Kvartalsrapport Q1 2024

Kvika banki hf.  Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
46
50. Interest  rate risk associated with non‐trading portfolios
a. Breakdown
31.3.2024 
Financial assets Up  to 1  1‐3  3‐12  1‐5  Over 5 
month  months  months  years  years  Total 
34,256,255  34,256,255 
23,228,266  4,978,909  1,870,358  20,569,987  3,316,158  53,963,678 
131,108,913  3,187,403  5,273,196  6,024,480  304,198  145,898,190 
Financial assets excluding derivatives 188,593,434   8,166,312  7,143,554  26,594,467  3,620,355  234,118,123 
21,831,699  41,218,828  5,619,837  943,977  820,422  70,434,763 
Total 210,425,134  49,385,140  12,763,392  27,538,444  4,440,777  304,552,886 
Financial liabilities Up  to 1  1‐3  3‐12  1‐5  Over 5 
month  months  months  years  years  Total 
116,885,847  7,786,333  8,296,135  3,979,822  195,001  137,143,138 
31,695,031  1,831,289  4,031,742  37,558,062 
89,937  29,591,583  33,377  6,785,398  2,251,960  38,752,257 
156,283  195,283  2,133,940  3,690,715  6,176,221 
Financial liabilities excluding derivatives 148,670,815   39,365,488  12,556,537  12,899,161  6,137,677  219,629,678 
22,970,671  34,437,211  1,357,656  58,765,538 
Total 171,641,487  73,802,699  13,914,193  12,899,161  6,137,677  278,395,216 
Total interest repricing gap 38,783,647  (24,417,559) (1,150,802) 14,639,282   (1,696,900) 26,157,670  
31.12.2023
Financial assets Up  to 1  1‐3  3‐12  1‐5  Over 5 
month  months  months  years  years  Total 
23,681,453  23,681,453 
13,234,607  2,813,780  22,531,739  18,795,625  3,172,359  60,548,110 
118,422,687  5,472,017  5,631,528  6,488,964  308,287  136,323,481 
Financial assets excluding derivatives 155,338,747   8,285,797  28,163,267  25,284,589  3,480,645  220,553,045 
24,309,020  33,360,561  13,512,749  945,276  803,219  72,930,826 
Total 179,647,767  41,646,358  41,676,016  26,229,865  4,283,865  293,483,870 
Financial liabilities Up  to 1  1‐3  3‐12  1‐5  Over 5 
month  months  months  years  years  Total 
116,363,448  8,209,284  5,187,702  3,827,784  184,724  133,772,941 
24,813,614  82,084  43,157  3,108  24,941,963 
7,093,090  29,547,945  184,841  6,664,263  2,225,289  45,715,427 
341,008  2,071,885  3,580,191  5,993,084 
Financial liabilities excluding derivatives 148,270,151   37,839,312  5,756,708  12,567,040  5,990,203  210,423,415 
26,099,269  21,434,697  11,957,255  59,491,221 
Total 174,369,421  59,274,009  17,713,963  12,567,040  5,990,203  269,914,636 
Total interest repricing gap 5,278,346  (17,627,651) 23,962,053   13,662,825  (1,706,339) 23,569,235  
b. Sensitivity  analysis
Shift in  31.3.2024  31.12.2023 
Currency basis  points  Downward  Upward  Downward  Upward 
50  (244,091) 227,791   (245,435) 228,724  
100  293,234  (284,343) 396,558   (385,418)
20  1,639  (1,631) 1,223   (1,215)
Total 50,782  (58,183) 152,346   (157,909)
 Issued bonds .....................................................................
 Effect of derivatives ..........................................................
 Borrowings .......................................................................
 Subordinated liabilities ....................................................
 Fixed income securities ....................................................
 Loans to customers ..........................................................
 Issued bonds .....................................................................
 Borrowings .......................................................................
 Cash and balances with Central Bank ..............................
 Fixed income securities ....................................................
ISK, non‐indexed ......................................................................................
Other currencies .......................................................................................
The Group performs monthly sensitivity analysis on financial assets and liabilities in non ‐trading portfolios subject to interest rate risk. The
sensitivity analysis assumes a shift in the yield curves for all currencies. A parallel shift in yield curves would have the following impact on the
Group's pre‐tax profit and equity, assuming all other risk factors remain constant:
ISK, indexed ..............................................................................................
The breakdown of financial assets and liabilities in non ‐trading portfolios by the earlier of interest repricing time or maturity is specified as
follows:
 Cash and balances with Central Bank ..............................
 Deposits  ...........................................................................
 Effect of derivatives ..........................................................
 Subordinated liabilities ....................................................
 Effect of derivatives ..........................................................
 
Loans to customers ..........................................................
 Effect of derivatives ..........................................................
 Deposits  ...........................................................................
 Condensed Interim Consolidated Financial Statements 31 March 2024 ‐ Unaudited  38

===== SIDA 42 =====

Kvika banki hf.  Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
46
51. Exposure  towards changes in the CPI
a. Definition
b. Management
c. Balance  of CPI linked assets and liabilities
31.3.2024  31.12.2023 
36,435,197  34,860,451 
(23,699,267) (23,177,052)
Total 12,735,930  11,683,398 
d. Sensitivity  to changes in CPI
31.3.2024  31.12.2023 
‐1% 1% ‐1% 1%
(59,482) 59,482   (58,667) 58,667  
(22,179) 22,179   (21,561) 21,561  
(250,211) 250,211   (236,126) 236,126  
(32,479) 32,479   (32,251) 32,251  
1,903  (1,903) 683   (683)
82,367  (82,367) 81,464   (81,464)
91,072  (91,072) 89,710   (89,710)
61,651  (61,651) 59,913   (59,913)
(127,359) 127,359   (116,834) 116,834  
The effect on equity would be the same.
52. Currency  risk
a. Definition
b. Management
c. Hedge  accounting
d. Exchange  rates
The following exchange rates have been used by the Group in the preparation of these financial statements:
Closing  Average  Closing  Average 
31.3.2024  3m 2024  31.12.2023  3m 2023
149.9  149.0  150.5  152.4 
138.6  137.3  136.2  142.0 
174.8  174.1  173.2  172.5 
 Issued bonds ..................................................................................................................
 Liabilities .......................................................................................................................................................................
 Assets ............................................................................................................................................................................
Currency risk arises when financial instruments are not denominated in the functional currency of the respective Group entity and can affect both
the Group's income statement and statement of financial position. A part of the Group's financial assets and liabilities is denominated in foreign
currencies. 
Currency positions are monitored by risk management and reported to the ALCO committee. Any mismatch between assets and liabilities in each
currency is monitored closely and managed within limits.  
The Group is subject to limits set by the Central Bank of Iceland regarding the maximum open currency position. At 31 March 2024 and 31
December 2023 the Group's position in foreign currencies was within those limits.
 EUR/ISK ...........................................................................................................................
 USD/ISK ..........................................................................................................................
 GBP/ISK ...........................................................................................................................
The Group applies hedge accounting according to IAS 39 against translation of foreign operations. Currency swap agreements are used as a hedge
instrument against translation difference arising from foreign operations. 
 Short positions ...............................................................................................................
 Deposits ..........................................................................................................................
 Subordinated liabilities
 ..................................................................................................
Given the net balance of CPI linked assets and liabilities, a 1% change in the CPI would, with other things constant, result in the following changes
to the Group's pre‐tax profit.
 Government bonds ........................................................................................................
 Other fixed income securities ........................................................................................
 Loans to customers ........................................................................................................
 Derivatives ......................................................................................................................
Exposure towards changes in CPI is the risk that fluctuations in the Icelandic Consumer Price Index (CPI) will affect the balance and cash flow of
indexed financial instruments.
The Group is exposed to inflation indexation of assets and liabilities den ominated in ISK. All indexed assets and liabilities are valued according to
the CPI measure at any given time and changes in CPI are recognised in the income statement.
The Group controls its indexation risk through derivatives contracts and sales and purchases of indexed bonds, mostly government bonds, and
thus keeps its exposure to the CPI within the limits set by the ALCO committee.
 Condensed Interim Consolidated Financial Statements 31 March 2024 ‐ Unaudited  39

===== SIDA 43 =====

Kvika banki hf.  Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
52
52. Currency  risk (cont.)
e. Breakdown  of financial assets and financial liabilities denominated in foreign currencies
31.3.2024 
Financial assets Other 
EUR  USD  GBP  NOK  currencies  Total 
1,765,610  1,978,549  2,266,885  112,429  2,127,325  8,250,798 
0  3,595,102  3,595,102 
121,927  112,701  1,810,283  10,643  4,278  2,059,832 
194,911  1,865,194  1,596  2,933  32,503  2,097,136 
2,767,467  501,972  35,647,835  42,911  38,960,184 
2,535,229  2,535,229 
1,095,189  885,678  832,930  22,109  2,835,905 
Financial assets excluding derivatives 5,945,104   8,939,195  43,094,757  126,005  2,229,126  60,334,187 
15,201,897  3,509,216  825,043  10,452,322  8,516,690  38,505,169 
Total 21,147,001  12,448,411  43,919,801  10,578,327  10,745,816  98,839,355 
Financial liabilities Other 
EUR  USD  GBP  NOK  currencies  Total 
2,579,497  5,480,814  739,402  77,081  441,800  9,318,594 
123,187  1,205,224  14,979,042  16,307,453 
2,008,219  10,385,377  10,189,997  22,583,593 
722,295  884,828  825,573  18,467  2,451,162 
Financial liabilities excluding derivatives 3,424,979   7,570,866  18,552,236  10,462,459  10,650,263  50,660,803 
17,719,325  4,733,076  25,168,376  53,840  18,334  47,692,951 
Total 21,144,304  12,303,942  43,720,612  10,516,299  10,668,597  98,353,753 
Net currency position  Other 
EUR  USD  GBP  NOK  currencies  Total 
21,147,001  12,448,411  43,919,801  10,578,327  10,745,816  98,839,355 
(21,144,304) (12,303,942) (43,720,612) (10,516,299) (10,668,597) (98,353,753)
74,950  74,950 
Total 77,647  144,469  199,189  62,028  77,219  560,552 
31.12.2023 
Financial assets Other 
EUR  USD  GBP  SEK currencies   Total 
2,922,506  657,800  2,109,634  79,125  255,219  6,024,284 
1,503,990  13,834,864  15,338,855 
88,400  242,497  1,539,466  12,880  1,883,243 
657,191  1,167,816  1,413  1,656,645  2,703  3,485,768 
2,280,065  478,715  28,876,368  47,414  31,682,562 
2,540,412  2,540,412 
849,032  1,236,043  718,974  163  2,804,212 
Financial assets excluding derivatives 8,301,183   17,617,736  35,786,267  1,748,651  305,498  63,759,336 
11,811,725  1,328,055  4,467,242  15,253,051  10,870,463  43,730,536 
Total 20,112,909  18,945,791  40,253,509  17,001,701  11,175,962  107,489,872 
Financial liabilities Other 
EUR  USD  GBP  SEK currencies   Total 
2,286,689  7,057,779  756,682  28,189  281,357  10,410,697 
122,840  830,698  14,816,743  15,770,282 
1,292,489  1,990,376  15,220,348  10,837,164  29,340,377 
527,123  669,394  803,960  5  4,616  2,005,098 
Financial liabilities excluding derivatives 4,229,142   8,557,872  18,367,762  15,248,542  11,123,136  57,526,454 
15,861,328  10,352,601  22,199,121  1,692,775  105,127  50,210,951 
Total 20,090,469  18,910,472  40,566,883  16,941,318  11,228,263  107,737,405 
Net currency position  Other 
EUR  USD  GBP  SEK currencies   Total 
20,112,909  18,945,791  40,253,509  17,001,701  11,175,962  107,489,872 
(20,090,469) (18,910,472) (40,566,883) (16,941,318) (11,228,263) (107,737,405)
75,250  75,250 
Total 97,689  35,319  (313,374) 60,384   (52,302) (172,283)
 Derivatives .............................................................................
 Fixed income securities .........................................................
 Shares and other variable income securities ........................
 Loans to customers ................................................................
 Financial liabilities ..................................................................
 Financial guarantee contracts ...............................................
 Financial assets ......................................................................
 Financial assets ......................................................................
 Financial guarantee contracts ...............................................
 Other liabilities .......................................................................
 Issued bonds ..........................................................................
 Other liabilities .......................................................................
 Securities used for hedging ...................................................
 Borrowings .............................................................................
 Financial liabilities ..................................................................
 Issued bonds ..........................................................................
 Derivatives .............................................................................
 Cash and balances with Central Bank ....................................
 Shares and other variable income securities ........................
 Securities used for hedging ...................................................
 Loans to customers ................................................................
 Cash and balances with Central Bank ....................................
 Other assets ...........................................................................
 Derivatives .............................................................................
 Deposits  ................................................................................
 Deposits  ................................................................................
 Fixed income securities .........................................................
 Other assets ...........................................................................
 Derivatives .............................................................................
 Intangible assets ....................................................................
 Intangible assets ....................................................................
 Borrowings .............................................................................
 Condensed Interim Consolidated Financial Statements 31 March 2024 ‐ Unaudited  40

===== SIDA 44 =====

Kvika banki hf.  Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
52
52. Currency  risk (cont.)
f. Sensitivity  to currency risk
31.3.2024  31.12.2023 
Assets and liabilities denominated in foreign currencies ‐ 10%  +10% ‐ 10%  +10% 
7,765  (7,765) 9,769   (9,769)
14,447  (14,447) 3,532   (3,532)
19,919  (19,919) (31,337) 31,337  
6,203  (6,203) (2,537) 2,537  
6,203  (6,203) 6,038   (6,038)
1,519  (1,519) (2,693) 2,693  
Total 56,055  (56,055) (17,228) 17,228  
53. Equity  risk
a. Definition
b. Sensitivity  analysis of equity risk
31.12.2023 
‐10%  +10% ‐ 10%  +10% 
(75,331) 75,331   (51,270) 51,270  
(202,568) 202,568   (202,767) 202,767  
(153,510) 153,510   (131,710) 131,710  
Total (431,408) 431,408   (385,748) 385,748  
54. Operational  risk
a. Definition
b. Management
 SEK .......................................................................................................................................
 GBP ......................................................................................................................................
The analysis below calculates the effect of possible movements in equity prices that affect the Consolidated Financial Statements. A negative
amount in the table reflects a potential net reduction in the Consolidated Income Statement or equity, while a positive amount reflects a
potential net increase. Investments in associates are excluded.
31.3.2024 
 Listed shares ........................................................................................................................
 Unlisted shares ....................................................................................................................
 Unlisted unit shares in funds ...............................................................................................
 NOK ......................................................................................................................................
Given the net currency position, a 10% change in the value of the ISK would, with other things constant, result in the following changes to the
Group's Consolidated Income Statement or equity.
The individual business units within the Group are primarily responsible for managing their respective operational risk. The risk management unit
is furthermore responsible for identifying, monitoring and reporting the Group's operational risk. Operational risk can be reduced through staff
training, process re ‐design and enhancement of the control environment. The risk management unit monitors operational risk by tracking loss
events, quality deficiencies, potential risk indicators and other early ‐warning signals. The unit takes an active role in internal control and quality
management.
Operational risk is the risk of direct or indirect loss from inadequate or failed internal processes or systems, from human error or external events
that affect the Group's
 reputation and operational earnings.
 EUR ......................................................................................................................................
 USD ......................................................................................................................................
 Other currencies ..................................................................................................................
Equity risk is the risk that the fair value of equites decreases as the result of changes in the value of shares and other variable income securities in
the Group’s portfolio. 
 Condensed Interim Consolidated Financial Statements 31 March 2024 ‐ Unaudited  41

===== SIDA 45 =====

Kvika banki hf.  Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
54
Financial assets and financial liabilities
55. Accounting  classification of financial assets and financial liabilities
Manda‐ 
31.3.2024         Fair value  torily at  Total 
Financial assets Amortised   through  fair value  carrying 
cost  OCI  through P/L  amount 
34,256,255  34,256,255 
52,882,488  4,073,767  56,956,255 
4,314,083  4,314,083 
12,706,506  12,706,506 
145,170,120  728,070  145,898,190 
3,065,234  3,065,234 
15,309,237  15,309,237 
Total 194,735,612  52,882,488  24,887,659  272,505,760 
Manda‐ 
      Fair value  torily at  Total 
Financial liabilities Amortised   through  fair value  carrying 
cost  OCI  through P/L  amount 
137,143,138  137,143,138 
37,558,062  37,558,062 
38,752,257  38,752,257 
6,176,221  6,176,221 
653,560  653,560 
113,800  113,800 
2,282,826  2,282,826 
56,746  56,746 
17,582,865  328,804  17,911,669 
Total 237,212,543  56,746  3,378,990  240,648,279 
Manda‐ 
31.12.2023           Fair value  torily at  Total 
Financial assets Amortised   through  fair value  carrying 
cost  OCI  through P/L  amount 
23,681,453  23,681,453 
61,293,556  3,683,849  64,977,406 
3,857,480  3,857,480 
16,852,313  16,852,313 
135,641,049  682,433  136,323,481 
2,497,877  2,497,877 
10,401,128  10,401,128 
Total 169,723,630  61,293,556  27,573,952  258,591,138 
Manda‐ 
      Fair value  torily at  Total 
Financial liabilities Amortised   through  fair value  carrying 
cost  OCI  through P/L  amount 
133,772,941  133,772,941 
23,817,062  23,817,062 
45,715,427  45,715,427 
5,993,084  5,993,084 
131,745  131,745 
4,230  4,230 
2,044,723  2,044,723 
152,182  152,182 
16,189,231  404,762  16,593,993 
Total 225,487,745  152,182  2,585,460  228,225,386 
 Derivatives ....................................................................................................................
 Other liabilities ..............................................................................................................
 Derivatives used for hedge accounting ........................................................................
The accounting classification of financial assets and financial liabilities is specified as follows:
 Fixed income securities .................................................................................................
 Shares and other variable income securities ................................................................
 Securities used for hedging ...........................................................................................
 Loans to customers .......................................................................................................
 Derivatives ....................................................................................................................
 Other assets ..................................................................................................................
 Cash and balances with Central Bank ...........................................................................
 Fixed income securities .................................................................................................
 Shares and other variable income securities ................................................................
 Securities used for hedging ...........................................................................................
 Loans to customers .......................................................................................................
 Derivatives ....................................................................................................................
 Other assets ..................................................................................................................
 Deposits  ........................................................................................................................
 Borrowings ....................................................................................................................
 Issued bonds .................................................................................................................
 Subordinated liabilities .................................................................................................
 Short positions used for hedging ..................................................................................
 Short positions used for hedging ..................................................................................
 Short positions held for trading ....................................................................................
 Derivatives ....................................................................................................................
 Other liabilities ..............................................................................................................
 Cash and balances with Central Bank ...........................................................................
 Deposits  ........................................................................................................................
 Borrowings ....................................................................................................................
 Issued bonds .................................................................................................................
 Subordinated liabilities .................................................................................................
 Short positions held for trading ....................................................................................
 Derivatives used for hedge accounting ........................................................................
 Condensed Interim Consolidated Financial Statements 31 March 2024 ‐ Unaudited  42

===== SIDA 46 =====

Kvika banki hf.  Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
54
56. Financial  assets and financial liabilities measured at fair value
a.
‐
‐
‐
b.
c.
Inputs are quoted market prices (unadjusted) in active markets for identical instruments.
Level 1
Level 2
Inputs are not observable or unobservable inputs have a significant effect on the valuation. This category includes instruments that are
valued based on quoted prices for similar instruments for which significant unobservable adjustments are required to reflect the differences
between the instruments.
Inputs are not quoted market prices but are observable either directly, i.e. as prices, or indirectly, i.e. derived from prices. This category
includes financial instruments valued using quoted prices in active markets for similar instruments, quoted prices for similar or identical
instruments in markets that are considered less than active and other instruments which are valued using techniques which rely primarily
on inputs that are directly or indirectly observable from market data.
Level 3
The fair value of financial assets and liabilities that are traded in active markets are based on quoted market prices. For other financial
instruments the Group determines fair value using various valuation techniques. IFRS 13 specifies a fair value hierarchy based on whether the
inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources
whereas unobservable inputs reflect the Group's market assumptions. These
 two types of inputs result in the following fair value hierarchy:
The Group uses widely recognised valuation techniques, including net present value and discounted cash flow models, comparison with similar
instruments for which market observable prices exist, Black‐Scholes and other valuation models. 
Fair value hierarchy
Valuation process
The Bank's Credit committee is responsible for fair value measurements of financial assets and financial liabilities classified as level 2 or level 3
instruments. The valuation is carried out by personnel from respective departments under supervision from Risk. The valuations are revised at
least quarterly, or when there are indications of significant changes in the underlying inputs.
Valuation techniques
For more complex instruments, the Group uses proprietary models, whic h usually are developed from recogn ised valuation models. Some or all
of the inputs into these models may not be market observable and are derived from market prices or rates or are estimated based on
assumptions. When entering into a transaction, the financial instrument is recognised initially at the transaction price, which is the best indicat or
of fair value, although the value obtained from the valuation model may differ from the transaction price. This initial difference, usually an
increase in fair value, indicated by valuation techniques is recognised in income depending upon the individual facts and circumstances of each
transaction and no later than
 when the market data becomes observable.
The value produced by a model or other valuation technique is adjusted to allow for a number of factors as appropriate, because valuation
techniques cannot appropriately reflect all factors market participants take into account when entering into a transaction. Valuation
adjustments are recorded to allow for model risks, bid ‐ask spreads, liquidity risks, as well as other factors. Management believes that these
valuation adjustments are necessary and appropriate to fairly state financial instruments carried at fair value in the statement of financial
position.
Valuation techniques include recent arm's length transactions between knowledgeable, willing parties, if available, reference to the current fai r
value of other instruments that are substantially the same, the discounted cash flow analysis and option pricing models. Valuation techniques
incorporate all factors that market participants would consider in setting a price and are consistent with accepted methodologies for pricing
financial instruments. Periodically, the Group calibrates the valuation technique and tests it for validity using prices from any observable curre nt
market transactions in the same instrument, without modification or repackaging, or based on any available observable market data.
 Condensed Interim Consolidated Financial Statements 31 March 2024 ‐ Unaudited  43

===== SIDA 47 =====

Kvika banki hf.  Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
54
56. Financial  assets and financial liabilities measured at fair value (cont.)
d.
31.3.2024 
Financial assets          Carrying 
Level 1  Level 2  Level 3  amount 
Mandatorily measured at fair value through profit and loss 
3,714,683  103,747  255,337  4,073,767 
1,696,293  74,430  2,543,360  4,314,083 
12,706,506  12,706,506 
728,070  728,070 
3,065,234  3,065,234 
Measured at fair value through other comprehensive income 
52,882,488  52,882,488 
Total 70,999,970  3,243,410  3,526,767  77,770,148 
Financial liabilities          Carrying 
Level 1  Level 2  Level 3  amount 
Mandatorily measured at fair value through profit and loss 
653,560  653,560 
113,800  113,800 
1,410,171  872,656  2,282,826 
328,804  328,804 
Measured at fair value through other comprehensive income 
56,746  56,746 
Total 767,360  1,466,916  1,201,459  3,435,736 
31.12.2023
Financial assets          Carrying 
Level 1  Level 2  Level 3  amount 
Mandatorily measured at fair value through profit and loss 
3,465,191  104,584  114,075  3,683,849 
1,237,775  102,362  2,517,343  3,857,480 
16,852,313  16,852,313 
682,433  682,433 
2,497,877  2,497,877 
Measured at fair value through other comprehensive income 
61,293,556  61,293,556 
Total 82,848,836  2,704,822  3,313,851  88,867,508 
 
Financial liabilities          Carrying 
Level 1  Level 2  Level 3  amount 
Mandatorily measured at fair value through profit and loss 
131,745  131,745 
4,230  4,230 
1,185,091  859,631  2,044,723 
404,762  404,762 
Measured at fair value through other comprehensive income 
152,182  152,182 
Total 135,975  1,337,273  1,264,394  2,737,641 
 Fixed income securities ..............................................................................................
 Fixed income securities ..............................................................................................
 Derivatives used for hedge accounting ......................................................................
 Derivatives ..................................................................................................................
 Fixed income securities ..............................................................................................
 Shares and other variable income securities .............................................................
Fair value hierarchy classification
The fair value of financial assets and financial liabilities measured at fair value in the statement of financial position is classified into the fair
value hierarchy as follows:
 Derivatives ..................................................................................................................
 Other liabilities ...........................................................................................................
 Other liabilities ...........................................................................................................
 Short positions held for trading .................................................................................
 Short positions used for hedging ...............................................................................
 Derivatives ..................................................................................................................
 Short positions held for
 trading .................................................................................
 Short positions used for hedging ...............................................................................
 Derivatives ..................................................................................................................
 Fixed income securities ..............................................................................................
 Loans to customers ....................................................................................................
 Shares and other variable income securities .............................................................
 Securities used for hedging ........................................................................................
 Loans to customers ....................................................................................................
 Securities used for hedging ........................................................................................
 Derivatives used for hedge accounting ......................................................................
 Condensed Interim Consolidated Financial Statements 31 March 2024 ‐ Unaudited  44

===== SIDA 48 =====

Kvika banki hf.  Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
54
56. Financial  assets and financial liabilities measured at fair value (cont.)
e.
Shares and 
Fixed  other var. 
income  income  Loans to  Other  
31.3.2024  securities  securities  customers  Derivatives  liabilities  Total 
Balance as at 1 January 2024 114,075  2,517,343  682,433  (859,631) (404,762) 2,049,457  
5,311  15,183  65,637  (7,913) 0   78,218 
135,952  10,834  0  (5,111) 141,674  
0  0  (20,000) 75,959   55,959 
Balance as at 31 March 2024 255,337  2,543,360  728,070  (872,656) (328,804) 2,325,308  
Shares and 
Fixed  other var. 
income  income  Loans to  Other  
31.12.2023  securities  securities  customers  Derivatives  liabilities  Total 
Balance as at 1 January 2023 615,304  7,437,283  1,210,390  (691,713) (373,715) 8,197,550  
130,943  987,969  10,173  (11,159) (31,048) 1,086,879  
380,542  1,085,457  40,000  (156,759) 1,349,240  
(162,024) 0   (578,130) 0   (740,155)
0  (2,246,400) (2,246,400)
(850,690) (4,746,966) (5,597,656)
Balance as at 31 December 2023 114,075  2,517,343  682,433  (859,631) (404,762) 2,049,457  
f.
Book value 
Range 31.3.2024 
0‐95% 255,337 
‐ 2,543,360 
‐ 728,070 
Total 3,526,767 
Book value 
Range 31.12.2023 
0‐95% 114,075 
‐ 2,517,343 
‐ 682,433 
Total 3,313,851 
g.
+10% ‐ 10% 
25,534  (25,534)
254,336  (254,336)
72,807  (72,807)
Total 352,677  (352,677)
Value of assets
Significant unobservable input
Unlisted bonds
Fair value measurements for Level 3 financial assets
Level 3 assets consist primarily of unlisted bonds, shares and share certificates and loans measured at fair value. Each asset is evaluated
separately but assets within an asset group share a valuation method. The following valuation methods are in use:
Expert modelLoans to customers
Asset class Method Significant  unobservable input
Unlisted bonds  Expected recovery Value  of assets
Unlisted variable income securities Market  price Recent  trades
The Group believes its estimates represent appropriate approximations of fair value and that the use of different valuation methodologies and
reasonable changes in assumptions or unobservable inputs would not significantly change the estimates.
A
 10% change in the estimates would have the following effect on profit before taxes:
 Shares and other variable income securities ..................................................................................................................
 Loans to customers ..........................................................................................................................................................
Given the methods used, the possible range of the significant unobservable inputs is wide. When determining the values used the Group
considers the financial strength of the entity in question, recent trades if any and multipliers for comparable instruments.
The effect of unobservable inputs in Level 3 fair value measurements
Loan to customers Expert  model Value  of assets and collateral
 Fixed income securities ...................................................................................................................................................
Reconciliation of changes in Level 3 fair value measurements
Market price Recent  trades
Value of assets and collateral
Asset class Method
Expected recovery
Unlisted variable income securities
Additions ............................................................................ 
Repayments ........................................................................ 
Disposals ............................................................................. 
Reclassified as assets held for sale ..................................... 
Total gains and losses in profit or loss ............................... 
Additions ............................................................................ 
Repayments ........................................................................ 
Total gains and losses in profit or loss ............................... 
 Condensed Interim Consolidated Financial Statements 31 March 2024 ‐ Unaudited  45

===== SIDA 49 =====

Kvika banki hf.  Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
56
Other information
57. Pledged  assets
Settlement and  Securities  Asset backed 
31.3.2024 committed  facilities  borrowing  securities  Total 
0  443,619  0  443,619 
6,547,378  359,109  31,890  6,938,377 
21,447,737  0  900,355  22,348,092 
0  55,476  0  55,476 
Total 27,995,115  858,204  932,245  29,785,564 
Settlement and  Securities  Asset backed 
31.12.2023 committed  facilities  borrowing  securities  Total 
0  973,538  27,853  1,001,391 
6,392,856  249,194  0  6,642,050 
21,340,531  0  1,118,990  22,459,521 
0  52,979  0  52,979 
Total 27,733,387  1,275,711  1,146,843  30,155,941 
58. Related  parties
a. Definition  of related parties
b. Arm's  length
c. Balances  with related parties
31.3.2024 Assets  Liabilities 
3,538  85,523 
0  27,335 
Total 3,538  112,858 
31.12.2023 Assets  Liabilities 
5,861  77,974 
0  28,639 
Total 5,861  106,613 
d. Transactions  with related parties
Interest  Interest  Other  Other 
3m 2024 income  expense  income  expense 
0  939  8  534 
0  0  0  100,054 
Total 0  939  8  100,588 
Interest  Interest  Other  Other 
3m 2023 income  expense  income  expense 
0  145  0  58 
0  0  0  58,696 
Total 0  145  0  58,754 
Management ....................................................................................................................
Associates ........................................................................................................................
Transactions with related parties are carried out at arm's length and subject to an annual review by the Bank's internal auditor.
Cash and balances with Central Bank ..............................................................................
Fixed income securities ....................................................................................................
Other assets .....................................................................................................................
The Group has pledged assets, in the ordinary course of banking business, to the Central Bank of Iceland to secure general settlement in the
Icelandic clearing system. Cash pledged to secure the borrowing of securities from other counterparties than the Central Bank of Iceland is
classified as other assets. Furthermore, the Group has pledged loans to customers as collateral against asset backed bonds that it has issued. 
 Management .....................................................................................................................................................................
Management ....................................................................................................................
The Group has a related party relationship with the board members of the Bank, the CEO of the Bank and key employees (together referred to as
management), associates as disclosed in note 23, shareholders with significant influence over the Bank, close family members of individuals
identified 
as related parties and entities under the control or joint control of related parties.
Loans to customers ..........................................................................................................
Loans to customers ..........................................................................................................
Fixed income securities ....................................................................................................
Other assets .....................................................................................................................
 Management .....................................................................................................................................................................
 Associates ..........................................................................................................................................................................
Cash and balances with Central Bank ..............................................................................
 Associates ..........................................................................................................................................................................
Associates ........................................................................................................................
 Condensed Interim Consolidated Financial Statements 31 March 2024 ‐ Unaudited  46

===== SIDA 50 =====

Kvika banki hf.  Amounts are in ISK thousands
Notes to the Condensed Interim Consolidated Financial Statements
56
59. Other  matters
Offer for TM tryggingar hf. accepted
On‐site inspection by the Financial Supervisory Authority of the Central Bank
Tax treatment of warrants sold by the Bank
60. Events  after the reporting date
There are no material events after the reporting date.
As the Iceland revenue and customs has not yet concluded its review, the Bank has not charged any amount to its income statement nor made
any changes to the tax returns for the respective years.
As a part of its supervisory role the FME regularly conducts on ‐site inspections on the Bank's operations, either theme based or circumstantial.
The FME conducted such an inspection of the Bank’s anti money laundering measures in the first quarter of 2023 and the Bank received a report
with draft findings towards the end of the third quarter of 2023. The draft findings indicate some deficiencies in the Bank's compliance with the
relevant legal framework. When the FME issues final reports on its inspections, the findings are usually made public by the FME and, depending
on the circumstances, the Bank. The Bank takes its legal obligations very seriously and has already started working on the detected findings in the
draft report. 
The Bank is aware of that the Iceland revenue and customs ("Skatturinn") is currently reviewing the tax treatment of warrants that the Bank sold
during the years 2017 to 2019. The Iceland revenue and customs is looking into whether the warrants should be taxed as perquisites instead of as
a financial instruments. Should that be the case, then the Bank would be required to pay the respective social security tax and tax on financial
activity. The Bank would however be able to deduct the amount of salary related expenses, as well as the amount of the perquisites, from its tax
base for the respective years in question, and thereby increase its deferred tax losses. 
On 17 March 2024 the Bank announced that it had received binding offers for the purchase of the share capital of TM tryggingar hf. ("TM"). The
Bank furthermore announced that it had decided to accept an offer from Landsbankinn hf. with the aim to complete a confirmatory due diligence 
review, and sign a purchase agreement between the two banks for the purchase and sale of 100% of TM's shares as soon as possible, with
standard conditions of approval from The Financial Supervisory Authority of the Central Bank of Iceland and the Competition Authority. The
purchase price according to the offer is ISK 28.6 billion and Landsbankinn will pay for the share capital in cash. The purchase price is based on
TM's balance sheet at the end of 2023. The final purchase price will be adjusted for changes in TM's tangible equity from the beginning of the
year 2024 to the completion date, and the amount of
 the change will be added to or subtracted from the purchase price in the offer.
 Condensed Interim Consolidated Financial Statements 31 March 2024 ‐ Unaudited  47