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Consolidated Financial 
Statements 
31 December 2025

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Consolidated Financial Statements 
31 December 2025
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
7
10
11
12
13
15
16
17
19
21
26
35
53
57
61
Appendix - unaudited
76
83
Independent Auditor's Report ..........................................................................................................................................
Consolidated Income Statement ......................................................................................................................................
Endorsement and Statement by the Board of Directors and the CEO .............................................................................
Kvika highlights .................................................................................................................................................................
Consolidated Statement of Comprehensive Income  .......................................................................................................
Consolidated Statement of Financial Position ..................................................................................................................
Consolidated Statement of Changes in Equity .................................................................................................................
Notes to the Consolidated Financial Statements .............................................................................................................
EU Taxonomy Regulation ..................................................................................................................................................
Statement on the Corporate Governance of Kvika banki hf. ...........................................................................................
 - General information ......................................................................................................................................................
Consolidated Statement of Cash Flows ............................................................................................................................
 - Significant accounting policies .......................................................................................................................................
 - Risk management ..........................................................................................................................................................
 - Financial assets and financial liabilities .........................................................................................................................
 - Income statement ..........................................................................................................................................................
 - Statement of Financial Position .....................................................................................................................................
 - Other information ..........................................................................................................................................................
 - Segment information .....................................................................................................................................................
 Consolidated Financial Statements 31 December 2025

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Highlights
31.12.2025
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.
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. 12M 2025 12M 2024
Net operating income 19,411 17,184
Profit before tax, continuing 
operations
6,217 5,817
RoTE, continuing operations 14.5% 18.8%
31.12.2025 31.12.2024
Total assets 343,112 354,594
Loans to customers 207,560 150,203
Deposits 172,787 163,378
LCR 404% 360%
NSFR 137% 144%
Q4 24 Q1 25 Q2 25 Q3 25 Q4 25
4.7 4.4
5.1 4.9 5.0
Net operating income
ISK bn.
Loans to customers
ISK bn.
Total capital ratio
(%)
LCR ratio
(%)
0
50
100
150
200
250
0
20
40
60
80
100
120
140
160
180
200
220
92.0%
Q4 24
95.5%
Q1 25
95.5%
Q2 25
109.7%
Q3 25
120.1%
Q4 25
150 161 172
196 208
Loans to deposits
0
5
10
15
20
25
30
35
40
45
50
0
5
10
15
20
25
30
19.9%
Q4 24
21.0%
Q1 25
20.5%
Q2 25
20.4%
Q3 25
23.9%
Q4 25
22.8% 23.9% 23.3% 23.0%
26.8%
CET1
-500
0
500
1.000
1.500
2.000
2.500
3.000
0
100
200
300
400
500
600
700
800
900
1.000
144%
Q4 24
159%
Q1 25
160%
Q2 25
148%
Q3 25
137%
Q4 25
360%
279%
910%
659%
404%
NSFR
34.9%
23.1%
12.1%
19.8%
10.1%
Commercial Banking
Investment Banking
Asset Management
UK
Treasury and supporting units
Diversified operations
Revenues by segment
12M 2025

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Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
About the Bank
Operations during the year 2025
Financial position
Merger discussions with Arion banki hf.
Kvika’s foray into the mortgage market
TM sale finalised
In March 2025, Kvika completed the acquisition of the remaining management shares in Ortus Secured Finance ltd. ("OSF"). The transaction s upports
refinancing and streamlining of Kvika’s UK operations. An expense of ISK 580 million was recognized in the income statement, reflecting the revaluat ion
of the contingent consideration for the remaining purchase price of OSF.
On 6 July 2025, the Board of Directors of Kvika approved a request from the Board of Arion banki hf. ("Arion") to initiate formal merger discussions
between the two banks. Under the proposed terms, Kvika’s shareholders would receive new shares in Arion representing approximately 26% ownership
in the combined entity. The objective of the proposed merger is to combine the strengths of both institutions to form a robust financial entity offerin g
comprehensive services to customers. The parties have initiated preliminary discussions with the Icelandic Competition Authority, where the aims and
anticipated benefits of the merger for customers and the Icelandic financial market will be presented. The parties anticipate that the preliminary
discussions, finalization of contracts, and due diligence reviews will be completed in the coming months. Subject to a positive outcome of these
discussions, the merger will be formally announced to regulators and submitted for approval at the shareholders’ meetings of both companies.
Following the completion of the sale of TM in February 2025, the Group is no longer designated by the Financial Supervisory Authority of the Central
Bank of Iceland as a financial conglomerate as defined in Article no. 3 of Act no. 61/2017 on Additional Supervision of Financi al Conglomerates.
Kvika banki has achieved several significant funding milestones in 2025. In May the Bank successfully issued its inaugural euro-denominated bond with
a €200 m illion 4-year Senior Preferred note issuance. This marked the Bank’s entry into the European bond market and a key step in diversifying its
funding base. The transaction followed a multi-day investor process, gathering over €350 m illion in orders and pricing at a spread of 250bps over
interbank rates, with strong demand from the UK, Continental Europe, the Middle East and others. Earlier in the year, in January, Kvika completed a
dual-currency Nordic bond issuance for NOK/SEK 1,000 million priced at 200bps over STIBOR and NIBOR. In June, Kvika also strengthened its presence in
the domestic market with an ISK 5 billion bond issuance priced at a 1.14% spread over 3-month REIBOR.
At the end of May 2025, Kvika entered the mortgage market with a new housing loan offering through its A uður Heima brand. Auður emphasizes
transparency, flexible terms, and helping homeowners build equity. The mortgage offering was well received and Kvika managed to grow its mortgage
portfolio to ISK 23 billion at the end of the year.
These are the Consolidated Financial Statements of Kvika banki hf. ("Kvika" or the "Bank") and its subsidiaries (together the "Group") for the year 2025.
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, and Lykill, each focused on a specific customer need, while corporate and institutional services in Iceland are provided under t he
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.
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 fourth quarter amounted to ISK 1,522 million (Q4 2024: ISK 1,601 m illion) and for the year it
amounted to ISK 6,217 million ( 2024: ISK 5,817 m illion). Pre-tax annualised return on average tangible equity (RoTE) from continuing operations was
13.2% for the quarter (Q4 2024: 18.5%) and 14.5% for the year (2024: 18.8%) based on the average tangible equity position of Kvika net of TM during
the year. Tangible equity is the equity of shareholders of Kvika net of deferred tax assets and intangible assets. Profit after taxes, including disco ntinued
operations, for the fourth quarter amounted to ISK 1,266 million (Q4 2024: ISK 3,447 million) and for the year it amounted to ISK 6,264 million (2024: ISK
8,150 million).
According to the Consolidated Statement of Financial Position, equity at year end 2025 amounted to ISK 68,935 m illion (31.12.2024: ISK 89,517 million),
and total assets amounted to ISK 343,112 million (31.12.2024: ISK 354,594 million).
The Group's statement of financial position decreased by ISK 11.5 billion or 3.2% during the year 2025, the reduction was mainly due to the sale of TM
Tryggingar hf. in Q1 2025. Loans to customers grew by ISK 57.4 billion or 38.2% during the year.
On 28 February 2025 Kvika and Landsbankinn hf. ("Landsbankinn") finalised the sale of 100% of TM tryggingar hf. ("TM") share capital to Landsbankinn.
The handover of the insurance company took place simultaneously, with Landsbankinn paying Kvika the agreed purchase price upon completion. As
previously communicated by Kvika on 30 May 2024, the final purchase price has been adjusted based on changes in TM’s tangible equity from the
beginning of 2024 until the closing date, 28 February 2025. The initially agreed purchase price was ISK 28.6 b illion, but the final purchase price
amounted to ISK 32.3 billion, reflecting the purchase price adjustment for 2024 and for the period 1 January to 28 February 2025.
The Group's net operating income during the year was ISK 19,411 million ( 2024: ISK 17,184 million). Net interest income amounted to ISK 11,896 million
(2024: ISK 9,681 m illion). Net fee income amounted to ISK 6,291 million ( 2024: ISK 6,137 m illion). Other net operating income amounted to ISK 1,223
million (2024: ISK 1,367 million). Administrative expenses during the year amounted to ISK 12,074 million ( 2024: ISK 10,608 million). During the year, the
Group had a net impairment charge of ISK 515 million (2024: ISK 605 million).
 Consolidated Financial Statements 31 December 2025  2

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Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
Operational outlook
Economic outlook
Capital adequacy and dividends
Despite these pressures, the economy has demonstrated remarkable resilience. Private consumption and capital formation have seen strong growth,
NPL ratios remain near historical lows, and the króna has held steady. This resilience is thanks to concerted efforts to reduce internal and external
imbalances over the last decade. Aggressive deleveraging following the Global Financial Crisis has equipped households and businesses with health y
balance sheets, characterised by high accumulated savings and low leverage. Additionally, the external position of the economy remains benign, bot h
in terms of the balance of payments and net international investment position.
While there has been some apprehension regarding "stagflation" - with inflation hovering above the Central Bank’s 4% threshold during a period of low
growth - we expect this to be transitory. In effect, we expect the economic slowdown to act as a self-correcting mechanism, leading inflationary
pressures to unwind in the coming months.
At the end of December 2025, the MREL requirements, including the combined buffer requirement, are set at 28.3% of RWEA and 6.0% of the total
exposure measure ("TEM"). The Group comfortably exceeded both at the end of Q4 with ratios of 58.5% and 34.1% respectively.
Finally, receding inflation and a cooling labour market are expected to alleviate wage and cost pressures. This provides the necessary headroom to
maintain a lean cost base even as we continue to scale our balance sheet and strengthen our operations.
Despite the transient challenges noted above, Iceland’s long-term economic outlook compares favourably among advanced economies. As Iceland
weathers temporary export-driven headwinds, we expect continued resilience of households and businesses, progress on disinflati on, and further 
The Icelandic economy has faced significant headwinds over the past two years, with negligible GDP growth recorded since autumn 2023. This is largely
attributable to persistent challenges in the export sector.
The operational outlook for Kvika in 2026 remains positive, underpinned by diversified revenue streams across our core markets in Iceland and the
United Kingdom. Our primary objective is to build upon the momentum of the previous year. We have systematically strengthened our revenue
generation through targeted expansion into new markets and the broadening of our revenue base - most notably through our new re sidential mortgage 
offering under the Auður Heima brand and continued expansion of property backed lending in Iceland and the UK market. Overall, the Group’s
objectives regarding loan book expansion have been realised. Net interest margin has improved due to favourable interest rate environment and
improved funding costs. Furthermore, fee and commission income grew modestly between years mainly due to increased fee and commission income
from Investment banking. Additionally Kvika has successfully leveraged its increasing economies of scale to contain cost growth .
Kvika’s financial position remains strong, with robust liquidity and capital buffers well above regulatory minimums. The divestment of our insuran ce
arm, TM, in February further fortified our balance sheet, supporting credit growth across the Group’s divisions and leading to more efficient utilis ation
of internal infrastructure. Changes to capital position due to the implementation of CRR3 regulation resulted in a decrease of risk weighted assets b y
17% which lead to corresponding strengthening of Kvika’s capital ratios, and as a result the CAR ratio stood at 26.8% at year end 2025 compared to
22.8% at the end of 2024.
Domestic economic activity has been subdued - a trend likely to persist through 2026 in the wake of export shocks experienced in late 2025. However,
the testing economic backdrop is balanced by the expectation that inflation will subside as the year progresses, paving the way for further interest r ate
reductions. Given our formidable capital position and modest market share, Kvika is well positioned to gain ground in the credit market, even as the
external environment remains mixed.
The Central Bank of Iceland has already lowered rates by 200 basis points since autumn 2024. Continued disinflation and a widening output gap should
provide scope for further policy easing this year. A downward-sloping yield curve indicates that markets anticipate continued normalisation of the
policy stance, with rates becoming less restrictive in the coming quarters. Lower interest rates will, ceteris paribus, support the Bank's operatio nal
outlook across both lending and investment services.
The outlook for asset markets is encouraging. We are already seeing an upturn in the equity markets, with Icelandic share prices rallying since the end
of 2025. Continued recovery should s upport increased trading volumes and brokerage commissions as well as rebounding performance-related fees in
asset management in the coming year.
Kvika continues to maintain a strong capital position, significantly above regulatory requirements. At the end of December 2025, the Group’s capita l
adequacy ratio was 26.8% and CET1 ratio was 23.9%. This compares to regulatory requirements of 17.9% and 12.9%, including capital buffers. In
December, Iceland completed the implementation of Regulation (EU) No. 2024/1623 of the European Parliament and of the Council (CRR III). As of
December 31 2025, CRR III has resulted in an approximate 17% decrease in the Bank's risk-weighted exposure amount.
The BOD proposes that a dividend of 0.36 ISK per share for a total amount of ISK 1,566 million, taking into account treasury shares held by the Group,
will be paid in the year 2026 on 2025 operations. The dividend payment amounts to 25% of Profit after tax for the year, which is in line with the Bank's
dividend policy. Additionally, the BOD will consider distributing an extraordinary dividend or additional share buybacks later in the year or at the AGM.
These further distributions will be considered provided that certain conditions are satisfied, including maintaining the Capital Adequacy Ratio ( CAR)
within the Bank’s target range of 2–4% above regulatory requirements for the foreseeable future. In April 2025 the Bank paid a dividend amounting to
ISK 23.1 billion, equivalent to ISK 5 per share.
 Consolidated Financial Statements 31 December 2025  3

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Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
Share capital and shareholders
Shareholder 31.12.2025 31.12.2024 
9.14% 9.17% 
8.04% 7.93% 
7.86% 5.64% 
7.24% 5.58% 
5.07% 7.09% 
2.96% 2.55% 
2.76% 2.59% 
2.37% 2.33% 
2.66% 2.32% 
1.49% 1.71% 
49.59% 46.92% 
Risk management
Corporate governance
The Bank's issued share capital amounted to ISK 4,631 million as at 31 December 2025 (31.12.2024: ISK 4,722 million). At the end of the year the Bank
held ISK 214 million treasury shares (31.12.2024: ISK 62 million). The shares were acquired through a share buy-back programme. The net change in the
Bank's issued share capital amounted to a reduction in nominal value of ISK 243 million during the year (ISK 59 million reduction during the year 2024).
The Bank's 2025 A nnual General Meeting ("AGM") approved a motion from the Board of Directors ("BOD") to renew the BOD's authorisation from the
Bank's 2024 AGM to purchase up to 10% of own shares subject to regulatory approvals. This authorisation applies until the next AGM in 2026. In
February 2025, based on authorisation from the AGM and approval from the Financial Supervisory Authority of the Central Bank of Iceland, the BOD
decided to establish a buy-back programme to carry out the purchase of shares for a total consideration amount of ISK 5 billion but for no higher
nominal amount than 400,000,000 shares. Following the announcement of merger discussions with Arion banki hf. in July 2025, the BOD suspended
further share buybacks, until announcing in December 2025 that the Bank intended to complete share buybacks under the existing authorisation in the
amount of ISK 1,125,207,500, as well as requesting an additional authorisation from the Financial Supervisory Authority of the Central Bank of Icela nd
for further buybacks in the amount of up to ISK 631,548,500. The buyback programme was formally resumed in January 2026.
The 2025 AGM also approved a motion from the BOD, based on an approval from the Financial Supervisory Authority of the Central Bank of Iceland, to
decrease the share capital of the Bank by 91,073,340 shares by cance lling treasury shares held by the Bank. The share capital reduction was carried out
in April 2025.
The Bank had 2,776 shareholders at year-end 2025 (2024: 2,741), none of which held more than 10% of shares in the Bank (2024: 0). The ten largest
shareholders are as follows: 
Stapi lífeyrissjóður .........................................................................................................................................
Lífeyrissjóður starfsmanna ríkisins A-deild ....................................................................................................
Gildi - lífeyrissjóður ........................................................................................................................................
Birta lífeyrissjóður ..........................................................................................................................................
Lífeyrissjóður verzlunarmanna ......................................................................................................................
Stoðir hf. .........................................................................................................................................................
Lífsverk lífeyrissjóður .....................................................................................................................................
Almenni lífeyrissjóðurinn ...............................................................................................................................
Frjálsi lífeyrissjóðurinn ...................................................................................................................................
Lífeyrissjóður starfsmanna ríkisins B-deild ....................................................................................................
Further information about the shareholders of the Bank is provided in note 67. 
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 Consolidated Financial Statements. Refer to notes 42-58 on the
analysis of exposure to various types of risk.
Kvika is obliged to observe recognised corporate governance guidelines, pursuant to Par. 7 of Article 54 of Act No. 161/2002, on Financial Undertakin gs.
The Bank complies with chapter VII of Act No. 161/2002 and with the Guidelines on Corporate Governance issued jointly in February 2021 by the
Chamber of Commerce, Confederation of Icelandic Enterprise (SA) and Nasdaq Iceland. Kvika has three times been recognised as a company which has
achieved excellence in corporate governance following a formal assessment based on the Icelandic Guidelines on Corporate Governance issued by the
Icelandic Chamber of Commerce, Confederation of Icelandic Enterprise (SA) and Nasdaq Iceland, first in 2018, in 2021 and in 2024. The recognition
applies for three years at a time unless there have been significant changes to the BOD or the ownership of the Bank. The BOD intends to have such an
assessment carried out on a regular basis and maintain the aforementioned recognition. Additionally, Kvika complies with Guidelines of the Europea n
Banking Authority (EBA) on Internal Governance (EBA/GL/2021/05). 
In accordance with the Bank´s articles of association, five members and two alternate members are elected to the BOD each year at the annual general
meeting. The eligibility of members of the BOD is subject to statutory law. It is the Bank´s policy concerning election of the BOD that the BOD
collectively has sufficient knowledge, competency and experience to understand the Bank´s operations, including the main risk factors. The ratio o f
each gender of members of the BOD and alternate members shall be at least 40%. The election of BOD members and their eligibility is furthermore
governed by the provisions of the Act on Public Limited Liability Companies No. 2/ 1995 and the Act on Financial Undertakings No. 161/2002. The Bank
has a Nomination Committee which acts in compliance with the Bank´s articles of association and the Procedural Rules of the Nomination Committee as
approved by a shareholders' meeting.
The Bank´s articles of association may be amended at lawfully convened shareholders´ meetings, provided that the notice of the meeting specifies tha t
proposals for such amendments are scheduled and outlines the main substance of the amendments. An amendment takes effect only if approved by at
least 2/3 of the votes cast and by shareholders controlling at least 2/3 of the shares represented at the meeting. However, the provisions of the articl es
of association regarding the voting rights of shareholders and equality among them cannot be amended except with the consent of all the shareholders
who are subject to the curtailment of rights, cf. paragraph 3 of Article 94 of the Act on Public Limited Liability Companies No. 2/1995.
 Consolidated Financial Statements 31 December 2025  4

===== SIDA 8 =====

Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
The Board determines compensation for the CEO. The BOD emphasises good corporate governance and adherence to accepted guidelines on corporate
governance. The Board has laid down comprehensive rules in which the authority of the Board is defined and its scope of work in conjunction with the
CEO. They address e.g. the competence of Board members to participate in individual decisions, confidentiality and information disclosure between the
CEO and the Board. All Board members are independent of the Bank and its major shareholders, and no executive directors are on the Board. The Bank
aims to promote gender equality, and two out of five board members are women. 
The BOD has delegated certain tasks to three separate subcommittees , the Risk Committee, Audit Committee and Remuneration Committee. The
appointment of committee members shall always comply with currently applicable law. It is not permitted to appoint employees of the Bank to any
subcommittee. Members shall have the necessary ex perience and knowledge for each committee's tasks according to applicable laws and rules. Each
committee has incorporated procedural rules which have been confirmed by the BOD.
The sustainability strategy applies to the entire group based on Kvika’s ownership policy for material subsidiaries. The Board of Directors of Kvika is
responsible for the strategy, while the Sustainability Committee is responsible for its implementation. The CEO, who chairs the Sustainability
Committee, is accountable for sustainability matters to the Board. Sustainability issues are regularly discussed by the Board, Executive Manageme nt,
and relevant committees.
Kvika’s Sustainability Committee is composed of the CEO of Kvika, few of the executive managers of the Bank and of Kvika Asset Management, and the
Director of Sustainability. The Committee is responsible for the implementation and execution of the Sustainability Strategy, the Sustainability Risk
Policy, as well as all aspects of the Group Risk Policy regarding sustainability risk.
The sustainability risk policy was revised during the year considering Kvika’s material sustainability factors. Before, the Policy was limited to c limate
risks but now covers all material sustainability risks. The Board defines risk appetite for the sub-categories of sustainability risk, while releva nt
committees regularly review matters related to sustainability risk. Sustainability risk is also incorporated into the remuneration policy and the
performance criteria of the employee bonus scheme.
The main aspects of internal and external control and the Bank's management in connection with the accounting process are described in detail in the
Statement on the Corporate Governance of Kvika.
The CEO reports to the Board and verifies the effectiveness of internal controls and risk management in the Consolidated Financial Statements. Inter nal
controls and risk management applied in the preparation of the Consolidated Financial Statements are organised with a view to preventing any
significant deficiencies in the accounting process. Kvika's BOD and control units regularly verify the effectiveness of internal controls and risk
management.
The Risk Committee has an advisory and supervisory role for the Bank's BOD, among other things, in determining its risk policy and risk appetite. The
Audit Committee is intended to play an advisory and supervisory role for the Bank's BOD by, among other things, ensuring the quality of financial
statements and other financial information from the Bank and the independence of its auditors. The Audit Committee supervises accounting
procedures and the effectiveness of internal controls as well as internal and external auditing. The Remuneration Committee has an advisory and
monitoring role for the BOD in relation to remuneration in the Group and that they support its goals and interests. 
Sustainability and non-financial disclosure
Employee turnover among full-time employees of the Group was 7.4% in 2025. Women represent 38% of Kvika’s workforce and 33% of the executive
management. The gender pay gap at Kvika was 0.1% in favour of men, and 0.4% in favour of men at Kvika Asset Management.
Kvika conducted a double materiality assessment in the second half of 2024 in collaboration with a group of stakeholders to define Kvika’s material
sustainability factors. The results were used to develop a new sustainability strategy, which was approved by the Board of Directors in September 202 5.
Kvika’s sustainability strategy is built around four focus areas: good corporate governance, employee wellbeing and success, responsible and trus ted
services, and sustainable finance and fintech. These focus areas are based on the Bank’s material sustainability factors and sub-factors.
In parallel with the refinement of Kvika’s sustainability priorities the number of UN Sustainable Development Goals (SDGs) specifically targeted b yK v i k a
was reduced from six to four, namely: Goal no. 5 on gender equality, Goal no. 9 on industry, innovation and infrastructure, Goal no. 13 on climate
action, and Goal no. 17 on partnerships for the goals. Other sustainability objectives of Kvika are aligned with the focus areas of the sustainability
strategy.
Total greenhouse gas emissions from Kvika´s operations amounted to 333 tCO ₂e in 2025 representing an 18% increase compared to previous year.
Scope 1 emissions decreased by 48% while Scope 2 emissions increased by 17% and Scope 3 emissions by 32%. The emission increase can partly be
attributed to more employee air travel and changes in the energy mix compared to the previous year as the environmental reporting now for the first
time also includes the UK operations.
The total outstanding balance of green liabilities at year-end 2025 amounted to ISK 7,523 m illion, representing the total issuance of green bonds and
deposits in Auður’s green future accounts. Green liabilities have been allocated to projects related to the energy transition in transportation and
environmentally friendly buildings. Kvika’s green assets at year-end 2025 amounted to ISK 17,389 m illion. The Green Asset Ratio (GAR) in accordance
with the EU Taxonomy Regulation is disclosed in an unaudited appendix to the annual financial statements.
Kvika operates a comprehensive and harmonised group-wide framework to prevent financial crime and ensure sound corporate governance. This
framework comprises various policies, rules and procedures. In addition, regular anti-money laundering risk assessments are conducted, along wit h
ongoing monitoring of suspicious activity, including the use of the artificial intelligence and analytics system Lucinity.
Further information about the Bank's corporate governance can be found in an appendix to these financial statements which contains a corporate
governance statement. A copy of the statement is available on the Bank's website, www.kvika.is. 
The BOD is responsible for the Group's risk management framework. It approves the Kvika Banki Group risk policy, which provides an efficient and
transparent framework for managing risk and risk appetite in relation to identified risk factors.
 Consolidated Financial Statements 31 December 2025  5

===== SIDA 9 =====

Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
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 Consolidated Financial Statements of Kvika banki hf. for the year ended 31 December 2025 are electronically certificated by the Board of Director s
and the CEO.
Kvika is publishing its sustainability report for the second time, with disclosure partly aligned to the European Sustainability Reporting Standar ds (ESRS)
and the EU Corporate Sustainability Reporting Directive (CSRD). The objective is to establish a solid foundation and progress towards full complian ce
with ESRS and CSRD requirements.
The Consolidated Financial Statements of Kvika banki hf. for the year 2025 have been prepared in accordance with International Financial Reporting
Standards 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 Consolidated Financial Statements give a true and fair view of the Group's assets, liabilities and financial positi on as
at 31 December 2025 and the financial performance of the Group and changes of cash flows for the year 2025. Furthermore, in our opinion the
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.
In our opinion, the Consolidated Financial Statements of Kvika banki hf. for the year 2025 identified as "254900WR3I1Z9NPC7D84-2025-12-31-en.xbr i"
are prepared in all material respects, in compliance with the European Single Electronic Format Regulation (ESEF).
The Board of Directors and the CEO of the Bank have today discussed the Consolidated Financial Statements for the year 2025 and confirmed them by
the means of their signatures.
Reykjavík, 11 February 2026.
Board of Directors
Deloitte provides limited assurance on selected data points in the Sustainability report and on the disclosures included in the impact and allocatio n
report under Kvika’s Green Financing Framework.
Further information on the Bank’s non-financial disclosures and sustainability matters can be found in Kvika’s Sustainability Report for 2025, which is
available on the Bank’s website at www.kvika.is.
 Consolidated Financial Statements 31 December 2025  6

===== SIDA 10 =====

Kvika banki hf.
Independent Auditor's Report
To the Board of Directors and Shareholders of Kvika banki hf.
Opinion
Basis for Opinion 
Key Audit Matters 
Key Audit Matters How the matter was addressed in our audit
Impairment charges for loans
• 
• • 
• • 
• • 
• 
Management has provided further information about expected credit
losses and provisions for guarantees in notes 21, 46 and 82 to the
Consolidated Financial Statements.
Assumptions used in the expected credit loss models to incorporate
macroeconomic uncertainties.
Post-model adjustments for particular high-risk exposures, which are
not appropriately captured in the expected credit loss model.
The most significant judgements are: 
Timely identification of exposures with significant increase in credit
risk and credit impaired exposures. 
Valuation of collateral and assumptions of future cash flows on
manually assessed credit-impaired exposures.
We have reviewed the disclosures to the Consolidated Financial statements to
confirm compliance with IFRS.
Testing the appropriateness of forwa rd looking information and how they
have been applied in the expected credit loss models.
We have audited the Consolidated Financial Statements of Kvika banki hf. for the year ended December 31, 2025 which comprise, the consolidated income
statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes
in equity, the consolidated statement of cash flows for the year then ended and the notes to the consolidated financial statements, including a summaryo f
significant accounting policies.
In our opinion, the accompanying Consolidated Financial Statements give a true and fair view of the consolidated financial position of Kvika banki hf .a sa t
December 31, 2025, and its consolidated financial per formance and its consolidated cash flows for th e year then ended in accordance with Internation al
Financial Reporting Standards (IFRSs) as adopted by the EU and additional requirements, as applicable, in the Act on Annual Accounts, the Act on Finan cial
Undertakings and rules on accounting for credit institutions.
We conducted our audit in accordance with Internat ional Standards on Auditing (ISAs). Our responsi bilities under those standards are further descr ibed in
the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. 
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Consolidated Financial Statements of
the current period. These matters were addressed in the context of our audit of the Consolidated Financial Statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Book value of loans to customer s amounted to ISK 207,560 m illion at
year end (2024: ISK 150,203 million) and the total expected credit loss
for the group amounted to ISK 2, 345 million ( 2024: ISK 2, 345 million)
against loans at amortized cost, unused credit facilities and guarantees
at 31 December 2025.
Based on our risk assessment and industry knowledge, we have examined the
impairment charges for loans and provisions for undrawn loan commitments and
evaluated the methodology applied as well as the assumptions made according
to the description of the key audit matter.
Our opinion in this report on the Consolidated Financial Statements is consi stent with the content of the additional report that has been submitted to the
company´s audit committee in accordance with the EU Audit Regulation 537/2014 Article 11.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of Kvika banki hf. in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional
Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Iceland, and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the IESBA. 
Based on the best of our knowledge and belief, no prohibited services referred to in the EU Audit Regulation 537/2014 Article 5.1 has been provided. 
Our examination included the following elements:
Testing of key controls over assumptions used in the expected credit loss
models. 
Obtaining and substantively testing the evidence behind valuation of collateral
with particular focus on post-model adjustments applied to collateral value.
Measurement of loan impairment charges for loans and provisions for
guarantees is deemed a key audit matter as the determination of
assumptions for expected credit losses is highly subjective due to the
level of judgement applied by Management.
Substantively testing the PD models, related methodology and how they have
been applied in the expected credit loss models.
During our audit we have evaluated whether the Groups expected credit loss
models are compliant to IFRS 9. 
 Consolidated Financial Statements 31 December 2025  7

===== SIDA 11 =====

Kvika banki hf.
Independent Auditor's Report
Other information
Responsibilities of the Board of Directors and the CEO for the Consolidated Financial Statements
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements 
• 
• 
• 
• 
• 
• 
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon, except the
confirmation regarding report of the board of directors as stated below.
In accordance with Paragraph 2 article 104 of th e Icelandic Financial Statement Act no. 3/2006, we confirm to the best of our knowledge that the
accompanying report of the board of directors includes all information re quired by the Icelandic Financial Statement Act that is not disclosed elsew here in
the financial statements.
The Board of Directors and the CEO are responsible for the preparation and fa ir presentation of the Consolidated Financial Statements in accordance w ith
International Financial Reporting Standards (IFRSs) as adopted by the EU and additional requirements in the Icelandic Financial Statement Act, and for such
internal control as the Board of Directors and the CEO determines is necessary to enable the preparation of Consolidated Financial Statements that aref r e e
from material misstatement, whether due to fraud or error.
The board of directors and the audit committee are responsible for overseeing the Kvika banki hf. financial reporting process.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. I f
we conclude that a material uncertainty exists, we are required to draw atte ntion in our auditor’s report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the ot her
information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
I f ,b a s e do nt h ew o r kw eh a v ep e r f o r m e d ,w ec o n c l u d et h a tt h e r ei sam a t e r i a lm isstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
management.
Our objectives are to obtain reasonable assurance about whether the Conso lidated Financial Statements as a whole are free from material misstatemen t,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fra ud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of us ers
taken on the basis of these Consolidated Financial Statements.
The Board of Directors and the CEO are responsible for the other information . Other information comprises the report of board of directors, Statement on
the Corporate Governance and Non-Financial information.
Evaluate the overall presentation, structure and content of the Consolidated Financial Statements, including the disclosures, and whether the
Consolidated Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to expres sa n
opinion on the Consolidated and Separate Financial Statements. We are responsible for the direction, supervision and performance of the group audit .
We remain solely responsible for our audit opinion.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: 
Identify and assess the risks of material misstatement of the Consolidated Financial Statements, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk o f
not detecting a material misstatement resulting from fraud is higher tha n for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of Kvika banki hf.'s internal control.
In preparing the Consolidated Financial Statements, the Board of Directors and the CEO are responsible for assessing Kvika banki hf.’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Direc tors
and the CEO either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
 Consolidated Financial Statements 31 December 2025  8

===== SIDA 12 =====

Kvika banki hf.
Independent Auditor's Report
Report on other legal and regulatory requirements
Report on European single electronic format (ESEF Regulation)
Deloitte ehf.
The Consolidated Financial Statements of Kvika banki hf. for the year ended 31 December 2025 are electronically certificated by the auditor.
Kópavogur, 11 February 2026.
In addition to our work as the auditors of Kvika banki hf., Deloitte has provi ded the firm with permitted additional services such as review of interim
financial statements, other assurance engagements and consultation on t ax matters. Deloitte has in place internal procedures in order to ensure its
independence before acceptance of additional services. Deloitte has provi ded to the audit commitee written confirmation that Deloitte is independ ent of
Kvika banki hf.   
Deloitte was appointed auditor of Kvika banki hf. by the general meeting of shareholders on March 26th 2025. Deloitte have been elected since the general
meeting 2016. 
Guðmundur Ingólfsson
As part of our audit of the Consolidated Financial Statements of Kvika bank i hf. we performed procedures to be able to issue an opinion on whether the
Consolidated Financial Statements of Kvika banki hf. for the year 2025 with the file name „254900WR3I1Z9NPC7D84-2025-12-31-en.zip“is prepared, i na l l
material respects, in compliance with laws no. 20/2021 disclosure obligation of issuers of securities and the obligation to flag relating to require ments
regarding European single electronic format regulation EU 2019/815 which i nclude requirements related to the preparation of the Consolidated Fina ncial
Statements in XHTML format and iXBRL markup.
Management is responsible for preparing the Consolidated Financial Sta tements in compliance with laws no. 20/2021 disclosure obligation of issuer so f
securities and the obligation to flag. This responsibility includes preparing the Consolidated Financial Statements in a XHTML format in accordanc et oE U
regulation 2019/815 on the European single electronic format (ESEF regulation).
Our responsibility is to obtain reasonable assurance, based on evidence that we have obtained, on whether the Consolidated Financial Statements is
prepared in all material respects, in compliance with the ESEF Regulation, and to issue a report that includes our opinion. The nature, timing and exte nt of
procedures selected depend on the auditor's judgement, including the assessm ent of the risks of material departures from the requirement set out in t he
ESEF regulation, whether due to fraud or error.
In our opinion, the Consolidated Financial Statements of Kvika bank i hf. for the 2025 with the file name „254900WR3I1Z9NPC7D84-2025-12-31-en.xbri “i s
prepared, in all material respects, in compliance with the ESEF Regulation.
We communicate with the Board of Directors and the Audit Committee regardi ng, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
State Authorized Public Accountant
We also provide the Board of Directors and the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with the Board of Directors and the Audit Co mmittee, we determine those matters that were of most significance in the
audit of the Consolidated Financial Statements of the current period and a re therefore the key audit matters. We describe these matters in our auditor ’s
report unless law or regulation precludes public disclosure about the matte r or when, in extremely rare circumstances, we determine that a matter sho uld
not be communicated in our report because the adverse consequences of doin g so would reasonably be expected to outweigh the public interest benefits
of such communication.
 Consolidated Financial Statements 31 December 2025  9

===== SIDA 13 =====

Kvika banki hf.  Amounts are in ISK millions
Consolidated Income Statement
 For the year 2025
Notes Q4 2025 Q4 2024 2025 2024
7,307 6,805 29,895 28,865 
(4,242) (4,307) (17,999) (19,184)
Net interest income 5 3,065 2,498 11,896 9,681 
1,442 1,765 6,901 6,788 
(177) (164) (610) (651)
Net fee and commission income 6 1,265 1,601 6,291 6,137 
7 481 507 926 1,054 
27 15 16 37 41 
146 44 261 271 
Other net operating income 642 567 1,223 1,367 
Net operating income 4,972 4,666 19,411 17,184 
9-12 (3,263) (2,864) (12,074) (10,608)
13 (175) (91) (515) (605)
14 (12) (110) (604) (154)
Profit before taxes from continuing operations 1,522 1,601 6,217 5,817 
15 (209) (45) (1,423) (766)
16 20 18 (113) (109)
17 (67) (47) (319) (252)
Profit for the year from continuing operations 1,266 1,528 4,363 4,690 
Discontinued operations
3 - 1,919 1,901 3,460 
Profit for the year 1,266 3,447 6,264 8,150 
Notes Q4 2025 Q4 2024 2025 2024
1,269 3,447 6,267 8,143 
26 (3) - (3) 7 
Profit for the year 1,266 3,447 6,264 8,150 
Earnings per share 18
0.29 0.74 1.39 1.73
0.29 0.74 1.39 1.73
Quarterly information is unaudited.
The notes on pages 17 to 74 are an integral part of these Consolidated Financial Statements.
 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 ..................................................................................................
 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 ............................................................................
 Special tax on financial activity ..................................................................................
 Basic earnings per share (ISK per share) ....................................................................
 Profit after tax from discontinued operations ...........................................................
 Consolidated Financial Statements 31 December 2025  10

===== SIDA 14 =====

Kvika banki hf.  Amounts are in ISK millions
 For the year 2025
Notes Q4 2025 Q4 2024 2025 2024 
Profit for the year 1,266 3,447 6,264 8,150 
99 241 197 347 
(12) (14) 7 1 
Changes to reserve for financial assets at fair value through OCI 88 227 203 347 
73 (59) (39) (7)
161 168 164 340 
Total comprehensive income for the year 1,427 3,615 6,428 8,490 
Notes Q4 2025 Q4 2024 2025 2024 
1,430 3,615 6,431 8,484 
(3) - (3) 7 
Total comprehensive income for the year 1,427 3,615 6,428 8,490 
Quarterly information is unaudited.
The notes on pages 17 to 74 are an integral part of these Consolidated Financial Statements.
Consolidated Statement of Comprehensive Income 
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 loss transferred to the Income Statement, net of tax ........................
Other comprehensive income that is or may be reclassified subsequently to 
profit and loss
 Consolidated Financial Statements 31 December 2025  11

===== SIDA 15 =====

Kvika banki hf.  Amounts are in ISK millions
Consolidated Statement of Financial Position
 As at 31 December 2025
Assets Notes 31.12.2025 31.12.2024* 
19 20,145 18,593 
20 8,154 11,530 
21 207,560 150,203 
22 44,522 64,795 
23 20,663 5,432 
24 6,695 12,601 
25 3,250 1,197 
27 117 113 
28 21,130 21,693 
29 361 215 
402 543 
15, 30 939 2,273 
31 9,174 7,704 
3 - 57,702 
Total assets 343,112 354,594 
Liabilities
50 172,787 163,378 
32 6,806 14,390 
33 73,249 37,123 
34 5,841 5,629 
35 433 153 
36 432 42 
25 773 2,932 
30 257 466 
37 13,599 13,635 
3 - 27,329 
Total liabilities 274,177 265,077 
Equity
38 4,417 4,660 
43,119 46,750 
4,376 9,357 
16,948 28,672 
Total equity attributable to the shareholders of Kvika banki hf. 68,859 89,439 
26 76 79 
Total equity 68,935 89,517 
Total liabilities and equity 343,112 354,594 
* Comparative information has been restated, reference is made to note 2 for further information.
The notes on pages 17 to 74 are an integral part of these Consolidated Financial Statements.
 Other reserves ....................................................................................................................................
 Retained earnings ...............................................................................................................................
 Loans to credit institutions .................................................................................................................
 Issued bonds .......................................................................................................................................
 Operating lease assets ........................................................................................................................
 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 .........................................................................................................................................
 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 ..........................................................................................................................................
 Consolidated Financial Statements 31 December 2025  12

===== SIDA 16 =====

Kvika banki hf.  Amounts are in ISK millions
Consolidated Statement of Changes in Equity
 For the year 2025
Deficit Trans- Restricted Total share- Non- 
Share Share Option reduction Fair value lation retained  Retained holders' controlling Total 
1 January 2025 to 31 December 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 
6,267 6,267 (3) 6,264 
197 197 197 
7 7 7 
(39) (39) - (39)
- - - - 203 (39) - 6,267 6,431 (3) 6,428 
220 (5,306) 5,086 - - 
44 (44) - - 
(243) (3,632) (3,875) (3,875)
(23,135) (23,135) (23,135)
66 (102) 102 - - 
Equity as at 31 December 2025 4,417 43,119 7 1,204 (160) 40 3,285 16,948 68,859 76 68,935 
The notes on pages 17 to 74 are an integral part of these Consolidated Financial Statements.
(9,182,573) 43,118,541 7,080 1,163,480 (4,576,544) 40,217 3,278,162 15,743,966 75,512 
 Dividend paid to shareholders ..................................................................
Transactions with owners of the Bank
 Stock options .............................................................................................
Other reserves
 Profit for the year ........................................................................................
 Restricted due to subsidiaries and associates .............................................
Translation of foreign operations
 Exchange difference on translation of foreign operations .......................
 Equity as at 1 January 2025 .........................................................................
 Total comprehensive income for the year ..................................................
 Realized net loss transferred to the Income Statement ..............................
 Changes in fair value of financial assets through OCI .................................
 Restricted due to development costs ..........................................................
 Treasury shares acquired as part of a buy-back programme ...................
 Consolidated Financial Statements 31 December 2025  13

===== SIDA 17 =====

Kvika banki hf.  Amounts are in ISK millions
Consolidated Statement of Changes in Equity
 For the year 2024
Deficit Trans- Restricted Total share- Non- 
Share Share Option reduction Fair value lation retained  Retained holders' controlling Total 
1 January 2024 to 31 December 2024 Notes capital premium reserve reserve reserve reserve earnings earnings equity interest equity 
4,722 47,662 174 1,204 (930) 86 3,797 25,172 81,886 72 81,958 
8,143 8,143 7 8,150 
347 347 347 
1 1 1 
Translation of foreign operations
(7) (7) - (7)
- - - - 347 (7) - 8,143 8,484 7 8,490 
4,745 (4,745) - - 
6 (6) - - 
(64) (936) (1,000) (1,000)
66 (60) 103 43 43 
2 25 (5) - - - - 5 26 26 
Equity as at 31 December 2024 4,660 46,750 109 1,204 (583) 79 8,547 28,672 89,439 79 89,517 
The notes on pages 17 to 74 are an integral part of these Consolidated Financial Statements.
 Equity as at 1 January 2024 .........................................................................
 Stock options exercised .............................................................................
 Total comprehensive income for the year ..................................................
 Treasury shares acquired as part of a buy-back programme ...................
 Stock options .............................................................................................
 Restricted due to subsidiaries and associates .............................................
Transactions with owners of the Bank
 Restricted due to development costs ..........................................................
Other reserves
 Changes in fair value of financial assets through OCI .................................
 Realized net loss transferred to the Income Statement ..............................
 Profit for the year ........................................................................................
 Exchange difference on translation of foreign operations .......................
 Consolidated Financial Statements 31 December 2025  14

===== SIDA 18 =====

Kvika banki hf.  Amounts are in ISK millions
Consolidated Statement of Cash Flows
 For the year 2025
Cash flows from operating activities Notes 2025 2024*
6,264 8,150 
40 6 
(37) (41)
1,348 1,106 
(11,896) (9,681)
515 605 
1,854 1,128 
(1,901) (3,488)
- 43 
(3,812) (2,173)
Changes in:
1,752 (777)
(59,289) (11,224)
17,497 750 
(144) (5,246)
5,906 4,251 
(2,053) 1,301 
(199) 225 
(1,430) (444)
9,019 20,413 
368 2,361 
670 59 
(2,304) 713 
(190) (2,690)
(30,398) 9,693 
28,978 27,993 
(17,414) (18,851)
(452) (614)
Net cash (to) from operating activities (23,098) 16,048 
Cash flows from investing activities
28 (329) (608)
72 (91)
36 20 
31,825 1,238 
Net cash from investing activities 31,605 558 
Cash flows from financing activities
(5,313) (2,072)
36,126 (8,592)
- (300)
(3,875) (1,000)
- 26 
(23,135) - 
(382) (408)
Net cash from (to) financing activities 3,421 (12,346)
11,927 4,260 
22,500 20,852 
556 (539)
Cash and balances with Central Bank at the end of the year, including asset held for sale 34,984 24,572 
2,072 (2,072)
Cash and cash equivalents at the end of the year 19 37,056 22,500 
Cash and cash equivalents
19 20,145 18,593 
19 (6,203) (5,819)
20 8,102 9,726 
23 15,013 - 
Cash and cash equivalents at the end of the year 37,056 22,500 
* Comparative information has been restated, reference is made to note 2 for further information.
The notes on pages 17 to 74 are an integral part of these Consolidated Financial Statements.
 Interest received ..........................................................................................................................................
 Sale of own shares due to share options .....................................................................................................
 Acquired own shares ....................................................................................................................................
 Additions of intangible assets ......................................................................................................................
 Net acquisition and sale of property and equipment ..................................................................................
 Interest paid .................................................................................................................................................
 Income tax paid ............................................................................................................................................
 Dividend from associates .............................................................................................................................
 Disposal of subsidiary and associates, net of cash ......................................................................................
 Net change in cash and cash equivalents ....................................................................................................
 Repayment of lease liabilities ......................................................................................................................
 Issued bonds ................................................................................................................................................
 Dividend paid to shareholders .....................................................................................................................
 Subordinated loans ......................................................................................................................................
 Borrowings ...................................................................................................................................................
 Effects of exchange rate fluctuations on cash and cash equivalents ..........................................................
 Cash and cash equivalents at the beginning of the year .............................................................................
 Cash and cash equivalents due 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 ........................................................................................................................
 Other adjustments .....................................................................................................................................
 Profit for the year .........................................................................................................................................
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 ...............................................................................................
 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  ....................................................................................................................................................
 Insurance contract liabilities .....................................................................................................................
 Short positions ...........................................................................................................................................
 Other liabilities ..........................................................................................................................................
 Consolidated Financial Statements 31 December 2025  15

===== SIDA 19 =====

Kvika banki hf.  
Notes to the Consolidated Financial Statements
0
General information Page Risk management Page
1 Reporting entity ............................................................................ 17 42  Risk management framework ........................................................ 35
2 Basis of preparation ..................................................................... 17 43  Hedging ........................................................................................... 36
3 Discontinued operations .............................................................. 18 44  Credit risk - overview ...................................................................... 37
45  Maximum exposure to credit risk .................................................. 38
Segment information 46  Credit quality of financial assets .................................................... 38
4 Business segments ....................................................................... 19 47  Loan-to-value ................................................................................. 43
48  Collateral against exposures to derivatives ................................... 43
Income statement 49  Large exposures .............................................................................. 43
5 Net interest income ...................................................................... 21 50  Liquidity risk ................................................................................... 44
6 Net fee and commission income .................................................. 21 51  Market risk ...................................................................................... 48
7 Net financial income .................................................................... 22 52  Interest rate risk ............................................................................. 48
8 Foreign currency exchange difference ......................................... 22 53  Interest rate risk associated with trading portfolios ...................... 48
9 Administrative expenses .............................................................. 22 54  Interest rate risk associated with non-trading portfolios .............. 49
10  Salaries and related expenses ...................................................... 22 55  Exposure towards changes in the CPI ............................................ 50
11  Employment terms of the Board of Directors and management 23 56  Currency risk ................................................................................... 50
12  Auditor's fees ................................................................................ 23 57  Equity risk ....................................................................................... 52
13  Net impairment ............................................................................ 24 58  Operational risk .............................................................................. 52
14  Revaluation of contingent consideration ..................................... 24
15  Income tax .................................................................................... 24 Financial assets and liabilities
16  Special tax on financial activity .................................................... 24 59  Accounting classif. of financial assets and financial liabilities ....... 53
17  Special tax on financial institutions .............................................. 24 60  Financial assets and financial liabilities measured at fair value .... 54
18  Earnings per share ........................................................................ 25 61 Financial assets and financial liabilities
 not measured at fair value ............................................................. 56
Statement of Financial Position
19  Cash and balances with Central Bank .......................................... 26
20  Loans to credit institutions ........................................................... 26
21  Loans to customers ...................................................................... 26 Other information
22  Fixed income securities ................................................................ 26 62  Pledged assets ................................................................................ 57
23  Shares and other variable income securities ............................... 27 63  Related parties ............................................................................... 57
24  Securities used for hedging .......................................................... 27 64  Remuneration policy ...................................................................... 58
25  Derivatives .................................................................................... 27 65  Incentive scheme ............................................................................ 58
26  Group entities ............................................................................... 28 66  Share-based payments ................................................................... 59
27  Investment in associates .............................................................. 28 67  Shareholders of the Bank ............................................................... 60
28  Intangible assets ........................................................................... 28 68  Others matters ............................................................................... 60
29  Operating lease assets .................................................................. 29 69  Events after the reporting date ...................................................... 60
30  Deferred tax assets and liabilities ................................................ 30
31  Other assets .................................................................................. 30 Significant accounting policies 61
32  Borrowings ................................................................................... 30
33  Issued bonds ................................................................................. 31
34  Subordinated liabilities ................................................................ 31
35  Short positions held for trading ................................................... 31
36  Short positions used for hedging ................................................. 32
37  Other liabilities ............................................................................. 32
38  Share capital ................................................................................. 32
39  Capital adequacy ratio (CAR) ........................................................ 33
40  Leverage ratio ............................................................................... 34
41 Minimum requirements for own funds
 and eligible liabilities (MREL) ....................................................... 34
 Consolidated Financial Statements 31 December 2025  16

===== SIDA 20 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the 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
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 Consolidated Financial Statements is provided in note 109.
In order to enhance the informational value of the 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. 
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"). Following the completion of the sale of TM in February 2025, the Group is no longer designated by
the FME as a financial conglomerate as defined in Article no. 3 of Act no. 61/2017 on Additional Supervision of Financial Congl omerates.
The Consolidated Financial Statements were approved and authorised for issue by the Board of Directors and the CEO on 11 February 2026.
The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS), 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 Consolidated Financial Statements have been prepared using the historical cost basis except for the following:
The Consolidated Financial Statements for the year ended 31 December 2025 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, busin esses 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 financial statements in accordance with IFRSs 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 Consolidated Financial Statements are prepared in Icelandic krona (ISK), which is the Group's functional currency. All financial information h as
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 other currency than ISK are translated to ISK using the exchange rate as at the end of
day 31 December 2025.
 Consolidated Financial Statements 31 December 2025  17

===== SIDA 21 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
0
2. Basis of preparation (cont.)
g. Change in presentation
Restated
31.12.2024 Reclassified  31.12.2024 
Assets:
28,319 (9,726) 18,593 
- 11,530 11,530 
9,507 (1,804) 7,704 
316,768 - 316,768 
354,594 - 354,594 
Liabilities and Equity:
265,077 - 265,077 
89,517 - 89,517 
354,594 - 354,594 
Restated
12m 2024 Reclassified  12m 2024 
Lines in the Consolidated Statement of Cash Flows
- (777) (777)
773 (1,216) (444)
24,677 (3,825) 20,852 
28,319 (5,819) 22,500 
3. Discontinued operations
Assets 28.2.2025 31.12.2024 
391 2,072 
25,551 21,065 
18,567 20,608 
12,350 12,350 
1,796 1,608 
58,655 57,702 
Liabilities
26,477 25,302 
561 605 
1,367 1,422 
28,405 27,329 
- (55)
30,250 30,318 
 Intangible assets ......................................................................................................................................................................
 All other assets ..................................................................................................................................................
 Loans to credit institutions ...............................................................................................................................
 Other assets .......................................................................................................................................................
 Cash and cash equivalents at the end of the year ............................................................................................
 Loans to credit institutions ...............................................................................................................................
In 2025 the Group changed the way it presents cash and balances with central bank. The Group now presents loans to credit institutions as a
separate line item in the statement of financial position. That line item includes balances with other credit institutions, which were previously
included as part of cash and balances with central bank and other assets. The comparative figures for 31 December 2024 in the statement of
financial position, 12m 2024 in the Consolidated Statement of Cash Flows and in the notes have been restated, as applicable.
 Cash and balance with Central bank .................................................................................................................
 Equity .................................................................................................................................................................
Total liabilities and equity
The table below shows the effect of the reclassification on the Consolidated Statement of Financial Position at 31 December 2024: 
On 28 February 2025 Kvika and Landsbankinn hf. finalised the sale of 100% of TM tryggingar hf. share capital to Landsbankinn hf. as specified in
note 68.
 Other assets .......................................................................................................................................................
 Cash and balances with Central Bank at the beginning of the year .................................................................
 Other liabilities ........................................................................................................................................................................
The major classes of assets and liabilities of the discontinued operations are as follows:
 Other assets .............................................................................................................................................................................
Assets classified as held for sale
 Insurance contract liabilities ....................................................................................................................................................
 Deferred tax liabilities .............................................................................................................................................................
Liabilities associated with assets classified as held for sale
Net assets directly associated with disposal group
 Eliminations with the Group ....................................................................................................................................................
Total assets
 Cash and balances with Central Bank ......................................................................................................................................
 Fixed income securities ...........................................................................................................................................................
 Shares and other variable income securities ..........................................................................................................................
 Liabilities ...........................................................................................................................................................
 Consolidated Financial Statements 31 December 2025  18

===== SIDA 22 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
0
3. Discontinued operations (cont.)
31.12.2025 31.12.2024 
30,318 26,830 
1,901 3,460 
(32,217) - 
(2) 28 
0 30,318 
2025 2024 
1.1.-28.2 1.1.-31.12 
1,058 5,161 
(2,739) (4,077)
0 (1)
(1,681) 1,083 
391 0 
Segment information
4. Business segments
-
-
-
-
-
 Cash and cash equivalents of the subsidiary that left the Group at disposal .........................................................................
The loss after tax of the disposed entity for the period 1 January to 28 February 2025 amounted to ISK 138 m illion and is included in profit after tax
from discontinued operations.
Treasury
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 provide a range of professional services in the fields of specialised financing, securities and foreign exchange transactions
and corporate finance services.
UK operations
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. UK operations is the only geographic area outside of Iceland
where the Group operates and for the year 2025 it accounted for 19.8% (2024: 17.4%) of net operating income. 
Net cash inflow/(outflow)
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
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.
 Other adjustments ...................................................................................................................................................................
 Balance at the beginning of the year .......................................................................................................................................
 Purchase price .........................................................................................................................................................................
Net assets directly associated with disposal group
 Profit after tax from discontinued operations ........................................................................................................................
During the year 2025, the Group defined the following reportable operating segments; Asset Management, Commercial Banking, Investment
Banking, UK operations and Treasury. Treasury, which was previously r eported as part of Investment Banking, is now presented separately.
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.
During the year 2025, the Group implemented the change that operating segments would receive interest from Treasury to reflect the allocation of
capital. Comparative figures have been restated, as applicable.
 Operating .................................................................................................................................................................................
 Investing ...................................................................................................................................................................................
 Financing ..................................................................................................................................................................................
The net cash flows incurred by the discontinued operations are as follows:
Set out below is the reconciliation of Net assets directly associated with disposal group:
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.
 Consolidated Financial Statements 31 December 2025  19

===== SIDA 23 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
0
4. Business segments (cont.)
Asset Commercial Investment UK Supporting 
2025 Management Banking Banking operations Treasury units Total 
(6) 5,084 2,777 2,376 1,691 (27) 11,896 
2,206 1,549 1,807 648 93 (11) 6,291 
98 2 (117) 813 131 (0) 926 
- - - - - 37 37 
53 138 9 8 43 9 261 
Net operating income 2,351 6,772 4,476 3,846 1,958 7 19,411 
(1,132) (1,014) (925) (877) (296) (2,720) (6,965)
(122) (1,939) (211) (416) (167) (2,254) (5,109)
Administrative expenses (1,254) (2,953) (1,137) (1,293) (463) (4,974) (12,074)
0 (282) (155) (79) 1 - (515)
(24) - - (580) - - (604)
(682) (1,481) (882) (214) (334) 3,592 - 
Profit (loss) before tax from continuing operations 392 2,057 2,302 1,680 1,162 (1,375) 6,217 
Net segment revenue from external 
2,336 1,338 8,709 5,420 1,322 285 19,411 
Net segment revenue from other 
15 5,434 (4,233) (1,575) 636 (278) - 
Asset Commercial Investment UK Supporting 
2024 Management Banking Banking operations Treasury units Total 
(18) 4,844 1,954 1,792 1,147 (38) 9,681 
2,457 1,536 1,399 623 120 0 6,137 
96 (6) 292 554 122 (4) 1,054 
- 41 - - - - 41 
33 218 - 13 - 7 271 
Net operating income 2,568 6,634 3,645 2,982 1,389 (34) 17,185 
(1,030) (979) (855) (748) (245) (2,588) (6,445)
(78) (1,695) (185) (413) (102) (1,688) (4,162)
Administrative expenses (1,108) (2,674) (1,040) (1,161) (348) (4,276) (10,608)
(3) (343) (90) (169) (1) - (605)
(5) - - (149) - - (154)
(730) (1,548) (832) (162) (297) 3,570 - 
Profit (loss) before tax from continuing operations 723 2,069 1,682 1,341 743 (740) 5,818 
Net segment revenue from external 
2,610 159 7,583 4,534 2,314 (15) 17,185 
Net segment revenue from other 
(41) 6,475 (3,938) (1,552) (925) (19) - 
 Share in profit of associates ....................................
 Other operating income .........................................
 Salaries and related expenses ................................
 Other operating expenses ......................................
 Net impairment .......................................................
    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 ........................................................
    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 ...............
 Consolidated Financial Statements 31 December 2025  20

===== SIDA 24 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
4
Income statement
5. Net interest income
Interest income is specified as follows:
Q4 2025 Q4 2024 2025 2024 
473 382 2,002 2,198 
10 43 481 154 
5,792 4,692 21,707 19,538 
141 392 1,703 2,779 
765 1,288 3,724 4,186 
125 8 280 9 
Total 7,307 6,805 29,895 28,865 
Interest expense is specified as follows:
Q4 2025 Q4 2024 2025 2024 
2,368 2,690 10,083 11,059 
589 678 2,371 2,744 
985 696 3,782 3,332 
98 88 560 597 
132 142 1,094 1,396 
71 13 109 57 
Total 4,242 4,307 17,999 19,184 
Net interest income 3,065 2,498 11,896 9,681 
6. Net fee and commission income
Q4 2025 Q4 2024 2025 2024 
434 659 2,157 2,401 
267 394 1,566 1,419 
194 159 748 602 
510 464 2,063 2,084 
36 89 366 281 
Total fee and commission income 1,442 1,765 6,901 6,788 
(177) (164) (610) (651)
Net fee and commission income 1,265 1,601 6,291 6,137 
In the fourth quarter, the Group reclassified retrospectively a port ion of the fees that had been recorded as other fee and commission income
during the first three quarters of 2025. The reclassification primarily resulted in a decrease in other fee and commission income and an increase in
fee income related to loans and guarantees.
Total interest income recognised in respect of financial assets not carried at fair value through profit or loss amounts to ISK 24,437 million ( 2024:
ISK 21,772 million). Total interest expense recognised in respect of financial liabilities not carried at fair value through profit or loss amounts t oI S K
16,905 million (2024: ISK 17,788 million).
Fee 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 ......................................................................................
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 service, securities, derivatives and FX brokerage as well as market making.
 Cards and payment solutions .....................................................................................................
 Loans and guarantees .................................................................................................................
 Other interest expense* .............................................................................................................
 Issued bonds ...............................................................................................................................
 Derivatives ..................................................................................................................................
 Deposits  .....................................................................................................................................
 Cash and balances with Central Bank .........................................................................................
 Derivatives ..................................................................................................................................
 Loans to customers .....................................................................................................................
 Other interest income ................................................................................................................
 Fixed income securities (FVOCI) .................................................................................................
 Loans to credit institutions .........................................................................................................
 Other fee and commission income ............................................................................................
 Fee and commission expense .....................................................................................................
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.
 Borrowings ....................................................................................................................
..............
 Subordinated liabilities ...............................................................................................................
* Thereof are lease liabilities' interest expense amounting to ISK 37 million (2024: ISK 54 million).
 Consolidated Financial Statements 31 December 2025  21

===== SIDA 25 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
4
7. Net financial income
Net financial income is specified as follows:
Q4 2025 Q4 2024 2025 2024 
Net (loss) gain on financial assets and financial liabilities mandatorily measured at fair value through profit or loss
133 87 420 310 
15 17 (8) (1)
395 356 848 354 
1 7 41 460 
19 5 (62) (62)
(190) - (273) - 
108 34 (40) (6)
Total 481 507 926 1,054 
8. Foreign currency exchange difference
Foreign currency exchange difference is specified as follows:
Q4 2025 Q4 2024 2025 2024 
674 (13) 2,003 (1,326)
(566) 47 (2,044) 1,319 
Total 108 34 (40) (6)
9. Administrative expenses
Administrative expenses are specified as follows:
Q4 2025 Q4 2024 2025 2024 
1,939 1,705 6,965 6,445 
1,040 871 3,761 3,056 
241 231 1,140 872 
42 57 208 234 
Total 3,263 2,864 12,074 10,608 
10. Salaries and related expenses
Salaries and related expenses are specified as follows:
Q4 2025 Q4 2024 2025 2024 
1,314 1,170 4,848 4,574 
194 170 627 478 
- 7 - 33 
218 186 709 642 
90 79 290 273 
124 93 491 447 
Total 1,939 1,705 6,965 6,445 
250 251 249 247 
250 253 250 253 
 (Loss) gain on other financial instruments .................................................................................
 Other salary related expenses ....................................................................................................
 Tax on financial activity ..............................................................................................................
 Salaries ........................................................................................................................................
 Performance based payments excluding share-based payments .............................................
 Fixed income securities ............................................................................................................
 Financial assets at fair value through OCI ................................................................................
 Derivatives ................................................................................................................................
 Loans to customers ..................................................................................................................
 Gain (loss) on financial instruments at fair value through profit and loss .................................
 Total number of full time employees at year-end .....................................................................
 Share-based payment expenses .................................................................................................
 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 ..............................................................................................
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% (2024: 5.50%).
During the first quarter of 2025, ISK 225 m
illion in irregular and one-off costs were incurred by the Group, among other due to the finalisation of
the sale of TM. The expenses are included in all the line items in the table above except salaries and related expenses. 
 Average number of full time employees during the year ..........................................................
 Pension fund contributions ........................................................................................................
 Consolidated Financial Statements 31 December 2025  22

===== SIDA 26 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
4
11. Employment terms of the Board of Directors and management
Board and Pension Board and Pension 
committee contribut- committee contribut- 
remunerat. ion Total remunerat. ion Total 
20 3 23 21 3 24 
16 2 19 21 3 24 
11 2 13 13 2 15 
14 2 16 16 2 18 
8 1 9 - - - 
3 0 4 4 0 4 
1 0 1 1 0 1 
- - - 13 2 15 
Total 73 11 84 88 13 101 
Performance Pension Performance Pension 
Salaries and based contribut- Salaries and based contribut- 
benefits payments ion Total benefits payments ion Total 
60 12 11 83 60 9 10 80 
318 48 51 416 259 33 40 331 
- - - - 25 - 4 29 
54 - 8 62 49 - 7 56 
- - - - 60 - 9 69 
Total 431 60 70 560 452 42 70 565 
12. Auditor's fees
Remuneration to the Group's auditors is specified as follows:
2025 2024
139 189 
27 31 
11 25 
Total 178 244 
154 180 
Sigurgeir Guðlaugsson, former Board member and former
The members of the BOD owned, or controlled, 21,440 thousand shares at year-end 2025. The CEO owned, or controlled, 4,842 thousand shares
in the Bank at year-end 2025. The members of the executive committee owned, or controlled, 67,467 thousand shares and options for 1,366
thousand shares at year-end 2025. 
  the Risk and Remuneration committees ............................................
 (on average 0), 2024: 1 (on average: 0.5)) ....
Guðjón Karl Reynisson, Board member and chairperson
Helga Kristín Auðunsdóttir, Deputy Chairman of the Board, member 
Ingunn Svala Leifsdóttir,  Board member, chairperson
  of the Audit and the Remuneration committees ...............................
  of the Audit committee and member of the Risk committee ............
 Helga Jóhanna Oddsdóttir, former alternate Board member .............
  of the Remuneration committee ........................................................
Sigurður Hannesson, Chairman of the Board and member of 
Páll Harðarson, Board member and chairperson
  of the Risk committee .........................................................................
 Ármann Þorvaldsson, CEO  ............................
2024: 8 (on average: 7.6)) ............................. 
 Other audit related services ................................................................................................................................................
 Thereof to the auditors of the Bank ....................................................................................................................................
2024 2025 Remuneration to the Board of Directors
Salaries and benefits paid to the Board of Directors, the CEO, Managing Directors, including the Deputy CEO, and other key employees of the Bank
for their work for companies within the Group are specified as follows:
 Expensed notice payments ...........................
  member of the Risk committee ..........................................................
 Review of interim accounts .................................................................................................................................................
 Audit of annual accounts ....................................................................................................................................................
The table above shows fees paid to Deloitte and other component auditors. Total fee paid to other component auditors for the year 2025
amounts to ISK 23 million (2024: ISK 65 million).
  chairperson of the Risk committee ....................................................
The Bank has adopted a remuneration policy which covers three remuneration components, base pay, performance based incentive scheme and
other benefits, including pension fund contributions. Further info rmation about the remuneration policy is provided in notes 64-66.
Besides the CEO, the following were a part of the Bank's executive committee during 2025: i) Anna Rut Ágústsdóttir, Deputy CEO (from January
2026) and MD Operations and Development, ii) Eiríkur Magnús Jensson, CFO, iii) Halldór Snæland, MD of Commercial Banking, iv) Bjarni Eyvinds,
MD Investment Banking, v) Lilja Jensen, General Counsel, vi) Elísabet G. Björnsdóttir, MD Risk Management and vii) Guðmundur Þórðarson, MD
Business Development.
Expensed notice payments include payments during notice period for the members of executive committee and other key employees, as
applicable, which left the Group during the respective year.
Guðmundur Þórðarson, former Board member and former
2025 2024 
Managing Directors (2025: 7 (on average 7),
Former Managing Directors (2025: 0
 Other key employees (2025:2, 2024:2) .........
Remuneration to the CEO, executive 
committee and other key employees
 Consolidated Financial Statements 31 December 2025  23

===== SIDA 27 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
4
13.
Q4 2025 Q4 2024 2025 2024 
(179) (91) (511) (599)
(0) (1) (7) (4)
4 1 2 (2)
Total (175) (91) (515) (605)
14. Revaluation of contingent consideration
15. Income tax
Reconciliation of effective tax rate:
2025 2024 
6,217 5,817 
20.0% (1,243) 21.0% (1,222)
(0.1%) 5 (0.9%) 53 
1.0% (63) 0.0% 0 
0.3% (16) 0.4% (21)
3.3% (205) (4.5%) 260 
(1.6%) 100 (2.8%) 163 
Effective income tax rate 22.9% (1,423) 13.2% (766)
1.8% (113) 1.9% (109)
Effective tax rate 24.7% (1,536) 15.0% (876)
16. Special tax on financial activity
17. Special tax on financial institutions
 Special tax on financial activity ..................................................................................................
In March 2025, the Group completed the expedited acquisition of the remaining management shares in Ortus Secured Finance ltd. (OSF),
originally scheduled to be acquired over a five-year period (2024–2028) with pricing linked to OSF’s a nnual performance . An expense of ISK 580
million was incurred in the first quarter of 2025 related to the expedited acquisition of the OSF shares.
 Net change in impairment of loans ............................................................................................
 Income tax using the domestic corporation tax rate .................................................................
 Profit before tax ..........................................................................................................................
The Bank and some of its subsidiaries will not pay income tax on its profit for 2025 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 b illion. 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 Consolidated Statement of Financial Position.
The contingent consideration related to the acquisition of Gamma Capital Management ehf. was revalued during the year 2025. The revaluation
led to an expense of ISK 24 million.
 Other changes .............................................................................................................................
Net impairment
According to Act No. 155/2010 on Special Tax on Financial Institutions, certain types of financial institutions, including banks, must pay a nnually 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% (2024: 0.145%) and the tax is not a deductible expense for income tax purposes. The tax is presented separately in the Consolidated
Income Statement. 
 Effect of tax rates in foreign jurisdictions ...................................................................................
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% (2024: 6.0%) and the tax is not a
deductible expense for income tax purposes. The tax is presented separately in the Consolidated Income Statement. 
Profit before tax amounts to ISK 6,217 million. Income tax amounts to ISK 1,423 million, resulting in an effective income tax rate of 22.9%. This is
substantially different from the Icelandic corporate tax rate of 20%, mainly due to non-taxable income from shares. Special tax on financial
activity amounts to ISK 113 million, resulting in an effective tax rate of 24.7%.
 Tax exempt revenues / loss ........................................................................................................
 Non-deductible expenses ...........................................................................................................
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% (2024: 21.0%). Companies within the Group, which operate outside of Iceland, recognise income tax in accordance with the
applicable tax laws in the country they reside.
 Net change in impairment of other assets .................................................................................
 Net change in impairment of loan commitments, guarantees and unused credit facilities .....
 Different tax rates .......................................................................................................................
 Consolidated Financial Statements 31 December 2025  24

===== SIDA 28 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
4
18. Earnings per share
2025 2024 2025 2024 2025 2024 
Net earnings attributable to equity holders of the Bank 4,366 4,683 1,901 3,460 6,267 8,143 
4,496 4,698 4,496 4,698 4,496 4,698 
1 - 1 - 1 - 
Total 4,497 4,698 4,497 4,698 4,497 4,698 
0.97 1.00 0.42 0.74 1.39 1.73
0.97 1.00 0.42 0.74 1.39 1.73
Q4 2025 Q4 2024 Q4 2025 Q4 2024 Q4 2025 Q4 2024 
Net earnings attributable to equity holders of the Bank 1,269 1,528 - 1,919 1,269 3,447 
4,417 4,658 4,417 4,658 4,417 4,658 
1 - 1 - 1 - 
Total 4,418 4,658 4,418 4,658 4,418 4,658 
0.29 0.33 - 0.41 0.29 0.74
0.29 0.33 - 0.41 0.29 0.74
 Weighted average number of outstanding shares .............................
 Adjustments for stock options ............................................................
 Basic earnings per share (ISK) ..............................................................
 Diluted earnings per share (ISK) ..........................................................
Continuing operations Continuing and 
discontinued operations
 Weighted average number of outstanding shares .............................
 Adjustments for stock options ............................................................
 Basic earnings per share (ISK) ..............................................................
 Diluted earnings per share (ISK) ..........................................................
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 dilut ive effect. 
Discontinued 
operations
 Consolidated Financial Statements 31 December 2025  25

===== SIDA 29 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
18
Statement of Financial Position
19. Cash and balances with Central Bank
Cash and balances with Central Bank are specified as follows:
31.12.2025 31.12.2024 
13,929 12,759 
12 16 
Included in cash and cash equivalents 13,941 12,774 
6,203 5,819 
Total 20,145 18,593 
20. Loans to credit institutions
Loans to credit institutions are specified as follows:
31.12.2025 31.12.2024 
8,102 9,726 
52 1,804 
Total 8,154 11,530 
21. Loans to customers
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 
Gross Gross Gross
carrying Book carrying Book carrying Book 
31.12.2024 amount value amount value amount value
40,609 39,736 111,047 109,593 151,656 149,329 
- - 874 874 874 874 
Total 40,609 39,736 111,921 110,466 152,530 150,203 
22. Fixed income securities
Fixed income securities are specified as follows:
Mandatorily measured at fair value through profit or loss 31.12.2025 31.12.2024 
1,793 2,714 
2,425 2,189 
1,436 722 
Measured at fair value through other comprehensive income
37,473 54,256 
- 3,453 
1,394 1,459 
Total 44,522 64,795 
The Group presents finance lease receivables as part of loans to customers at amortised cost. As at 31 December 2025, the book value of finance
lease receivables amounted to ISK 23,175 million (31.12.2024: ISK 22,866 million).
Loans to customers at FV through profit or loss 
 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 ............................................................................................................................................................. 
CorporatesIndividuals
Loans to customers at amortised cost ...............
 Bank accounts .................................................................................................................................................................
 Other loans .....................................................................................................................................................................
The breakdown of the loan portfolio by individuals and corporates is specified as follows:
Listed government bonds and bonds with government guarantees .......................................................................... 
Listed treasury bills ...................................................................................................................................................... 
TotalIndividuals
Loans to customers at amortised cost ...............
Listed bonds ................................................................................................................................................................. 
Total
Corporates
 Consolidated Financial Statements 31 December 2025  26

===== SIDA 30 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
18
23. 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 31.12.2025 31.12.2024 
996 1,101 
3,097 3,069 
15,013 - 
1,558 1,262 
Total 20,663 5,432 
24. Securities used for hedging
Securities used for hedging are specified as follows:
31.12.2025 31.12.2024 
938 1,905 
320 584 
5,353 9,669 
84 442 
Total 6,695 12,601 
25. Derivatives
31.12.2025 Assets Liabilities 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 
31.12.2024 Assets Liabilities Assets Liabilities 
159 107 56 - 
34,755 35,672 455 1,321 
13,022 13,000 40 18 
- 7,386 - 283 
13,586 14,534 645 1,310 
Total 61,522 70,699 1,197 2,932 
31.12.2025 31.12.2024 
(21) (53)
182 39 
(36) (8)
Total 124 (21)
 Currency forwards ................................................................................................
 Interest rate derivatives .......................................................................................
Notional 
 Equity options ......................................................................................................
Carrying amount 
 Foreign currency revaluation of the net foreign operations .........................................................................................
 Tax effect ........................................................................................................................................................................
Listed government bonds and bonds with government guarantees ............................................................................. 
 Listed bonds ....................................................................................................................................................................
Unlisted shares ............................................................................................................................................................. 
Unlisted unit shares ..................................................................................................................................................... 
 Listed shares ...................................................................................................................................................................
 Bond and equity total return swaps ....................................................................
Notional 
Derivatives are specified as follows:
 Currency forwards ................................................................................................
 Interest rate derivatives .......................................................................................
Listed shares ................................................................................................................................................................. 
Unit shares in cash equivalent liquidity funds ............................................................................................................. 
 Unlisted unit shares ........................................................................................................................................................
Carrying amount 
 Currency forwards used for hedge accounting ...................................................
 Cross - currency interest rate swaps ....................................................................
 Currency forwards used for hedge accounting ...................................................
 Cross - currency interest rate swaps ....................................................................
 Bond and equity total return swaps ....................................................................
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 .............................................................................................................................
 Consolidated Financial Statements 31 December 2025  27

===== SIDA 31 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
18
26. Group entities
Share Share 
Entity Nature of operations Domicile 31.12.2025 31.12.2024 
Holding company Iceland 100% 100% 
Asset management Iceland 100% 100% 
Debt Collection Iceland 100% 100% 
Iceland 100% 100% 
Insurance company Iceland - 100% 
Insurance company Iceland - 100% 
Iceland 85% 85% 
UK 100% 100% 
UK 100% 80% 
27. Investment in associates
a. Investment in associates is accounted for using the equity method and is specified as follows:
Share Share 
Entity Nature of operations Domicile 31.12.2025 31.12.2024 
Iceland 24% 24% 
Croatia 40% 40% 
b. Changes in investments in associates are specified as follows: 31.12.2025 31.12.2024 
113 96 
(36) (20)
37 41 
3 (5)
Total 117 113 
28. Intangible assets
Intangible assets are specified as follows:
a. 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 
Customer Software 
31.12.2024 Goodw ill relationships Brands and other Total 
17,783 1,732 264 2,127 21,906 
- - - 476 476 
- - - (4) (4)
- (167) (46) (476) (689)
1 2 0 0 4 
Balance as at 31 December 2024 17,784 1,567 219 2,123 21,693 
17,784 2,098 370 4,022 24,273 
- (531) (151) (1,898) (2,580)
Balance as at 31 December 2024 17,784 1,567 219 2,123 21,693 
Holding company
 Balance at the beginning of the year .............................................................................................................................
 Dividend received ...........................................................................................................................................................
 Share in profit of associates, net of income tax .............................................................................................................
 Currency adjustments ...............................................................
 Accumulated amortisation and impairment losses .................
Digital solutions provider
 Amortisation .............................................................................
 Balance as at 1 January 2025 ....................................................
 Discontinued .............................................................................
 Amortisation .............................................................................
 Discontinued .............................................................................
 Balance as at 1 January 2024 ....................................................
 Currency adjustments ...............................................................
 Gross carrying amount .............................................................
 Skilum ehf. .........................................................
The Group does not consider its associates material, neither individually nor as a group.
 Gláma fjárfestingar slhf. ....................................
 Kvika eignastýring hf. .........................................
 GAMMA Capital Management ehf. ...................
 Moberg d. o. o. ..................................................
 
TM tryggingar hf. ...............................................
 Gross carrying amount .............................................................
 Accumulated amortisation and impairment losses .................
 Additions during the year .........................................................
 Ortus Secured Finance ltd. ................................
Fund management
The sale of TM tryggingar hf. and TM líftryggingar hf. was concluded during the first quarter of 2025. Furthermore, during the same period the Group
acquired the remaining shares in Ortus Secured Finance ltd. Additionally, during the same period, one of the Group's subsidiary was renamed from
Kvika Securities ltd., to Kvika Limited.
 Straumur greiðslumiðlun hf. .............................
 Kvika Limited .....................................................
Lending operations
 Exchange rate difference ................................................................................................................................................
 AC GP 3 ehf. .......................................................
 Additions during the year .........................................................
Payment facilitator
Business consultancy services
 TM líftryggingar hf. ............................................
The main subsidiaries held directly or indirectly by the Group are listed in the table below. 
 Consolidated Financial Statements 31 December 2025  28

===== SIDA 32 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
18
28. Intangible assets (cont.)
b. Impairment testing
Future Discount
31.12.2025 growth rate rate Book value 
3.8% 12.0% 2,944 
3.8% 10.1% 11,827 
3.8% 10.3% 921 
3.0% 10.2% 1,768 
3.8% 10.3% 278 
Total 17,738 
Future Discount
31.12.2024 growth rate rate Book value 
3.5% 11.2% 2,944 
3.9% 11.3% 11,827 
3.5% 11.2% 1,200 
3.5% 9.2% 1,814 
Total 17,784 
29. Operating lease assets
Operating lease assets are specified as follows:
31.12.2025 31.12.2024 
215 530 
285 36 
(86) (261)
(53) (90)
Total 361 215 
494 465 
(132) (250)
Total 361 215 
The cash flow projections for 2025 are derived from the Group's three year business plan which has been approved by the Board of Directors. In
some instances, the Group's subsidiaries have prepared a three year business plan which has been approved by the Board of Directors of those
companies. Management prepares a five year cash flow projection for each CGU, which is derived from the three year business plan and is also
based on management assumptions. The following table shows the key assumptions used in the estimation of the recoverable amount. The
recoverable amounts are calculated by discounting the estimated future cash flow of the CGUs. The time value of money and price of uncertainty are
based on external market information about market risk, interest rates and CGU specific elements like country risk. 
 UK operations .......................................................................................................................................
 Additions .........................................................................................................................................................................
 Disposals .........................................................................................................................................................................
 Depreciation ...................................................................................................................................................................
 Accumulated depreciation .............................................................................................................................................
Assets with indefinite useful life, such as goodwill, are not amortised but are subject to annual impairment testing as described in note 91. Goodwill
is allocated to cash generating units ("CGUs") for the purpose of impairment testing. The allocation is made to those CGUs or groups of CGUs that are
expected to benefit from the business combinations in which the goodwill arose. As described in note 4, at the beginning of the year 2025 the
operations of Treasury were separated from Investment Banking and presented as a distinct segment. In accordance with the relative value
approach, the allocated goodwill was split between the two segments, with 77% (ISK 921 million) assigned to Investment Banking and 23% (ISK 278
million) to Treasury. Goodwill was therefore allocated to five CGUs during 2025 but four CGUs during 2024.
 Investment Banking .............................................................................................................................
The goodwill impairment tests were performed at the end of 2025. Their results show that the recoverable values exceed the carrying values of
goodwill. In addition to the base case testing, additional scenarios were tested where some key inputs had been stressed. In all scenarios tested the
results show that there is sufficient headroom and that there are no triggers indicating that impairment is necessary.
 Commercial Banking ............................................................................................................................
 Asset Management ..............................................................................................................................
 Commercial Banking ............................................................................................................................
 Treasury ................................................................................................................................................
 Asset Management ..............................................................................................................................
 Investment Banking .............................................................................................................................
 UK operations .......................................................................................................................................
 Gross carrying amount ...................................................................................................................................................
 Balance as at 1 January ...................................................................................................................................................
 Consolidated Financial Statements 31 December 2025  29

===== SIDA 33 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
18
30. Deferred tax assets and liabilities
31.12.2025 31.12.2024 
939 2,273 
(257) (466)
Net 682 1,807 
31.12.2025 31.12.2024 
38 41 
(68) (79)
(495) 159 
(114) (246)
1,322 1,931 
Total 682 1,807 
5,474 
2 
909 
1 
14 
8 
14 
187 
Total 6,608 
31. Other assets
Other assets are specified as follows:
31.12.2025 31.12.2024 
4,096 2,861 
3,686 3,207 
569 1,024 
93 - 
731 612 
Total 9,174 7,704 
Right of use asset and lease receivables are specified as follows:
31.12.2025 31.12.2024 
1,024 1,321 
- 13 
- (15)
30 56 
(3) 1 
(201) - 
(282) (352)
Total 569 1,024 
32. Borrowings
Borrowings are specified as follows:
31.12.2025 31.12.2024 
5,228 13,809 
1,579 580 
Total 6,806 14,390 
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 ...........................................................................................................................................................
 Derivatives ......................................................................................................................................................................
Tax losses 2022, expiring in 2032 ................................................................................................................................................................
Tax losses 2023, expiring in 2033 ................................................................................................................................................................
Tax losses 2024, expiring in 2034 ................................................................................................................................................................
Tax losses 2019, expiring in 2029 ................................................................................................................................................................
 Tax losses carried forward ..............................................................................................................................................
 Termination of lease agreements ..................................................................................................................................
Tax losses 2018, expiring in 2028 ................................................................................................................................................................
 Other items .....................................................................................................................................................................
 Accounts receivable ........................................................................................................................................................
Tax losses 2020, expiring in 2030 ................................................................................................................................................................
Tax losses 2021, expiring in 2031 ................................................................................................................................................................
Tax losses 2025, expiring in 2035 ................................................................................................................................................................
At year end 2025, tax losses carried forward amount to ISK 6.6 billion, and are set to expire as follows:
 Right of use asset and lease receivables ........................................................................................................................
 Unsettled transactions ...................................................................................................................................................
Tax losses 
The Group's deferred tax assets (liabilities) are attributable to the following items:
 Property and equipment ................................................................................................................................................
 Intangible assets .............................................................................................................................................................
 Deferred tax assets .........................................................................................................................................................
 Deferred tax liabilities ....................................................................................................................................................
 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
37.
 Impairment .....................................................................................................................................................................
 Currency adjustments .....................................................................................................................................................
 Right of use asset and lease receivables as at 1 January ...............................................................................................
 Additions during the year ...............................................................................................................................................
 Sundry assets ..................................................................................................................................................................
 Investment properties ....................................................................................................................................................
 Consolidated Financial Statements 31 December 2025  30

===== SIDA 34 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
18
33. Issued bonds
Issued bonds are specified as follows:
First Maturity
Currency, nominal value issued Maturity type Terms of interest 31.12.2025 31.12.2024 
Unsecured bonds:
2022 2025 At maturity Floating, 3 month REIBOR + 1.25% - 1,674 
2023 2026 At maturity Floating, 3 month STIBOR + 4.10% 3,115 9,832 
2023 2026 At maturity Floating, 3 month NIBOR + 4.10% 4,193 9,891 
2023 2026 At maturity Floating, 3 month STIBOR + 4.0% 6,845 6,325 
2021 2027 At maturity CPI-indexed, fixed 1.0% 7,172 6,915 
2025 2028 At maturity Floating, 3 month NIBOR + 2.0% 5,039 - 
2025 2028 At maturity Floating, 3 month STIBOR + 2.0% 8,228 - 
2025 2028 At maturity Floating, 3 month REIBOR + 1.14% 5,109 - 
2025 2029 At maturity Fixed 4.50% 30,209 - 
2022 2032 At maturity CPI-indexed, fixed 1.40% 2,579 2,486 
Total 72,490 37,123 
759 - 
Total 73,249 37,123 
34. Subordinated liabilities
a. Subordinated liabilities:
First Maturity
Currency, nominal value issued Maturity type Terms of interest 31.12.2025 31.12.2024 
2023 2034 At maturity CPI-Indexed, fixed 6.25% 2,733 2,634 
2015 2045 At maturity CPI-Indexed, fixed 6.25% 3,109 2,994 
Total 5,841 5,629 
b. Subordinated liabilities are specified as follows:
31.12.2025 31.12.2024 
5,629 5,993 
- (800)
- 500 
(272) (113)
(76) (346)
560 394 
Total 5,841 5,629 
35. Short positions held for trading
Short positions held for trading are specified as follows:
31.12.2025 31.12.2024 
108 128 
253 25 
72 - 
Total 433 153 
 EMTN 28 0421, NOK 400 million .....
 TM 15 1, ISK 2,000 million ...............
 KVIKA 32 0112, ISK 2,000 million .....
 KVIKA 28 0703, ISK 5,000 million .....
 EMTN 26 0511, SEK 566 million * ....
 EMTN 26 0511, NOK 750 million * ...
 Additions ...........................................................................................................................................................................
 Listed shares ......................................................................................................................................................................
 KVIKA 25 1201 GB ISK 1,660 million 
 EMTN 28 0421, SEK 600 million .......
 Unlisted senior unsecured bonds, total ............................................................................................................................
 KVIKA 34 1211 T2i, ISK 2,500 m. ......
* Bond issued in two tranches, first tranche SEK 275 million was issued in May 2023 at a spread of STIBOR + 410 bps, the second tranche amounting to
SEK 500 million was issued in May 2024 at a price corresponding to a spread of STIBOR + 240 bps. In January 2025, concurrent with an offering of new
bonds in SEK/NOK, Kvika offered to buy back bonds issued by the Bank in SEK with a maturity date 11 May 2026  and in NOK with a maturity date of 11
May 2026. The Bank received valid tenders of SEK 209 m illion and NOK 50 million which were all accepted. The Bank further tendered the Bonds in
October 2025, accepting offers for a total aggregate nominal amount of SEK 339 m illion and NOK 417 million. Following both tenders, the remaining
outstanding nominal amount of SEK Notes and NOK Notes are SEK 227 million and NOK 333 million respectively.
 Listed bonds ......................................................................................................................................................................
 Paid interests due to indexation .......................................................................................................................................
 Accrued interests and indexation .....................................................................................................................................
Listed government bonds and bonds with government guarantees ............................................................................... 
 Balance at the beginning of the year ................................................................................................................................
S
ubordinated liabilities are financial liabilities in the form of subordinated capital which, in case of the Group's voluntary or compulsory windin g-up,
will not be repaid until after the claims of ordinary creditors have been met. In the calculation of the capital ratio, they are included within Tier 2 an d
are a part of the equity base. The amount eligible for Tier 2 capital treatment is amortised on a straight-line basis over the final 5 years to maturity or
up to 20% a year. The Group may only retire subordinated liabilities with the permission of the FME.
At the interest payment date in May 2025 for TM 15 01, the a nnual interest rate increased from 5.25% p.a. to 6.25% p.a. Furthermore, as of that
interest payment date, the Group had the right to repay the TM 15 01 subordinated bond and on any subsequent 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.
 EMTN 26 1123 GB, SEK 500 million .
 Redemption of KVB 18 02 .................................................................................................................................................
 Paid interest ......................................................................................................................................................................
 KVB 21 02, ISK 5,400 million ............
 EMTN 29 0602, EUR 200 million ......
 Consolidated Financial Statements 31 December 2025  31

===== SIDA 35 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
18
36. Short positions used for hedging
Short positions used for hedging are specified as follows:
31.12.2025 31.12.2024 
432 - 
- 42 
Total 432 42 
37. Other liabilities
Other liabilities are specified as follows:
31.12.2025 31.12.2024 
5,268 7,531 
3,252 1,565 
1,688 1,259 
1,055 1,111 
802 1,158 
641 320 
433 377 
16 18 
444 296 
Total 13,599 13,635 
Lease liability is specified as follows:
31.12.2025 31.12.2024 
1,158 1,510 
- 13 
- (15)
(5) 2 
(382) (408)
30 56 
Total 802 1,158 
38. Share capital
a. Share capital
31.12.2025 31.12.2024 
4,631 4,722 
214 62 
240 310 
b. Changes made to the nominal amount of share capital
c. Share capital increase authorisations
 Contingent consideration ...............................................................................................................................................
 Special taxes on financial institutions and financial activities .......................................................................................
 Listed government bonds and bonds with government guarantees .............................................................................
 Lease liability as at 1 January .........................................................................................................................................
 Other liabilities ...............................................................................................................................................................
A copy of the Bank's Articles of Association, including the temporary prov isions, is available on the Bank's website, www.kvika.is, reference is mad e
to them for more information.
 Additions during the year ...............................................................................................................................................
 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 31.
During the year 2025 the Bank's share capital was decreased by ISK 91 m illion in nominal value following a resolution by the AGM to cancel treasury
shares. Furthermore, during the year 2025 the Bank acquired treasury shares amounting to ISK 243 million in nominal value as a result of a share buy
-
back plan.
 Accounts payable and accrued expenses .......................................................................................................................
 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 ...........................................................................................................................................................
 Listed bonds ....................................................................................................................................................................
According to the Bank's Articles of Association dated 26 March 2025, 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.
 Termination of lease agreements ..................................................................................................................................
 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 one 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 .....................................................................................................................................................
 Consolidated Financial Statements 31 December 2025  32

===== SIDA 36 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
18
39. Capital adequacy ratio (CAR)
Own funds 31.12.2025 31.12.2024
68,935 89,517 
(3,323) (2,050)
(20,925) (28,828)
(217) (23,500)
(939) (2,273)
1,156 5,801 
Common equity Tier 1 capital (CET 1) 44,687 38,667 
5,416 5,601 
Total own funds 50,103 44,268 
Risk-weighted exposure amount (RWEA) 
157,968 158,178 
8,296 7,586 
20,503 28,080 
Total risk-weighted exposure amount 186,767 193,844 
Capital ratios
23.9% 19.9% 
23.9% 19.9% 
26.8% 22.8% 
Capital buffer requirement, % of RWEA
1.6% 1.5% 
2.4% 2.4% 
2.5% 2.5% 
Combined buffer requirement 6.4% 6.4% 
Capital requirement, % of RWEA 31.12.2025 
CET1 Tier 1 Total
4.5% 6.0% 8.0% 
2.0% 2.6% 3.5% 
Minimum requirement under Pillar I and Pillar II-R 6.5% 8.6% 11.5% 
6.4% 6.4% 6.4% 
Total capital requirement 12.9% 15.0% 17.9%
 Capital conservation buffer (CCB) ..................................................................................................................................
 Operational risk ..............................................................................................................................................................
 Total equity .....................................................................................................................................................................
 Market risk ......................................................................................................................................................................
 Tier 2 capital ...................................................................................................................................................................
 Amounts below the threshold for deduction * ..............................................................................................................
 Deferred tax asset * ........................................................................................................................................................
 Capital adequacy ratio (CAR) ..........................................................................................................................................
 Pillar II-R capital requirement ..............................................................................................................
 Combined buffer requirement ............................................................................................................
 T1 ratio ............................................................................................................................................................................
 Systemic risk buffer (SRB) ...............................................................................................................................................
 Countercyclical capital buffer (CCyB) .............................................................................................................................
 Goodwill and intangibles ................................................................................................................................................
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 ........................................................................................................................................................................
 Credit risk ........................................................................................................................................................................
The Group has updated its disclosure of the capital adequacy ratio and the key components in order to provide more information. As a part of this
some comparative figures for 31 December 2024 have been restated, although the total figure for common equity Tier 1 capital (CET 1) remains the
same. Those line items are marked with an asterisk (*). 
 Pillar I capital requirement ..................................................................................................................
 Consolidated Financial Statements 31 December 2025  33

===== SIDA 37 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
18
40. Leverage ratio
31.12.2025 31.12.2024
315,613 253,117 
3,331 2,533 
1,093 800 
Total exposure measure 320,037 256,450 
44,687 38,667 
14.0% 15.1%
41. Minimum requirements for own funds  and eligible liabilities (MREL)
Own funds and eligible liabilities 31.12.2025 31.12.2024
44,687 38,667 
5,416 5,601 
59,096 35,449 
Total own funds and eligible liabilities 109,199 79,718 
MREL-RWEA and CBR 
186,767 193,844 
58.5% 41.1%
21.9% 22.0%
6.4% 6.4%
MREL-RWEA requirement including CBR* 28.3% 28.4%
MREL-TE
M
320,037 256,450 
34.1% 31.1%
6.0% 6.0%
 Own funds and eligible liabilities as % of TEM ...............................................................................................................
 Common equity Tier 1 capital (CET 1) ............................................................................................................................
 Tier 2 capital ...................................................................................................................................................................
 Minimum requirements for own funds (MREL)* ...........................................................................................................
 Combined buffer requirement (CBR) .............................................................................................................................
 Own funds and eligible liabilities as % of RWEA ............................................................................................................
 Eligible liabilities .............................................................................................................................................................
 Risk-weighted exposure amount (RWEA) ......................................................................................................................
*Requirements were first set in January 2025 
 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%. 
 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 31 December are 21.9% of MREL-RWEA and 6% of
MREL-TEM. 
 Leverage ratio .................................................................................................................................................................
 Tier 1 capital ...................................................................................................................................................................
 Total exposure measure .................................................................................................................................................
 Consolidated Financial Statements 31 December 2025  34

===== SIDA 38 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
41
Risk management
42. Risk management framework
a. Board of Directors
b. Board of Directors sub-committees
c. CEO and the Executive Committee
The Executive Committee manages and supervises, as decided by the CEO, the day-to-day operations of the Bank in accordance with the policy
formulated by the Bank's Board of Directors in collaboration with the CEO. The managing directors of subsidiaries and the managing
directors/directors of individual units of the Bank are each responsible to their CEO/managing director and the boards of each company for risk-
taking and risk management in the daily operations of their units.
Furthermore, the CEO has established five committees within the Bank which are responsible to the CEO for, among other things, risk
management of different risk factors and that the implementation of risk management is in accordance with the Board of Directors’ risk appetite.
These committees are composed of the Bank’s employees.
The Board of Directors is responsible for the governance of the Bank's Group, including determining the risk management framework. In this
regard, the Board of Directors has, among other things, set a Group Governance Policy and approved a Group Risk Policy, which describes the
framework that the Board of Directors has set for risk management and the Group's risk appetite. The Board of Directors is responsible for the
framework for identifying, assessing, monitoring, managing and disclosing the Group's identified risk factors. The Board of Directors is also
responsible for ensuring that the policy is implemented and instructs the CEO to implement and elaborate on its implementation in more detail.
The Board of Directors defines the risk appetite, including in the form of the Group's key risk indicators, and defines risk tolerance and risk
capacity. The Board of Directors also sets policies for the Bank's main risk factors. In order to ensure consistent and good governance on a
consolidated basis, the Board of Directors has also set out ownership po licies for those subsidiaries that are considered an important part of the
Group's operations. According to the ownership policies, the boards of the relevant subsidiaries shall always provide the Bank with all necessary
information to enable it to perform its supervisory role and the services provided by the Bank to the companies. As it is necessary to coordinate
risk management on a consolidated basis, the relevant companies shall provide the Bank’s risk management with all necessary information to
enable the Bank to fulfil its obligations as a parent company in a group. The Bank’s Chief Risk Officer and the Compliance Officer may request a
direct audience of the boards of the relevant subsidiaries. The risk policy and the entire risk management framework are reviewed regularly with
a view to adapting the framework to changes in market conditions and the Group’s operations. The Group, through training and management
standards and procedures, continuously aims to develop a disciplined and constructive control environment in which all employees understand
their roles and obligations. 
The Bank's Board of Directors has established three sub-committees, the Risk Committee, the Audit Committee and the Remuneration
Committee. In accordance with the Bank´s articles of association, members of the committees are appointed in accordance with applicable law,
and each committee currently has three members. It is not permitted to appoint employees of the Bank to any committee. Members shall have
the necessary experience and knowledge for each committee´s tasks according to applicable laws and rules. Each committee has incorporated
procedural rules which have been confirmed by the Board of Directors.
The Remuneration Committee has an advisory and supervisory role for the Bank´s Board of Directors in relation to remuneration and shall advise
the Board on the Company's remuneration policy and independently assess the policy and its implementation. This includes, among other things,
ensuring that bonuses support sound risk management and do not encourage excessive risk-taking. The Committee also makes proposals for the
remuneration of the Executive Committee and the Internal Auditor and oversees the remuneration of the Chief Risk Officer and the Compliance
Officer.
The CEO is responsible for the effective implementation of risk management through the corporate governance structure and committees. The
CEO appoints Managing Directors which, together with the CEO, form the Bank’s Executive Committee. Each Managing Director heads individual
divisions within the Bank at any given time. The Bank’s Executive Committee together with the CEO of Kvika eignastýring hf. form the Group
Executive Committee.  
The Risk Committee has an advisory and supervisory role for the Bank´s Board of Directors, including in formulating the Group's risk policy and
risk appetite, and acts on behalf of the Bank's Board of Directors in supervising the implementation of the Group's Risk Policy. The Committee
supervises the management of the Group's risk factors and the arrangement and effectiveness of risk management. The Committee shall discuss
the Bank's risk culture and risk appetite.
The Audit Committee has an advisory and supervisory role for the Bank's Board of Directors, including in ensuring the quality of the Bank's annual
accounts and other financial information and the independence of the Bank's auditor. The Committee oversees the work process for preparing
financial statements, the effectiveness of internal controls, and internal and external audits.
 Consolidated Financial Statements 31 December 2025  35

===== SIDA 39 =====

Kvika banki hf.  Amounts are in ISK millions
Notes to the Consolidated Financial Statements
42
Risk management
42. Risk management framework (cont.)
d. Committees
e. Risk management
f.
g.
43. Hedging
The Sustainability Committee, as a professional committee on sustainability and sustainability risk, is responsible for the implementation and
execution of the part of the Group's risk policy that relates to sustainability risk. The Sustainability Committee informs the Group Risk Committee
on the status of sustainability risk on a regular basis.
The Risk Management department is an independent unit reporting to the CEO. It simultaneously fulfils the risk management functions of both
the Bank and the entire Group. It monitors the identified risk factors across the Group and develops methods for systematically identifying,
assessing, monitoring, and managing them. Risk Management supports other units in identifying and managing risks, ensuring compliance with
internal and external regulations. The Risk Management department prepares reports for relevant professional committees and supervisory
bodies, including compliance with the defined risk appetite. It provides direct information to the Group's Board and participates in shaping the
Group Risk Policy.
The Bank operates five committees that deal with the Bank’s risk management: the Group Risk Committee, the Asset and Liability Committee
(ALCO), the Credit Committee, the Operations Committee and the Sustainability Committee.  
The Group Risk Committee oversees the implementation of and compliance with the Group’s risk policy and risk management framework. The
Committee has a comprehensive overview of the main risks faced by the Group and monitors that risk-taking is in accordance with the Board of
Directors’ risk appetite. The Committee reviews the rules of procedure of other committees and ensures that procedures are coordinated
between different committees and companies.
ALCO, as a professional committee for the management of the balance sheet as well as capital-, liquidity-, funding- and market risks, is
responsible for the implementation and execution of the part of the Group's risk policy that relates to capital-, liquidity-, funding- and market
risks. ALCO informs the Group's Risk Committee on the status of these risk factors on a regular basis.
The Credit Committee, as a professional committee for the Bank's lending and credit risk, is responsible for the implementation and execution of
that part of the Group's risk policy that relates to credit risk. The Credit Committee informs the Group's Risk Committee on the status of credit risk
on a regular basis. 
The Operations Committee, as a professional committee for operations and operational risk, is responsible for the implementation and execution
of the part of the Group's risk policy that relates to operational risk. The Operations Committee informs the Group's Risk Committee on the status
of operational risk on a regular basis.
Internal Audit
The compliance function is an independent function that operates under the CEO, and the appointment of the Compliance Officer and his deputy
is confirmed by the Board. The compliance function monitors the Bank's compliance risk on a permanent basis and that the measures, policies
and procedures that have been put in place so that the Bank complies with its obligations are adequate and effective. The Compliance Officer is
also responsible for coordinating and monitoring the Bank's compliance with applicable anti-money laundering and terrorist financing laws and
regulations. The Compliance officer, further, manages provisions of applicable market abuse laws and regulations, regarding the handling of
inside information and PDMR transactions, and oversees the complaints managements process. Compliance is operated on a consolidated basis
and the employees responsible for compliance in the Bank’s subsidiaries report to and receive support from the Compliance Officer and the
parent entity’s compliance function. 
Compliance Officer
The internal audit (IA) activity of Kvika bank hf. operates according to Article 16 on the Act on financial companies no. 161/2002 and guiding
recommendations of the Financial Supervisory Authority of the Central Bank of Iceland regarding the work of the audit activity of financial
companies no. 3/2008. The IA department operates in accordance with the International Professional Practices Framework (IPPF framework). The
position of IA in the organizational chart demonstrates the independence of the department. In accordance with the Internal Auditor's charter,
the internal auditor has direct and unrestricted access to the Board and managers of the Bank and its subsidiaries. Kvika´s Internal Audit
Department provides independent and objective assurance and advisory services regarding the operations of the Bank on a consolidated basis,
with the aim of enhancing its overall value. The department’s activities assess and improve the effectiveness of risk management, control
processes, and governance practices through systematic and disciplined work, thereby contributing to the Group’s achievement of its key
objectives. The Internal Auditor is responsible for effectively managing the IA activity in accordance with the IA´s charter and the IPPF framework.
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. 
 Consolidated Financial Statements 31 December 2025  36

===== SIDA 40 =====