 60.1% 249 253 253 249 246 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Cost to core income Excl.one-off costs
Page 14
Balance Sheet: Assets Strong liquidity position and continued loan book growth • The bank’s balance sheet is now broadly back to its pre- divestment size, driven by organic growth in lending and a solid funding base • Total assets amounted to ISK 352.7 billion at the end of Q3 2025, a slight decrease from Q2, mainly reflecting reduced balances in financial instruments after the temporary cash surplus from the May EUR issuance was deployed • Loans to customers increased to ISK 195.7 billion, largely contributable to the Auður mortgage offering • The bank holds a positive CPI balance of ISK 6.4 billion, of which ISK 2.2 billion is held in securities for market making Assets ISK bn. *The Group has changed the way it presents cash and balances with central bank, comparative figures for 31 December 2024 have been restated. For more information see note 2 in Kvika’s Condensed Interim Consolidated Financial Statements dated 31.3.2025 Assets (%) 21.9 17.2 146.0 83.5 14.7 25.8 30.9.2024* 57.7 21.712.0 150.2 82.8 11.518.6 31.12.2024* 21.416.2 160.6 76.6 24.1 43.9 31.3.2025 21.315.1 172.1 94.1 27.7 30.9 30.6.2025 363.8 354.6 54.5 361.2 30.9.2025 352.7 21.2 342.8 84.7 9.7 32.5 9.0 195.7 Assets held for sale Intangible assets Other assets Loans to customers Financial Instruments Loans to credit institutions Cash and balances with Central Bank 6.0% 4.7% 40.1% 23.0% 4.1% 7.1% 30.9.2024* 16.3% 6.1%3.4% 42.4% 23.4% 3.3%5.2% 31.12.2024* 6.3% 4.7% 46.8% 15.0% 7.0% 12.8% 31.3.2025 5.9%4.2% 47.6% 26.0% 7.7% 8.6% 30.6.2025 30.9.2025 9.2% 2.7% 24.0% 55.5% 2.6% 6.0% 22.3%
Page 15
Loans to Customers Mortgage growth drives expansion of the loan book • Loans to customers increased to ISK 195.7 billion in Q3 2025, up 14% since year-end, driven primarily by robust growth of Auður Heima mortgages • Total amount of mortgages ISK 20.8 billion at end of Q3 includes ISK 1.8 billion legacy mortgages • Real estate backed lending domestically and in the UK increases modestly, while other lending remained broadly unchanged • LTV profile remains stable, with the majority of loans below 70% LTV 18.1 6.8 34.6 6.54.6 2.6 37.5 30.9.2024 35.9 17.5 7.3 35.9 7.04.6 2.4 39.7 31.12.2024 36.2 17.9 7.0 42.3 9.1 6.92.1 39.1 31.3.2025 5.1 36.7 18.6 7.1 41.0 10.9 5.38.7 38.8 30.6.2025 146.0 150.2 160.6 35.4 30.9.2025 195.7 37.0 20.8 18.7 172.1 44.6 12.4 5.78.9 40.3 7.3 Mortgages Vehicles Commercial vehicles and equipm. Unsecured loans Real estate Real estate dev. Investment and op. Securities UK real estate Loans to customers by type ISK bn. Loans to customers ISK bn. 37.5 108.5 30.9.2024 39.7 110.5 31.12.2024 39.6 121.0 31.3.2025 44.2 127.9 30.6.2025 146.0 150.2 160.6 172.1 30.9.2025 195.7 135.4 60.3 Loan to value distribution ISK bn. Individual Corporate Other Less than 50% 50-70% 70-90% 90-100% >100% No collateral 27.4% 27.2% 38.1% 38.8% 22.3% 22.7% 2.0% 3.6% 4.2% 2.8% 6.0% 4.8% 31.12.2024 30.9.2025
Page 16
Balance Sheet: Liabilities Stable funding base with balanced mix of deposits and market funding • Total liabilities amounted to ISK 285.3 billion at the end of Q3 2025, broadly unchanged from Q2 • Debt issuance remained stable, following Kvika’s inaugural EUR 200 million bond issue in May, which continues to strengthen the funding mix • Borrowings decreased during the quarter, reflecting the partial repayment of legacy UK debt • Deposits declined modestly in Q3, after strong growth earlier in the year, in line with normal seasonal movements Liabilities and equity ISK bn. *Money market deposits were previously presented as part of borrowings but are now presented as part of deposits. Comparative figures have been restated. Reference is made to note 2 in Kvika’s Consolidated Financial Statements dated 31.12.2024 for further information 45.7 Liabilities and equity ISK bn. 45.7 Deposits are a key source of funding that is supplemented with debt issuance and other borrowings 5.6%4.1% 12.5% 45.1% 1.6% 23.6% 30.9.2024* 7.7% 4.9% 4.1% 10.5% 46.1% 1.6% 25.2% 31.12.2024 11.6% 4.1% 13.9% 7.5% 1.7% 19.7% 31.3.2025 4.3%3.7% 22.2% 49.9% 1.6% 18.3% 30.6.2025 3.6%1.8% 23.2% 50.6% 1.7% 19.1% 30.9.2025 49.0% 20.414.9 45.4 164.0 5.8 85.9 30.9.2024* 27.3 17.2 14.4 37.1 163.4 5.6 89.5 31.12.2024 39.7 13.9 47.8 168.0 5.8 67.6 31.3.2025 15.413.5 80.2 180.2 5.9 66.0 30.6.2025 12.76.227.3 178.4 6.0 67.5 30.9.2025 81.9 354.6 342.8 361.2 352.7363.8 Liabilities of asset held for sale Other Borrowings Debt issuance Deposits Subordinated liabilities Equity
Page 17
Credit Quality Stable credit quality and low impairment levels • Loan book quality remained stable in Q3, with a modest increase in Stage 3 loans to 2.6% of the net loan book, following the resolution of several exposures earlier in the year • Impairment allowance stood at ISK 2.2 billion, unchanged from Q2, and equal to 1.1% of the gross loan book • Stage 3 loans remain well-collateralised, with an average loan-to-value of 68%, supporting the overall low credit risk profile Loans to customers risk stage allocation Impairment loss allowance Net loan book / (%) ISK bn. 4.3% 6.2% 89.3% 30.9.2024 4.1% 4.5% 90.8% 31.12.2024 2.5% 5.6% 91.3% 31.3.2025 2.3% 6.9% 89.4% 30.6.2025 30.9.2025 2.6% 7.2% 88.6% Stage 1 Stage 2 Stage 3 FVTPL 1.6% 1.9 0.2 0.4 30.9.2024 1.5% 1.8 0.2 0.4 31.12.2024 1.4% 1.7 0.2 0.3 31.3.2025 1.3% 1.6 0.2 0.3 30.6.2025 2.4 2.3 2.3 2.2 30.9.2025 1.1% 2.2 0.2 1.7 0.3 Stage 1 Stage 2 Stage 3 % of gross loan book
Page 18
Deposits Retail deposits remain a stable core funding base • Total deposits amount to ISK 178.4 billion at the end of Q3 2025, slightly lower than in Q2 as balances from financial entities declined from unusually high levels in the previous quarter • Retail deposits continue to grow, reflecting the strength of the Auður deposit franchise • Loans to deposits ratio increases to 110% as loan book growth outpaces deposits • Deposit maturity profile remained consistent, with around 80% of deposits on demand 30.06.2025 / ISK bn. *Money market deposits were previously presented as part of borrowings but are now presented as part of deposits. Comparative figures have been restated. Reference is made to note 2 in Kvika’s Consolidated Financial Statements dated 31.12.2024 for further information Maturity of deposits Loans to deposits ISK bn. Deposits by type 4.0 7.4 25.2 3.5 30.9.2024* 119.3 6.0 11.2 23.3 3.5 31.12.2024 124.7 6.5 11.9 21.2 3.5 31.3.2025 119.6 6.7 10.5 35.1 4.1 30.6.2025 160.1 163.4 168.0 180.2 30.9.2025 178.4 125.7 7.9 9.3 29.4 3.0 121.9 Individuals SMEs Large corporates Public entities Financial entities Other (%) 80% 82% 81% 82% 79% 20% 18% 19% 18% 21% 30.9.2024* 31.12.2024 31.3.2025 30.6.2025 30.9.2025 0-30 days Over 30 days 89% 30.9.2024* 92% 31.12.2024 96% 31.3.2025 95% 30.6.2025 30.9.2025 110%
Page 19
Debt Issuance Steady funding profile supported by international market access • Market funding is largely unchanged from Q2 with the main change being the partial repayment of secured borrowings in the UK • Kvika tendered SEK/NOK notes with a maturity in May 2026 earlier in October, accepting offers for a total of SEK 339 million and NOK 417 million, not reflected in the maturity profile shown in the slide, decreasing the 2026 maturity profile by nearly ISK 10 billion • Kvika holds a long-term issuer rating of Baa2, currently under review for upgrade by Moody’s (as of July 2025), following merger proposals from Arion Banki hf. and Íslandsbanki hf. and consequently, the ongoing merger discussions with Arion. The review reflects the potential for long-term credit profile enhancement through consolidation • MREL requirements remain comfortably met, with buffers well above both risk-weighted and total exposure measures through a combination of own funds and eligible liabilities Development of market funding ISK bn. Maturity of issuance Rating 30.9.2025 / ISK bn. Rating *Money market deposits were previously presented as part of borrowings but are now presented as part of deposits. Comparative figures have been restated. Reference is made to note 2 in Kvika’s Consolidated Financial Statements dated 31.12.2024 for further information 0.7 14.3 5.8 45.4 30.9.2024* 0.4 13.7 5.6 37.1 31.12.2024 0.313.6 5.8 47.8 31.3.2025 0.313.2 5.9 80.2 30.6.2025 1.2 5.06.0 81.9 30.9.2025 66.2 56.8 67.4 99.6 94.1 Bank deposit rating Issuer rating Long term Baa1 Baa2 Short term P-2 P-2 Outlook On review for upgrade On review for upgrade Last update 24 September 2025 24 September 2025 2025 2027 2029+ 1.7 23.0 7.1 18.6 37.5 30.09.2025 MREL requirements 6.4% 22.0% Requirement Available 28.4% 50.5% MREL-RWEA: Percentage of risk- weighted exposure amount Requirement Available 6.0% 33.2% MREL-TEM: Percentage of total exposure measure Total own funds and eligible liabilities MREL requirement Combined buffer requirement 2026 2028 Other borrowings Secured borrowings Subordinated bonds Senior unsec. bonds
Page 20
Liquidity and Funding Ratios Continued strong liquidity position High quality liquid assets (HQLA) 30.09.2025 / (%) • The liquidity coverage ratio (LCR) is strong at 659%, well above the 100% regulatory requirement • Net stable funding ratio (NSFR) is strong at 148%, well above the 100% regulatory requirement • High-quality liquid assets (HQLA) totaled ISK 84.6 billion, with 88% classified as Level 1 assets • Kvika maintains a conservative liquidity profile, with funding primarily sourced from retail deposits and long-term debt issuance, supporting balance sheet resilience Total liquidity coverage ratio (LCR) Net stable funding ratio (NSFR) 30.9.2025 / (%) 30.9.2025 / (%) L1: Level 1 assets , L2: Level 2 assets Available stable funding 30.09.2025 / (%) Thereof HQLA level 1 assets 88% 1.2% 31.2% 57.7% 8.8% Central bank reserves Central bank assets Government assets Public sector assets Regional government assets Covered bonds 17% 28% 16% 9% 17% 13% Capital Retail deposits Corporate deposits Financial deposits Debt Issuance Other facilities -100 0 100 200 300 400 500 600 700 800 900 0 20 40 60 80 100 120 140 160 100% 30.09.24 100% 31.12.24 100% 31.03.25 100% 30.6.2025 148% 144% 159% 160% 30.9.2025 100% 148% Regulatory minimum -100 0 100 200 300 400 500 600 700 800 900 0 100 200 300 400 500 600 700 800 900 1.000 100% 30.09.24 100% 31.12.24 100% 31.03.25 100% 30.6.2025 780% 360% 279% 910% 30.9.2025 100% 659% Regulatory minimum
Page 21
Capital Position Strong capital position well above regulatory requirements • CAR of 23.0% at the end of September, well above Kvika’s management target as expected during the transitional period post-divestment • CAR of 22.5% excluding unaudited retained earnings for Q3 2025 • The CAR includes an ISK 2.3 bn deduction from own funds, reflecting the remaining ISK 1.1 bn portion of the share buyback programme (currently on hold due to the planned merger with Arion), as well as deductions for regular dividends and buybacks in line with the bank’s dividend and share buyback policy • Capital, including unaudited retained earnings for Q3 2025, exceeds regulatory requirements by ISK 11.1 bn at the end of Q3 • The bank continues to target a management buffer of 2% to 4% over current and anticipated CAR requirements • CRR III is expected to be implemented before year-end. Based on the currently available assumptions and September month-end data, the implementation is projected to reduce the bank’s risk-weighted exposure amount by approximately 14% Risk-weighted exposure amount (RWEA) CET1 ISK bn. (%) 22.1% 22.1% 23.5% 22.8% 23.9% 19.4% 19.4% 20.6% 19.9% 21.0% 150.0 5.3 25.6 30.9.2024 158.2 7.6 28.1 31.12.2024 161.7 8.0 28.1 31.3.2025 173.8 7.9 28.1 30.6.2025 180.1 9.6 28.1 30.9.2025 180.9 193.8 197.8 209.8 217.7 RWEA / Total assets Credit risk Market risk Operational risk 30.9.2024 31.12.2024 31.3.2025 30.6.2025 30.9.2025 23.5% 22.8% 23.9% 23.3% 23.0% CAR CAR requirement 18.9% 18.0% 18.0% 17.9% 17.9% 49.7% 54.7% 57.7% 58.1% 61.8% CAR 22.8% 23.9% (%) 30.9.2024 31.12.2024 31.3.2025 30.6.2025 30.9.2025 20.6% 19.9% 21.0% 20.5% 20.4% CET1 CET1 requirement 13.8% 12.9% 12.9% 12.9% 12.9%
Page 22
Capital Adequacy Ratio (CAR) Buffer Over Requirement (basis points) Return on Tangible Equity Pre-tax Dividend Payout Ratio Dividends and Share Buybacks as % of Profit after Tax Financial Targets Target 12M 2024 Q3 2025 >20% 17.4% 17.8% 200-400 bps. 480 bps. 510 bps. 25% 25% - Special dividend and share buyback due to divestment of TM Insurance not included
Page 23
Looking ahead
Page 24
In a Strong Position to Drive Business Plan Kvika remains well-positioned to deliver on its strategic ambitions Kvika is in a favorable position ✓ Loan book growth on track Driven by strong demand in Auður Heima mortgages and diversified lending across segments, Kvika is on track to reach ambitious year-end goals ✓ Growing capital position Combination of operating results and paused share buybacks, Kvika’s capital position is exceptionally strong. CRR3 legislation will substantially strengthen capital ratios when implemented ✓ UK exposure adds diversification UK operations representing about a quarter of total lending provide meaningful diversification from domestic market cycles ✓ Strong funding position Supported by diversified long term funding, a stable deposit base, and liquidity coverage ratio of around 659% ✓ NIM resilience Net interest margin has remained stable at 4.0% despite changes in balance sheet composition and high liquidity position ✓ Cost control and scalability Disciplined expense management combined with strong scalability of Kvika’s infrastructure to support growth without significant cost increases The external environment remains mixed, with inflation and interest rates still elevated and the pace of disinflation uncertain. The mortgage market is adjusting to new conditions following the Supreme Court ruling on variable-rate loans and domestic capital markets remain cautious amid subdued equity performance Despite potential near-term challenges, the overall backdrop remains resilient and Kvika continues to be in a strong position
Page 25
Merger Process Continues Progress in line with original plans Phase I Phase II Phase III Phase IV Ongoing Pending Phase II Pending Phase III • Due diligence about to complete • Pre-notification discussions with the ICA • Letter of intent signed • Agreement on heads of terms including exchange ratios • Merger notification sent to regulatory bodies • Shareholder meetings once conditions are fulfilled and merger has regulatory approval Process expectations Pre-notification discussions with the ICA have commenced, and mutual due diligence is nearing completion Pre-discussions are not bound by a defined timeframe, though they are expected to take at least several weeks. The progress and outcome of this phase will shape the next steps in the merger process
Page 26
Disclaimer This presentation and the information contained therein has been prepared by Kvika banki hf. on a best knowledge basis. Any statements or assumptions are set forth by Kvika alone and not by any third party. Forward looking statements may deviate from what is presented in this presentation, e.g. due to market conditions or other factors. Kvika does not guarantee the accuracy or completeness of the information set forth in this presentation, whether it comes from Kvika or a third party. This presentation shall not in any way be viewed as a recommendation or solicitation to buy, hold or sell any security or to take any investment decision. The recipient is solely responsible for any investment decision taken based on the information in this presentation. Kvika does not assume any liability whatsoever for any direct or consequential loss or damage arising from any use of this presentation or its contents. Kvika is not obliged to make amendments or changes to this publication or to submit further information, should errors be discovered or opinions or information change. Copyright of this presentation and its contents is the property of Kvika.