Interim report
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Condensed Interim Consolidated Financial Statements 30 September 2026
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Condensed Interim Consolidated Financial Statements 30 September 2026 Kvika banki hf. Katrínartún 2 105 Reykjavík Iceland Reg. no. 540502-2930
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Kvika banki hf. Table of Contents Page 1 2 4 5 6 7 9 10 11 12 14 17 25 41 45 - General information ...................................................................................................................................................... Condensed Interim Consolidated Statement of Cash Flows ............................................................................................ - Risk management .......................................................................................................................................................... - Financial assets and financial liabilities ......................................................................................................................... - Income statement .......................................................................................................................................................... - Statement of Financial Position ..................................................................................................................................... - Other information .......................................................................................................................................................... - Segment information ..................................................................................................................................................... Condensed Interim Consolidated Statement of Financial Position .................................................................................. Condensed Interim Consolidated Statement of Comprehensive Income ...................................................................... Condensed Interim Consolidated Statement of Changes in Equity ................................................................................. Notes to the Condensed Interim Consolidated Financial Statements ............................................................................. Condensed Interim Consolidated Income Statement ...................................................................................................... Endorsement and Statement by the Board of Directors and the CEO ............................................................................. Kvika highlights ................................................................................................................................................................. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited
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Highlights 30.09.2026 Kvika in brief Kvika is a financial services company with operations in Iceland and the United Kingdom. Kvika does not operate traditional branches but delivers its services primarily online, offering a wide range of solutions in asset management, payments, and banking for individuals, businesses and investors. Kvika’s shares are publicly traded on the Nasdaq Iceland stock exchange. Kvika operates in four business segments: Commercial Banking, Investment Banking, Asset Management and UK operations, the latter through subsidiaries Kvika Asset Management and Kvika Limited. Kvika’s operations are underpinned by a distinctive brand strategy. Retail financial services are delivered through specialized consumer brands such as Auður, Aur, Netgíró and Lykill, each focused on a specific customer need, while corporate and institutional services are provided under the Kvika and Kvika Asset Management brands. In the UK, the bank operates under the Kvika and Ortus Secured Finance brands. Key figures ISK m. 9M 2026 9M 2025 Net operating income 14,441 14,439 Profit before tax, continuing operations 5,108 4,695 RoTE, continuing operations 16.4% 14.9% 30.09.2026 31.12.2025 Total assets 370,033 343,112 Loans to customers 234,952 207,560 Deposits 200,422 172,787 LCR 174% 404% NSFR 134% 137% 2.0 1.5 1.8 1.5 1.8 18% 13% 16% 15% 19% Q3 25 Q4 25 Q1 26 Q2 26 Q3 26 Profit before tax ISK bn. Loans to customers ISK bn. Total capital ratio (CAR) (%) 36.2% 23.6% 12.2% 18.0% 10.0% Commercial Banking Investment Banking Asset Management UK Treasury and supporting units Diversified operations Revenues by segment 9M 2026 20.4% 23.9% 23.8% 18.3% 17.7% 23.0% 26.8% 26.7% 23.0% 22.3% Q3 25 Q4 25 Q1 26 Q2 26 Q3 26 Thereof CET1 196 208 217 223 235 110% 120% 114% 111% 117% Q3 25 Q4 25 Q1 26 Q2 26 Q3 26 Loans to deposits (%) Quarterly development Administrative expenses ISK bn. 2.7 3.3 3.0 2.9 2.8 60% 73% 63% 65% 62% Q3 25 Q4 25 Q1 26 Q2 26 Q3 26 Cost to core income (%)1RoTE (%) 1 Core income is defined as net operating income excluding net financial income.
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Kvika banki hf. Endorsement and Statement by the Board of Directors and the CEO About the Bank Operations during the period in 2026 Financial position Merger with Arion banki hf. will not take place Jón Birgir Jónsson appointed CEO of Kvika banki These are the Condensed Interim Consolidated Financial Statements of Kvika banki hf. ("Kvika" or the "Bank") and its subsidiaries (together the "Group") for the period 1 January to 30 September 2026.The Condensed Interim Consolidated Financial Statements have not been audited or reviewed by the Bank's independent auditors. Kvika’s operations are underpinned by a distinctive brand strategy. Retail financial services are delivered through specialized consumer brands s uch as Auður, Aur, Netgíró, Straumur and Lykill, each focused on a specific customer need, while corporate and institutional services in Iceland are provid ed under the Kvika and Kvika Asset Management brands. In the UK, the Group operates under the Kvika and Ortus Secured Finance brands. Kvika is a financial services company with operations in Iceland and the United Kingdom. Kvika does not operate traditional branches but delivers its services primarily online, offering a wide range of solutions in asset management, payments, and banking for individuals, businesses and investors . Kvika’s shares are publicly traded on the Nasdaq Iceland stock exchange. Kvika operates in four business segments: Commercial Banking, Investment Banking, Asset Management and UK operations, the latter through subsidiaries Kvika Asset Management and Kvika Limited. Profit before taxes from continuing operations for the third quarter amounted to ISK 1,754 million (Q3 2025: ISK 1,969 m illion). Pre-tax annualised return on average tangible equity (RoTE) from continuing operations was 18.9% for the quarter (Q3 2025: 17.8%) and 16.4% for the first nine months of the year (9m 2025: 14.9%) based on the average tangible equity position of Kvika during the period. Tangible equity is the equity of shareholders of Kvika net of deferred tax assets and intangible assets. Profit after taxes for the third quarter amounted to ISK 1,342 million (Q3 2025: ISK 1,472 million). According to the Consolidated Statement of Financial Position, equity at the end of the period amounted to ISK 58,059 million (31.12. 2025: ISK 68,935 million), and total assets amounted to ISK 370,033 million (31.12.2025: ISK 343,112 million). The Group's total assets grew by ISK 26.9 billion or 7.8% from year-end 2025. Loans to customers grew by ISK 27.4 b illion or 13.2% during the first nine months of 2026. The Group's net operating income during the first nine months was ISK 14,441 million (9m 2025: ISK 14,439 million). Net interest income amounted to ISK 9,331 million (9m 2025: ISK 8,831 million). Net fee income amounted to ISK 4,282 million (9m 2025: ISK 5,026 million). Other net operating income amounted to ISK 828 million (9m 2025: ISK 581 million). Administrative expenses during the period amounted to ISK 8,767 million (9m 2025: ISK 8,811 million). During the period, the Group had a net impairment charge of ISK 601 million (9m 2025: ISK 340 million). The Board of Directors of Kvika banki has appointed Jón Birgir Jónsson as Chief Executive Officer of Kvika banki. Jón Birgir will assume his new role on 1 December 2026, succeeding Ármann Þorvaldsson, who announced earlier this year his intention to step down as CEO. A significant step was the finalisation of the Bank's covered bond programme, which was authorised by the Financial Supervisory Authority of the Central Bank of Iceland in July. In October, Kvika issued its inaugural covered bonds under the programme and became the fourth covered bond issuer in the Icelandic market. The issuance was well received, with the offering approximately 1.7 times oversubscribed, and the ISK 6.4 billion series car ries a fixed annual coupon of 7.74%. The covered bonds are secured against the Bank's mortgage portfolio, and the programme supports the continued growth of mortgage lending under the Auður brand, which was launched in the summer of 2025 and has been very well received by customers, while adding a durable new source of long-term funding in Icelandic króna. During the period, the Group resolved to divest Straumur greiðslumiðlun hf. The sale of the company is in progress. Accordingly, the assets and liabilities of Straumur greiðslumiðlun hf. have been classified as held for sale in accordance with IFRS 5. Taken together, these transactions mean that Kvika is now well funded in both Icelandic króna and foreign currencies, with a more diversified funding base, improved funding terms and a lengthened maturity profile. The Bank is consequently in a strong position to support its clients going forward and to continue growing its lending and other core activities. In June, Kvika issued EUR 150 million of senior preferred notes under its Euro Medium Term Note Programme. The four-year notes were priced at a spread of 165 basis points over mid-swap rates with a fixed annual coupon of 4. 375%, an improvement of 85 basis points compared with the Bank's inaugural senior preferred issuance in May 2025. Investor demand increased substantially, with 38 institutional investors participating compare dw i t h 24 in 2025, and the transaction was more than three times oversubscribed, reflecting the growing diversification of the Bank's investor base and increasing market confidence in its credit profile. Earlier in the year, in April, the Bank completed its inaugural issuance of Additional Tier 1 (AT1) notes amounting to SEK 300 million, a key component o f the capital optimisation strategy outlined in connection with the 2025 year-end results. The issuance was oversubscribed and placed with investors across Scandinavia. On 15 April the preliminary discussions between Kvika banki hf. and Arion banki hf. with the Competition Authority regarding the proposed merger concluded. On that day representatives of Kvika banki and Arion banki met with representatives of the Competition Authority, during which the authority presented its position following the completion of the preliminary discussions process. In light of the position expressed by the Competi tion Authority at the meeting, the Boards of Directors of Kvika banki and Arion banki concluded that the proposed merger cannot proceed. The Boards of Directors therefore decided to discontinue the merger plans that were announced in a Stock Exchange notice dated 6 July 2025. Kvika has continued to build on the momentum generated in the previous year's capital markets activities, completing three milestone transactions during 2026. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 2
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Kvika banki hf. Endorsement and Statement by the Board of Directors and the CEO Shareholder Distributions and Share Buyback Programme Risk management Statement by the Board of Directors and the CEO Sigurður Hannesson, Chairman Helga Kristín Auðunsdóttir, Deputy Chairman Ingunn Svala Leifsdóttir Guðjón Reynisson Páll Harðarson Chief Executive Officer Ármann Þorvaldsson The Condensed Interim Consolidated Financial Statements of Kvika banki hf. for the period ended 30 September 2026 are electronically signed by the Board of Directors and the CEO. The Condensed Interim Consolidated Financial Statements of Kvika banki hf. for the period 1 January to 30 September 2026 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU, and additional requirements, as applicable, in the Act on Annual Accounts no. 3/2006, the Act on Financial Undertakings no. 161/2002 and rules on accounting for credit institutions no. 834/2003. To the best of our knowledge these Condensed Interim Consolidated Financial Statements give a true and fair view of the Group's assets, liabilities an d financial position as at 30 September 2026 and the financial performance of the Group and changes of cash flows for the period 1 January to 30 September 2026. Furthermore, in our opinion the Condensed Interim Consolidated Financial Statements and the Endorsement of the Board of Directors and the CEO give a fair view of the development and performance of the Group's operations and its position and describe the principal risks and uncertainties faced by the Group. The Board of Directors and the CEO of the Bank have today discussed the Condensed Interim Consolidated Financial Statements for the period 1 January to 30 September 2026 and confirmed them by the means of their signatures. Reykjavík, 4 November 2026. Board of Directors The objective of risk management is to promote a good and efficient culture of risk awareness within the Group and to increase the understanding of employees and management on the Group's risk taking, in addition to an assessment process related to risk and capital position. An emphasis is placed on being up to speed on the latest developments and adoption of rules related to risk management, such as regarding capital- and liquidity management. The Group faces various risks associated with its operations as a financial institution that arise from its day-to-day operations. Acti ve risk management entails analysing risk, measuring it and taking actions to limit it, as well as monitoring risk factors across the Group. The Group's risk management and main operations are described in the notes accompanying the Condensed Interim Consolidated Financial Statements. Refer to notes 39-54 on the analysis of exposure to various types of risk. The Bank's strong capital position enabled significant capital distributions to shareholders during the period in 2026. At the A nnual General Meeting in March 2026, shareholders approved an ordinary dividend of ISK 0.36 per share based on the 2025 financial results, as well as the cancellation of 301 million treasury shares. In June 2026, shareholders further approved a special dividend of ISK 2.35 per share following the decision not to proceed with the proposed merger with Arion banki hf. As a result, total dividends paid during the period 2026 amounted to ISK 2.71 per share, or ISK 11.7 billion. In addition, the Board of Directors launched a new share buyback programme in July 2026, following shareholder and regulatory approval, with a maximum purchase amount of ISK 2.0 billion. The programme is well underway and is expected to be concluded during the fourth qu arter. Kvika continues to maintain a strong capital position, well above regulatory requirements. At the end of September 2026, the Group’s capital adequac y ratio was 21.8% and CET1 ratio was 17.2%, compared with regulatory requirements of 17.7% and 12.8%, respectively, including capital buffers. The Group also comfortably exceeded its MREL requirements, reporting ratio s of 56.0% of RWEA and 31.9% of total exposure measure ("TEM"), well above the applicable requirements of 28.3% and 6.0%, respectively. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 3
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Kvika banki hf. Amounts are in ISK millions Condensed Interim Consolidated Income Statement For the period 1 January 2026 to 30 September 2026 Notes Q3 2026 Q3 2025 9m 2026 9m 2025 8,337 7,714 24,547 22,868 (5,286) (4,761) (15,216) (14,037) Net interest income 5 3,052 2,953 9,331 8,831 1,536 1,711 4,758 5,460 (155) (141) (476) (433) Net fee and commission income 6 1,380 1,571 4,282 5,026 7 257 305 577 445 24 0 0 10 22 109 33 241 115 Other net operating income 366 338 828 581 Net operating income 4,798 4,862 14,441 14,439 9 (2,807) (2,740) (8,767) (8,811) 11 (238) (153) (601) (340) - - 1 (593) - - 34 - Profit before taxes from continuing operations 1,754 1,969 5,108 4,695 12 (268) (351) (955) (1,213) 13 (53) (63) (250) (133) 14 (91) (82) (283) (252) Profit for the period from continuing operations 1,342 1, 472 3,619 3, 097 Discontinued operations - - - 1, 901 Profit for the period 1,342 1,472 3,619 4,998 Notes Q3 2026 Q3 2025 9m 2026 9m 2025 1,343 1,472 3,621 4,998 23 (1) - (1) - Profit for the period 1,342 1,472 3,619 4,998 Earnings per share 15 0.31 0.33 0.84 1.11 0.31 0.33 0.84 1.10 Quarterly information is unaudited. The notes on pages 11 to 46 are an integral part of these Condensed Interim Consolidated Financial Statements. Diluted earnings per share (ISK per share) ............................................................... Income tax ................................................................................................................ Attributable to the shareholders of Kvika banki hf. ................................................. Attributable to non-controlling interest ................................................................... Special tax on financial institutions .......................................................................... Revaluation of investment properties ...................................................................... Special tax on financial activity ................................................................................ Basic earnings per share (ISK per share) ................................................................... Profit after tax from discontinued operations ......................................................... Other operating income ........................................................................................... Administrative expenses .......................................................................................... Net impairment ........................................................................................................ Revaluation of contingent consideration ................................................................. Share in profit of associates, net of income tax ....................................................... Interest income ......................................................................................................... Interest expense ....................................................................................................... Fee and commission income .................................................................................... Fee and commission expense ................................................................................... Net financial income ................................................................................................. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 4
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Kvika banki hf. Amounts are in ISK millions Comprehensive Income For the period 1 January 2026 to 30 September 2026 Notes Q3 2026 Q3 2025 9m 2026 9m 2025 Profit for the period 1,342 1,472 3,619 4,998 (28) 81 (222) 97 0 7 (0) 18 Changes to reserve for financial assets at fair value through OCI (28) 88 (222) 116 (83) (33) (108) (112) (111) 55 (331) 4 Total comprehensive income for the period 1,231 1,527 3,288 5,001 Notes Q3 2026 Q3 2025 9m 2026 9m 2025 1,232 1,527 3,290 5,001 (1) - (1) - Total comprehensive income for the period 1,231 1,527 3,288 5,001 Quarterly information is unaudited. The notes on pages 11 to 46 are an integral part of these Condensed Interim Consolidated Financial Statements. Condensed Interim Consolidated Statement of Attributable to the shareholders of Kvika banki hf. .................................................. Attributable to non-controlling interest .................................................................... Exchange difference on translation of foreign operations ..................................... Changes in fair value of financial assets through OCI, net of tax ............................ Realized net profit (loss) transferred to the Income Statement, net of tax ........... Other comprehensive income that is or may be reclassified subsequently to profit and loss Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 5
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Kvika banki hf. Amounts are in ISK millions Condensed Interim Consolidated Statement of Financial Position As at 30 September 2026 Assets Notes 30.9.2026 31.12.2025 16 30, 194 20,145 17 6,993 8,154 18 234,952 207,560 19 34,958 44,522 20 25,552 20,663 21 3,502 6,695 22 2,583 3,250 24 119 117 25 20,123 21,130 26 1,415 361 261 402 12 55 939 27 8,718 9,174 28 608 - Total assets 370,033 343,112 Liabilities 46 200,422 172,787 29 5,016 6,806 30 83,317 73,249 31 10,019 5,841 32 583 433 33 37 432 22 797 773 254 257 34 8,443 13,599 28 3,086 - Total liabilities 311,974 274,177 Equity 35 4,269 4,417 40,816 43,119 3,561 4,376 9,339 16,948 Total equity attributable to the shareholders of Kvika banki hf. 57,985 68,859 23 74 76 Total equity 58,059 68,935 Total liabilities and equity 370,033 343,112 The notes on pages 11 to 46 are an integral part of these Condensed Interim Consolidated Financial Statements. Non-controlling interest ..................................................................................................................... Short positions held for trading ......................................................................................................... Short positions used for hedging ....................................................................................................... Share capital ....................................................................................................................................... Share premium ................................................................................................................................... Other liabilities ................................................................................................................................... Liabilities associated with assets classified as held for sale .............................................................. Deferred tax liabilities ........................................................................................................................ Derivatives .......................................................................................................................................... Cash and balances with Central Bank ................................................................................................ Other assets ........................................................................................................................................ Deferred tax assets ............................................................................................................................. Subordinated liabilities ...................................................................................................................... Derivatives .......................................................................................................................................... Fixed income securities ...................................................................................................................... Shares and other variable income securities ..................................................................................... Securities used for hedging ................................................................................................................ Loans to customers ............................................................................................................................ Investment in associates .................................................................................................................... Intangible assets ................................................................................................................................. Property and equipment .................................................................................................................... Assets classified as held for sale ........................................................................................................ Deposits ............................................................................................................................................. Borrowings ......................................................................................................................................... Other reserves .................................................................................................................................... Retained earnings ............................................................................................................................... Loans to credit institutions ................................................................................................................. Issued bonds ....................................................................................................................................... Op erating lease assets ........................................................................................................................ Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 6
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Kvika banki hf. Amounts are in ISK millions Condensed Interim Consolidated Statement of Changes in Equity For the period 1 January 2026 to 30 September 2026 Deficit Trans- Restricted Total share- Non- Share Share Option reduction Fair value lation retained Retained holders' controlling Total 1 January 2026 to 30 September 2026 Notes capital premium reserve reserve reserve reserve earnings earnings equity interest equity 4,417 43,119 7 1,204 (160) 40 3,285 16,948 68,859 76 68,935 3,621 3,621 (1) 3,619 (222) (222) (222) (0) (0) (0) (108) (108) - (108) - - - - (222) (108) - 3,621 3,290 (1) 3,288 (386) 386 - - (99) 99 - - (147) (2,302) (2,450) (2,450) (11,715) (11,715) (11,715) Equity as at 30 September 2026 4,269 40,816 7 1,204 (382) (68) 2,800 9,339 57,985 74 58,059 The notes on pages 11 to 46 are an integral part of these Condensed Interim Consolidated Financial Statements. (4,173,285) 37,730,162 7,080 1,271,832 (4,651,464) (68,136) 2,792,950 8,135,045 74,083 Restricted due to development costs .......................................................... Treasury shares acquired as part of a buy-back programme ................... Other reserves Profit for the period ..................................................................................... Restricted due to subsidiaries and associates ............................................. Translation of foreign operations Exchange difference on translation of foreign operations ....................... Equity as at 1 January 2026 ......................................................................... Total comprehensive income for the period ............................................... Realized net loss transferred to the Income Statement .............................. Changes in fair value of financial assets through OCI ................................. Dividend paid to shareholders .................................................................. Transactions with owners of the Bank Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 7
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Kvika banki hf. Amounts are in ISK millions Condensed Interim Consolidated Statement of Changes in Equity For the period 1 January 2025 to 30 September 2025 Deficit Trans- Restricted Total share- Non- Share Share Option reduction Fair value lation retained Retained holders' controlling Total 1 January 2025 to 30 September 2025 Notes capital premium reserve reserve reserve reserve earnings earnings equity interest equity 4,660 46,750 109 1,204 (583) 79 8,547 28,672 89,439 79 89,517 4,998 4,998 - 4,998 97 97 97 18 18 18 Translation of foreign operations (112) (112) - (112) - - - - 116 (112) - 4,998 5,001 - 5,001 220 (5,848) 5,628 - - 44 (44) - - (243) (3,632) (3,875) (3,875) (23,135) (23,135) (23,135) (102) 102 - - Equity as at 30 September 2025 4,417 43,119 7 1,204 (247) (33) 2,744 16,220 67,430 79 67,508 The notes on pages 11 to 46 are an integral part of these Condensed Interim Consolidated Financial Statements. Restricted due to development costs .......................................................... Other reserves Dividend paid to shareholders .................................................................. Changes in fair value of financial assets through OCI ................................. Realized net loss transferred to the Income Statement .............................. Profit for the period ..................................................................................... Exchange difference on translation of foreign operations ....................... Share options ............................................................................................ Total comprehensive income for the period ............................................... Treasury shares acquired as part of a buy-back programme ................... Restricted due to subsidiaries and associates ............................................. Transactions with owners of the Bank Equity as at 1 January 2025 ......................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 8
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Kvika banki hf. Amounts are in ISK millions Condensed Interim Consolidated Statement of Cash Flows For the period 1 January 2026 to 30 September 2026 Cash flows from operating activities Notes 9m 2026 9m 2025 3,619 4,998 107 148 (10) (22) 865 1,065 (9, 331) (8,831) 601 340 1,489 1,598 - (1, 901) (2,660) (2,605) Changes in: (582) 1,381 (28,628) (46,212) 9,286 18,620 (1, 531) (1,070) 3,193 6,925 667 (1, 630) (1,152) (40) (1,674) (605) 26,438 13,892 (245) 383 (266) (3,231) (786) (2,207) 4,719 (13, 795) 22,691 21,643 (12, 555) (11,914) (512) (196) Net cash from (to) operating activities 11,683 (6, 868) Cash flows from investing activities 25 (163) (234) (21) 214 - 32,217 Net cash (to) from investing activities (184) 32,198 Cash flows from financing activities 2,390 (5, 868) 10,068 44,768 3,894 - (2, 450) (3,875) (11,715) (23,135) (304) (285) Net cash from financing activities 1,883 11,606 13,382 36,935 37,056 22,500 (1, 274) 50 Cash and cash equivalents at the end of the period 16 49, 164 59,485 Cash and cash equivalents 16 30, 194 32,532 16 (7,050) (6,546) 17 6,359 9,230 20 19,660 24,269 Cash and cash equivalents at the end of the period 49,164 59,485 The notes on pages 11 to 46 are an integral part of these Condensed Interim Consolidated Financial Statements. Unit shares in cash equivalent liquidity funds ............................................................................................. Cash and balances with Central Bank .......................................................................................................... Loans to credit institutions - Bank accounts ................................................................................................ Restricted balances with Central Bank - fixed reserve requirement ........................................................... Net interest income ................................................................................................................................... Income tax and special tax on financial activity and institutions ............................................................. Net impairment ......................................................................................................................................... Other assets ............................................................................................................................................... Operating lease assets ............................................................................................................................... Derivatives - liabilities ............................................................................................................................... Deposits .................................................................................................................................................... Short positions ........................................................................................................................................... Other liabilities .......................................................................................................................................... Profit for the period ..................................................................................................................................... Adjustments for: Indexation and exchange rate difference ................................................................................................. Share in profit of associates, net of income tax ........................................................................................ Depreciation and amortisation ................................................................................................................. Adjustment relating to assets held for sale ............................................................................................... Derivatives - assets .................................................................................................................................... Fixed income securities ............................................................................................................................. Shares and other variable income securities ............................................................................................ Securities used for hedging ....................................................................................................................... Loans to customers .................................................................................................................................... Loans to credit institutions ........................................................................................................................ Effects of exchange rate fluctuations on cash and cash equivalents .......................................................... Cash and cash equivalents at the beginning of the year ............................................................................. Net change in cash and cash equivalents .................................................................................................... Repayment of lease liabilit ies ...................................................................................................................... Issued bonds ................................................................................................................................................ Dividend paid to shareholders ..................................................................................................................... Subordinated loans ...................................................................................................................................... Borrowings ................................................................................................................................................... Disposal of subsidiary and associates, net of cash ...................................................................................... Interest received .......................................................................................................................................... Acquired own shares .................................................................................................................................... Additions of intangible assets ...................................................................................................................... Net acquisition and sale of property and equipment .................................................................................. Interest paid ................................................................................................................................................. Income tax and special tax on financial activity paid .................................................................................. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 9
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 0 General information Page Risk management Page 1 Reporting entity ............................................................................ 11 39 Hedging ........................................................................................... 25 2 Basis of preparation ..................................................................... 11 40 Credit risk - overview ...................................................................... 25 3 Changes in accounting policies .................................................... 12 41 Maximum exposure to credit risk .................................................. 26 42 Credit quality of financial assets .................................................... 26 Segment information 43 Loan-to-value ................................................................................. 31 4 Business segments ....................................................................... 12 44 Collateral against exposures to derivatives ................................... 31 45 Large exposures .............................................................................. 31 Income statement 46 Liquidity risk ................................................................................... 32 5 Net interest income ...................................................................... 14 47 Market risk ...................................................................................... 36 6 Net fee and commission income .................................................. 14 48 Interest rate risk ............................................................................. 36 7 Net financial income .................................................................... 15 49 Interest rate risk associated with trading portfolios ...................... 36 8 Foreign currency exchange difference ......................................... 15 50 Interest rate risk associated with non-trading portfolios .............. 37 9 Administrative expenses .............................................................. 15 51 Exposure towards changes in the CPI ............................................ 38 10 Salaries and related expenses ...................................................... 15 52 Currency risk ................................................................................... 38 11 Net impairment ............................................................................ 16 53 Equity risk ....................................................................................... 40 12 Income tax .................................................................................... 16 54 Operational risk .............................................................................. 40 13 Special tax on financial activity .................................................... 16 14 Special tax on financial institutions .............................................. 16 Financial assets and liabilities 15 Earnings per share ........................................................................ 16 55 Accounting classif. of financial assets and financial liabilities ....... 41 56 Financial assets and financial liabilities measured at fair value .... 42 Statement of Financial Position 16 Cash and balances with Central Bank .......................................... 17 Other information 17 Loans to credit institutions ........................................................... 17 57 Pledged assets ................................................................................ 45 18 Loans to customers ...................................................................... 17 58 Related parties ............................................................................... 45 19 Fixed income securities ................................................................ 17 59 Other matters ................................................................................. 46 20 Shares and other variable income securities ............................... 18 60 Events after the reporting date ...................................................... 46 21 Securities used for hedging .......................................................... 18 22 Derivatives .................................................................................... 18 23 Group entities ............................................................................... 19 24 Investment in associates .............................................................. 19 25 Intangible assets ........................................................................... 19 26 Operating lease assets .................................................................. 20 27 Other assets .................................................................................. 20 28 Assets classified as held for sale .................................................. 20 29 Borrowings ................................................................................... 20 30 Issued bonds ................................................................................. 21 31 Subordinated liabilities ................................................................ 21 32 Short positions held for trading ................................................... 22 33 Short positions used for hedging ................................................. 22 34 Other liabilities ............................................................................. 22 35 Share capital ................................................................................. 22 36 Capital adequacy ratio (CAR) ........................................................ 23 37 Leverage ratio ............................................................................... 24 38 Minimum requirements for own funds and eligible liabilities (MREL) ....................................................... 24 Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 10
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 0 General information 1. Reporting entity 2. Basis of preparation a. Statement of compliance b. Basis of measurement - - - - - - -s h a r e-based payment is accounted for in accordance with IFRS 2; - - c. Functional and presentation currency d. Going concern e. Estimates and judgements f. Relevance and importance of notes to the reader Kvika banki hf. ("Kvika" or the "Bank") is a limited liability company incorporated and domiciled in Iceland, with its registered office at Katrínart ún 2, Reykjavík. The Bank operates as a bank based on Act No. 161/2002, on Financial Undertakings, and is supervised by the Financial Supervisory Authority of the Central Bank of Iceland ("FME"). The Condensed Interim Consolidated Financial Statements were approved and authorised for issue by the Board of Directors and the CEO on 4 November 2026. The Condensed Interim Consolidated Financial Statements have been prepared in accordance with International Accounting Standard IAS 34 Interim Financial Reporting, as adopted by the European Union and additional requirements, as applicable, in the Act on Annual Accounts no. 3/2006, the Act on Financial Undertakings no. 161/2002 and rules on accounting for credit institutions no. 834/2003. The Condensed Interim Consolidated Financial Statements have been prepared using the historical cost basis except for the follo wing: The Condensed Interim Consolidated Financial Statements for the period ended 30 September 2026 comprise Kvika banki hf. and its subsidiaries (together referred to as the Group). The Group operates four business segments, Asset Management, Commercial Banking, Investment Banking and UK operations. Kvika is a financial services company with operations in Iceland and the United Kingdom. Kvika does not operate traditional branches but delivers its services primarily online, offering a wide range of solutions in asset management, payments, and banking for individuals, businesses and investors. fixed income securities are measured at fair value; shares and other variable income securities are measured at fair value; The Bank's management has assessed the Group's ability to continue as a going concern and is satisfied that the Group has the resources to continue its operations. The preparation of interim financial statements in accordance with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The Condensed Interim Consolidated Financial Statements are prepared in Icelandic krona (ISK), which is the Bank's functional currency and the Group's presentation currency. All financial information has been rounded to the nearest million, unless otherwise stated. securities used for hedging are measured at fair value; The Group's assets and liabilities which are denominated in currencies other than ISK are translated to ISK using the exchange rate at the end of day 30 September 2026. The Condensed Interim Consolidated Financial Statements do not include all of the information required for full Consolidated Financial Statements and should be read in conjunction with the Group's Consolidated Financial Statements for the financial year ending 31 December 2025. derivatives are measured at fair value; short positions are measured at fair value. investment properties are measured at fair value; certain loans to customers which are measured at fair value; contingent consideration is measured at fair value; and Information about areas of estimation uncertainty and critical judgements made by management in applying accounting policies that can have a significant effect on the amounts recognised in the Condensed Interim Consolidated Financial Statements, is provided in the Consolidated Financia l Statements as at and for the year ended 31 December 2025. In order to enhance the informational value of the Condensed Interim Consolidated Financial Statements, the notes are evaluated based on relevance and importance for the reader. This can result in information, that has been evaluated as neither important nor relevant for the reader, not being presented in the notes. The estimates and underlying assumptions are based on historical results and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period and future periods if the revision affects both current and future periods. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 11
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 0 3. Changes in accounting policies Segment information 4. Business segments - - - - - Supporting units consist of the functions carried out by the Bank's support divisions, such as Risk Management, Finance, IT and Operations, etc. The information presented relating to the supporting units does not represent an operating segment. Treasury is responsible for the Bank's funding, liquidity and asset-and-liability management. Treasury oversees the internal fund‘s transfer pricing and manages the relationship with investors, credit rating agencies and financial institutions. Market making activities in domestic securities sit within Treasury. Treasury The UK operations consist of asset management and corporate finance services through Kvika Limited and specialised lending services through Ortus Secured Finance Ltd, as well as the Bank's lending to customers in the UK. The UK operations are the only geographic area outside of Iceland where the Group operates and for the period in 2026 it accounted for 18.0% (9m 2025: 18.6%) of net operating income. New standards, amendments to standards and interpretations have been issued but are not yet effective for the current year, and have not been applied in preparing these Condensed Interim Consolidated Financial Statements. Relevant to the Group's reporting is IFRS 18 Presentation and disclosures in financial statements. In April 2024, the International Accounting Standards Board (IASB) issued IFRS 18 Presentation and Disclosure in Financial Statements. IFRS 18 replaces IAS 1 Presentation of Financial Statements and introduces new requirements for the presentation and disclosure of financial information, including specified categories and subtotals in the statement of profit or loss and enhanced disclosure requirements for management-defined performance measures. IFRS 18 is effective for annual reporting periods beginning on or after 1 January 2027, with retrospective application required. The Group has not early adopted the standard. Management is currently assessing the impact of IFRS 18 on the Group’s financial reporting. The implementation is expected to result in changes to the presentation of the statement of profit or loss and related disclosures, and the detailed assessment of these impacts is ongoing. The Group defines the following reportable operating segments; Asset Management, Commercial Banking, Investment Banking, UK operations and Treasury. Operating segments pay and receive interest to and from Treasury on an arm's length basis to reflect the allocation of capital and funding cost. Commercial Banking offers various forms of banking services and related advisory services. Included in this operating segment is Lykill, the leasing operations of the Group, and the Group's fintech operations, such as Auður, Netgíró and Aur, as well as the payment facilitation operations of Straumur greiðslumiðlun hf. Investment Banking Investment Banking provides a range of professional services in the fields of specialised financing, securities and foreign exchange transactions and corporate finance services. UK operations Segment reporting is based on the same principles and structure as internal reporting to the CEO and the Board of Directors. Segment performance is evaluated on profit before tax and excludes income from discontinued operations. Reportable segments Asset Management Products and services offered include asset management involving both domestic and foreign assets, private banking and private pension plans. The management of a broad range of mutual funds, investment funds and institutional investor funds is included in this segment through the operations of Kvika eignastýring hf. Commercial Banking Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 12
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 0 4. Business segments (cont.) Asset Commercial Investment UK Supporting 9m 2026 Management Banking Banking operations Treasury units Total (6) 3,906 2,312 1,807 1,325 (14) 9,331 1,693 1,145 933 466 120 (75) 4,282 54 (11) 150 301 82 (0) 577 - - - - - 10 10 28 187 5 20 - 1 241 Net operating income 1,769 5,227 3,401 2,595 1,527 (78) 14,441 (819) (747) (624) (764) (179) (2,248) (5,382) (51) (1,320) (131) (279) (136) (1,470) (3,385) Administrative expenses (870) (2,066) (755) (1,043) (315) (3,718) (8,767) - (234) (268) (98) 0 - (601) 1 - - - - - 1 - 2 - - - 32 34 (541) (1,190) (664) (206) (259) 2,861 - Profit (loss) before tax from continuing operations 358 1,738 1,713 1,247 953 (902) 5,108 Net segment revenue from external 1,824 1,976 7,582 4,287 (1,258) 30 14,441 Net segment revenue from other (56) 3,251 (4,181) (1,693) 2,786 (108) - Asset Commercial Investment UK Supporting 9m 2025 Management Banking Banking operations Treasury units Total (6) 3,743 1,955 1,741 1,419 (21) 8,831 1,772 1,171 1,559 474 65 (14) 5,026 71 2 (106) 470 9 (0) 445 - - - - - 22 22 13 97 1 (4) - 8 115 Net operating income 1,849 5,012 3,408 2,682 1,493 (5) 14,439 (799) (695) (592) (645) (180) (2,115) (5,026) (99) (1,463) (156) (302) (92) (1,674) (3,785) Administrative expenses (898) (2,157) (748) (947) (272) (3,789) (8,811) 0 (191) (92) (56) (0) - (340) (12) - - (580) - - (593) (494) (1,066) (624) (149) (242) 2,575 - Profit (loss) before tax from continuing operations 444 1,598 1,945 949 978 (1,219) 4,695 Net segment revenue from external 1,823 688 6,432 3,828 1,403 265 14,439 Net segment revenue from other 26 4,324 (3,023) (1,146) 89 (270) - customers ............................................................. segments .............................................................. Cost allocation ........................................................ Net interest income ................................................ Net fee and commission income ............................ Net financial income ............................................... Net interest income ................................................ Net fee and commission income ............................ Net financial income ............................................... Revaluation of contingent consideration ............... customers ............................................................. segments .............................................................. Share in profit of associates .................................... Other operating income ......................................... Salaries and related expenses ................................ Other operating expenses ...................................... Net impairment ....................................................... Revaluation of contingent consideration ............... Cost allocation ........................................................ Revaluation of investment properties .................... Share in profit of associates .................................... Other operating income ......................................... Salaries and related expenses ................................ Other operating expenses ...................................... Net impairment ....................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 13
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 4 Income statement 5. Net interest income Interest income is specified as follows: Q3 2026 Q3 2025 9m 2026 9m 2025 499 435 1,568 1, 528 10 139 34 470 6, 834 5,677 19,723 15,915 244 476 979 1, 841 570 858 1,818 2, 959 181 128 426 155 To tal 8,337 7,714 24,547 22,868 Interest expense is specified as follows: Q3 2026 Q3 2025 9m 2026 9m 2025 3,466 2,938 9,868 8,775 100 112 331 722 1, 117 1,174 3,235 2,797 248 151 711 463 345 373 1,041 1, 242 10 13 30 38 To tal 5,286 4,761 15,216 14,037 Net interest income 3,052 2,953 9,331 8,831 6. Net fee and commission income Q3 2026 Q3 2025* 9m 2026 9m 2025* 551 541 1,709 1, 723 234 323 794 1, 299 200 196 538 554 521 570 1,621 1, 553 29 82 97 330 T otal fee and commission income 1,536 1,711 4,758 5,460 (155) (141) (476) (433) Net fee and commission income 1,380 1, 571 4,282 5, 026 Oth er fee and commission income ............................................................................................ Fee and commission expense ..................................................................................................... * A portion of the fees that were recorded as other fee and commission income during the period in 2025 has been reclassified, as stated in the 2025 Consolidated Financial Statements. The reclassification primarily resulted in a decrease in other fee and commission income and an increase in fee income related to loans and guarantees. Borrowings .................................................................................................................................. Subordinated liabilities ............................................................................................................... * Thereof are lease liabilities' interest expense amounting to ISK 19 million (9m 2025: ISK 28 million). Total interest income recognised in respect of financial assets not carried at fair value through profit or loss amounts to ISK 21,380 million (9m 2025: ISK 17,897 million). Total interest expense recognised in respect of financial liabilities not carried at fair value through profit or loss amounts to ISK 14,175 million (9m 2025: ISK 12,795 million). During the period, the Group revised the presentation of certain interest expenses to align with the classification of money market deposits in the statement of financial position. Accordingly, part of the interest expenses previously included under Borrowings are now presented under Deposits. Furthermore, the Group revised the presentation of interest income and interest expense on derivatives, resulting in an increase in both line items, with no impact on net interest income. Comparative figures have been restated accordingly. Fee and commission income is disclosed based on the nature and type of income generated across business segments. Information on net fee and commission income by segment is disclosed in note 4. Cash and balances with Central Bank ......................................................................................... Derivatives .................................................................................................................................. Loans to customers ..................................................................................................................... Other interest income ................................................................................................................ Fixed income securities (FVOCI) ................................................................................................. Loans to credit institutions ......................................................................................................... Asset management fees are earned by the Group for trust and fiduciary activities where the Group holds or invests assets on behalf of the customers. Fee and commission income from capital markets and corporate finance include fees and commissions generated by miscellaneous corporate finance services, securities, derivatives and FX brokerage as well as market making. Other interest expense* ............................................................................................................. Issued bonds ............................................................................................................................... Derivatives .................................................................................................................................. Deposits ..................................................................................................................................... Cards and payment solutions ..................................................................................................... Loans and guarantees ................................................................................................................. F ee and commission income from cards and payment solutions relate to the Group's payment facilitations services as well as the issuance of debit and credit cards. Fee and commission income from loans and guarantees include the Group's lending operations, notification and collection fees, as well as fees from issuing guarantees. Asset Management ..................................................................................................................... Capital markets and corporate finance ...................................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 14
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 4 7. Net financial income Net financial income is specified as follows: Q3 2026 Q3 2025 9m 2026 9m 2025 Net gain (loss) on financial assets and financial liabilities mandatorily measured at fair value through profit or loss 101 120 275 287 (0) (9) 0 (23) 244 179 449 454 - 44 (0) 40 (5) (35) (41) (81) - - - (83) (83) 6 (107) (148) Total 257 305 577 445 8. Foreign currency exchange difference Foreign currency exchange difference is specified as follows: Q3 2026 Q3 2025 9m 2026 9m 2025 (1,507) 988 (1,634) 1,329 1,424 (983) 1,527 (1,477) Total (83) 6 (107) (148) 9. Administrative expenses Administrative expenses are specified as follows: Q3 2026 Q3 2025 9m 2026 9m 2025 1,688 1,573 5,382 5,026 825 890 2,520 2,720 239 239 726 899 54 38 139 166 Total 2,807 2,740 8,767 8,811 10. Salaries and related expenses Salaries and related expenses are specified as follows: Q3 2026 Q3 2025 9m 2026 9m 2025 1,085 1,055 3,796 3,534 212 164 430 433 166 165 516 491 68 67 211 201 158 121 429 367 Total 1,688 1,573 5,382 5,026 234 243 241 249 234 246 234 246 Fixed income securities ............................................................................................................ Average number of full time employees during the period ....................................................... Pension fund contributions ........................................................................................................ Derivatives ................................................................................................................................ Financial assets at fair value through OCI ................................................................................ Loans to customers .................................................................................................................. (Loss) gain on financial instruments at fair value through profit and loss ................................. Total number of full time employees at the end of the period ................................................. Gain (loss) on other financial instruments ................................................................................. According to Act No. 165/2011, passed in 2011, banks and other financial institutions providing VAT exempt services, must pay a tax based on salary payments, called tax on financial activity. The current tax rate is 5.50% (2025: 5.50%). The amount of performance based payments that has been expensed is based on the results for the year to date 2026 and the guidelines on performance based payments set forth in the Group’s remuneration policy. The performance based payments have not been allocated to any employees or business segments and are subject to approval by the Board of Directors. Other salary related expenses .................................................................................................... Tax on financial activity .............................................................................................................. Salaries ........................................................................................................................................ Performance based payments excluding share-based payments ............................................. Loss on prepayments of borrowings .......................................................................................... Foreign currency exchange difference ....................................................................................... Shares and other variable income securities ........................................................................... Salaries and related expenses .................................................................................................... Other operating expenses .......................................................................................................... Depreciation and amortisation .................................................................................................. Depreciation of right of use asset .............................................................................................. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 15
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 4 11. Q3 2026 Q3 2025 9m 2026 9m 2025 (241) (147) (607) (332) - - (1) (7) 3 (6) 6 (2) Total (238) (153) (601) (340) 9m 2026 9m 2025 9m 2026 9m 2025 9m 2026 9m 2025 Net earnings attributable to equity holders of the Bank 3,621 3,097 - 1,901 3,621 4,998 4,330 4,522 4,330 4,522 4,330 4,522 - 1 - 1 - 1 Total 4,330 4,523 4,330 4,523 4,330 4,523 0.84 0.68 0.00 0.42 0.84 1.11 0.84 0.68 0.00 0.42 0.84 1.10 Q3 2026 Q3 2025 Q3 2026 Q3 2025 Q3 2026 Q3 2025 Net earnings attributable to equity holders of the Bank 1,343 1,472 - - 1,343 1,472 4,301 4,417 4,301 4,417 4,301 4,417 - 1 - 1 - 1 Total 4,301 4,418 4,301 4,418 4,301 4,418 0.31 0.33 - - 0.31 0.33 0.31 0.33 - - 0.31 0.33 Net impairment Net change in impairment of other assets ................................................................................. Net change in impairment of loan commitments, guarantees and unused credit facilities ..... Weighted average number of outstanding shares ............................. Adjustments for stock options ............................................................ Discontinued operations Basic earnings per share (ISK) .............................................................. Diluted earnings per share (ISK) .......................................................... Continuing operations Continuing and discontinued operations Net change in impairment of loans ............................................................................................ Weighted average number of outstanding shares ............................. Adjustments for stock options ............................................................ Basic earnings per share (ISK) .............................................................. Diluted earnings per share (ISK) .......................................................... 12. Income tax The Bank and some of its subsidiaries will not pay income tax on its profit for 2026 due to the fact that Group has a tax loss carry forward that offsets the calculated income tax. At year-end 2025, the tax loss carry forward of the Group amounted to ISK 6.6 billion. A substantial part of the tax loss carry forward is utilisable until end of year 2028. Management is of the opinion that the Group's operations in the years to come will result in taxable results which will be offset with the tax loss carry forward. The Group has therefore recognised the tax loss carry forward as a deferred tax asset in the Condensed Interim Consolidated Statement of Financial Position. Income tax is recognised based on the tax rates and tax laws enacted during the current year, according to which the domestic corporate income tax rate was 20.0% (2025: 20.0%). Companies within the Group, which operate outside of Iceland, recognise income tax in accordance with the applicable tax laws in the country they reside. 13. Special tax on financial activity The special tax on financial activity is an additional income tax which becomes effective when the income tax base exceeds ISK 1,000 million. It is levied on the same entities as the tax on financial activity according to Act No. 90/2003. The tax rate is set at 6.0% (2025: 6.0%) and the tax is not a deductible expense for income tax purposes. The tax is presented separately in the Condensed Interim Consolidated Income Statement. 14. Special tax on financial institutions According to Act No. 155/2010 on Special Tax on Financial Institutions, certain types of financial institutions, including banks, must pay annually a tax based on the carrying amount of their liabilities as determined for tax purposes in excess of ISK 50 billion at year-end. The tax rate is set at 0.145% (2025: 0.145%) and the tax is not a deductible expense for income tax purposes. The tax is presented separately in the Condensed Interim Consolidated Income Statement. 15. Earnings per share The calculation of basic earnings per share is based on earnings attributable to shareholders and a weighted average number of shares outstanding during the period. The diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Bank has issued stock options that have a dilutive effect. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 16
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 15 Statement of Financial Position 16. Cash and balances with Central Bank Cash and balances with Central Bank are specified as follows: 30.9.2026 31.12.2025 23,140 13,929 5 12 Included in cash and cash equivalents 23,145 13,941 7,050 6,203 Total 30,194 20,145 17. Loans to credit institutions Loans to credit institutions are specified as follows: 30.9.2026 31.12.2025 6,359 8,102 634 52 Total 6,993 8,154 18. Loans to customers Gross Gross Gross carrying Book carrying Book carrying Book 30.9.2026 amount value amount value amount value 68,946 67,935 165,621 163,954 234,567 231,890 - - 3,062 3,062 3,062 3,062 Total 68,946 67,935 168,683 167,016 237,629 234,952 Gross Gross Gross carrying Book carrying Book carrying Book 31.12.2025 amount value amount value amount value 64,981 64,090 141,030 139,593 206,012 203,683 - - 3,877 3,877 3,877 3,877 Total 64,981 64,090 144,907 143,470 209,889 207,560 19. Fixed income securities Fixed income securities are specified as follows: Mandatorily measured at fair value through profit or loss 30.9.2026 31.12.2025 1,577 1,793 1,850 2,425 1,743 1,436 Measured at fair value through other comprehensive income 28,406 37,473 1,380 1,394 Total 34,958 44,522 Deposits with Central Bank ......................................................................................................................................... Cash on hand ............................................................................................................................................................... Loans to customers at FV through profit or loss ..... Restricted balances with Central Bank - fixed reserve requirement .......................................................................... Listed government bonds and bonds with government guarantees ....................................................................... Listed bonds .............................................................................................................................................................. Unlisted bonds .......................................................................................................................................................... Corporates Total Corporates Individuals Loans to customers at amortised cost .................... Bank accounts .............................................................................................................................................................. Other loans .................................................................................................................................................................. The breakdown of the loan portfolio by individuals and corporates is specified as follows: The Group presents finance lease receivables as part of loans to customers at amortised cost. As at 30 September 2026, the book value of finance lease receivables amounted to ISK 25,019 million (31.12.2025: ISK 23,175 million). Loans to customers at FV through profit or loss ..... TotalIndividuals Loans to customers at amortised cost .................... Listed government bonds and bonds with government guarantees ....................................................................... Listed bonds .............................................................................................................................................................. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 17
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 15 20. Shares and other variable income securities Shares and other variable income securities are specified as follows: Mandatorily measured at fair value through profit or loss 30.9.2026 31.12.2025 929 996 4,275 3,097 19,660 15,013 688 1,558 Total 25,552 20,663 21. Securities used for hedging Securities used for hedging are specified as follows: 30.9.2026 31.12.2025 473 938 678 320 2,125 5,353 198 - 29 84 Total 3,502 6,695 22. Derivatives 30.9.2026 Assets Liabilities Assets Liabilities 47,950 47,950 526 - 37,792 28,281 23 216 4,514 5,099 1 40 - 9,353 640 - 4,916 4,064 989 138 1,907 1,907 404 404 Total 97,079 96,654 2,583 797 31.12.2025 Assets Liab ilities Assets Liabilities 29,496 29,476 685 - 65,265 55,477 1,037 6 4,890 4,868 29 15 - 8,745 156 - 8,100 7,510 1,020 429 2,034 2,034 323 323 Total 109,785 108,109 3,250 773 30.9.2026 31.12.2025 124 (21) 485 182 (97) (36) Total 512 124 The hedging gain recognised in OCI before tax is equal to the change in fair value used for measuring effectiveness. There is no ineffectiveness recognised in profit or loss. Set out below is the reconciliation of foreign currency translation reserve component of equity due to hedge accounting and the analysis of other comprehensive income: Balance at the beginning of the year .......................................................................................................................... Foreign currency revaluation of the net foreign operations ...................................................................................... Tax effect ..................................................................................................................................................................... Listed government bonds and bonds with government guarantees .......................................................................... Listed unit shares ......................................................................................................................................................... Listed bonds ................................................................................................................................................................ Unlisted unit shares .................................................................................................................................................. Listed shares ................................................................................................................................................................ Listed shares ............................................................................................................................................................. Unit shares in cash equivalent liquidity funds .......................................................................................................... Unlisted unit shares ..................................................................................................................................................... Carrying amount Notional Bond and equity total return swaps .................................................................... Currency forwards used for hedge accounting ................................................... Cross - currency interest rate swaps ................................................................... Currency forwards used for hedge accounting ................................................... Cross - currency interest rate swaps ................................................................... Equity options ...................................................................................................... Bond and equity total return swaps .................................................................... Derivatives are specified as follows: Currency forwards ............................................................................................... Interest rate derivatives ...................................................................................... Unlisted shares ......................................................................................................................................................... Currency forwards ............................................................................................... Interest rate derivatives ...................................................................................... Notional Equity options ...................................................................................................... Carrying amount Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 18
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 15 23. Group entities Share Share Entity Nature of operations Domicile 30.9.2026 31.12.2025 Asset management Iceland 100% 100% Debt Collection Iceland 100% 100% Iceland 100% 100% UK 100% 100% UK 100% 100% 24. Investment in associates a. Investment in main associates is accounted for using the equity method and is specified as follows: Share Share Entity Nature of operations Domicile 30.9.2026 31.12.2025 Croatia 40% 40% b. Changes in investments in associates are specified as follows: 30.9.2026 31.12.2025 117 113 - (36) 10 37 (8) 3 Total 119 117 25. Intangible assets Intangible assets are specified as follows: a. Customer Software 30.9.2026 Goodw ill relationships Brands and other Total 17,738 1,388 174 1,829 21,130 - - - 163 163 - (115) - (22) (137) - (106) (11) (367) (484) - (148) - (285) (433) (91) (25) - - (116) Balance as at 30 September 2026 17,648 994 162 1,318 20,123 17,648 1,742 369 4,047 23,805 - (747) (207) (2,728) (3,682) Balance as at 30 September 2026 17,648 994 162 1,318 20,123 Customer Software 31.12.2025 Goodw ill relationships Brands and other Total 17,784 1,567 219 2,123 21,693 - - - 306 306 - - - (27) (27) - (163) (45) (573) (781) (45) (15) (1) - (61) Balance as at 31 December 2025 17,738 1,388 174 1,829 21,130 17,738 2,082 369 4,281 24,471 - (694) (195) (2,452) (3,341) Balance as at 31 December 2025 17,738 1,388 174 1,829 21,130 Kvika eignastýring hf. ............................................. Exchange rate difference ............................................................................................................................................ Additions during the period .......................................................... Payment facilitator Business consultancy services The main subsidiaries held directly or indirectly by the Group are listed in the table below. Balance at the beginning of the year .......................................................................................................................... Ortus Secured Finance ltd. ..................................... Straumur greiðslumiðlun hf. .................................. Kvika Limited .......................................................... Lending operations Moberg d. o. o. ....................................................... Skilum ehf. .............................................................. The Group does not consider its associates material, neither individually nor as a group. The Group disposed of its shareholding in Gláma fjárfestingar slhf. during the third quarter of 2026. Currency adjustments ................................................................... Accumulated amortisation ............................................................ Digital solutions provider Amortisation .................................................................................. Balance as at 1 January 2026 ........................................................ Discontinued ................................................................................. Amortisation .................................................................................. Discontinued ................................................................................. Reclassified as assets held for sale ............................................... Balance as at 1 January 2025 ........................................................ Currency adjustments ................................................................... Gross carrying amount .................................................................. Gross carrying amount .................................................................. Accumulated amortisation ............................................................ Additions during the period .......................................................... Dividend received ........................................................................................................................................................ Share in profit of associates, net of income tax .......................................................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 19
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 15 26. Operating lease assets Operating lease assets are specified as follows: 30.9.2026 31.12.2025 361 215 1,203 285 (52) (86) (98) (53) Total 1,415 361 1,569 494 (155) (132) Total 1,415 361 27. Other assets Other assets are specified as follows: 30.9.2026 31.12.2025 4,830 4,096 2,247 3,686 389 569 508 93 744 731 Total 8,718 9,174 Right of use asset and lease receivables are specified as follows: 30.9.2026 31.12.2025 569 1,024 26 30 (5) (3) - (201) (200) (282) Total 389 569 28. Assets classified as held for sale 29. Borrowings Borrowings are specified as follows: 30.9.2026 31.12.2025 4,968 5,228 48 1,579 Total 5,016 6,806 Indexation .................................................................................................................................................................... Depreciation and lease receivable instalment ............................................................................................................ Right of use asset and lease receivables mostly consist of real estates for the Group's own use. The Group has entered into sublease contracts for parts of the real estates which it does not use for its operations. The lease receivables are immaterial at year end. Lease liability is specified in not e 34. Impairment .................................................................................................................................................................. Currency adjustments ................................................................................................................................................. Right of use asset and lease receivables as at 1 January ............................................................................................ Sundry assets ............................................................................................................................................................... Investment properties ................................................................................................................................................. Right of use asset and lease receivables ..................................................................................................................... Accounts receivable .................................................................................................................................................... Balance as at 1 January ............................................................................................................................................... The Group has not had any defaults of principal, interest or other breaches with respect to its debt issued and other borrowed funds. Secured borrowings ..................................................................................................................................................... Other borrowings ........................................................................................................................................................ Unsettled transactions ................................................................................................................................................ On 30 June 2026 the Group classified the assets and liab ilities of Straumur greiðslumiðlun hf. as held for sale in accordance with IFRS 5. Management is committed to a plan to sell the subsidiary and expects the transaction to be completed within twelve months. The disposal group does not represent a separate major line of business or geographical area of operations and, accordingly, has not been presented as a discontinued operation. At 30 September 2026, assets classified as held for sale amounted to ISK 608 m illion and liabilities associated with assets classified as held for sale amounted to ISK 3,086 million. The carrying amounts presented represent the disposal group on a consolidated basis and therefore exclude all intragroup balances that are eliminated in the preparation of the consolidated financial statements. Gross carrying amount ................................................................................................................................................ Additions ..................................................................................................................... ................................................ Disposals ...................................................................................................................................................................... Depreciation ................................................................................................................................................................ Accumulated depreciation .......................................................................................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 20
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 15 30. Issued bonds Issued bonds are specified as follows: First Maturity Currency, nominal value issued Maturity type Terms of interest 30.9.2026 31.12.2025 Unsecured bonds: 2023 5/2026 At maturity Floating, 3 month STIBOR + 4.10% - 3,115 2023 5/2026 At maturity Floating, 3 month NIBOR + 4.10% - 4,193 2023 11/2026 At maturity Floating, 3 month STIBOR + 4.0% 6,084 6,845 2021 5/2027 At maturity CPI-indexed, fixed 1.0% 7,549 7,172 2025 4/2028 At maturity Floating, 3 month NIBOR + 2.0% 5,093 5,039 2025 4/2028 At maturity Floating, 3 month STIBOR + 2.0% 7,313 8,228 2025 7/2028 At maturity Floating, 3 month REIBOR + 1.14 % 5,116 5,109 2025 6/2029 At maturity Fixed 4.50% 27,809 30,209 2026 6/2030 At maturity Fixed 4.375% 20,828 - 2022 1/2032 At maturity CPI-indexed, fixed 1.40% 2,712 2,579 Total 82,504 72,490 813 759 Total 83,317 73,249 31. Subordinated liabilities a. Subordinated liabilities: First Currency, nominal value issued Maturity First call Terms of interest 30.9.2026 31.12.2025 2023 12/2034 12/2029 CPI-Indexed, fixed 6.25% 3,018 2,733 2015 5/2045 5/2027 CPI-Indexed, fixed 6.25% 3,333 3,109 Total - Tier 2 6,351 5,841 2026 Perpetual 4/2031 Floating, 3 month STIBOR + 4.25% 3,668 - Total - Additional Tier 1 3,668 - Total subordinated liabilities 10,019 5,841 b. Subordinated liabilities are specified as follows: 30.9.2026 31.12.2025 5,841 5,629 3,894 - (62) (272) (37) (76) 382 560 Total 10,019 5,841 EMTN 29 0602, EUR 200 million ........ Paid interest ................................................................................................................................................................ Paid interests due to indexation ................................................................................................................................. Accrued interests and indexation ............................................................................................................................... KVB 21 02, ISK 5,400 million .............. KVIKA 34 1211 T2i, ISK 2,500 m. ........ Balance at the beginning of the year .......................................................................................................................... Subordinated liabilities and capital instruments form part of the Group's regulatory capital base. In the event of the Group's voluntary or compulsory winding-up, subordinated liabilities rank behind the claims of ordinary creditors. Tier 2 instruments are included in Tier 2 capital, wh ile AT1 instruments are included in Additional Tier 1 capital for regulatory capital purposes. The amount eligible for Tier 2 capital treatment is amortised on a straight-line basis over the final five years to maturity, in accordance with applicable capital adequacy regulations. The Group may only redeem, repurchase or otherwise retire subordinated liabilities and capital instruments with the approval of the Financial Supervisory Authority of the Central Bank of Iceland. In September 2026 the ticker of the bond series TM 15 1 was changed to KVIKA 45 0515 T2i. The Group has the right to repay the KVIKA 45 0515 T2i subordinated bond on any interest payment dates until maturity. Additionally, at the interest payment date in the year 2029 for KVIKA 34 1211 T2i, the Group has the right to repay the subordinated bond and on any subsequent interest payment dates until maturity. Additions ..................................................................................................................................................................... In April 2026, the Group issued SEK 300 m illion Additional Tier 1 (AT1) capital instruments. The AT1 instruments are perpetual and have no fixed maturity date. The instruments are callable at the option of the Group after five years and on subsequent interest payment dates thereafter, subject to regulatory approval. The instruments include a temporary write-down feature with a Common Equity Tier 1 (CET1) trigger of 5.125%. KVIKA AT1, SEK 300 million ................ EMTN 26 1123 GB, SEK 500 million ... EMTN 28 0421, SEK 600 million ......... Unlisted senior unsecured bonds, total ...................................................................................................................... EMTN 28 0421, NOK 400 million ....... KVIKA 45 0515 T2i, ISK 2,000 million . KVIKA 32 0112, ISK 2,000 million ....... KVIKA 28 0703, ISK 5,000 million ....... EMTN 30 0610, EUR 150 million ........ EMTN 26 0511, SEK 566 million ......... EMTN 26 0511, NOK 750 million ....... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 21
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 15 32. Short positions held for trading Short positions held for trading are specified as follows: 30.9.2026 31.12.2025 130 108 453 253 - 72 Total 583 433 33. Short positions used for hedging Short positions used for hedging are specified as follows: 30.9.2026 31.12.2025 - 432 37 - Total 37 432 34. Other liabilities Other liabilities are specified as follows: 30.9.2026 31.12.2025 2,933 3,252 1,688 1,688 1,070 5,268 932 1,055 515 802 290 641 699 433 9 16 306 444 Total 8,443 13,599 Lease liability is specified as follows: 30.9.2026 31.12.2025 802 1,158 (8) (5) (304) (382) 26 30 Total 515 802 35. Share capital a. Share capital 30.9.2026 31.12.2025 4,330 4,631 61 214 240 240 b. Changes made to the nominal amount of share capital c. Share capital increase authorisations Authorised but not issued shares ................................................................................................................................ Nominal amount of treasury shares ........................................................................................................................... The nominal value of shares issued by the Bank is ISK 1 per share. All currently issued shares are fully paid. The holders of shares are entitled to receive dividends as approved by the general meeting and are entitled to o ne vote per nominal value of ISK 1 at shareholders' meetings. Reference is made to the Bank's Articles of Association for more information about the share capital. Currency adjustments ................................................................................................................................................. According to the Bank's Articles of Association dated 18 March 2026, cf. temporary provision I, the Board of Directors is authorised to issue options or warrants for up to ISK 240 million in nominal value. To serve such instruments the Board of Directors is authorised to either increase the share capital accordingly or purchase own shares, as permitted by law. This authorisation is valid until 31 March 2027. A copy of the Bank's Articles of Association, including the temporary provisions, is available on the Bank's website, www.kvika.is, reference is mad e to them for more information. Accounts payable and accrued expenses ................................................................................................................... Instalment .................................................................................................................................................................... The lease liability mostly consists of real estate for the Group's own use. The end date of the lease agreement of the Group's head office is in November 2031 but with an exit clause in September 2027. The lease is linked to the Icelandic consumer price index. Right of use asset and lease receivables are specified in note 27. Listed bonds ................................................................................................................................................................ During the period in 2026 the Bank's share capital was decreased by ISK 301 m illion in nominal value following a resolution by the AGM to cancel treasury shares. Furthermore, during the period in 2026 the Bank acquired treasury shares amounting to ISK 147 m illion in nominal value as a result of a share buy-back plan. Lease liability ............................................................................................................................................................... Salaries and salary related expenses .......................................................................................................................... Share capital according to the Bank's Articles of Association ..................................................................................... Indexation .................................................................................................................................................................... Expected credit loss allowance for loan commitments, guarantees and unused credit facilities ............................. Unsettled transactions ........................................................................................................ ........................................ Withholding taxes ....................................................................................................................................................... Lease liability as at 1 January ...................................................................................................................................... Other liabilities ............................................................................................................................................................ Listed government bonds and bonds with government guarantees .......................................................................... Listed government bonds and bonds with government guarantees .......................................................................... Listed shares ................................................................................................................................................................ Listed shares ................................................................................................................................................................ Contingent consideration ............................................................................................................................................ Special taxes on financial institutions and financial activities .................................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 22
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 15 36. Capital adequacy ratio (CAR) Own funds 30.9.2026 31.12.2025 58,059 68,935 (1,340) - (1,876) (3,323) (20,013) (20,925) (217) (217) (55) (939) 272 1,156 Common equity Tier 1 capital (CET1) 34,831 44,687 3,668 0 Tier 1 capital 38,499 44,687 Tier 2 capital 5,730 5,416 Total own funds 44,229 50,103 Risk-weighted exposure amount (RWEA) 175,158 157,968 7,129 8,296 20,503 20,503 Total risk-weighted exposure amount 202,790 186,767 Capital ratios 17.2% 23.9% 19.0% 23.9% 21.8% 26.8% 45,232 17.7% 19.5% 22.3% Capital buffer requirement, % of RWEA 1.6% 1.6% 2.4% 2.4% 2.5% 2.5% Combined buffer requirement 6.4% 6.4% Capital requirement, % of RWEA 30.9.2026 CET1 Tier 1 Total 4.5% 6.0% 8.0% 1.9% 2.5% 3.3% Minimum requirement under Pillar I and Pillar II-R 6.4% 8.5% 11.3% 6.4% 6.4% 6.4% Total capital requirement 12.8% 14.9% 17.7% Total own funds including unaudited (positive) retained earnings and expected dividends .................................... Deferred tax asset ...................................................................................................................................................... Capital adequacy ratio (CAR) ....................................................................................................................................... CET1 ratio including unaudited (positive) retained earnings and expected dividends .............................................. Pillar II-R capital requirement ........................................................................................................... Combined buffer requirement ......................................................................................................... T1 ratio ......................................................................................................................................................................... T1 ratio including unaudited (positive) retained earnings and expected dividends .................................................. Systemic risk buffer (SRB) ............................................................................................................................................ Additional Tier 1 Capital .............................................................................................................................................. Goodwill and intangibles ............................................................................................................................................. Other unaudited (positive) changes to total equity in current period ....................................................................... The capital adequacy ratio of the Group is calculated in accordance with capital requirements regulation no. 575/2013 as implemented through the Act on Financial Undertakings No. 161/2002. The Bank's regulatory capital calculations for credit risk and market risk are based on the standardised approach and the capital calculations for operational risk are based on the basic indicator approach. Proposed dividends and buybacks .............................................................................................................................. Shares in other financial institutions .......................................................................................................................... CET1 ratio .................................................................................................................................................................... Capital adequacy ratio (CAR) including unaudited (positive) retained earnings and expected dividends ................ Credit risk ..................................................................................................................................................................... Pillar I capital requirement ............................................................................................................... Operational risk ........................................................................................................................................................... Total equity .................................................................................................................................................................. Market risk ................................................................................................................................................................... Amounts below the threshold for deduction ............................................................................................................. Countercyclical capital buffer (CCyB) .......................................................................................................................... Capital conservation buffer (CCB) ............................................................................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 23
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 15 37. Leverage ratio 30.9.2026 31.12.2025 346,700 315,613 4,315 3,331 6,633 1,093 Total exposure measure 357,648 320,037 38,499 44,687 10.8% 14.0% 38. Minimum requirements for own funds and eligible liabilities (MREL) Own funds and eligible liabilities 30.9.2026 31.12.2025 34,831 44,687 3,668 - 5,730 5,416 69,674 59,096 Total own funds and eligible liabilities 113,903 109,199 MREL-RWEA and CBR 202,790 186,767 56.0% 58.5% 21.9% 21.9% 6.4% 6.4% MREL-RWEA requirement including CBR 28.3% 28.3% MREL-TE M 357,648 320,037 31.9% 34.1% 6.0% 6.0% MREL-TEM requirement .............................................................................................................................................. According to Act No. 70/2020 on Resolution of Credit Institutions and Investment Firms, the Bank shall at all times meet the minimum requirement for own funds and eligible liabilities (MREL) as a percentage to the Group's total risk-weighted exposure amount (MREL-RWEA). The MREL-RWEA requirement must be met parallel to the combined buffer requirement (CBR). The Group must also meet a requirement of MREL funds as a percentage of the Group's total exposure measure (MREL-TEM). The MREL requirements as of 30 September are 22% of MREL-RWEA and 6% of MREL-TEM. Leverage ratio .............................................................................................................................................................. Tier 1 capital ................................................................................................................................................................ Total exposure measure .............................................................................................................................................. Own funds and eligible liabilities as % of RWEA ......................................................................................................... Eligible liabilities .......................................................................................................................................................... Risk-weighted exposure amount (RWEA) ................................................................................................................... Additional tier 1 capital (AT1) ...................................................................................................................................... Own funds and eligible liabilities as % of TEM ............................................................................................................ On-balance sheet exposures ....................................................................................................................................... Derivative exposures ................................................................................................................................................... Off - balance sheet exposures ..................................................................................................................................... The leverage ratio is calculated on the basis of the Group's consolidated numbers as per regulation no. 575/2013 of the EU. According to Act no. 161/2002 on Financial Undertakings the minimum leverage ratio requirement is 3%. Common equity Tier 1 capital (CET1) .......................................................................................................................... Tier 2 capital ................................................................................................................................................................ Minimum requirements for own funds (MREL) .......................................................................................................... Combined buffer requirement (CBR) .......................................................................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 24
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 38 Risk management 39. Hedging 40. Credit risk - overview a. Definition b. Management c. Credit approval process d. Collateral e. Credit rating f. Loan portfolio management g. Impairment h. Derivatives i. Securities used for hedging The Group offers derivative contracts in the form of swap contracts on highly liquid securities or currencies. On the day when the contract is entered into, the Group purchases the underlying asset and hedges its exposure to price changes. Collateral is primarily in the form of cash or listed, highly liquid securities. The risk management unit and ALCO set rules about the level of collateralisation and the risk management unit monitors the compliance to these rules. Contracts are closed if required levels of collateralisation are not met. The Group hedges itself for market risk of derivative contracts by purchasing the underlying securities at the commencement of the contract. Since the contracts require delivery of the underlying securities to the customer on the settlement day, the credit risk towards the issuer is immaterial. To ensure effective diversification of the loan portfolio, the board has established a limit framework defining maximum exposure as a proportion of the Group’s capital or the total size of the loan portfolio. This framework includes limits on exposures to connected clients, industries, regions and countries etc. Risk management is responsible for monitoring compliance with these limits and reporting any breaches to the credit committee. One of the Group's primary sources of risk is credit risk. Credit risk is the risk of financial loss arising from a customer’s failure to meet its contractual obligations. Credit risk primarily relates to default risk but also includes other risk components where applicable. Credit risk comprises, among other things, default risk, which is the risk that a borrower fails to meet its loan obligations and is mitigated through collateral where available; concentration risk, arising from insufficient diversification of the loan portfolio across borrowers, industries, or geographi cal areas; settlement risk, which may arise in transactions involving securities, foreign exchange, or derivatives if a counterparty fails to fulfil it s obligations on the settlement date; counterparty risk related to deriva tives, resulting from a counterparty’s failure to meet its contractual obligations; and equity risk in the investment portfolio, which reflects the risk of a decline in the value of unlisted equity investments. The risk management unit monitors credit risk and is responsible for developing methodologies to systematically identify, assess, monitor, and manage it. The Group uses a variety of tools and processes to manage credit risk, including collaterals, hedges and loan portfo lio management. A substantial proportion of the Group's loan portfolio consists of senior loans, most of which are secured with collateral. The Group monitors the value of collateral by listed securities on a real time basis and takes prompt action when necessary. Securing loans with collateral is a traditional and effective method of mitigating credit risk. The Group employs various risk-mitigation techniqu es, including obtaining collateral from customers where appropriate. Such collateral grants the Group the right to enforce against the collateralised assets for both current and future obligations of the customer. The Group applies appropriate haircuts to all collateral to ensure that the mitigating effect is prudent and robust. For collateral consisting of listed securities, the Group retains the right to liquidate the assets if their market value falls below a predefined threshold . Risk management ensures that loans have a credit rating and is responsible for reviewing the loan portfolio. The originating department prepares a proposal for each larger loan or credit line which is presented to the credit committee for approval. The proposal consists of a basic description of the client, the purpose of the loan, a simple credit assessment and arguments for or against granting the loan. The committee decides whether there is need for further cred it assessment and on what terms the loan may be granted. For smaller loans the originating department obtains a general credit approval from the credit committee with respect to the process, terms, credit limits and total amount of the specific lending type. A more thorough credit assessment may be conducted if considered appropriate and can include an assessment of a borrower's fundamental credit strength as well as the value of any collateral. To assess the borrower's ability to meet its obligations, the committee may request stress testing of the borrower's cash flows or obtain assessments from third parties. Provisioning for loan impairments is estimated based on expected credit loss models assessing the portfolio as well as individual lending. Risk management suggests a level of provisioning for the portfolio, based on the expected credit loss assessment. Provisions require approval from the credit committee. Refer to note 82 in the 2025 Consolidated Financial Statements for more information on the Group's impairment policy. Securities held as a hedge against derivative positions of customers make up a part of the Group's portfolio of assets. The Group hedges currency exposure between the Group's asset portfolio and its liabilities to the extent possible as part of managing its balance and keeping it within approved limits. The Group applies hedge accounting according to IAS 39 against translation of foreign operations. Currency swap agreements are used as a hedge instrument against translation difference arising from foreign operations. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 25
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 40 41. Maximum exposure to credit risk Public Financial Corporate On-balance sheet exposure entities institutions customers Individuals 30.9.2026 30,194 - - - 30,194 - 6,993 - - 6,993 6 1 167,009 67,935 234,952 31,934 2,843 181 - 34,958 - 1,819 686 78 2,583 2 623 7,195 - 7,821 62,137 12,280 175,071 68,013 317,501 Off-balance sheet exposure 22 7 15,144 893 16,066 - - 367 - 367 Maximum exposure to credit risk 62,159 12,287 190,582 68,906 333,935 Public Financial Corporate On-balance sheet exposure entities institutions customers Individuals 31.12.2025 20,145 - - - 20,145 - 8,154 - - 8,154 6 2 143,462 64,090 207,560 41,326 3,008 188 - 44,522 - 2,493 650 107 3,250 1 1,417 5,944 1,151 8,513 61,477 15,074 150,244 65,348 292,143 Off-balance sheet exposure 10 6 8,647 1,050 9,713 - - 1,097 - 1,097 Maximum exposure to credit risk 61,487 15,080 159,988 66,398 302,953 42. Credit quality of financial assets Model parameters for Icelandic portfolio Scenarios Base case Upside Downside Base case Upside Downside Unemployment rate 6.1% 5.1% 6.9% 5.0% 4.0% 6.4% Inflation CPI index 5.1% 4.4% 6.6% 3.4% 3.0% 5.8% Assigned weight 55.0% 10.0% 35.0% 55.0% 10.0% 35.0% Model parameters for UK portfolio Scenarios Base case Upside Downside Severe Base case Upside Downside Severe Unemployment rate 5.1% 4.8% 6.1% 7.5% 4.9% 2.3% 3.6% 5.9% Inflation CPI index 3.3% 2.8 % 4.5% 8.5% 2.5% 4.4% 5.9% 7.5% Assigned weight 50.0% 15.0% 25.0% 10.0% 50.0% 15.0% 25.0% 10.0% 31.12.2025 Loan commitments ........................................................................................ Financial guarantee contracts ....................................................................... The book value of financial assets which fall under the impairment requirements of IFRS 9 are presented as net of expected credit losses ("ECL") in the statement of financial position. The ECL are recalculated for each asset on at least a quarterly basis. The assessment of ECL is based on calculations from PD, LGD and EAD models. Furthermore, the assessment is based upon management's assumptions regarding the development of macroeconomic factors over the coming twelve months. The assumption s for macroeconomic development are decided for three scenarios: a base case, an upside scenario, a downside scenario and for the UK portfolio there is a fourth scenario, severe downturn. Each scenario includes a probability weight, and the ECL is derived as a weighted average. The amount of ECL to be recognized is dependent on the Group's definition of significant increase in credit risk, which controls the impairment stage each asset is allocated to. The factors that are used to measure significant increase in credit risk include comparison of changes in credit rating, lifetime PD values, days past due and registration on Creditinfo’s delinquency register. 30.9.2026 30.9.2026 31.12.2025 Cash and balances with Central Bank ........................................................... The maximum exposure to credit risk for on-balance sheet and off-balance sheet items, before taking into account any collateral held or other credit enhancements, is specified as follows: Cash and balances with Central Bank ........................................................... Loans to credit institutions ............................................................................ Fixed income securities ................................................................................. Loans to credit institutions ............................................................................ Fixed income securities ................................................................................. Loans to customers ........................................................................................ Derivatives ..................................................................................................... Other assets ................................................................................................... Loan commitments ........................................................................................ Financial guarantee contracts ....................................................................... The Group utilises an economic forecast which is aligned with requirements for the calculation of expected credit loss. The Group owns loan portfolios in two geographical segments, i.e. Iceland and the United Kingdom ("UK"). In general, the Group utilises the same ECL methodology for the portfolios in both segments, although in the UK it is to a larger extent based on an individual assessment by credit specialists and a separate macroeconomic forecast is used to reflect the UK economy. The following tables show the first 12 month macro economic values for the variables used in the expected credit loss model. Reference is made to note 82 in the 2025 Consolidated Financial Statements for further information about the Group's impairment methodology. Loans to customers ........................................................................................ Derivatives ..................................................................................................... Other assets ................................................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 26
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 42 42. Credit quality of financial assets (cont. ) a. Impairment Listed Unlisted Claim due to expected Carrying Total securities and securities and Residential Commercial Industrial Unsecured 30.9.2026 value credit loss amount % collateral Deposits liquid funds other funds real estate real estate Automobiles equipment Guarantee s Other claim value 7 (0) 6 0.0% 8 - - - - - 8 - - - 3 1 (0) 1 0.0% - - - - - - - - - - 1 Corporate Real estate activities .................................. 65,128 (243) 64,885 27.6% 108,787 27 164 496 40,952 64,844 1,045 459 100 702 427 Construction .............................................. 26,296 (190) 26,106 11.1% 45,977 1 - - 21,576 9,685 7,296 5,591 - 1,82 9 795 Activities of Holding Companies ................. 19,870 (688) 19,182 8.2% 57,264 4 833 9,940 12,196 14,807 197 137 660 18,490 2,3 00 Service Activities ........................................ 16,286 (103) 16,184 6.9% 32,529 48 445 2,053 1,342 5,280 19,219 3,377 - 765 302 Accommodat. and Food Service Activit. ..... 13,631 (69) 13,562 5.8% 27,293 35 - - 2,635 23,909 548 147 - 20 310 Act. of Hold. Comp. - Securities Financing .. 10,172 (274) 9,898 4.2% 20,308 139 19,446 710 13 - - - - - 647 Other ......................................................... 17,292 (100) 17,193 7.3% 35,594 45 2,343 533 2,903 12,291 8,207 5, 482 115 3,674 2,380 68,946 (1,011) 67,935 28.9% 133,865 66 516 853 80,996 2,244 46,287 1,322 - 1,581 9,388 Total 237,629 (2,678) 234,952 100.0% 461,627 365 23,747 14,584 162,613 133,060 82,807 16,514 875 27,060 16,553 Impairment Listed Unlisted Claim due to expected Carrying Total securities and securities and Residential Commercial Industrial Unsecured 31.12.2025 value credit loss amount % collateral Deposits liquid fund s other funds real estate real estate Automobile s equipment Guarantees Other claim value 6 (0) 6 0.0% 9 - - - - - 9 - - - 1 2 (0) 2 0.0% - - - - - - - - - - 2 Corporate Real estate activities .................................. 51,219 (308) 50,911 24.5% 89,260 63 400 2,983 36,289 47,916 956 322 100 231 1,249 Construction .............................................. 22,161 (104) 22,057 10.6% 42,192 9 - - 21,576 7,534 6,344 5,140 - 1,58 9 411 Activities of Holding Companies ................. 16,541 (48) 16,493 7.9% 60,434 4 40 10,588 10,152 17,785 1,513 147 706 19,500 1, 322 Service Activities ........................................ 15,859 (527) 15,333 7.4% 29,280 38 67 711 1,596 6,655 16,724 3,004 - 4 85 522 Accommodat. and Food Service Activit. ..... 11,299 (75) 11,224 5.4% 22,120 144 - - 3,905 17,419 542 60 - 50 271 Act. of Hold. Comp. - Securities Financing .. 7,698 (282) 7,417 3.6% 14,583 364 13,891 276 52 - - - - - 664 Other ......................................................... 20,122 (94) 20,028 9.6% 40,580 378 4,968 3,645 3,674 10,998 7,795 4,887 115 4,120 2,029 64,981 (891) 64,090 30.9% 121,954 35 446 665 73,022 2,314 42,932 1,178 - 1,362 8,982 Total 209,889 (2,329) 207,560 100.0% 420,411 1,034 19,812 18,868 150,266 110,621 76,814 14,737 921 27,338 15,452 Breakdown of loans to customers by industry and information on collateral and other credit enhancements The Group applies the same valuation methods to collateral held as other comparable assets held by the Group. For other types of assets the Group uses third party valuation where possible. Public entities .................................................. Individuals ....................................................... Financial institutions ....................................... Allocated collateral Public entities .................................................. Financial institutions ....................................... Individuals ....................................................... Collateral value is shown as the market- or accounting value of collateral allocated to exposures. Other collateral includes financial claims, inventories and receivables. Allocated collateral Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 27
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 42 42. Credit quality of financial assets (cont.) b. 30.9.2026 Loans to customers: Stage 1 Stage 2 Stage 3 FVTPL Total 154,108 1,128 - 2,880 158,116 41,642 2,522 - - 44,164 16,928 5,419 - - 22,347 863 851 - - 1,714 11 0 9,979 - 9,990 674 442 - 182 1,298 Gross carrying amount 214,227 10,362 9,979 3,062 237,629 (440) (288) (1,949) - (2,678) Book value 213,786 10,073 8,030 3,062 234,952 Loan commitments, guarantees and unused credit facilities: Stage 1 Stage 2 Stage 3 FVTPL Total 10,485 2 - 1,082 11,570 1,376 12 - - 1,388 318 208 - - 525 3 6 - - 9 - 0 38 112 149 2,792 - - - 2,792 Total off-balance sheet amount 14,975 227 38 1,194 16,434 (6) (1) (2) - (9) Net off-balance sheet amount 14,969 226 36 1,194 16,424 31.12.2025 Loans to customers: Stage 1 Stage 2 Stage 3 FVTPL Total 139,620 5,455 - 3,658 148,733 33,264 2,123 - 94 35,480 11,787 4,113 - - 15,901 374 518 - - 892 4 1 7,706 - 7,710 730 318 - 125 1,173 Gross carrying amount 185,778 12,527 7,706 3,877 209,889 (379) (203) (1,747) - (2,329) Book value 185,400 12,324 5,959 3,877 207,560 Loan commitments, guarantees and unused credit facilities: Stage 1 Stage 2 Stage 3 FVTPL Total 6,722 0 - 61 6,783 2,945 0 - - 2,945 236 14 - - 249 2 77 - - 80 - - 12 - 12 741 - - - 741 Total off-balance sheet amount 10,646 91 12 61 10,810 (13) (0) (3) - (16) Net off-balance sheet amount 10,633 91 9 61 10,794 The following tables show financial assets subject to the impairment requirements of IFRS 9 broken down by credit quality bands where band i denotes the lowest credit risk and band iv the highest credit risk. Assets measured at fair value through profit or loss are not subject to the stage classification requirements of IFRS 9 but are nevertheless included in the tables in order to give a more complete picture of the credit quality of loans to customers and reconcile the tables to the carrying amount on the balance sheet. The Bank has primarily used calibrated external credit ratings to assess the default probability of its customers. Some of the larger borrowers are furthermore individually assessed by credit specialist s. The Bank has implemented internal credit rating models for part of the loan portfolio and intends to continue this development. Credit quality band I ............................................................................. Credit quality band II ............................................................................ Credit quality band III ........................................................................... Credit quality band IV .......................................................................... Credit quality of financial assets by credit quality band Credit quality band III ........................................................................... Credit quality band IV .......................................................................... In default .............................................................................................. Non-rated ............................................................................................. Expected credit loss ............................................................................. Credit quality band I ............................................................................. In default .............................................................................................. Non-rated ............................................................................................. Expected credit loss ............................................................................. Credit quality band I ............................................................................. Credit quality band II ............................................................................ Expected credit loss ............................................................................. Credit quality band I ............................................................................. Credit quality band II ............................................................................ Credit quality band III ........................................................................... Credit quality band IV .......................................................................... In default .............................................................................................. Credit quality band II ............................................................................ Credit quality band III ........................................................................... Credit quality band IV .......................................................................... In default .............................................................................................. Non-rated ............................................................................................. Non-rated ............................................................................................. Expected credit loss ............................................................................. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 28
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 42 42. Credit quality of financial assets (cont.) c. Breakdown of loans to customers into not past due and past due Claim Expected Carrying 30.9.2026 value credit loss amount 218,453 (729) 217,724 7,366 (85) 7,281 3,138 (88) 3,050 1,647 (28) 1,619 912 (143) 769 4,617 (825) 3,792 1,496 (780) 717 Total 237,629 (2,678) 234,952 Claim Expected Carrying 31.12.2025 value credit loss amount 193,748 (620) 193,129 5,802 (510) 5,292 2,633 (62) 2,572 3,145 (10) 3,135 1,963 (144) 1,819 1,049 (192) 857 1,549 (792) 757 Total 209,889 (2,329) 207,560 d. Allowance for expected credit loss on loans to customers and loan commitments, guarantees and unused credit facilities 30.9.2026 Expected credit loss allowance total Sta ge 1 Sta ge 2 Sta ge 3 Total Transfers of financial assets: Balance as at 1 January 2026 392 204 1,749 2,345 60 (39) (21) - (21) 70 (48) - (16) (38) 54 - (74) 65 514 505 253 82 175 509 (146) (54) (241) (441) (0) (0) (231) (231) Balance as at 30 September 2026 447 290 1,951 2,687 Expected credit loss allowance for loans to customers S t a g e 1S t a g e 2S t a g e 3 T o t a l Transfers of financial assets: Balance as at 1 January 2026 379 203 1,747 2,329 59 (39) (20) - (20) 68 (48) - (16) (38) 54 - (68) 66 513 511 251 81 175 507 (145) (54) (240) (438) (0) (0) (231) (231) Balance as at 30 September 2026 440 288 1,949 2,678 Past due 91-180 days ................................................................................................................................ Past due 181-360 days .............................................................................................................................. Past due more than 360 days ................................................................................................................... Not past due ............................................................................................................................................. Past due 1-30 days .................................................................................................................................... Past due 31-60 days .................................................................................................................................. Not past due ............................................................................................................................................. Past due 1-30 days .................................................................................................................................... Past due 31-60 days .................................................................................................................................. Past due 61-90 days .................................................................................................................................. The following tables show changes in the expected credit loss allowance of loans to customers and for loan commitments, guarantees and unused credit facilities during the period. Transfer to Stage 1 - (Initial recognition) .................................................................. Transfer to Stage 2 - (significantly increased credit risk) ......................................... Transfer to Stage 3 - (credit impaired) ..................................................................... Net remeasurement of loss allowance .......................................................................... New financial assets, originated or purchased .............................................................. Past due 61-90 days .................................................................................................................................. Past due 91-180 days ................................................................................................................................ Past due 181-360 days .............................................................................................................................. Past due more than 360 days ................................................................................................... ................ New financial assets, originated or purchased .............................................................. Derecognitions and maturities ...................................................................................... Write-offs ....................................................................................................................... Derecognitions and maturities ...................................................................................... Write-offs ....................................................................................................................... Transfer to Stage 1 - (Initial recognition) .................................................................. Transfer to Stage 2 - (significantly increased credit risk) ......................................... Transfer to Stage 3 - (credit impaired) ..................................................................... Net remeasurement of loss allowance .......................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 29
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 42 42. Credit quality of financial assets (cont.) Expected credit loss allowance for loan commitments, guarantees and unused credit facilities S t a g e 1S t a g e 2S t a g e 3 T o t a l Transfers of financial assets: Balance as at 1 January 2026 13 0 3 16 1 (0) (1) - (2) 2 (0) - (0) (0) 0 - (6) (1) 1 (6) 2 1 - 2 (1) (0) (1) (2) Balance as at 30 September 2026 6 1 2 9 31.12.2025 Expected credit loss allowance total S t a g e 1S t a g e 2S t a g e 3 T o t a l Transfers of financial assets: Balance as at 1 January 2025 377 189 1,778 2,345 80 (33) (47) - (18) 42 (24) - (17) (28) 45 - (139) 5 99 (35) 303 107 633 1,043 (194) (79) (405) (679) (0) (0) (329) (330) Balance as at 31 December 2025 392 204 1,749 2,345 Expected credit loss allowance for loans to customers S t a g e 1S t a g e 2S t a g e 3 T o t a l Transfers of financial assets: Balance as at 1 January 2025 367 189 1,771 2,327 74 (33) (41) - (18) 42 (24) - (17) (28) 45 - (134) 5 98 (31) 297 107 633 1,038 (191) (79) (405) (675) (0) (0) (329) (330) Balance as at 31 December 2025 379 203 1,747 2,329 Expected credit loss allowance for loan commitments, guarantees and unused credit facilities S t a g e 1S t a g e 2S t a g e 3 T o t a l Transfers of financial assets: Balance as at 1 January 2025 11 0 7 18 6 (0) (6) - (0) 0 (0) - (0) (0) 0 - (5) 0 2 (4) 5 - - 5 (3) (0) (0) (4) Balance as at 31 December 2025 13 0 3 16 Transfer to Stage 1 - (Initial recognition) .................................................................. Transfer to Stage 2 - (significantly increased credit risk) ......................................... Transfer to Stage 3 - (credit impaired) ..................................................................... Transfer to Stage 3 - (credit impaired) ..................................................................... Net remeasurement of loss allowance .......................................................................... New financial assets, originated or purchased .............................................................. Derecognitions and maturities ...................................................................................... Write-offs ....................................................................................................................... Transfer to Stage 1 - (Initial recognition) .................................................................. Net remeasurement of loss allowance .......................................................................... New financial assets, originated or purchased .............................................................. Derecognitions and maturities ...................................................................................... Transfer to Stage 1 - (Initial recognition) .................................................................. Transfer to Stage 2 - (significantly increased credit risk) ......................................... Transfer to Stage 2 - (significantly increased credit risk) ......................................... Transfer to Stage 3 - (credit impaired) ..................................................................... Net remeasurement of loss allowance .......................................................................... New financial assets, originated or purchased .............................................................. Derecognitions and maturities ...................................................................................... Write-offs ....................................................................................................................... Transfer to Stage 1 - (Initial recognition) .................................................................. Transfer to Stage 2 - (significantly increased credit risk) ......................................... Transfer to Stage 3 - (credit impaired) ..................................................................... Net remeasurement of loss allowance .......................................................................... New financial assets, originated or purchased .............................................................. Derecognitions and maturities ...................................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 30
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 42 43. Loan-to-value a. General b. Breakdown 30.9.2026 % 31.12.2025 % 69,582 29.6% 66,278 31.9% 81,852 34.8% 70,430 33.9% 59,606 25.4% 44,615 21.5% 4,060 1.7% 6,707 3.2% 2,875 1.2% 3,814 1.8% 2,871 1.2% 2,371 1.1% 1,114 0.5% 2,231 1.1% No or negligible collateral: 12,991 5.5% 11,112 5.4% Total 234,952 100.0% 207,560 100.0% 44. Collateral against exposures to derivatives Fixed Variable Other income income Real fixed Deposits securities securities estate assets Other 30.9.2026 176 62 125 - - - 362 351 45 1,027 - - - 1,423 39 - 119 - - - 158 Total 566 107 1,271 - - - 1,944 Fixed Variable Other income income Real fixed Deposits securities securities estate assets Other 31.12.2025 1,533 86 298 - - - 1,916 618 13 1,151 - - - 1,783 44 9 104 - - - 156 Total 2,195 107 1,553 - - - 3,855 45. Large exposures 30.9.2026 31.12.2025 Large exposures before risk adjusted mitigation Number Amount Number Amount 3 13,642 2 9,610 0 - 0 - 0 - 0 - Total 3 13,642 2 9,610 0 - 0 - 1 4,921 1 4,662 In accordance with regulation no. 575/2013 of the European Union on prudential requirements for credit institutions, which was incorporated into Icelandic law with Act No. 38/2022, total exposure towards a customer is classified as a large exposure if it exceeds 10% of the financial institution's Tier 1 capital (see note 36). According to the regulation a single exposure, net of risk adjusted mitigation, cannot exceed 25% of the eligible Tier 1 capital. Based on Icelandic rules no. 789/2022 on the Application of Optional Provisions and Authorisations Pursuant to the Act on Financial Undertakings, the value of exposures towards financial institutions shall not exceed 25% of the eligible Tier 1 capital or 15 bn. ISK, whichever is higher. Single large exposure s net of risk adjusted mitigation take into account the effects of collateral and other credit enhancements held by the financial institution, and other credit enhancements, in accordance with regulation no. 575/2013. The loan-to-value ratio (LTV) is the ratio of the gross amount of the loan to the value of the collateral, if any. The general creditworthiness of a customer is viewed as the most reliable indicator of credit quality of a loan. Besides collateral included in the LTV ratios the Group uses other risk mitigation measures, such as guarantees, negative pledge, cross-collateral and collateralization of non-quantifiable assets. The breakdown of loans to customers by LTV is specified as follows: Less than 50% ................................................................................................................. 50-70% ............................................................................................................................ 70-90% ............................................................................................................................ 90-100% .......................................................................................................................... Individuals .............................................. Amounts have been adjusted to exclude collateral posted in excess of the contractual collateral limit (overcollateralisation). 100-125% ........................................................................................................................ 125-200% ........................................................................................................................ Other loans with no collateral .................................................................................. The Group applies the same valuation methods to collateral held as other comparable assets held by the Group. Haircuts are applied to account for liquidity and other factors which may affect the collateral value of the asset. 10-20% of capital base ................................................................................................... 20-25% of capital base ................................................................................................... Exceeding 25% of capital base ....................................................................................... Thereof loans to credit institutions which are part of Large exposures net of risk adjusted mitigation ............................................................ Kvika's liquidity management ..................................................................................... Financial institutions .............................. Corporate customers .............................. Financial institutions .............................. Corporate customers .............................. Individuals .............................................. Greater than 200% ......................................................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 31
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 46. Liquidity risk a. Definition b. Management 30.9.2026 Unweighted Weighted Unweighted Weighted Unweighted Weighted 53,085 53,085 3,188 3,029 56,765 56,582 2,908 2,471 181 145 3,121 2,642 - - - - 29 13 - - - - - - Total high quality liquid assets (HQLA) 55,992 55,556 3,369 3,174 59,916 59,237 159,081 41,197 3,072 1,322 165,126 44,217 118 118 - - 336 336 12,491 3,846 754 126 21,295 4,565 Total outflows (0-30 days) 171,690 45,161 3,825 1,448 186,757 49,118 56 56 1,100 1,100 6,003 6,003 10,716 6,311 1,263 1,263 13,611 9,098 - - - (1,277) - - Total inflows (0-30 days) 10,772 6,367 2,363 1,086 19,614 15,101 143% 877% 174% 31.12.2025 Unweighted Weighted Unweighted Weighted Unweighted Weighted 53,860 53,860 957 909 55,809 55,712 2,559 2,175 758 606 4,970 4,104 - - 3,442 1,549 6,109 2,749 - - - (1,549) - - Total high quality liquid assets (HQLA) 56,419 56,035 5,157 1,516 66,888 62,565 129,272 24,320 3,703 1,647 136,160 27,418 131 131 - - 292 292 8,515 4,238 1,651 222 15,898 4,887 Total outflows (0-30 days) 137,918 28,688 5,354 1,869 152,350 32,597 284 284 2,870 2,870 8,075 8,075 7,335 5,778 490 489 11,194 9,030 - - - (1,957) - - Total inflows (0-30 days) 7,620 6,062 3,359 1,402 19,268 17,104 248% 324% 404% 30.9.2026 31.12.2025 134% 137% Liquidity risk is the risk that the Group will encounter difficulty in meeting contractual payment obligations associated with its financial liabil ities that are settled by delivering cash or another financial asset. This risk mainly arises from mismatches in the timing of cash flows. The Group has internal rules that require certain matching of the maturities of assets and liabilities. Furthermore, to ensure the ability to meet liquidity needs ,t h e Group maintains a stock of highly liquid unencumbered assets, e.g. cash, treasury bills and treasury bonds. Liquidity is managed by treasury and monitored by risk management. Liquidity position is reported to the ALCO committee. The Central Bank of Iceland sets minimum requirements for the liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR). The minimum 30 day LCR regulatory requirement is 100% for LCR total, 50% minimum requirement for LCR in ISK and 80% minimum requirement for LCR in EUR. The minimum requirement for LCR EUR only applies when the Group‘s commitments in EUR represent 10% or more of the Group's total commitments. The minimum regulatory requirement for NSFR total is 100%. NSFR total ........................................................................................................................................................................... Other inflows .......................................................................... Restrictions on inflows ........................................................... Liquidity coverage ratio .......................................................... Deposits .................................................................................. Other borrowings ................................................................... Other outflows ....................................................................... Restrictions on inflows ........................................................... Liquidity coverage ratio .......................................................... Deposits .................................................................................. Other borrowings ................................................................... Other outflows ....................................................................... Excess liquid asset amount .................................................... Excess liquid asset amount .................................................... Liquid assets level 2B .............................................................. Liquid assets level 2B .............................................................. Short-term deposits with other banks ................................... Other inflows .......................................................................... ISK EUR Total all currencies Liquid assets level 1 ................................................................ Liquid assets level 2A ............................................................. ISK EUR Total all currencies Liquid assets level 1 ................................................................ Liquid assets level 2A ............................................................. Short-term deposits with other banks ................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 32
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 46. Liquidity risk (cont.) c. LCR deposit categories 30.9.2026 Run off date 0-30 days Over 30 days Total 5%-100% 117,581 19,126 136,707 5%-100% 9,253 473 9,727 20%-40% 10,137 265 10,402 40% 1,101 6 1,106 100% 26,356 14,670 41,026 1,394 61 1,455 Total 165,821 34,601 200,422 31.12.2025 Run off date 0-30 days Over 30 days Total 5%-100% 106,607 16,120 122,727 5%-100% 8,905 118 9,023 20%-40% 9,005 6 9,011 40% 98 1 98 100% 11,545 18,130 29,676 2,247 5 2,252 Total 138,407 34,380 172,787 The Group's deposit base is divided into different categories depending on customer type according to the LCR methodology. Different run off rates are applied on each category representing their level of stickiness, which measures the stability of the deposit. Deposits with maturity over 30 days are defined as term deposits within the LCR calculations, other as demand deposits. Run off rates are applied on each category of demand deposits and the expected cash outflow over the next 30 days under stressed conditions calculated. The higher the run off rate, the more high quality liquid assets the Group must hold to ensure it can meet its obligations and maintain stability during a crisis. The table below shows the Group's deposit base divided into different categories depending on customer type and run off rates according to the LCR methodology. Individuals ........................................................................................................................... Small and medium sized corporates ................................................................................... *Pledged deposits do not have any run off rate according to liquidity rules. Financial entities ................................................................................................................. Other * ................................................................................................................................. Large corporates ................................................................................................................. Financial entities ................................................................................................................. Other * ................................................................................................................................. Individuals ........................................................................................................................... Small and medium sized corporates ................................................................................... Large corporates ................................................................................................................. Public entities ...................................................................................................................... Public entities ...................................................................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 33
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 46. Liquidity risk (cont.) d. Maturity analysis of financial assets and financial liabilities 30.9.2026 Up to 1 1-3 3-12 1-5 Over 5 Gross inflow/ Carrying Financial assets by type month months months years years (outflow) amount Non-derivative assets 30,201 - - - - 30,201 30,194 6,360 - - 633 - 6,993 6,993 24,471 15,462 66,976 141,859 78,786 327,554 234,952 13,242 2,969 14,650 451 3,646 34,958 34,958 21,426 - 4,127 - - 25,552 25,552 3,502 - - - - 3,502 3,502 6,024 147 1,329 322 - 7,821 7,821 105,226 18,577 87,081 143,264 82,432 436,581 343,972 Derivative assets Inflow ....................................................... 5,490 11,160 - 9,843 - 26,493 Outflow .................................................... (4, 739) (10,829) - (7,852) - (23,420) 751 331 - 1,991 - 3,073 2,583 Up to 1 1-3 3-12 1-5 Over 5 Gross inflow/ Carrying Financial liabilities by type month months months years years (outflow) amount Non-derivative liabilities (165,970) (23,132) (8,008) (3,777) (849) (201,735) 200,422 - (82) (243) (5,188) - (5,512) 5,016 (278) (6,138) (10,610) (72,482) (2,722) (92,231) 83,317 (58) (282) (277) (6,031) (9,697) (16,345) 10,019 (583) - - - - (583) 583 (37) - - - - (37) 37 (2,682) (2,696) (1,653) (1,425) - (8,456) 8,443 (169,608) (32,330) (20,791) (88,903) (13,268) (324,900) 307,836 Derivative liabilities Inflow ....................................................... 2,907 2,048 - 44,704 - 49,658 Outflow .................................................... (3, 102) (2,081) - (45,762) - (50,946) (196) (34) - (1,058) - (1,287) 797 Unrecognised financial items Inflow ....................................................... 1, 714 640 4,092 10, 994 1,271 18,711 Outflow .................................................... (16,066) - - - - (16,066) Inflow ....................................................... - - 191 169 7 367 Outflow .................................................... (367) - - - - (367) (14,719) 640 4,282 11,163 1,278 2,645 Summary 105,226 18,577 87,081 143,264 82,432 436,581 751 331 - 1,991 - 3,073 (169,608) (32,330) (20,791) (88,903) (13,268) (324,900) (196) (34) - (1,058) - (1,287) unrecognised items (63,826) (13,455) 66,290 55,293 69,165 113,467 (14,719) 640 4,282 11,163 1,278 2,645 Net assets (liabilities) (78,546) (12,815) 70,573 66,456 70,443 116,112 Loans to credit institutions ............................ Deposits ........................................................ Borrowings ..................................................... Securities used for hedging ........................... Loans to customers ........................................ Other assets ................................................... Cash and balances with Central Bank ........... Shares and other variable income securities Fixed income securities ................................. Other liabilities .............................................. Loan commitments Financial guarantee contracts Net unrecognised items ................................ Net assets (liabilities) excluding Issued bonds .................................................. Subordinated liabilities .................................. Short positions used for hedging .................. Short positions held for trading .................... Derivative assets ............................................ Derivative liabilities ....................................... Non-derivative assets .................................... Non-derivative liabilities ............................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 34
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 46. Liquidity risk (cont.) 31.12.2025 Up to 1 1-3 3-12 1-5 Over 5 Gross inflow/ Carrying Financial assets by type month months months years years (outflow) amount Non-derivative assets 20,146 - - - - 20,146 20,145 8,149 - 5 0 - 8,154 8,154 21,090 15,270 71,415 112,754 63,673 284,203 207,560 10,847 985 18,015 12,450 2,224 44,522 44,522 16,966 - 3,697 - - 20,663 20,663 6,695 - - - - 6,695 6,695 5,321 2,103 856 232 - 8,513 8,513 89,214 18,358 93,989 125,437 65,898 392,895 316,251 Derivative assets Inflow ....................................................... 5,634 569 17,818 28,615 - 52,636 Outflow .................................................... (4, 599) (550) (16,866) (27,004) - (49,019) 1,035 18 952 1,611 - 3,617 3,250 Up to 1 1-3 3-12 1-5 Over 5 Gross inflow/ Carrying Financial liabilities by type month months months years years (outflow) amount Non-derivative liabilities (138,421) (18,034) (15,538) (1,386) (685) (174,063) 172,787 - (87) (528) (6,989) - (7,604) 6,806 (292) (238) (16,687) (61,576) (2,616) (81,409) 73,249 - - (362) (1,452) (9,285) (11,099) 5,841 (433) - - - - (433) 433 (432) - - - - (432) 432 (3,003) (7,188) (1,286) (2,156) - (13,633) 13,599 (142,580) (25,547) (34,401) (73,558) (12,585) (288,672) 273,147 Derivative liabilities Inflow ....................................................... 12,126 - 10,687 3,149 - 25,963 Outflow .................................................... (12,653) - (10,926) (3,523) - (27,103) (527) - (239) (374) - (1,140) 773 Unrecognised financial items by type Loan commitments Inflow ....................................................... 489 673 3,371 6,302 94 10,930 Outflow .................................................... (9,713) - - - - (9,713) Inflow ....................................................... - 1 298 792 7 1,097 Outflow .................................................... (1,097) - - - - (1,097) (10,321) 674 3,669 7,094 101 1,217 Summary 89,214 18,358 93,989 125,437 65,898 392,895 1,035 18 952 1,611 - 3,617 (142,580) (25,547) (34,401) (73,558) (12,585) (288,672) (527) - (239) (374) - (1,140) unrecognised items (52,858) (7,171) 60,301 53,115 53,312 106,700 (10,321) 674 3,669 7,094 101 1,217 Net assets (liabilities) (63,179) (6,497) 63,970 60,209 53,414 107,917 Loans to credit institutions ............................ It should be noted that the Group's expected cash flows sometimes vary considerably from the contractual cash flows, most significantly in that demand deposits from customers are expected to remain stable or increase in the long term. In this case the presentation used reflects the worst case scenario from the Group's perspective. Furthermore, the analysis does not consider any measures that could be taken to convert long-term assets to cash through sale. Cash flows relating to unrecognised balance sheet items (unused loan commitments and financial guarantee contracts) are presented separately from financial assets and financial liabilities. Both contractual outflows and inflows are shown, to fully reflect the nature o f these items. Derivative liabilities ....................................... Net unrecognised items ................................ Net assets (liabilities) excluding Maturity analysis of financial assets and financial liabilities is based on contractual cash flows or, in the case of held for trading securities, exp ected cash flows. If an amount receivable or payable is not fixed, e.g. for inflation indexed assets and liabilities, the maturity analysis uses estimates based on current conditions. Loans to customers ........................................ Fixed income securities ................................. Non-derivative liabilities ............................... Deposits ........................................................ Borrowings ..................................................... Subordinated liabilities .................................. Short positions held for trading .................... Short positions used for hedging .................. Other liabilities .............................................. Derivative assets ............................................ Issued bonds .................................................. Financial guarantee contracts Non-derivative assets .................................... Other assets ................................................... Cash and balances with Central Bank ........... Shares and other variable income securities Securities used for hedging ........................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 35
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 46 47. Market risk a. Definition b. Management 48. Interest rate risk a. Definition b. Management 49. Interest rate risk associated with trading portfolios a. Breakdown Up to 1 1-3 3-12 1-5 Over 5 month months months years years 30.9.2026 25 25 244 2,415 725 3,434 (2) (1) (102) (344) (134) (583) Net imbalance 23 24 142 2,072 591 2,851 Up to 1 1-3 3-12 1-5 Over 5 month months months years years 31.12.2025 33 58 364 2,438 1,320 4,213 (1) (8) (7) (135) (210) (361) Net imbalance 32 50 357 2,303 1,110 3,853 b. Sensitivity analysis Shift in 30.9.2026 31.12.2025 basis points Downward Upward Downward Upward 50 22 (21) 43 (40) 100 56 (52) 59 (58) Total 78 (73) 102 (97) The Group performs monthly sensitivity analysis on financial assets and liabilities in trading portfolios that are subject to interest rate risk. Th e sensitivity analysis assumes a shift in the yield curves for all currencies. A parallel shift in yield curves would have the following impact on the Group's pre-tax profit and equity, assuming all other risk factors remain constant: Indexed ..................................................................................................... Non-indexed ............................................................................................. Market risk constitutes risk due to changes in the market prices of financial instruments and comprises interest rate risk, currency risk and other price risk. Notes 48-53 relate to market risk exposure. The Group has a strict policy on controlling market risk and to keep the exposure within set limits. The risk management unit monitors market risk limits on a daily basis and reports regularly to the ALCO committee and to the CEO. The Group's exposure to interest rate risk is twofold. On the one hand, the Group has a proprietary portfolio of bonds, where market rates affect prices and any fluctuations are recognised in the income statement. On the other hand, the Group has mismatch in assets and liabilities with fixed interest terms. These include loans and swap contracts for securities on the asset side and borrowings and deposits on the liability side. This mismatch does not create an immediate effect on the income statement but nevertheless affects the Group's economic value. The Group takes measures to minimise interest rate risk by matching the interest rate profile and duration of assets with the Group's liabilities as well as using derivative and non-derivative financial instruments to manage effectively the risk of an adverse impact on the Gr oup's earnings. Proprietary positions which are subject to interest rate risk fall under the scope of the Group's market risk management. Fixed income securities .................................................... Short positions - fixed income securities ......................... Fixed income securities .................................................... Short positions - fixed income securities ......................... The breakdown of financial assets and liabilities in trading portfolios by the earlier of interest repricing time or maturity i s specified as follows: Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 36
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 46 50. Interest rate risk associated with non-trading portfolios a. Breakdown 30.9.2026 Financial assets Up to 1 1-3 3-12 1-5 Over 5 month months months years years Total 30,194 - - - - 30,194 6,993 - - - - 6,993 222,103 2,439 7,788 2,616 5 234,952 8,349 3,013 14,687 1,901 3,574 31,524 8,337 11,323 - - - 19,660 Financial assets excluding derivatives 275,976 16,775 22,475 4,517 3,579 323,323 16,628 56,093 2,070 48,628 - 123,419 Total 292,604 72,868 24,545 53,145 3,579 446,742 Financial liabilities Up to 1 1-3 3-12 1-5 Over 5 month months months years years Total 173,935 18,044 6,226 2,217 0 200,422 5,016 - - - - 5,016 17,480 6,030 9,656 47,620 2,530 83,317 3,650 3,509 - 2,860 - 10,019 - - 81 81 - 162 Financial liabilities excluding derivatives 200,081 27,584 15,963 52,778 2,530 298,935 13,067 104,525 - - - 117,591 Total 213,147 132,109 15,963 52,778 2,530 416,527 Total interest repricing gap 79,457 (59,241) 8,582 368 1,050 30,215 31.12.2025 Financial assets Up to 1 1-3 3-12 1-5 Over 5 month months months years years Total 20,145 - - - - 20,145 8,154 - - - - 8,154 192,654 3,693 5,590 5,353 270 207,560 3,984 1,049 18,974 12,893 3,408 40,309 15,013 - - - - 15,013 Financial assets excluding derivatives 239,950 4,741 24,565 18,247 3,677 291,180 22,616 48,125 6,256 30,818 - 107,815 Total 262,566 52,867 30,820 49,065 3,677 398,995 Financial liabilities Up to 1 1-3 3-12 1-5 Over 5 mont h mont hs mont hs years years Tota l 144,844 13,644 14,259 40 0 172,787 6,806 - - - - 6,806 18,358 14,035 1,389 37,061 2,406 73,249 - - 3,272 2,570 - 5,841 - - 84 166 - 250 Financial liabilities excluding derivatives 170,008 27,679 19,004 39,836 2,406 258,933 22,744 69,396 6,674 - - 98,814 Total 192,752 97,075 25,678 39,836 2,406 357,746 Total interest repricing gap 69,814 (44,208) 5,142 9,229 1,272 41,248 b. Sensitivity analysis Shift in 30.9.2026 31.12.2025 Currency basis points Downward Upward Downward Upward 50 52 (48) 53 (49) 100 63 (62) 201 (197) 20 (11) 11 (6) 6 Total 104 (99) 248 (240) The breakdown of financial assets and liabilities in non-trading portfolios by the earlier of interest repricing time or maturity is specified as follows: Cash and balances with Central Bank .............................. Deposits ........................................................................... Effect of derivatives .......................................................... Subordinated liabilities .................................................... Other liabilities ................................................................. Effect of derivatives .......................................................... Unit shares in cash equivalent liquidity funds ................. Effect of derivatives .......................................................... Deposits ........................................................................... Borrowings ....................................................................... Cash and balances with Central Bank .............................. Fixed income securities .................................................... Issued bonds ..................................................................... Loans to customers .......................................................... Loans to credit institutions ............................................... Unit shares in cash equivalent liquidity funds ................. Borrowings ....................................................................... Effect of derivatives .......................................................... Issued bonds ..................................................................... Loans to credit institutions ............................................... Loans to customers .......................................................... ISK, non-indexed ...................................................................................... Other currencies ....................................................................................... The Group performs monthly sensitivity analysis on financial assets and liabilities in non-trading portfolios subject to interest rate risk. The sensitivity analysis assumes a shift in the yield curves for all currencies. A parallel shift in yield curves would have the following impact on the Group'sp r e-tax profit and equity, assuming all other risk factors remain constant: ISK, indexed .............................................................................................. Other liabilities ................................................................. Subordinated liabilities .................................................... Fixed income securities .................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 37
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 46 51. Exposure towards changes in the CPI a. Definition b. Management c. Balance of CPI linked assets and liabilities 30.9.2026 31.12.2025 31,352 31,407 (26,894) (24,971) Total 4,458 6,436 d. Sensitivity to changes in CPI 30.9.2026 31.12.2025 -1% 1% -1% 1% (30) 30 (25) 25 (36) 36 (35) 35 (226) 226 (233) 233 (21) 21 (20) 20 4 (4) 2 (2) 99 (99) 91 (91) 103 (103) 98 (98) 63 (63) 58 (58) (45) 45 (64) 64 The effect on equity would be the same. 52. Currency risk a. Definition b. Management c. Hedge accounting d. Exchange rates The following exchange rates have been used by the Group in the preparation of these financial statements: Closing Average Closing Average 30.9.2026 9m 2026 31.12.2025 9m 2025 137.0 143.4 147.2 144.4 120.7 123.4 125.2 129.5 160.3 166.1 169.0 169.9 Short positions ............................................................................................................... Exposure towards changes in CPI is the risk that fluctuations in the Icelandic Consumer Price Index (CPI) will affect the balance and cash flow of indexed financial instruments. The Group is exposed to inflation indexation of assets and liabilities den ominated in ISK. All indexed assets and liabilities are valued according to the CPI measure at any given time and changes in CPI are recognised in the income statement. Deposits .......................................................................................................................... Subordinated liabilities .................................................................................................. Given the net balance of CPI linked assets and liabilities, a 1% change in the CPI would, with other things constant, result in the following changes to the Group's pre-tax profit. Government bonds ........................................................................................................ Other fixed income securities ........................................................................................ Loans to customers ........................................................................................................ Derivatives ...................................................................................................................... Issued bonds .................................................................................................................. Currency risk arises when financial instruments are not denominated in the functional currency of the respective Group entity and can affect both the Group's income statement and statement of financial position. A part of the Group's assets and liabilities is denominated in foreign currencies. Currency positions are monitored by risk management and reported to the ALCO committee. Any mismatch between assets and liabilities in each currency is monitored closely and managed within limits. The Group is subject to limits set by the Central Bank of Iceland regarding the maximum open currency position. At 30 September 2026 and 31 December 2025 the Group's position in foreign currencies was within those limits. EUR/ISK ........................................................................................................................... USD/ISK .......................................................................................................................... GBP/ISK ........................................................................................................................... The Group applies hedge accounting according to IAS 39 against translation of foreign operations. Currency swap agreements are used as a hedge instrument against translation difference arising from foreign operations. The Group controls its indexation risk through derivatives contracts and sales and purchases of indexed bonds, mostly government bonds, and thus keeps its exposure to the CPI within the limits set by the ALCO committee. Liabilities ....................................................................................................................................................................... Assets ............................................................................................................................................................................ Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 38
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 52 52. Currency risk (cont.) e. Breakdown of assets and liabilities denominated in foreign currencies 30.9.2026 Assets Other EUR USD GBP SEK currencies Total 1 1 1 - - 2 1,111 1,723 2,488 214 436 5,972 5,373 93 48,580 51 - 54,096 11 83 - - - 93 8,389 454 14,663 0 - 23,506 24 401 68 261 44 797 - - 2,122 - - 2,122 2,944 1,293 598 32 9 4,875 Assets excluding derivatives 17,852 4,047 68,519 557 489 91,465 90,606 1,559 - 16,635 5,094 113,894 Total 108,459 5,605 68,519 17,193 5,583 205,359 Liabilities Other EUR USD GBP SEK currencies Total 3,458 2,154 783 21 110 6,525 - - 4,968 - - 4,968 48,637 - - 17,065 5,093 70,796 1,107 1,867 1,196 10 1 4,181 Liabilities excluding derivatives 53, 202 4,022 6,947 17,096 5,204 86,470 54,575 1,403 60,885 17 - 116,881 Total 107,777 5,425 67,832 17,113 5,204 203,351 Other Net currency position EUR USD GBP SEK currencies Total 108,459 5,605 68,519 17,193 5,583 205,359 (107,777) (5,425) (67,832) (17,113) (5,204) (203,351) 290 - - - - 290 Total 972 180 687 80 379 2,298 31.12.2025 Assets Other EUR USD GBP SEK currencies Total 1 1 2 - - 4 2,872 813 3,657 143 307 7,793 3,121 578 41,146 251 - 45,096 - 81 - - - 81 5,727 390 11,629 0 16 17,762 59 705 10 626 116 1,517 - - 2,293 - - 2,293 777 16 804 16 13 1,626 Assets excluding derivatives 12,558 2,585 59,540 1,037 452 76,171 62,372 1,679 - 17,261 14,434 95,746 Total 74,930 4,264 59,540 18,297 14,886 171,917 Liabilities Other EUR USD GBP SEK currencies Total 4,104 2,918 666 51 182 7,920 - - 5,228 - - 5,228 30,209 - - 18,188 9,232 57,629 2,225 146 1,661 19 - 4,051 Liabilities excluding derivatives 36, 538 3,064 7,554 18,257 9,415 74,828 38,448 1,124 51,389 19 5,226 96,207 Total 74,987 4,188 58,944 18,276 14,641 171,035 Other Net currency position EUR USD GBP SEK currencies Total 74,930 4,264 59,540 18,297 14,886 171,917 (74,987) (4,188) (58,944) (18,276) (14,641) (171,035) 862 - - - - 862 Total 805 76 596 21 245 1,744 Loans to credit institutions .................................................... Loans to credit institutions .................................................... Issued bonds .......................................................................... Total liabilities ........................................................................ Other liabilities ....................................................................... Derivatives ............................................................................. Cash and balances with Central Bank .................................... Shares and other variable income securities ........................ Securities used for hedging ................................................... Loans to customers ................................................................ Cash and balances with Central Bank .................................... Other assets ........................................................................... Derivatives ............................................................................. Deposits ................................................................................ Deposits ................................................................................ Fixed income securities ......................................................... Other assets ........................................................................... Derivatives ............................................................................. Intangible assets .................................................................... Intangible assets .................................................................... Borrowings ............................................................................. Total assets ............................................................................ Financial guarantee contracts ............................................... Fixed income securities ......................................................... Shares and other variable income securities ........................ Loans to customers ................................................................ Total liabilities ........................................................................ Financial guarantee contracts ............................................... Total assets ............................................................................ Derivatives ............................................................................. Other liabilities ....................................................................... Securities used for hedging ................................................... Borrowings ............................................................................. Issued bonds .......................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 39
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 52 52. Currency risk (cont.) f. Sensitivity to currency risk 30.9.2026 31.12.2025 Assets and liabilities denominated in foreign currencies -10% +10% -10% +10% 97 (97) 81 (81) 18 (18) 8 (8) 69 (69) 60 (60) 8 (8) 2 (2) 38 (38) 25 (25) Total 230 (230) 174 (174) 53. Equity risk a. Definition b. Sensitivity analysis of equity risk 31.12.2025 -10% +10% -10% +10% (93) 93 (100) 100 (428) 428 (310) 310 (69) 69 (156) 156 Total (589) 589 (565) 565 54. Operational risk a. Definition b. Management The individual business units within the Group are primarily responsible for managing their respective operational risk. The risk management unit is furthermore responsible for identifying, monitoring and reporting the Group's operational risk. Operational risk can be reduced through staff training, process re-design and enhancement of the control environment. The risk management unit monitors operational risk by tracking loss events, quality deficiencies, potential risk indicators and other early-warning signals. The unit takes an active role in internal control and qual ity management. Operational risk is the risk of direct or indirect loss from inadequate or failed internal processes or systems, from human error or external events that affect the Group's reputation and operational earnings. EUR ...................................................................................................................................... USD ...................................................................................................................................... Other currencies .................................................................................................................. Equity risk is the risk that the fair value of equities decreases as the result of changes in the value of shares and other variable income securities in the Group’s portfolio. GBP ...................................................................................................................................... The analysis below calculates the effect of possible movements in equity prices that affect the Consolidated Financial Statements. A negative amount in the table reflects a potential net reduction in the Consolidated Income Statement or equity, while a positive amount reflects a potential net increase. Investments in unit shares in cash equivalent liquidity funds are excluded. 30.9.2026 Listed shares ........................................................................................................................ Unlisted shares .................................................................................................................... Unlisted unit shares in funds ............................................................................................... SEK ....................................................................................................................................... Given the net currency position, a 10% change in the value of the ISK would, with other things constant, result in the following changes to the Group's Consolidated Income Statement or equity. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 40
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 54 Financial assets and financial liabilities 55. Accounting classification of financial assets and financial liabilities Manda- 30.9.2026 Fair value torily at Total Financial assets Amortised through fair value carrying cost OCI through P/L amount 30,194 - - 30,194 6,993 - - 6,993 231,890 - 3,062 234,952 - 29,786 5,171 34,958 - - 25,552 25,552 - - 3,502 3,502 - - 1,943 1,943 - 640 - 640 7,821 - - 7,821 Total 276,898 30,427 39,230 346,555 Manda- Fair value torily at Total Financial liabilities Amortised through fair value carrying cost OCI through P/L amount 200,422 - - 200,422 5,016 - - 5,016 83,317 - - 83,317 10,019 - - 10,019 - - 583 583 - - 37 37 - - 797 797 8,152 - 290 8,443 Total 306,926 - 1,707 308,634 Manda- 31.12.2025 Fair value torily at Total Financial assets Amortised through fair value carrying cost OCI through P/L amount 20,145 - - 20,145 8,154 - - 8,154 203,683 - 3,877 207,560 - 38,867 5,655 44,522 - - 20,663 20,663 - - 6,695 6,695 - - 3,094 3,094 - 156 - 156 8,513 - - 8,513 Total 240,494 39,023 39,984 319,501 Manda- Fair value torily at Total Financial liabilities Amortised through fair value carrying cost OCI through P/L amount 172,787 - - 172,787 6,806 - - 6,806 73,249 - - 73,249 5,841 - - 5,841 - - 433 433 - - 432 432 - - 773 773 12,958 - 641 13,599 Total 271,642 - 2,278 273,920 Issued bonds ............................................................................................................... Subordinated liabilities ............................................................................................... Short positions used for hedging ................................................................................ Short positions used for hedging ................................................................................ Short positions held for trading .................................................................................. Loans to credit institutions ......................................................................................... Derivatives .................................................................................................................. Other liabilities ............................................................................................................ Cash and balances with Central Bank ......................................................................... Deposits ...................................................................................................................... Borrowings .................................................................................................................. Issued bonds ............................................................................................................... Subordinated liabilities ............................................................................................... Short positions held for trading .................................................................................. Derivatives used for hedge accounting ...................................................................... Cash and balances with Central Bank ......................................................................... Fixed income securities ............................................................................................... Shares and other variable income securities .............................................................. Securities used for hedging ......................................................................................... Loans to customers ..................................................................................................... Derivatives .................................................................................................................. Other assets ................................................................................................................ Deposits ...................................................................................................................... Borrowings .................................................................................................................. Derivatives used for hedge accounting ...................................................................... The accounting classification of financial assets and financial liabilities is specified as follows: Fixed income securities ............................................................................................... Shares and other variable income securities .............................................................. Securities used for hedging ......................................................................................... Loans to customers ..................................................................................................... Derivatives .................................................................................................................. Other assets ................................................................................................................ Loans to credit institutions ......................................................................................... Derivatives .................................................................................................................. Other liabilities ............................................................................................................ Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 41
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 54 56. Financial assets and financial liabilities measured at fair value a. - - - b. c. d. 30.9.2026 Financial assets Carrying Level 1 Level 2 Level 3 amount Mandatorily measured at fair value through profit and loss 4,042 88 1,041 5,171 20,898 1 4,652 25,552 3,502 - - 3,502 - - 3,062 3,062 - 1,943 - 1,943 Measured at fair value through other comprehensive income 29,786 - - 29,786 Derivatives used for hedge accounting - 640 - 640 Total 58,229 2,672 8,756 69,657 Valuation techniques For more complex instruments, the Group uses proprietary models, whic h usually are developed from recogn ised valuation models. Some or all of the inputs into these models may not be market observable and are derived from market prices or rates or are estimated based on assumptions. When entering into a transaction, the financial instrument is recognised initially at the transaction price, which is the best indicator of fair value, although the value obtained from the valuation model may differ from the transaction price. This initial difference, usually an increase in fair value, indicated by valuation techniques is recognised in income depending upon the individual facts and circumstances of each transaction and no later than when the market data becomes observable. The value produced by a model or other valuation technique is adjusted to allow for a number of factors as appropriate, because valuation techniques cannot appropriately reflect all factors market participants take into account when entering into a transaction. Valuation adjustments are recorded to allow for model risks, bid-ask spreads, liquidity risks, as well as other factors. Management believes that these valuation adjustments are necessary and appropriate to fairly state financial instruments carried at fair value in the statement of financial position. Valuation techniques include recent arm's length transactions between knowledgeable, willing parties, if available, reference to the current fai r value of other instruments that are substantially the same, the discounted cash flow analysis and option pricing models. Valuation techniques incorporate all factors that market participants would consider in setting a price and are consistent with accepted methodologies for pricing financial instruments. Periodically, the Group calibrates the valuation technique and tests it for validity using prices from any observable curre nt market transactions in the same instrument, without modification or repackaging, or based on any available observable market da ta. Derivatives ................................................................................................................ Loans to customers .................................................................................................. Securities used for hedging ...................................................................................... The fair value of financial assets and liabilities that are traded in active markets are based on quoted market prices. For other financial instruments the Group determines fair value using various valuation techniques. IFRS 13 specifies a fair value hierarchy based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources whereas unobservable inputs reflect the Group's market assumptions. These two types of inputs result in the following fair valu e hierarchy: The Group uses widely recognised valuation techniques, including net present value and discounted cash flow models, comparison with similar instruments for which market observable prices exist, Black-Scholes and other valuation models. Fixed income securities ............................................................................................ Shares and other variable income securities ........................................................... Fair value hierarchy Fair value hierarchy classification The fair value of financial assets and financial liabilities measured at fair value in the statement of financial position is classified into the fair value hierarchy as follows: Valuation process The Bank's Credit committee is responsible for fair value measurements of financial assets and financial liabilities classified as level 2 or level 3 instruments. The valuation is carried out by personnel from respective departments under supervision from Risk. The valuations are revised at least quarterly, or when there are indications of significant changes in the underlying inputs. Inputs are quoted market prices (unadjusted) in active markets for identical instruments. Level 1 Level 2 Fixed income securities ............................................................................................ Inputs are not observable or unobservable inputs have a significant effect on the valuation. This category includes instruments that are valued based on quoted prices for similar instruments for which significant unobservable adjustments are required to reflect th e differences between the instruments. Inputs are not quoted market prices but are observable either directly, i.e. as prices, or indirectly, i.e. derived from prices. This category includes financial instruments valued using quoted prices in active markets for similar instruments, quoted prices for similar or identical instruments in markets that are considered less than active and other instruments which are valued using techniques which rely primarily on inputs that are directly or indirectly observable from market data. Level 3 Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 42
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 54 56. Financial assets and financial liabilities measured at fair value (cont.) 30.9.2026 Financial liabilities Carrying Level 1 Level 2 Level 3 amount Mandatorily measured at fair value through profit and loss 583 - - 583 37 - - 37 - 797 - 797 - - 290 290 Total 620 797 290 1,707 31.12.2025 Financial assets Carrying Level 1 Level 2 Level 3 amount Mandatorily measured at fair value through profit and loss 4,781 107 767 5,655 17,068 2 3,594 20,663 6,695 - - 6,695 - - 3,877 3,877 - 3,094 - 3,094 Measured at fair value through other comprehensive income 38,867 - - 38,867 Derivatives used for hedge accounting - 156 - 156 Total 67,411 3,358 8,237 79,007 Financial liabilities Carrying Level 1 Level 2 Level 3 amount Mandatorily measured at fair value through profit and loss 433 - - 433 432 - - 432 - 773 - 773 - - 641 641 Total 865 773 641 2,278 e. Shares and Fixed other var. income income Loans to Other 30.9.2026 securities securities customers Derivatives liab ilities Total Balance as at 1 January 2026 767 3,594 3,877 (0) (641) 7,596 47 86 330 - 11 474 227 1,170 617 - - 2,014 - - (1,763) - 340 (1,423) - (197) - - - (197) Balance as at 30 September 2026 1,041 4,652 3,062 - (290) 8,465 Shares and Fixed other var. income income Loans to Other 31.12.2025 securities securities customers Derivatives liab ilities Total Balance as at 1 January 2025 611 3,456 874 (939) (320) 3,682 (69) 589 224 17 (18) 742 778 1,937 1,325 (580) (6) 3,454 - - (922) 990 216 283 - (2,388) - - - (2,388) (553) - 2,376 513 (513) 1,823 Balance as at 31 December 2025 767 3,594 3,877 (0) (641) 7,596 Reclassification ................................................................. Total gains and losses in profit or loss ............................. Additions .......................................................................... Repayments ...................................................................... Disposals ........................................................................... Total gains and losses in profit or loss ............................. Short positions held for trading ............................................................................... Short positions used for hedging ............................................................................. Fixed income securities ............................................................................................ Shares and other variable income securities ........................................................... Loans to customers .................................................................................................. Securities used for hedging ...................................................................................... Other liabilities ......................................................................................................... Short positions held for trading ............................................................................... Reconciliation of changes in Level 3 fair value measurements Short positions used for hedging ............................................................................. Derivatives ................................................................................................................ Derivatives ................................................................................................................ Derivatives ................................................................................................................ Other liabilities ......................................................................................................... Fixed income securities ............................................................................................ Additions .......................................................................... Repayments ...................................................................... Disposals ........................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 43
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 54 56. Financial assets and financial liabilities measured at fair value (cont.) f. Book value Range 30.9.2026 0-95% 1,041 - 4,652 - 3,062 Total 8,756 Book value Range 31.12.2025 0-95% 767 - 3,594 - 3,877 Total 8,237 g. +10% -10% 104 (104) 465 (465) 306 (306) Total 876 (876) Market price Recent trades Value of assets and collateral Asset class Method Expected recovery Unlisted variable income securities Asset class Method Significant unobservable input Unlisted bonds Expected recovery Value of assets Unlisted variable income securities Market price Recent trades The Group believes its estimates represent appropriate approximations of fair value and that the use of different valuation methodologies and reasonable changes in assumptions or unobservable inputs would not significantly change the estimates. A 10% change in the estimates would have the following effect on profit before taxes: Shares and other variable income securities ................................................................................................................ Loans to customers ........................................................................................................................................................ Given the methods used, the possible range of the significant unobservable inputs is wide. When determining the values used the Group considers the financial strength of the entity in question, recent trades if any and multipliers for comparable instruments. The effect of unobservable inputs in Level 3 fair value measurements Loan to customers Expert model Value of assets and collateral Fixed income securities ................................................................................................................................................. Value of assets Significant unobservable input Unlisted bonds Fair value measurements for Level 3 financial assets Level 3 assets consist primarily of unlisted bonds, shares and share certificates and loans measured at fair value. Each asset is evaluated separately but assets within an asset group share a valuation method. The following valuation methods are in use: Expert modelLoans to customers Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 44
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 56 Other information 57. Pledged assets Settlement and Securities 30.9.2026 committed facilities borrowing Total - 633 633 7,076 - 7,076 14,074 590 14,664 - - - Total 21,150 1,224 22,373 Settlement and Securities 31.12.2025 committed facilities borrowing Total - - - 9,045 - 9,045 13,659 324 13,984 - 47 47 Total 22,704 372 23,076 58. Related parties a. Definition of related parties b. Arm's length c. Balances with related parties 30.9.2026 Assets Liabilities 126 335 - 20 Total 126 355 31.12.2025 Assets Liabilities 130 243 - 39 Total 130 283 d. Transactions with related parties Interest Interest Other Other 9m 2026 income expense income expense 8 7 0 0 - - - 210 Total 8 7 0 210 Interest Interest Other Other 9m 2025 income expense income expense - 5 1 1 - - - 240 Total - 5 1 241 Management .................................................................................................................... Transactions with related parties are carried out at arm's length and subject to an annual review by the Bank's internal auditor. The Group has pledged assets, in the ordinary course of banking business, to the Central Bank of Iceland to secure general settlement in the Icelandic clearing system. Cash pledged to secure the borrowing of securities from other counterparties than the Central Bank of Iceland is classified as loans to credit institutions. The Group has a related party relationship with the board members of the Bank, the CEO of the Bank and key employees (together referred to as management), associates as disclosed in note 24, shareholders with significant influence over the Bank, close family members of individuals identified as related parties and entities under the control or joint control of related parties. Management ...................................................................................................................................................................... Associates .......................................................................................................................................................................... Loans to credit institutions ........................................................................................................................ Loans to customers ................................................................................................................................... Fixed income securities ............................................................................................................................. Loans to credit institutions ........................................................................................................................ Loans to customers ................................................................................................................................... Fixed income securities ............................................................................................................................. Other assets ............................................................................................................................................... Other assets ............................................................................................................................................... Associates .......................................................................................................................................................................... Associates ......................................................................................................................... Management ...................................................................................................................................................................... Management .................................................................................................................... Associates ......................................................................................................................... Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 45
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Kvika banki hf. Amounts are in ISK millions Notes to the Condensed Interim Consolidated Financial Statements 56 59. Other matters Tax treatment of warrants sold by the Bank 60. Events after the reporting date As the Iceland Revenue and Customs has not yet concluded its review, the Bank has not charged any amount to its income statement nor made any changes to the tax returns for the respective years. The Bank is aware that the Iceland Revenue and Customs ("Skatturinn") is currently reviewing the tax treatment of warrants that the Bank sold during the years 2017 to 2019. The Iceland Revenue and Customs is looking into whether the warrants should be taxed as perquisites instead of as a financial instrument. Should that be the case, then the Bank would be required to pay the respective social security tax and tax on financial activity. The Bank would however be able to deduct the amount of salary related expenses, as well as the amount of the perquisites, from its tax base for the respective years in question, and thereby increase its deferred tax losses. There are no material events after the reporting date. Condensed Interim Consolidated Financial Statements 30 September 2026 - Unaudited 46