FULLTEXT DEL 1 AV 2
Kvartalsrapport Q2 2025
===== SIDA 1 =====
Condensed Interim
Consolidated Financial Statements
30 June 2025
===== SIDA 2 =====
Condensed Interim
Consolidated Financial Statements
30 June 2025
Kvika banki hf. Katrínartún 2 105 Reykjavík Iceland Reg. no. 540502-2930
===== SIDA 3 =====
Kvika banki hf.
Table of Contents
Page
1
2
5
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8
9
11
12
13
15
17
20
28
44
48
Review Report on the Condensed Interim Consolidated Financial Statements ............................................................
Condensed Interim Consolidated Income Statement ......................................................................................................
Endorsement and Statement by the Board of Directors and the CEO .............................................................................
Kvika highlights .................................................................................................................................................................
Condensed Interim Consolidated Statement of Comprehensive Income ......................................................................
Condensed Interim Consolidated Statement of Financial Position ..................................................................................
Condensed Interim Consolidated Statement of Changes in Equity .................................................................................
Notes to the Condensed Interim Consolidated Financial Statements .............................................................................
- General information ......................................................................................................................................................
Condensed Interim Consolidated Statement of Cash Flows ............................................................................................
- Risk management ..........................................................................................................................................................
- Financial assets and financial liabilities .........................................................................................................................
- Income statement ..........................................................................................................................................................
- Statement of Financial Position .....................................................................................................................................
- Other information ..........................................................................................................................................................
- Segment information .....................................................................................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025
===== SIDA 4 =====
Highlights
30.06.2025
Kvika in brief
Kvika is a financial services company working to make
banking more competitive and accessible in Iceland.
Instead of operating traditional branches, Kvika delivers its
services online, offering a wide range of solutions in
investment banking, 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.
Key figures
ISK m. 6M 2025 6M 2024
Net operating income 9,577 8,064
Profit before tax, continuing
operations
2,726 2,404
RoTE, continuing operations 13.3% 14.8%
30.06.2025 31.12.2024
Total assets 361,212 354,594
Loans to customers 172,101 150,203
Deposits 180,248 163,378
LCR 910% 360%
NSFR 160% 144%
Q2 24 Q3 24 Q4 24 Q1 25 Q2 25
4.0 4.5 4.7 4.4
5.1
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
91.0%
Q2 24
89.0%
Q3 24
92.0%
Q4 24
95.5%
Q1 25
95.5%
Q2 25
147 146 150 161 172
Loans to deposits*
0
5
10
15
20
25
30
35
40
45
50
0
5
10
15
20
25
19.4%
Q2 24
20.6%
Q3 24
19.9%
Q4 24
21.0%
Q1 25
20.5%
Q2 25
22.1% 23.5% 22.8% 23.9% 23.3%
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
142%
Q2 24
148%
Q3 24
144%
Q4 24
159%
Q1 25
160%
Q2 25
475%
780%
360%
279%
910%
NSFR
34.1%
24.2%
12.9%
17.8%
11.0%
Commercial Banking
Investment Banking
Asset Management
UK
Treasury and supporting units
*Money market deposits were previously presented as part of borrowings but are now presented as part of deposits. Comparative figures have been restated.
Reference is made to note 2 in Kvika’s Consolidated Financial Statements dated 31.12.2024 for further information
Diversified operations
Revenues by segment
6M 2025
===== SIDA 5 =====
Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
About the Bank
Operations during the period in 2025
Financial position
Merger discussions with Arion banki hf.
Kvika’s foray into the mortgage market
Kvika banki has achieved several significant funding milestones in 2025, led by the successful issuance of its inaugural euro-denominated bond on 23
May—a €200 m illion 4-year Senior Preferred note. 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 MS+ 250bps (~100bps over
Icelandic peers), with strong demand from the UK (79%), Europe (10%), the Middle East (8%), and others. Earlier in the year, in January, Kvika
completed a dual-currency Nordic bond issuance, raising SEK 600 million and NOK 400 million in 3.25-year floating rate notes priced at 200bps over
STIBOR and NIBOR. In June, Kvika also strengthened its presence in the domestic market with the launch of the KVIKA 28 0703 series, accepting ISK 5
billion in bids at a 1.14% spread over 3-month REIBOR, with the offering more than twice oversubscribed.
At the end of May 2025, Kvika’s well-known savings brand A uður entered the mortgage market with a new housing loan offering. The loans are non-
indexed with a variable interest rates which are among the lowest compared to similar products. Auður emphasizes transparency, flexible terms, and
helping homeowners build equity. Known for offering market-leading savings rates to over 50,000 customers, Auður now aims to increase competition
in housing finance, continuing its track record of delivering better terms for consumers.
These are the Condensed Interim Consolidated Financial Statements of Kvika banki hf. ("Kvika" or the "Bank") and its subsidiaries (together the
"Group") for the period 1 January to 30 June 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 are provided under the Kvika an d
Kvika Asset Management brands.
Kvika is a financial services company working to make banking more competitive and accessible in Iceland. Instead of operating traditional branches ,
Kvika delivers its services online, offering a wide range of solutions in investment banking, asset management, payments, and banking for individua ls,
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 second quarter amounted to ISK 2,025 million (Q2 2024: ISK 1,189 m illion) and for the first six
months of the year it amounted to ISK 2,726 million (6m 2024: ISK 2,404 m illion). Pre-tax annualised return on average tangible equity (RoTE) from
continuing operations was 18.5% for the quarter (Q2 2024: 14.6%) and 13.3% for the first six months of the year (6m 2024: 15.4%) based on the average
tangible equity position of Kvika net of TM in the period. Tangible equity is the equity of shareholders of Kvika net of deferred tax assets and intangib le
assets. Profit after taxes, including discontinued operations, for the second quarter amounted to ISK 1,439 million (Q2 2024: ISK 1,256 million) and for
the first six months of the year it amounted to ISK 3,525 million (6m 2024: ISK 2,340 million).
According to the Consolidated Statement of Financial Position, equity at the end of the period amounted to ISK 66,090 million (31.12. 2024: ISK 89,517
million), and total assets amounted to ISK 361,212 million (31.12.2024: ISK 354,594 million).
The Group's statement of financial position grew by ISK 6.6 billion or 1.9% during the first six months of 2025. Loans to customers grew by ISK 21.9
billion or 14.6% during the period. Liquid assets amounted to ISK 114 billion at end of June 2025, which is equal to 31.5% of total assets and 66.1% of
loans to customers.
The Group's net operating income during the first six months was ISK 9,577 million (6m 2024: ISK 8,064 million). Net interest income amounted to ISK
5,879 million (6m 2024: ISK 4,754 m illion). Net fee income amounted to ISK 3,455 million (6m 2024: ISK 2,984 m illion). Other net operating income
amounted to ISK 243 million (6m 2024: ISK 326 million). Administrative expenses during the period amounted to ISK 6,071 million (6m 2024: ISK 5,399
million). During the period, the Group had a net impairment charge of ISK 188 million (6m 2024: ISK 253 million).
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.
The Board of Kvika approved on 6 July 2025 a request from the Board of Arion banki hf. ("Arion") to initiate formal merger discussions between Kvika
and Arion. Kvika’s shareholders will receive new shares reflecting 26% ownership in the combined entity. The aim of the merger is to combine the
companies’ strengths and to create a robust financial institution which offers comprehensive services for its customers. The parties aim to request
preliminary discussions with the Icelandic Competition Authority where the aims of the merger and benefits resulting from it, both for customers and
the Icelandic financial market, will be presented. The parties hope that the preliminary discussions, the finalization of contracts and the due dili gence
review will be completed in the next few months. Assuming that the preliminary discussions with the Icelandic Competition Authority are successful,
the merger will be formally announced to the regulators and will be submitted for approval at shareholders’ meetings of both companies. If the merger
between Kvika and Arion goes ahead it will strengthen and enhance the banking services provided to the customers of the merged company – retail,
corporate and investors. The merger will generate opportunities for risk distribution and more diverse revenue streams, while also creating a more
effective business and bringing greater efficiency to the Icelandic financial market.
Condensed Interim Consolidated Financial Statements 30 June 2025 2
===== SIDA 6 =====
Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
TM sale finalised
Capital adequacy and dividends
Risk management
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 32.2 billion, reflecting the purchase price adjustment for 2024 and for the period 1 January to 28 February 2025.
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.
The objective of risk management is to promote a good and efficient culture of risk awareness within the Group and to increase the understanding of
employees and management on the Group's risk taking, in addition to an assessment process related to risk and capital position. An emphasis is placed
on being up to speed on the latest developments and adoption of rules related to risk management, such as regarding capital- and liquidity
management. The Group faces various risks associated with its operations as a financial institution that arise from its day-to-day operations. Acti ve risk
management entails analysing risk, measuring it and taking actions to limit it, as well as monitoring risk factors across the Group. The Group's risk
management and main operations are described in the notes accompanying the Condensed Interim Consolidated Financial Statements. Refer to notes
39-54 on the analysis of exposure to various types of risk.
The Bank's 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., the BOD has decided that no further
share buybacks will be carried out under the current buyback programme while merger discussions between Kvika and Arion banki h f. are ongoing.
The Central Bank's Resolution Authority presented the Group with their first minimum requirement for own funds and eligible liabilities (MREL) in
January 2025. The MREL requirements, including the combined buffer requirement, are 28.4% of RWEA and 6.0% of total exposure measure ("TEM"). At
the end of June 2025 these ratios were 53.3% and 32.8% respectively.
Kvika continues to maintain a strong capital position, significantly above regulatory requirements. At the end of June 2025, the Group’s capital
adequacy ratio was 23.3% and CET1 ratio was 20.5%. This compares to regulatory requirements of 17.9% and 12.9%, including capital buffers. Kvika has
prepared for the upcoming implementation of Regulation (EU) No. 2024/1623 of the European Parliament and of the Council (CRR III). Based on the
assumptions currently available, Kvika estimates that the implementation will lead to around 14% reduction in the Bank’s risk-weighted exposure
amount, based on data as of 30 June 2025.
The 2025 AGM also approved a motion from the BOD that a dividend of ISK 5 per share be paid in the year 2025 on 2024 operations and following the
receipt of the purchase price for TM. Furthermore, 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. In April 2025, both the dividend payment and the share capital reduction were carried out.
Condensed Interim Consolidated Financial Statements 30 June 2025 3
===== SIDA 7 =====
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 Condensed Interim Consolidated Financial Statements of Kvika banki hf. for the period ended 30 June 2025 are electronically certificated by the
Board of Directors and the CEO.
The Condensed Interim Consolidated Financial Statements of Kvika banki hf. for the period 1 January to 30 June 2025 have been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU, and additional requirements, as applicable, in the Act on Annual Accounts no. 3/ 2006, the
Act on Financial Undertakings no. 161/2002 and rules on accounting for credit institutions no. 834/2003.
To the best of our knowledge these Condensed Interim Consolidated Financial Statements give a true and fair view of the Group's assets, liabilities an d
financial position as at 30 June 2025 and the financial performance of the Group and changes of cash flows for the period 1 January to 30 June 2025.
Furthermore, in our opinion the Condensed Interim Consolidated Financial Statements and the Endorsement of the Board of Directors and the CEO give
a fair view of the development and performance of the Group's operations and its position and describe the principal risks and uncertainties faced by
the Group.
The Board of Directors and the CEO of the Bank have today discussed the Condensed Interim Consolidated Financial Statements for the period 1
January to 30 June 2025 and confirmed them by the means of their signatures.
Reykjavík, 13 August 2025.
Board of Directors
Condensed Interim Consolidated Financial Statements 30 June 2025 4
===== SIDA 8 =====
Kvika banki hf.
To the Board of Directors and Shareholders of Kvika banki hf.
Management’s and the Board of directors Responsibility for the Condensed Interim Consolidated Financial Statements
Auditor's Responsibility
Scope of Review
Conclusion
Confirmation of Endorsement and Statement by the Board of Directors and the CEO
Deloitte ehf.
Review Report on the Condensed Interim Consolidated
Financial Statements
The Condensed Interim Consolidated Financial Statements of Kvika banki hf. for the period ended 30 June 2025 are electronically certificated by the
auditors.
Guðmundur Ingólfsson
State Authorized Public Accountant
Kópavogur, 13 August 2025.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying Condensed Interim Consolidated Financial
Statements does not give a true and fair view of the financial position of the Group as at 30 June 2025, and of its financial performance and its cash
flows for the six-month period then ended in accordance with International Financial Reporting Standards for Interim Financial Reporting, IAS 34, a s
adopted by the European Union and additional requirements in the Icelandic Financial Statement Act., Act on financial undertakings and icelandic
accounting regulation for financial institution.
Pursuant to the requirements of Paragraph 2 Article 104 of the Icelandic Act on Financial Statements No. 3/2006, we confirm to the best of our
knowledge that the accompanying Endorsement and Statement by the Board of Directors and the CEO includes all information required by the
Icelandic Act on Financial Statements that is not disclosed elsewhere in the Condensed Interim Consolidated Financial Statement s.
We have reviewed the accompanying Condensed Interim Consolidated Statement of Financial Position of Kvika banki hf. and its subsidiaries (the
"Group") as of 30 June 2025 and the related Condensed Interim Consolidated Income Statement, Condensed Interim Consolidated Statement of
Comprehensive Income, Condensed Interim Consolidated Statement of changes in equity and Condensed Interim Consolidated Statement of cash
flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory notes.
The board of directors and management is responsible for the preparation and fair presentation of this Condensed Interim Consolidated Financial
Statements in accordance with International Financial Reporting Standards for Interim Financial Reporting, IAS 34, as adopted by the European Union
and additional requirements in the Icelandic Financial Statement Act., Act on financial undertakings and icelandic accounting regulation for fina ncial
institution.
Our responsibility is to express a conclusion on this Condensed Interim Consolidated Financial Statements based on our review.
We conducted our review in accordance with International Standard on Review Engagements, ISRE 2410 "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity". A review of Condensed Consolidated Interim Financial Statements consists of making inquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantia lly
less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not ex press an audit opinion.
Our opinion in this report on the Condensed Interim Consolidated Financial Statements is consistent with the content of the additional report that ha s
been submitted to the company´s audit committee in accordance with the EU Audit Regulation 537/2014 Article 11.
Condensed Interim Consolidated Financial Statements 30 June 2025 5
===== SIDA 9 =====
Kvika banki hf. Amounts are in ISK millions
Condensed Interim Consolidated Income Statement
For the period 1 January 2025 to 30 June 2025
Notes Q2 2025 Q2 2024 6m 2025 6m 2024
7,699 7,662 15,000 14,768
(4,737) (5,234) (9,121) (10,014)
Net interest income 5 2,962 2,428 5,879 4,754
2,079 1,497 3,748 3,293
(143) (146) (293) (309)
Net fee and commission income 6 1,935 1,351 3,455 2,984
7 187 120 140 144
25 22 26 22 26
22 71 82 157
Other net operating income 231 217 243 326
Net operating income 5,128 3,996 9,577 8,064
9 (2,981) (2,733) (6,071) (5,399)
11 (122) (65) (188) (253)
12 - (8) (593) (8)
Profit before taxes from continuing operations 2,025 1,189 2,726 2,404
13 (424) (282) (862) (434)
14 (70) (61) (70) (74)
15 (92) (70) (169) (133)
Profit for the period from continuing operations 1,439 777 1,625 1,764
Discontinued operations
3 - 480 1,901 576
Profit for the period 1,439 1,256 3,525 2,340
Notes Q2 2025 Q2 2024 6m 2025 6m 2024
1,439 1,256 3,525 2,336
24 - - - 4
Profit for the period 1,439 1,256 3,525 2,340
Earnings per share 16
0.31 0.27 0.77 0.49
0.31 0.27 0.77 0.49
Quarterly information is unreviewed.
The notes on pages 13 to 49 are an integral part of these Condensed Interim 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 ...........................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 6
===== SIDA 10 =====
Kvika banki hf. Amounts are in ISK millions
Comprehensive Income
For the period 1 January 2025 to 30 June 2025
Notes Q2 2025 Q2 2024 6m 2025 6m 2024
Profit for the period 1,439 1,256 3,525 2,340
(30) (119) 16 71
(13) 5 12 15
Changes to reserve for financial assets at fair value through OCI (43) (114) 28 86
(49) 7 (79) 17
(92) (107) (51) 103
Total comprehensive income for the period 1,347 1,149 3,474 2,443
Notes Q2 2025 Q2 2024 6m 2025 6m 2024
1,347 1,149 3,474 2,439
- - - 4
Total comprehensive income for the period 1,347 1,149 3,474 2,443
Quarterly information is unreviewed.
The notes on pages 13 to 49 are an integral part of these Condensed Interim Consolidated Financial Statements.
Condensed Interim Consolidated Statement of
Attributable to the shareholders of Kvika banki hf. ..................................................
Attributable to non-controlling interest ....................................................................
Exchange difference on translation of foreign operations .....................................
Changes in fair value of financial assets through OCI, net of tax ............................
Realized net loss transferred to the Income Statement, net of tax ........................
Other comprehensive income that is or may be reclassified subsequently to
profit and loss
Condensed Interim Consolidated Financial Statements 30 June 2025 7
===== SIDA 11 =====
Kvika banki hf. Amounts are in ISK millions
Condensed Interim Consolidated Statement of Financial Position
As at 30 June 2025
Assets Notes 30.6.2025 31.12.2024*
17 30,919 18,593
18 27,729 11,530
19 172,101 150,203
20 56,238 64,795
21 28,296 5,432
22 7,227 12,601
23 2,318 1,197
25 133 113
180 -
26 21,306 21,693
27 202 215
423 543
13 1,469 2,273
28 12,671 7,704
3 - 57,702
Total assets 361,212 354,594
Liabilities
46 180,249 163,378
29 13,514 14,390
30 80,225 37,123
31 5,861 5,629
32 - 153
33 104 42
23 1,124 2,932
439 466
34 13,607 13,635
3 - 27,329
Total liabilities 295,123 265,077
Equity
35 4,423 4,660
43,221 46,750
3,246 9,357
15,121 28,672
Total equity attributable to the shareholders of Kvika banki hf. 66,011 89,439
24 79 79
Total equity 66,090 89,517
Total liabilities and equity 361,212 354,594
* Comparative information has been restated, reference is made to note 2 for further information.
The notes on pages 13 to 49 are an integral part of these Condensed Interim Consolidated Financial Statements.
Investment properties ........................................................................................................................
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 ..........................................................................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 8
===== SIDA 12 =====
Kvika banki hf. Amounts are in ISK millions
Condensed Interim Consolidated Statement of Changes in Equity
For the period 1 January 2025 to 30 June 2025
Deficit Trans- Restricted Total share- Non-
Share Share Option reduction Fair value lation retained Retained holders' controlling Total
1 January 2025 to 30 June 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
3,525 3,525 - 3,525
16 16 16
12 12 12
(79) (79) - (79)
- - - - 28 (79) - 3,525 3,474 - 3,474
220 (6,224) 6,004 - -
47 (47) - -
(237) (3,529) (3,767) (3,767)
(23,135) (23,135) (23,135)
- (102) 102 - -
Equity as at 30 June 2025 4,423 43,221 7 1,204 (335) 0 2,370 15,121 66,011 79 66,090
The notes on pages 13 to 49 are an integral part of these Condensed Interim Consolidated Financial Statements.
(9,184,112) 43,220,741 7,080 1,203,545 (4,757,916) 151 2,363,222 13,917,686 78,646
Dividend paid to shareholders ..................................................................
Transactions with owners of the Bank
Share options ............................................................................................
Other reserves
Profit for the period .....................................................................................
Restricted due to subsidiaries and associates .............................................
Translation of foreign operations
Exchange difference on translation of foreign operations .......................
Equity as at 1 January 2025 .........................................................................
Total comprehensive income for the period ...............................................
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 ...................
Condensed Interim Consolidated Financial Statements 30 June 2025 9
===== SIDA 13 =====
Kvika banki hf. Amounts are in ISK millions
Condensed Interim Consolidated Statement of Changes in Equity
For the period 1 January 2024 to 30 June 2024
Deficit Trans- Restricted Total share- Non-
Share Share Option reduction Fair value lation retained Retained holders' controlling Total
1 January 2024 to 30 June 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
2,336 2,336 4 2,340
71 71 71
15 15 15
Translation of foreign operations
17 17 - 17
- - - - 86 17 - 2,336 2,439 4 2,443
1,125 (1,125) - -
2 (2) - -
- 21 - - - - - 21 21
Equity as at 30 June 2024 4,722 47,662 195 1,204 (844) 103 4,924 26,381 84,346 76 84,422
The notes on pages 13 to 49 are an integral part of these Condensed Interim Consolidated Financial Statements.
Equity as at 1 January 2024 .........................................................................
Total comprehensive income for the period ...............................................
Share 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 period .....................................................................................
Exchange difference on translation of foreign operations .......................
Condensed Interim Consolidated Financial Statements 30 June 2025 10
===== SIDA 14 =====
Kvika banki hf. Amounts are in ISK millions
Condensed Interim Consolidated Statement of Cash Flows
For the period 1 January 2025 to 30 June 2025
Cash flows from operating activities Notes 6m 2025 6m 2024*
3,525 2,340
154 (435)
(22) (26)
788 549
(5,879) (4,754)
188 253
1,101 640
(1,901) (514)
- 21
(2,046) (1,925)
Changes in:
(7,154) -
8,258 13,964
(5,581) (138)
5,374 7,413
(21,811) (8,714)
(1,121) 140
(14) 112
(5,713) (5,543)
16,153 14,201
(91) (89)
(2,201) (347)
(55) 2,272
(13,955) 23,269
14,310 13,737
(7,845) (8,963)
(147) (364)
Net cash (to) from operating activities (9,683) 25,755
Cash flows from investing activities
26 (166) (240)
138 (22)
32,217 -
Net cash from (to) investing activities 32,188 (262)
Cash flows from financing activities
5,330 (3,833)
43,102 6,528
(3,767) (800)
(23,135) -
(190) (183)
Net cash from financing activities 21,340 1,711
43,846 27,204
22,500 19,856
(3) 204
Cash and cash equivalents at the end of the period 17 66,343 47,264
Cash and cash equivalents
17 30,919 40,607
17 (6,118) (6,345)
18 18,771 13,002
21 22,770 -
Cash and cash equivalents at the end of the period 66,343 47,264
* Comparative information has been restated, reference is made to note 2 for further information.
The notes on pages 13 to 49 are an integral part of these Condensed Interim Consolidated Financial Statements.
Interest received ..........................................................................................................................................
Acquired own shares ....................................................................................................................................
Additions of intangible assets ......................................................................................................................
Net acquisition of property and equipment ................................................................................................
Interest paid .................................................................................................................................................
Income tax paid ............................................................................................................................................
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 .....................................................................................................................
Borrowings ...................................................................................................................................................
Effects of exchange rate fluctuations on cash and cash equivalents ..........................................................
Cash and cash equivalents at the beginning of the year .............................................................................
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 period .....................................................................................................................................
Adjustments for:
Indexation and exchange rate difference .................................................................................................
Share in profit of associates, net of income tax ........................................................................................
Depreciation and amortisation .................................................................................................................
Adjustment relating to assets held for sale ...............................................................................................
Shares and other variable income securities - Unit shares in cash equivalent liquidity funds ...................
Cash and balances with Central Bank ..........................................................................................................
Loans to credit institutions - Bank accounts ................................................................................................
Restricted balances with Central Bank - fixed reserve requirement ...........................................................
Net interest income ...................................................................................................................................
Income tax and special tax on financial activity and institutions .............................................................
Net impairment .........................................................................................................................................
Other assets ...............................................................................................................................................
Operating lease assets ...............................................................................................................................
Derivatives - liabilities ...............................................................................................................................
Deposits ....................................................................................................................................................
Short positions ...........................................................................................................................................
Other liabilities ..........................................................................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 11
===== SIDA 15 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
0
General information Page Risk management Page
1 Reporting entity ............................................................................ 13 39 Hedging ........................................................................................... 28
2 Basis of preparation ..................................................................... 13 40 Credit risk - overview ...................................................................... 28
3 Discontinued operations .............................................................. 14 41 Maximum exposure to credit risk .................................................. 29
42 Credit quality of financial assets .................................................... 29
Segment information 43 Loan-to-value ................................................................................. 34
4 Business segments ....................................................................... 15 44 Collateral against exposures to derivatives ................................... 34
45 Large exposures .............................................................................. 34
Income statement 46 Liquidity risk ................................................................................... 35
5 Net interest income ...................................................................... 17 47 Market risk ...................................................................................... 39
6 Net fee and commission income .................................................. 17 48 Interest rate risk ............................................................................. 39
7 Net financial income .................................................................... 18 49 Interest rate risk associated with trading portfolios ...................... 39
8 Foreign currency exchange difference ......................................... 18 50 Interest rate risk associated with non-trading portfolios .............. 40
9 Administrative expenses .............................................................. 18 51 Exposure towards changes in the CPI ............................................ 41
10 Salaries and related expenses ...................................................... 18 52 Currency risk ................................................................................... 41
11 Net impairment ............................................................................ 18 53 Equity risk ....................................................................................... 43
12 Revaluation of contingent consideration ..................................... 19 54 Operational risk .............................................................................. 43
13 Income tax .................................................................................... 19
14 Special tax on financial activity .................................................... 19 Financial assets and liabilities
15 Special tax on financial institutions .............................................. 19 55 Accounting classif. of financial assets and financial liabilities ....... 44
16 Earnings per share ........................................................................ 19 56 Financial assets and financial liabilities measured at fair value .... 45
Statement of Financial Position
17 Cash and balances with Central Bank .......................................... 20 Other information
18 Loans to credit institutions ........................................................... 20 57 Pledged assets ................................................................................ 48
19 Loans to customers ...................................................................... 20 58 Related parties ............................................................................... 48
20 Fixed income securities ................................................................ 20 59 Others matters ............................................................................... 49
21 Shares and other variable income securities ............................... 21 60 Events after the reporting date ...................................................... 49
22 Securities used for hedging .......................................................... 21
23 Derivatives .................................................................................... 21
24 Group entities ............................................................................... 22
25 Investment in associates .............................................................. 22
26 Intangible assets ........................................................................... 22
27 Operating lease assets .................................................................. 23
28 Other assets .................................................................................. 23
29 Borrowings ................................................................................... 23
30 Issued bonds ................................................................................. 24
31 Subordinated liabilities ................................................................ 24
32 Short positions held for trading ................................................... 24
33 Short positions used for hedging ................................................. 25
34 Other liabilities ............................................................................. 25
35 Share capital ................................................................................. 25
36 Capital adequacy ratio (CAR) ........................................................ 26
37 Leverage ratio ............................................................................... 27
38 Minimum requirements for own funds
and eligible liabilities (MREL) ....................................................... 27
Condensed Interim Consolidated Financial Statements 30 June 2025 12
===== SIDA 16 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
0
General information
1. Reporting entity
2. Basis of preparation
a. Statement of compliance
b. Basis of measurement
-
-
-
-
-
-
- shared 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 Condensed Interim Consolidated Financial Statements, is provided in the Consolidated Financia l
Statements as at and for the year ended 31 December 2024.
In order to enhance the informational value of the Condensed Interim Consolidated Financial Statements, the notes are evaluated based on
relevance and importance for the reader. This can result in information, that has been evaluated as neither important nor relevant for the reader,
not being presented in the notes.
The estimates and underlying assumptions are based on historical results and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying amounts of assets and liabilities that are not readily
apparent from other sources.
The estimates and underlying assumptions are reviewed on an on-going 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 Condensed Interim Consolidated Financial Statements were approved and authorised for issue by the Board of Directors and the CEO on 13
August 2025.
The Condensed Interim Consolidated Financial Statements have been prepared in accordance with International Accounting Standard IAS 34
Interim Financial Reporting, as adopted by the European Union and additional requirements, as applicable, in the Act on Annual Accounts no.
3/2006, the Act on Financial Undertakings no. 161/2002 and rules on accounting for credit institutions no. 834/2003.
The Condensed Interim Consolidated Financial Statements have been prepared using the historical cost basis except for the follo wing:
The Condensed Interim Consolidated Financial Statements for the period ended 30 June 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 working to make banking more competitive and accessible in Iceland. Instead of operating
traditional branches, Kvika delivers its services online, offering a wide range of solutions in investment banking, asset management, payments, an d
banking for individuals, businesses, and investors.
fixed income securities are measured at fair value;
shares and other variable income securities are measured at fair value;
The Bank's management has assessed the Group's ability to continue as a going concern and is satisfied that the Group has the resources to
continue its operations.
The preparation of interim financial statements in accordance with 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 Condensed Interim Consolidated Financial Statements are prepared in Icelandic krona (ISK), which is the Group's functional currency. All
financial information has been rounded to the nearest million, unless otherwise stated.
securities used for hedging are measured at fair value;
The Group's assets and liabilities which are denominated in other currency than ISK are translated to ISK using the exchange rate as at the end of
day 30 June 2025.
Condensed Interim Consolidated Financial Statements 30 June 2025 13
===== SIDA 17 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
0
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
6m 2024 Reclassified 6m 2024
Lines in the Consolidated Statement of Cash Flows
(3,023) (2,520) (5,543)
23,681 (3,825) 19,856
53,609 (6,345) 47,264
3. Discontinued operations
30.6.2025 31.12.2024
- 57,702
- (27,329)
- (55)
Net assets directly associated with disposal group - 30,318
30.6.2025 31.12.2024
30,318 26,830
1,901 3,460
(32,217) -
(2) 28
- 30,318
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, 6m 2024 in the Consolidated Statement of Cash Flows and in the notes have been restated, as applicable.
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 59.
Other assets .......................................................................................................................................................
Cash and balances with Central Bank at the beginning of the year .................................................................
Eliminations with the Group ....................................................................................................................................................
Other adjustments ...................................................................................................................................................................
Balance at the beginning of the year .......................................................................................................................................
Purchase price .........................................................................................................................................................................
Net assets directly associated with disposal group
Profit after tax from discontinued operations ........................................................................................................................
Set out below is the reconciliation of Net assets directly associated with disposal group:
Assets classified as held for sale ..............................................................................................................................................
Liabilities associated with assets classified as held for sale ....................................................................................................
Total assets
Cash and balance with Central bank .................................................................................................................
Liabilities ...........................................................................................................................................................
Equity .................................................................................................................................................................
Total liabilities and equity
All other assets ..................................................................................................................................................
Loans to credit institutions ...............................................................................................................................
Other assets .......................................................................................................................................................
Cash and cash equivalents at the end of the period ........................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 14
===== SIDA 18 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
0
Segment information
4. Business segments
-
-
-
-
-
Asset Commercial Investment UK Supporting
6m 2025 Management Banking Banking operations Treasury units Total
(3) 2,449 1,198 1,111 1,138 (15) 5,879
1,178 746 1,144 377 71 (60) 3,455
41 0 (21) 223 (103) (0) 140
- - - - - 22 22
17 71 - (9) - 3 82
Net operating income 1,233 3,266 2,321 1,702 1,105 (51) 9,577
(566) (484) (415) (404) (124) (1,459) (3,453)
(71) (1,001) (100) (206) (47) (1,192) (2,618)
Administrative expenses (637) (1,485) (516) (610) (171) (2,652) (6,071)
0 (103) (58) (26) (0) - (188)
(12) - - (580) - - (593)
(342) (727) (432) (100) (169) 1,770 -
Profit (loss) before tax from continuing operations 242 951 1,315 386 765 (932) 2,726
Net segment revenue from external
1,248 156 4,162 2,406 1,412 194 9,577
Net segment revenue from other
(15) 3,110 (1,841) (704) (306) (244) -
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. UK operations is the only geographic area outside of Iceland where the Group operates and for the period in 2025 it
accounted for 17.8% (6m 2024: 14.1%) of net operating income.
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.
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.
During the period in 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 period in 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.
Commercial Banking
Share in profit of associates ....................................
Other operating income .........................................
Salaries and related expenses ................................
Other operating expenses ......................................
Net impairment .......................................................
customers .............................................................
segments ..............................................................
Cost allocation ........................................................
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.
Net interest income ................................................
Net fee and commission income ............................
Net financial income ...............................................
Revaluation of contingent consideration ...............
Condensed Interim Consolidated Financial Statements 30 June 2025 15
===== SIDA 19 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
0
4. Business segments (cont.)
Asset Commercial Investment UK Supporting
6m 2024 Management Banking Banking operations Treasury units Total
(14) 2,429 953 833 572 (20) 4,754
1,219 705 708 297 45 11 2,984
46 4 171 (1) (73) (4) 144
- 26 - - - - 26
8 140 - 7 - 3 157
Net operating income 1,259 3,303 1,832 1,136 544 (10) 8,064
(508) (481) (395) (327) (114) (1,542) (3,367)
(58) (803) (86) (196) (47) (842) (2,032)
Administrative expenses (566) (1,285) (481) (523) (161) (2,384) (5,399)
(3) (188) (70) 9 (1) - (253)
(8) - - (0) - - (8)
(393) (816) (442) (84) (163) 1,899 -
Profit (loss) before tax from continuing operations 289 1,014 839 538 219 (495) 2,404
Net segment revenue from external
1,284 188 3,883 1,917 801 (10) 8,064
Net segment revenue from other
(25) 3,115 (2,051) (781) (257) - -
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 ........................................................
Net interest income ................................................
Net fee and commission income ............................
Net financial income ...............................................
Condensed Interim Consolidated Financial Statements 30 June 2025 16
===== SIDA 20 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
4
Income statement
5. Net interest income
Interest income is specified as follows:
Q2 2025 Q2 2024 6m 2025 6m 2024
502 775 1,093 978
221 38 331 74
5,243 5,115 10,237 10,025
648 859 1,211 1,865
1,059 875 2,101 1,826
26 0 27 1
Total 7,699 7,662 15,000 14,768
Interest expense is specified as follows:
Q2 2025 Q2 2024 6m 2025 6m 2024
2,591 2,837 5,242 5,472
598 812 1,206 1,352
939 895 1,622 1,761
174 189 312 372
423 488 714 1,027
12 13 25 31
Total 4,737 5,234 9,121 10,014
Net interest income 2,962 2,428 5,879 4,754
6. Net fee and commission income
Q2 2025 Q2 2024 6m 2025 6m 2024
581 554 1,203 1,164
643 247 977 695
127 145 244 282
526 491 986 1,030
201 60 339 121
Total fee and commission income 2,079 1,497 3,748 3,293
(143) (146) (293) (309)
Net fee and commission income 1,935 1,351 3,455 2,984
Total interest income recognised in respect of financial assets not carried at fair value through profit or loss amounts to ISK 11,615 million (6m
2024: ISK 11,001 million). Total interest expense recognised in respect of financial liabilities not carried at fair value through profit or loss amounts
to ISK 8,407 million (6m 2024: ISK 8,987 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 20 million (6m 2024: ISK 31 million).
Condensed Interim Consolidated Financial Statements 30 June 2025 17
===== SIDA 21 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
4
7. Net financial income
Net financial income is specified as follows:
Q2 2025 Q2 2024 6m 2025 6m 2024
Net (loss) gain on financial assets and financial liabilities mandatorily measured at fair value through profit or loss
86 54 167 138
17 0 (14) 0
207 (86) 275 (161)
1 211 (4) 188
(25) (31) (47) (9)
- - (83) -
(98) (28) (154) (12)
Total 187 120 140 144
8. Foreign currency exchange difference
Foreign currency exchange difference is specified as follows:
Q2 2025 Q2 2024 6m 2025 6m 2024
(777) 92 341 (572)
679 (120) (495) 560
Total (98) (28) (154) (12)
9. Administrative expenses
Administrative expenses are specified as follows:
Q2 2025 Q2 2024 6m 2025 6m 2024
1,750 1,743 3,453 3,367
924 711 1,830 1,483
267 213 660 430
41 66 128 120
Total 2,981 2,733 6,071 5,399
10. Salaries and related expenses
Salaries and related expenses are specified as follows:
Q2 2025 Q2 2024 6m 2025 6m 2024
1,249 1,257 2,479 2,458
144 116 269 200
- 10 - 17
165 166 326 315
69 70 134 134
124 124 245 243
Total 1,750 1,743 3,453 3,367
251 244 251 246
249 244 249 244
11.
Q2 2025 Q2 2024 6m 2025 6m 2024
(115) (60) (185) (247)
(7) (3) (7) (3)
(0) (1) 4 (3)
Total (122) (65) (188) (253)
Gain (loss) on financial instruments at fair value through profit and loss .................................
(Loss) gain on other financial instruments .................................................................................
Other salary related expenses ....................................................................................................
Tax on financial activity ..............................................................................................................
Salaries ........................................................................................................................................
Performance based payments excluding share-based payments .............................................
Net change in impairment of loans ............................................................................................
Fixed income securities ............................................................................................................
Financial assets at fair value through OCI ................................................................................
Derivatives ................................................................................................................................
Loans to customers ..................................................................................................................
Total number of full time employees at the end of the period .................................................
Share-based payment expenses .................................................................................................
Loss on prepayments of borrowings ..........................................................................................
Foreign currency exchange difference .......................................................................................
Shares and other variable income securities ...........................................................................
Net impairment
Net change in impairment of other assets .................................................................................
Net change in impairment of loan commitments, guarantees and unused credit facilities .....
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.
The amount of performance based payments that has been expensed is based on the results for the period in 2025 and the guidelines on
performance based payments set forth in the Group’s remuneration policy. The performance based payments have not been allocated to any
employees or business segments and are subject to approval by the Board of Directors.
Average number of full time employees during the period .......................................................
Pension fund contributions ........................................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 18
===== SIDA 22 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
4
12. Revaluation of contingent consideration
13. Income tax
14. Special tax on financial activity
15. Special tax on financial institutions
16. Earnings per share
6m 2025 6m 2024 6m 2025 6m 2024 6m 2025 6m 2024
Net earnings attributable to equity holders of the Bank 1,625 1,760 1,901 576 3,525 2,336
4,576 4,722 4,576 4,722 4,576 4,722
1 0 1 0 1 0
Total 4,577 4,722 4,577 4,722 4,577 4,722
0.36 0.37 0.42 0.12 0.77 0.49
0.35 0.37 0.42 0.12 0.77 0.49
Q2 2025 Q2 2024 Q2 2025 Q2 2024 Q2 2025 Q2 2024
Net earnings attributable to equity holders of the Bank 1,439 777 - 480 1,439 1,256
4,652 4,722 4,652 4,722 4,652 4,722
0 0 0 0 0 0
Total 4,652 4,722 4,652 4,722 4,652 4,722
0.31 0.16 0.00 0.10 0.3093 0.27
0.31 0.16 0.00 0.10 0.3093 0.27
Weighted average number of outstanding shares .............................
Adjustments for stock options ............................................................
Basic earnings per share (ISK) ..............................................................
Diluted earnings per share (ISK) ..........................................................
Continuing operations
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.
Continuing and
discontinued operations
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 2024, the tax loss carry forward of the Group amounted to ISK 9.7 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 Condensed Interim Consolidated Statement of Financial Position.
The contingent consideration related to the acquisition of Gamma Capital Management ehf. was revalued during the period in 2025. The
revaluation led to an expense of ISK 12 million.
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.
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 Condensed Interim
Consolidated Income Statement.
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 Condensed Interim Consolidated Income Statem ent.
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.
Condensed Interim Consolidated Financial Statements 30 June 2025 19
===== SIDA 23 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
16
Statement of Financial Position
17. Cash and balances with Central Bank
Cash and balances with Central Bank are specified as follows:
30.6.2025 31.12.2024
24,791 12,759
10 16
Included in cash and cash equivalents 24,801 12,774
6,118 5,819
Total 30,919 18,593
18. Loans to credit institutions
Loans to credit institutions are specified as follows:
30.6.2025 31.12.2024
18,771 9,726
8,050 -
908 1,804
Total 27,729 11,530
19. Loans to customers
Gross Gross Gross
carrying Book carrying Book carrying Book
30.6.2025 amount value amount value amount value
45,027 44,194 126,752 125,402 171,779 169,595
- - 2,506 2,506 2,506 2,506
Total 45,027 44,194 129,258 127,907 174,285 172,101
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
20. Fixed income securities
Fixed income securities are specified as follows:
Mandatorily measured at fair value through profit or loss 30.6.2025 31.12.2024
2,157 2,714
2,711 2,189
583 722
Measured at fair value through other comprehensive income
49,371 54,256
0 3,453
1,416 1,459
Total 56,238 64,795
The Group presents finance lease receivables as part of loans to customers at amortised cost. As at 30 June 2025, the book value of finance lease
receivables amounted to ISK 23,483 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 ...............................................................................................................................................................
Money market loans .....................................................................................................................................................
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 ....................................................................................................................................................
Listed bonds ...............................................................................................................................................................
Total
Corporates TotalIndividuals
Loans to customers at amortised cost .....................
Condensed Interim Consolidated Financial Statements 30 June 2025 20
===== SIDA 24 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
16
21. Shares and other variable income securities
Shares and other variable income securities are specified as follows:
Mandatorily measured at fair value through profit or loss 30.6.2025 31.12.2024
1,297 1,101
2,928 3,069
22,770 -
1,300 1,262
Total 28,296 5,432
22. Securities used for hedging
Securities used for hedging are specified as follows:
30.6.2025 31.12.2024
1,551 1,905
255 584
5,338 9,669
1 -
82 442
Total 7,227 12,601
23. Derivatives
30.6.2025 Assets Liab ilities Assets Liabilities
28,648 28,608 39 -
43,140 34,679 256 298
23,415 23,478 581 644
- 8,359 302 -
8,641 7,685 1,139 183
Total 103,844 102,809 2,318 1,124
31.12.2024 Assets Liab ilities 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
30.6.2025 31.12.2024
(21) (53)
329 39
(66) (8)
Total 242 (21)
Balance at the beginning of the year ............................................................................................................................
Currency forwards ..................................................................................................
Interest rate derivatives .........................................................................................
Notional Carrying amount
Foreign currency revaluation of the net foreign operations ........................................................................................
Tax effect ......................................................................................................................................................................
Cross - currency interest rate swaps ......................................................................
Listed government bonds and bonds with government guarantees ...........................................................................
Listed unit shares ..........................................................................................................................................................
Listed bonds ..................................................................................................................................................................
Unlisted shares ...........................................................................................................................................................
Listed shares .................................................................................................................................................................
Bond and equity total return swaps ......................................................................
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 .....................................................
Unlisted unit shares ...................................................................................................................................................
Bond and equity total return swaps ......................................................................
Notional
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:
Condensed Interim Consolidated Financial Statements 30 June 2025 21
===== SIDA 25 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
16
24. Group entities
Share Share
Entity Nature of operations Domicile 30.6.2025 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%
25. 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 30.6.2025 31.12.2024
Iceland 24% 24%
Croatia 40% 40%
b. Changes in investments in associates are specified as follows: 30.6.2025 31.12.2024
113 96
- (20)
22 41
(1) (5)
Total 133 113
26. Intangible assets
a. Intangible assets are specified as follows: Customer Software
30.6.2025 Goodw ill relationships Brands and other Total
17,784 1,567 219 2,123 21,693
- - - 166 166
- (89) (23) (344) (455)
(74) (24) (0) - (98)
Balance as at 30 June 2025 17,710 1,454 196 1,946 21,306
17,710 2,074 369 4,146 24,299
- (620) (173) (2,201) (2,993)
Balance as at 30 June 2025 17,710 1,454 196 1,946 21,306
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
0 (531) (151) (1,898) (2,580)
Balance as at 31 December 2024 17,784 1,567 219 2,123 21,693
Currency adjustments ....................................................................
Gross carrying amount ...................................................................
Amortisation ...................................................................................
Discontinued ..................................................................................
Balance as at 1 January 2024 .........................................................
Business consultancy services
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 .........................................................
TM líftryggingar hf. ..................................................
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. .....................................................
The main subsidiaries held directly or indirectly by the Group are listed in the table below.
Payment facilitator
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 subs idiary 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 ...............................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 22
===== SIDA 26 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
16
27. Operating lease assets
Operating lease assets are specified as follows:
30.6.2025 31.12.2024
215 530
62 36
(48) (261)
(27) (90)
Total 202 215
354 465
(152) (250)
Total 202 215
28. Other assets
Other assets are specified as follows:
30.6.2025 31.12.2024
2,944 3,207
8,328 2,861
643 1,024
756 612
Total 12,671 7,704
Right of use asset and lease receivables are specified as follows:
30.6.2025 31.12.2024
1,024 1,321
- 13
- (15)
5 56
(5) 1
(201) -
(181) (352)
Total 643 1,024
29. Borrowings
Borrowings are specified as follows:
30.6.2025 31.12.2024
13,240 13,809
274 580
Total 13,514 14,390
Additions .......................................................................................................................................................................
Disposals .......................................................................................................................................................................
Depreciation .................................................................................................................................................................
Accumulated depreciation ...........................................................................................................................................
Balance as at 1 January .................................................................................................................................................
Gross carrying amount ..................................................................................................................................................
Termination of lease agreements .................................................................................................................................
Currency adjustments ...................................................................................................................................................
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 ..........................................................................................................................................................
Right of use asset and lease receivables ......................................................................................................................
Unsettled transactions ..................................................................................................................................................
Accounts receivable ......................................................................................................................................................
Right of use asset and lease receivables as at 1 January ..............................................................................................
Additions during the period ..........................................................................................................................................
Sundry assets ................................................................................................................................................................
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 period end. Lease liability is specified in
note 34.
Impairment ...................................................................................................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 23
===== SIDA 27 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
16
30. Issued bonds
Issued bonds are specified as follows:
First Maturity
Currency, nominal value issued Maturity type Terms of interest 30.6.2025 31.12.2024
Unsecured bonds:
2022 2025 At maturity Floating, 3 month REIBOR + 1.25 % 1,672 1,674
2023
2026 At maturity Floating, 3 month STIBOR + 4.10 % 7,283 9,832
2023
2026 At maturity Floating, 3 month NIBOR + 4.10% 9,119 9,891
2023 2026 At maturity Floating, 3 month STIBOR + 4.0% 6,421 6,325
2021 2027 At maturity CPI-indexed, fixed 1.0% 7,057 6,915
2025 2028 At maturity Floating, 3 month NIBOR + 2.0% 4,867 -
2025 2028 At maturity Floating, 3 month STIBOR + 2.0% 7,717 -
2025 2028 At maturity Floating, 3 month REIBOR + 1.14
% 5,000 -
2025 2029 At maturity Fixed 4.50% 28,538 -
2022 2032 At maturity CPI-indexed, fixed 1.40% 2,550 2,486
Total 80,225 37,123
31. Subordinated liabilities
a. Subordinated liabilities:
First Maturity
Currency, nominal value issued Maturity type Terms of interest 30.6.2025 31.12.2024
2023 2034 At maturity CPI-Indexed, fixed 6.25% 2,786 2,634
2015 2045 At maturity CPI-Indexed, fixed 6.25% 3,075 2,994
Total 5,861 5,629
b. Subordinated liabilities are specified as follows:
30.6.2025 31.12.2024
5,629 5,993
- (800)
- 500
(53) (113)
(27) (346)
312 394
Total 5,861 5,629
32. Short positions held for trading
Short positions held for trading are specified as follows:
30.6.2025 31.12.2024
0 128
- 25
Total 0 153
Additions .......................................................................................................................................................................
KVIKA 25 1201 GB ISK 1,660 million ....
EMTN 28 0421, SEK 600 million ..........
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 million and NOK 50 million which were all accepted.
EMTN 28 0421, NOK 400 million .........
TM 15 1, ISK 2,000 million ..................
KVIKA 32 0112, ISK 2,000 million ........
Listed bonds ..................................................................................................................................................................
Listed government bonds and bonds with government guarantees ...........................................................................
Balance at the beginning of the year ............................................................................................................................
Subordinated 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
and 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.
KVB 21 02, ISK 5,400 million ...............
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. At the interest payment
date in May 2025 for TM 15 01, the Group had the right to repay the subordinated bond and on any subsequent interest payment dates until
maturity.
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.
KVIKA 28 0703, ISK 5,000 m. ...............
EMTN 26 0511, SEK 566 million * .......
EMTN 26 0511, NOK 750 million * ......
EMTN 26 1123 GB, SEK 500 m. ...........
Redemption of KVB 18 02 .............................................................................................................................................
EMTN 29 0602, EUR 200 m. ................
Paid interest ..................................................................................................................................................................
Paid interests due to indexation ...................................................................................................................................
Accrued interests and indexation .................................................................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 24
===== SIDA 28 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
16
33. Short positions used for hedging
Short positions used for hedging are specified as follows:
30.6.2025 31.12.2024
104 -
- 42
Total 104 42
34. Other liabilities
Other liabilities are specified as follows:
30.6.2025 31.12.2024
5,826 7,531
2,831 1,565
1,418 1,259
966 1,158
1,136 1,111
469 377
654 320
14 18
294 296
Total 13,607 13,635
Lease liability is specified as follows:
30.6.2025 31.12.2024
1,158 1,510
- 13
- (15)
(8) 2
(190) (408)
5 56
Total 966 1,158
35. Share capital
a. Share capital
30.6.2025 31.12.2024
4,631 4,722
208 62
240 310
b. Changes made to the nominal amount of share capital
c. Share capital increase authorisations
Listed government bonds and bonds with government guarantees ...........................................................................
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 period ..........................................................................................................................................
Instalment .....................................................................................................................................................................
Contingent consideration .............................................................................................................................................
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 28.
Lease liability as at 1 January ........................................................................................................................................
Other liabilities ..............................................................................................................................................................
During the period in 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 period, the Bank acquired treasury shares amounting to ISK 237 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 .................................................................................................................................
Special taxes on financial institutions and financial activities .....................................................................................
Authorised but not issued shares .................................................................................................................................
Nominal amount of treasury shares .............................................................................................................................
The nominal value of shares issued by the Bank is ISK 1 per share. All currently issued shares are fully paid. The holders of shares are entitled to
receive dividends as approved by the general meeting and are entitled to o ne vote per nominal value of ISK 1 at s hareholders' meetings. Reference
is made to the Bank's Articles of Association for more information about the share capital.
Currency adjustments ...................................................................................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 25
===== SIDA 29 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
16
36. Capital adequacy ratio (CAR)
Own funds 30.6.2025 31.12.2024
66,090 89,517
(2,115) (2,050)
(20,942) (28,828)
(267) (23,500)
(1,469) (2,273)
1,736 5,801
Common equity Tier 1 capital (CET 1) 43,033 38,667
5,745 5,601
Total own funds 48,778 44,268
Risk-weighted exposure amount (RWEA)
173,807 158,178
7,889 7,586
28,080 28,080
Total risk-weighted exposure amount 209,776 193,844
Capital ratios
20.5% 19.9%
20.5% 19.9%
23.3% 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 30.6.2025
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 reqiurement 12.9% 15.0% 17.9%
Operational risk ............................................................................................................................................................
Total equity ...................................................................................................................................................................
Market risk ....................................................................................................................................................................
Tier 2 capital ..................................................................................................................................................................
Amounts below the threshold for deduction * ............................................................................................................
Capital adequacy ratio (CAR) ........................................................................................................................................
Deferred tax asset * ......................................................................................................................................................
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 ..............................................................................................................
Pillar II-R capital requirement .........................................................................................................
Combined buffer requirement ........................................................................................................
T1 ratio ..........................................................................................................................................................................
Systemic risk buffer (SRB) ....................................................................................................
.........................................
Countercyclical capital buffer (CCyB) ...........................................................................................................................
Capital conservation buffer (CCB) ................................................................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 26
===== SIDA 30 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
16
37. Leverage ratio
30.6.2025 31.12.2024
336,719 253,117
3,357 2,533
562 800
Total exposure measure 340,639 256,450
43,033 38,667
12.6% 15.1%
38. Minimum requirements for own funds and eligible liabilities (MREL)
Own funds and eligible liabilities 30.6.2025 31.12.2024
43,033 38,667
5,745 5,601
63,038 35,449
Total own funds and eligible liabilities 111,816 79,718
MREL-RWEA and CBR
209,776 193,844
53.3% 41.1%
22.0% 22.0%
6.4% 6.4%
MREL-RWEA requirement including CBR* 28.4% 28.4%
MREL-TE
M
340,639 256,450
32.8% 31.1%
6.0% 6.0%
Own funds and eligible liabilities as % of RWEA ..........................................................................................................
Eligible liabilities ...........................................................................................................................................................
Risk-weighted exposure amount (RWEA) .....................................................................................................................
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) ............................................................................................................................
*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* .............................................................................................................................................
The Central Bank of Iceland's Resolution Authority presented the Group their first minimum requirement for own funds and eligible liabilities
(MREL) in January 2025. According to Act No. 70/2020 on Resolution of Credit Institutions and Investment Firms, the Bank shall at all times meet the
MREL funds 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 decision of the Resolution Authority entails that the Bank must at all times maintain a minimum of 22% of MREL-RWEA
and 6% of MREL-TEM.
Leverage ratio ...............................................................................................................................................................
Tier 1 capital ..................................................................................................................................................................
Total exposure measure ...............................................................................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 27
===== SIDA 31 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
38
Risk management
39. Hedging
40. Credit risk - overview
a. Definition
b. Management
c. Credit approval process
d. Collateral
e. Credit rating, control and provisioning
f. Loan portfolio management
g. Impairment
h. Derivatives
i. Securities used for hedging
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.
The Group offers derivative contracts in the form of swap contracts on highly liquid securities or currencies. On the day when the contract is
entered into, the Group purchases the underlying asset and hedges its exposure to price changes. Collateral is primarily in the form of cash or
listed, highly liquid securities. The risk management unit and ALCO set rules about the level of collateralisation and the risk management unit
monitors the compliance to these rules. Contracts are closed if required levels of collateralisation are not met.
The Group hedges itself for market risk of derivative contracts by purchasing the underlying securities at the commencement of the contract.
Since the contracts require delivery of the underlying securities to the customer on the settlement day, the credit risk towards the issuer is
immaterial.
To ensure an effective diversification of the loan portfolio the board has set a limit framework defining maximum exposure as a ratio of the
Group’s equity and/or the total size of the loan portfolio. These limits include limitation on joint exposure to associated clients, exposure to
individual and associated industries, single regions and countries etc. It is the responsibility of risk management to monitor that these limits are
not being violated and to report discrepancies to the credit committee.
One of the Group's primary sources of risk is credit risk. Credit risk is defined as the risk that one party to a financial instrument will cause a
financial loss for the other party by failing to discharge an obligation.
The risk management unit monitors credit risk and is responsible for developing methodologies to systematically identify, assess, monitor, and
manage it. The Group uses a variety of tools and processes to manage credit risk, including collaterals, hedges and loan portfo lio management.
To a very large extent the Group's loan portfolio consists of senior loans, most of which are highly collateralised.
Securing loans with collateral is a traditional method to reduce credit risk. The Group uses different methods to reduce credit risk by obtaining
collateral from customers where appropriate. Such collateral gives the Group right to the collateralised assets for current and future obligations
incurred by the customer.
The Group applies appropriate haircuts on all collateral in order to ensure proper risk mitigation. For all collateral in listed securities, the Grou p
maintains the right to liquidate collateral in case its market value falls below a predefined limit.
The risk management unit ensures that loans have a credit rating and is responsible for reviewing the loan portfolio. The Group monitors the
value of collateral by listed securities on a real time basis and takes prompt action when necessary.
The originating department prepares a proposal for each larger loan or credit line which is presented to the credit committee for approval. The
proposal consists of a basic description of the client, the purpose of the loan, a simple credit assessment and arguments for or against granting
the loan. The committee decides whether there is need for further cred it assessment and on what terms the loan may be granted. For smaller
loans the originating department obtains a general credit approval from the credit committee with respect to the process, terms, credit limits and
total amount of the specific lending type.
A more thorough credit assessment may be conducted if considered appropriate and can include an assessment of a borrower's fundamental
credit strength as well as the value of any collateral. To assess the borrower's capacity to meet his or her obligations the committee can request
stress test analysis of the borrower's cash flow or call for third party assessments.
Provisioning for loan impairments is estimated on the basis of expected loss models assessing the portfolio as a whole as well as individual
lending. Risk management unit suggest a level of provisioning for the portfolio, based on the expected loss assessment. Risk management unit
reassess impairments in the event of collateral decay, delayed payments, indication of increased risk, or other early warning signs. Provisions
require approval from the credit committee. Refer to note 82 in the 2024 Consolidated Financial Statements for more information on the Group's
impairment policy.
Condensed Interim Consolidated Financial Statements 30 June 2025 28
===== SIDA 32 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
40
41. Maximum exposure to credit risk
30.6.2025 Public Financial Corporate
On-balance sheet exposure entities institutions customers Individuals 30.6.2025
30,919 - - - 30,919
- 27,729 - - 27,729
6 0 127,901 44,194 172,101
53,842 2,143 254 - 56,238
- 1,884 327 107 2,318
1 650 11,332 45 12,029
84,768 32,406 139,815 44,345 301,335
Off-balance sheet exposure
11 5 4,344 848 5,209
- - 508 57 565
Maximum exposure to credit risk 84,779 32,411 144,667 45,251 307,108
31.12.2024 Public Financial Corporate
On-balance sheet exposure entities institutions customers Individuals 31.12.2024
18,593 - - - 18,593
- 11,530 - - 11,530
7 2 110,458 39,736 150,203
62,660 1,889 245 - 64,795
- 1,001 144 52 1,197
1 1,115 5,423 142 6,680
81,261 15,536 116,270 39,930 252,997
Off-balance sheet exposure
7 2 5,038 1,013 6,060
- - 801 - 801
Maximum exposure to credit risk 81,268 15,538 122,109 40,943 259,858
42. Credit quality of financial assets
Model parameters for
Icelandic portfolio
Scenarios Base case Upside Downside Base case Upside Downside
Unemployment rate 4.6% 3.7% 5.5% 4.2% 3.7% 4.9%
Inflation CPI index 3.9% 3.4% 5.8% 3.7% 3.4% 5.5%
Assigned weight 50.0% 15.0% 35.0% 50.0% 15.0% 35.0%
Model parameters for UK
portfolio
Scenarios Base case Upside Downside Severe Base case Upside Downside Severe
Unemployment rate 4.8% 4.5% 5.9% 7.5% 4.1% 3.9% 5.8% 7.5%
Inflation CPI index 3.3% 3.2% 3.5% 8.9% 5.0% 4.7% 8.3% 16.4%
Assigned weight 50.0% 15.0% 25.0% 10.0% 50.0% 20.0% 25.0% 5.0%
The Group utilises an economic forecast which is aligned with requirements for the calculation of expected credit loss. The Group owns loan
portfolios in two geographical segments, i.e. Iceland and the United Kingdom ("UK"). In general, the Group utilises the same ECL methodology for
the portfolios in both segments, although in the UK it is to a larger extent based on an individual assessment by credit specialists and a separate
macroeconomic forecast is used to reflect the UK economy. The following tables shows the first 12 month macro economic values for the
variables used in the expected credit loss model. Reference is made to note 82 in the 2024 Consolidated Financial Statements for further
information about the Group‘s impairment methodology.
Loans to customers ........................................................................................
Derivatives .....................................................................................................
Other assets ...................................................................................................
Cash and balances with Central Bank ...........................................................
The maximum exposure to credit risk for on-balance sheet and off-balance sheet items, before taking into account any collateral held or other
credit enhancements, is specified as follows:
Cash and balances with Central Bank ...........................................................
Loans to credit institutions ............................................................................
Fixed income securities .................................................................................
Loans to credit institutions ............................................................................
Fixed income securities .................................................................................
Loans to customers ........................................................................................
Derivatives .....................................................................................................
Other assets ...................................................................................................
Loan commitments ........................................................................................
Financial guarantee contracts .......................................................................
31.12.2024
Loan commitments ........................................................................................
Financial guarantee contracts .......................................................................
The book value of financial assets which fall under the impairment requirements of IFRS 9 are presented as net of expected credit losses ("ECL") in
the statement of financial position. The ECL are recalculated for each asset on at least a quarterly basis. The assessment of ECL is based on
calculations from PD, LGD and EAD models. Furthermore, the assessment is based upon management's assumptions regarding the development
of macroeconomic factors over the coming twelve months. The assumption s for macroeconomic development are decided for three scenarios: a
base case, an upside scenario, a downside scenario and for the UK portfolio there is a fourth scenario, severe downturn. Each scenario includes a
probability weight, and the ECL is derived as a weighted average. The amount of ECL to be recognized is dependent on the Group's definition of
significant increase in credit risk, which controls the impairment stage each asset is allocated to. The factors that are used to measure significant
increase in credit risk include comparison of changes in PD values, annualized lifetime PD values, days past due and watch list .
30.6.2025
30.6.2025 31.12.2024
Condensed Interim Consolidated Financial Statements 30 June 2025 29
===== SIDA 33 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
42
42. Credit quality of financial assets (cont. )
a.
Impairment Listed Unlisted
Claim due to expected Carrying Total securities and securities and Residential Commercial Industrial Unsecured
30.6.2025 value credit loss amount % collateral Deposits liquid funds other funds real estate real estate Automobiles equipment Guarantee s Other claim value
6 (0) 6 0.0% 9 - - - - - 9 - - - 0
0 (0) 0 0.0% - - - - - - - - - - 0
Corporate
Real estate activities .................................. 46,533 (241) 46,292 26.9% 87,121 62 251 279 35,568 49,452 984 223 100 20 2 1,947
Construction .............................................. 20,996 (98) 20,898 12.1% 37,646 4 - - 16,764 9,651 5,857 4,781 0 589 1 ,578
Service Activities ........................................ 17,256 (154) 17,103 9.9% 32,313 26 104 1,579 1,753 4,304 19,202 3,623 57 1,666 475
Activities of Holding Companies ................. 11,924 (555) 11,369 6.6% 27,137 20 86 8,503 8,818 6,901 1,519 175 685 429 955
Accommodat. and Food Service Activit. ..... 11,797 (60) 11,737 6.8% 21,665 81 - - 1,413 19,578 526 32 0 35 641
Act. of Hold. Comp. - Securities Financing .. 6,930 (147) 6,783 3.9% 14,203 575 13,156 472 - - - - 0 - 256
Other ......................................................... 13,815 (96) 13,719 8.0% 26,077 578 2,312 - 3,008 7,173 5,264 4,192 115 3,435 408
45,027 (834) 44,194 25.7% 70,643 22 770 649 22,354 2,713 41,595 1,130 - 1,410 8,049
Total 174,285 (2,184) 172,101 100.0% 316,815 1,366 16,680 11,483 89,679 99,772 74,956 14,156 956 7,766 14,309
Impairment Listed Unlisted
Claim due to expected Carrying Total securities and securities and Residential Commercial Industrial Unsecured
31.12.2024 value credit loss amount % collateral Deposits liquid fund s other funds real estate real estate Automobile s equipment Guarantees Other claim value
7 (0) 7 0.0% 10 - - - - - 10 - - 0 0
2 (0) 2 0.0% - - - - - - - - - - 2
Corporate
Real estate activities .................................. 45,564 (339) 45,225 30.1% 84,189 31 50 31 41,523 41,134 974 240 0 206 49 1
Construction .............................................. 16,412 (92) 16,320 10.9% 32,487 0 0 - 12,426 9,668 5,260 4,426 0 707 2 56
Service Activities ........................................ 16,068 (162) 15,906 10.6% 29,302 26 122 577 1,020 2,523 19,253 3,815 0 1,966 317
Accommodat. and Food Service Activit. ..... 11,492 (86) 11,406 7.6% 22,151 105 - - 1,367 20,069 528 47 - 36 8
Activities of Holding Companies ................. 7,143 (654) 6,489 4.3% 20,066 13 201 9,762 4,864 3,344 217 183 1,468 15 1,434
Wholesale and Retail Trade ....................... 4,930 (56) 4,875 3.2% 7,474 24 - - 247 913 3,601 1,952 100 636 384
Other ......................................................... 10,303 (66) 10,237 6.8% 29,559 342 7,208 163 3,390 11,277 2,176 2, 190 22 2,791 415
40,609 (872) 39,736 26.5% 57,599 33 793 655 11,886 1,815 40,060 1,032 - 1,325 8,312
Total 152,530 (2,327) 150,203 100.0% 282,838 575 8,374 11,187 76,723 90,743 72,080 13,884 1,589 7,683 11,619
Public entities .................................................
Financial institutions .......................................
Individuals .......................................................
Collateral value is shown as the market- or accounting value of collateral allocated to exposures. Other collateral includes financial claims, inventories and receivables.
Allocated collateral
Breakdown of loans to customers by industry and information on collateral and other credit enhancements
The Group applies the same valuation methods to collateral held as other comparable assets held by the Group. For other types of assets the Group uses third party valuation where possible.
Public entities .................................................
Individuals .......................................................
Financial institutions .......................................
Allocated collateral
Condensed Interim Consolidated Financial Statements 30 June 2025 30
===== SIDA 34 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
42
42. Credit quality of financial assets (cont.)
b.
30.6.2025
Loans to customers: Stage 1 Stage 2 Stage 3 FVTPL Total
107,073 5,624 - 2,393 115,090
34,695 779 - - 35,474
11,546 4,095 - - 15,641
339 512 - - 852
1 4 5,670 113 5,787
362 1,078 1 - 1,441
Gross carrying amount 154,016 12,092 5,671 2,506 174,285
(342) (201) (1,640) - (2,184)
Book value 153,674 11,891 4,031 2,506 172,101
Loan commitments, guarantees and unused credit facilities: Stage 1 Stage 2 Stage 3 FVTPL Total
3,221 37 - 646 3,904
494 0 - - 494
719 630 - - 1,349
1 1 - - 2
0 - 24 - 24
- - - - -
Total off-balance sheet amount 4,435 669 24 646 5,773
(10) (0) (3) - (14)
Net off-balance sheet amount 4,424 668 22 646 5,760
31.12.2024
Loans to customers: Stage 1 Stage 2 Stage 3 FVTPL Total
89,427 1,266 - 17 90,710
40,153 3,159 - - 43,313
6,609 2,004 - - 8,613
227 381 - - 608
1 - 7,940 114 8,055
287 203 - 743 1,232
Gross carrying amount 136,704 7,012 7,940 874 152,530
(367) (189) (1,771) - (2,327)
Book value 136,337 6,823 6,169 874 150,203
Loan commitments, guarantees and unused credit facilities: Stage 1 Stage 2 Stage 3 FVTPL Total
4,675 3 - - 4,678
1,568 0 - - 1,568
563 6 - - 569
2 1 - - 2
- - 34 10 44
- 0 - - 0
Total off-balance sheet amount 6,808 10 34 10 6,861
(11) (0) (7) - (18)
Net off-balance sheet amount 6,797 9 27 10 6,843
Non-rated .............................................................................................
Expected credit loss .............................................................................
Expected credit loss .............................................................................
Credit quality band I .............................................................................
Credit quality band II ............................................................................
Credit quality band III ...........................................................................
Credit quality band IV ..........................................................................
In default ..............................................................................................
Credit quality band II ............................................................................
Credit quality band III ...........................................................................
Credit quality band IV ..........................................................................
In default ..............................................................................................
Non-rated .............................................................................................
The following tables show financial assets subject to the impairment requirements of IFRS 9 broken down by credit quality bands where band i
denotes the lowest credit risk and band iv the highest credit risk. Assets measured at fair value through profit or loss are not subject to the stage
classification requirements of IFRS 9 but are nevertheless included in the tables in order to give a more complete picture of the credit quality of
loans to customers and reconcile the tables to the carrying amount on the balance sheet. The Bank has primarily used calibrated external credit
ratings to assess the default probability of its customers. Some of the larger borrowers are furthermore individually assessed by credit specialist s.
The Bank has implemented internal credit rating models for part of the loan portfolio and intends to continue this development in 2025.
Credit quality band I .............................................................................
Credit quality band II ............................................................................
Credit quality band III ...........................................................................
Credit quality band IV ..........................................................................
Credit quality of financial assets by credit quality band
Credit quality band III ...........................................................................
Credit quality band IV ..........................................................................
In default ..............................................................................................
Non-rated .............................................................................................
Expected credit loss .............................................................................
Credit quality band I .............................................................................
In default ..............................................................................................
Non-rated .............................................................................................
Expected credit loss .............................................................................
Credit quality band I .............................................................................
Credit quality band II ............................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 31
===== SIDA 35 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
42
42. Credit quality of financial assets (cont.)
c. Breakdown of loans to customers into not past due and past due
30.6.2025 Claim Expected Carrying
value credit loss amount
158,031 (585) 157,446
9,162 (65) 9,097
2,295 (49) 2,246
541 (34) 507
1,211 (108) 1,103
1,911 (879) 1,032
1,134 (464) 670
Total 174,285 (2,184) 172,101
31.12.2024 Claim Expected Carrying
value credit loss amount
137,349 (625) 136,724
7,724 (104) 7,619
2,321 (73) 2,249
698 (16) 682
2,180 (820) 1,359
809 (248) 561
1,448 (441) 1,008
Total 152,530 (2,327) 150,203
d. Allowance for expected credit loss on loans to customers and loan commitments, guarantees and unused credit facilities
30.6.2025
Expected credit loss allowance total
Sta
ge 1 Sta ge 2 Sta ge 3 Total
Transfers of financial assets:
Balance as at 1 January 2025 377 189 1,778 2,345
99 (46) (53) -
(25) 42 (17) -
(11) (27) 38 -
(136) 38 132 34
175 56 47 278
(128) (50) (208) (386)
(0) (0) (74) (74)
Balance as at 30 June 2025 352 202 1,643 2,198
Expected credit loss allowance for loans to customers
S t a g e 1S t a g e 2S t a g e 3 T o t a l
Transfers of financial assets:
Balance as at 1 January 2025 367 189 1,771 2,327
94 (46) (48) -
(25) 42 (17) -
(11) (27) 37 -
(129) 38 131 40
172 55 47 275
(126) (50) (208) (384)
(0) (0) (74) (74)
Balance as at 30 June 2025 342 201 1,640 2,184
New financial assets, originated or purchased ..............................................................
Derecognitions and maturities ......................................................................................
Write-offs .......................................................................................................................
Derecognitions and maturities ......................................................................................
Write-offs .......................................................................................................................
Transfer to Stage 1 - (Initial recognition) ..................................................................
Transfer to Stage 2 - (significantly increased credit risk) .........................................
Transfer to Stage 3 - (credit impaired) .....................................................................
Net remeasurement of loss allowance ..........................................................................
The following tables show changes in the expected credit loss allowance of loans to customers and for loan commitments, guarantees and unused
credit facilities during the year.
Transfer to Stage 1 - (Initial recognition) ..................................................................
Transfer to Stage 2 - (significantly increased credit risk) .........................................
Transfer to Stage 3 - (credit impaired) .....................................................................
Net remeasurement of loss allowance ..........................................................................
New financial assets, originated or purchased ..............................................................
Past due 61-90 days ..................................................................................................................................
Past due 91-180 days ................................................................................................................................
Past due 181-360 days ..............................................................................................................................
Past due more than 360 days ...................................................................................................................
Past due 91-180 days ................................................................................................................................
Past due 181-360 days ..............................................................................................................................
Past due more than 360 days ...................................................................................................................
Not past due .............................................................................................................................................
Past due 1-30 days ....................................................................................................................................
Past due 31-60 days ..................................................................................................................................
Not past due .............................................................................................................................................
Past due 1-30 days ....................................................................................................................................
Past due 31-60 days ..................................................................................................................................
Past due 61-90 days ..................................................................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 32
===== SIDA 36 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
42
42. Credit quality of financial assets (cont.)
Expected credit loss allowance for loan commitments, guarantees and unused credit facilities
S t a g e 1S t a g e 2S t a g e 3 T o t a l
Transfers of financial assets:
Balance as at 1 January 2025 11 0 7 18
5 (0) (5) -
(0) 0 (0) -
(0) (0) 0 -
(6) (0) 1 (6)
3 0 - 3
(2) (0) (0) (2)
Balance as at 30 June 2025 10 0 3 14
31.12.2024
Expected credit loss allowance total
S t a g e 1S t a g e 2S t a g e 3 T o t a l
Transfers of financial assets:
Balance as at 1 January 2024 382 128 1,724 2,234
104 (22) (82) -
(17) 30 (13) -
(32) (35) 68 -
(175) 16 845 686
271 120 224 615
(155) (47) (581) (783)
(0) (1) (406) (407)
Balance as at 31 December 2024 377 189 1,778 2,345
Expected credit loss allowance for loans to customers
S t a g e 1S t a g e 2S t a g e 3 T o t a l
Transfers of financial assets:
Balance as at 1 January 2024 368 128 1,723 2,219
103 (21) (82) -
(17) 30 (13) -
(32) (35) 68 -
(174) 16 843 685
268 120 219 608
(149) (47) (581) (778)
(0) (1) (406) (407)
Balance as at 31 December 2024 367 189 1,771 2,327
Expected credit loss allowance for loan commitments, guarantees and unused credit facilities
S t a g e 1S t a g e 2S t a g e 3 T o t a l
Transfers of financial assets:
Balance as at 1 January 2024 14 1 1 16
1 (0) (0) -
(0) 0 (0) -
(0) (0) 0 -
(1) (0) 1 0
3 0 4 7
(6) (0) (0) (6)
Balance as at 31 December 2024 11 0 7 18
Transfer to Stage 2 - (significantly increased credit risk) .........................................
Transfer to Stage 3 - (credit impaired) .....................................................................
Net remeasurement of loss allowance ..........................................................................
New financial assets, originated or purchased ..............................................................
Derecognitions and maturities ......................................................................................
Write-offs .......................................................................................................................
Transfer to Stage 1 - (Initial recognition) ..................................................................
Transfer to Stage 2 - (significantly increased credit risk) .........................................
Transfer to Stage 3 - (credit impaired) .....................................................................
Net remeasurement of loss allowance ..........................................................................
New financial assets, originated or purchased ..............................................................
Derecognitions and maturities ......................................................................................
Transfer to Stage 3 - (credit impaired) .....................................................................
Net remeasurement of loss allowance ..........................................................................
New financial assets, originated or purchased ..............................................................
Derecognitions and maturities ......................................................................................
Write-offs .......................................................................................................................
Transfer to Stage 1 - (Initial recognition) ..................................................................
Net remeasurement of loss allowance ..........................................................................
New financial assets, originated or purchased ..............................................................
Derecognitions and maturities ......................................................................................
Transfer to Stage 1 - (Initial recognition) ..................................................................
Transfer to Stage 2 - (significantly increased credit risk) .........................................
Transfer to Stage 1 - (Initial recognition) ..................................................................
Transfer to Stage 2 - (significantly increased credit risk) .........................................
Transfer to Stage 3 - (credit impaired) .....................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 33
===== SIDA 37 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
42
43. Loan-to-value
a. General
b. Breakdown
30.6.2025 % 31.12.2024 %
48,323 28.1% 41,225 27.4%
60,391 35.1% 57,209 38.1%
31,779 18.5% 33,497 22.3%
7,860 4.6% 2,958 2.0%
5,667 3.3% 3,461 2.3%
2,507 1.5% 1,505 1.0%
2,106 1.2% 1,378 0.9%
No or negligible collateral:
13,468 7.8% 8,968 6.0%
Total 172,101 100.0% 150,203 100.0%
44. Collateral against exposures to derivatives
Fixed Variable Other
income income Real fixed
Deposits securities securities estate assets Other 30.6.2025
148 118 74 - - - 341
920 112 1,310 - - - 2,343
99 8 91 - - - 198
Total 1,168 238 1,475 - - - 2,881
Fixed Variable Other
income income Real fixed
Deposits securities securities estate assets Other 31.12.2024
548 114 161 - - - 824
709 28 1,401 - - - 2,138
62 16 80 - - - 158
Total 1,319 158 1,643 - - - 3,120
45. Large exposures
30.6.2025 31.12.2024
Large exposures before risk adjusted mitigation Number Amount Number Amount
3 14,776 2 11,133
2 16,769 0 -
0 - 0 -
Total 5 31,545 2 11,133
3 13,661 1 6,522
4 26,494 1 6,702
10-20% of capital base ...................................................................................................
20-25% of capital base ...................................................................................................
Exceeding 25% of capital base .......................................................................................
Thereof loans to credit institutions which are part of
Large exposures net of risk adjusted mitigation ............................................................
Kvika's liquidity management .....................................................................................
Financial institutions ..............................
Corporate customers ..............................
Financial institutions ..............................
Corporate customers ..............................
Individuals ..............................................
Greater than 200% .........................................................................................................
In accordance with regulation no. 575/2013 of the European Union on prudential requirements for credit institutions, which was incorporated
into Icelandic law with Act No. 38/2022, total exposure towards a customer is classified as a large exposure if it exceeds 10% of the financial
institution's Tier 1 capital (see note 36).
According to the regulation a single exposure, net of risk adjusted mitigation, cannot exceed 25% of the eligible Tier 1 capital. Based on Icelandic
rules no. 789/2022 on the Application of Optional Provisions and Authorisations Pursuant to the Act on Financial Undertakings, the value of
exposures towards financial institutions shall not exceed 25% of the eligible Tier 1 capital or 10 bn. ISK, whichever is higher. Single large exposure s
net of risk adjusted mitigation take into account the effects of collateral and other credit enhancements held by the financial institution, and
other credit enhancements, in accordance with regulation no. 575/2013.
The loan-to-value ratio (LTV) is the ratio of the gross amount of the loan to the value of the collateral, if any. The general creditworthiness of a
customer is viewed as the most reliable indicator of credit quality of a loan. Besides collateral included in the LTV ratios the Group uses other risk
mitigation measures, such as guarantees, negative pledge, cross-collateral and collateralization of non-quantifiable assets.
The breakdown of loans to customers by LTV is specified as follows:
Less than 50% .................................................................................................................
50-70% ............................................................................................................................
70-90% ............................................................................................................................
90-100% ..........................................................................................................................
Individuals ..............................................
Amounts have been adjusted to exclude collateral in excess of claim value, i.e. overcollateralisation.
100-125% ........................................................................................................................
125-200% ........................................................................................................................
Other loans with no collateral ..................................................................................
The Group applies the same valuation methods to collateral held as other comparable assets held by the Group. Haircuts are applied to account
for liquidity and other factors which may affect the collateral value of the asset.
Condensed Interim Consolidated Financial Statements 30 June 2025 34
===== SIDA 38 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
45
46. Liquidity risk
a. Definition
b. Management
30.6.2025 Unweighted Weighted Unweighted Weighted Unweighted Weighted
79,568 79,568 12,450 11,828 92,021 91,399
544 462 3,369 2,695 3,913 3,157
- - 5,150 2,318 5,150 2,318
Total high quality assets 80,112 80,030 20,969 16,840 101,085 96,874
137,552 33,644 3,370 1,221 143,694 36,308
18 18 122 122 179 179
10,024 5,738 342 21 12,868 6,111
Total outflows (0-30 days) 147,594 39,399 3,834 1,364 156,741 42,598
348 348 1,789 1,789 19,114 19,114
26,393 10,429 1,810 1,809 31,973 14,407
- - - (2,574) - (1,573)
Total inflows (0-30 days) 26,741 10,777 3,599 1,023 51,087 31,948
280% 4938% 910%
31.12.2024 Unweighted Weighted Unweighted Weighted Unweighted Weighted
68,950 68,950 - - 72,409 72,409
823 700 - - 823 700
- - - - - -
Total high quality assets 69,773 69,650 - - 73,232 73,109
122,660 23,181 - - 131,228 27,435
17 17 - - 17 17
13,201 8,730 - - 15,672 9,141
Total outflows (0-30 days) 135,878 31,928 - - 146,918 36,594
692 692 - - 10,559 10,559
16,441 4,838 - - 17,763 5,718
- - - - - -
Total inflows (0-30 days) 17,133 5,530 - - 28,321 16,276
264% 0% 360%
30.6.2025 31.12.2024
160% 144%
*Requirement first applies from June 2025
Liquidity risk is the risk that the Group will encounter difficulty in meeting contractual payment obligations associated with its financial liabil ities
that are settled by delivering cash or another financial asset. This risk mainly arises from mismatches in the timing of cash flows. The Group has
internal rules that require certain matching of the maturities of assets and liabilities. Furthermore, to ensure the ability to meet liquidity needs ,t h e
Group maintains a stock of highly liquid unencumbered assets, e.g. cash, treasury bills and treasury bonds.
Liquidity is managed by treasury and monitored by risk management. Liquidity position is reported to the ALCO committee. The Central Bank of
Iceland sets minimum requirements for the liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR). The minimum 30 day LCR
regulatory requirement is 100% for LCR total, 50% minimum requirement for LCR in ISK and 80% minimum requirement for LCR in EUR. The
minimum requirement for LCR EUR only applies when the Group‘s commitments in EUR represent 10% or more of the Group´s total commitments.
The minimum regulatory requirement for NSFR total is 100%.
NSFR total ...........................................................................................................................................................................
Other inflows ..........................................................................
Restrictions on inflows ...........................................................
Liquidity coverage ratio ..........................................................
Deposits ..................................................................................
Other borrowings ...................................................................
Other outflows .......................................................................
Deposits ..................................................................................
Other borrowings ...................................................................
Other outflows .......................................................................
Liquid assets level 2B ..............................................................
Liquid assets level 2B ..............................................................
Short-term deposits with other banks ...................................
Other inflows ..........................................................................
ISK EUR* Total all currencies
Liquid assets level 1 ................................................................
Liquid assets level 2A .............................................................
ISK EUR* Total all currencies
Liquid assets level 1 ................................................................
Liquid assets level 2A .............................................................
Short-term deposits with other banks ...................................
Restrictions on inflows ...........................................................
Liquidity coverage ratio ..........................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 35
===== SIDA 39 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
45
46. Liquidity risk (cont.)
c. LCR deposit categories
30.6.2025 Run off date 0-30 days Over 30 days Total
5%-100% 106,432 15,422 121,854
5%-100% 6,369 356 6,724
20%-40% 10,299 228 10,528
40% 1,804 84 1,888
100% 18,790 16,321 35,111
4,037 107 4,144
Total 147,731 32,517 180,249
31.12.2024 Run off date 0-30 days Over 30 days Total
5%-100% 103,372 15,899 119,271
5%-100% 5,807 200 6,007
20%-40% 11,124 48 11,172
40% 81 83 164
100% 10,843 12,439 23,282
3,440 41 3,481
Total 134,668 28,710 163,378
Financial entities .................................................................................................................
Other * .................................................................................................................................
Individuals ...........................................................................................................................
Small and medium sized corporates ...................................................................................
Large corporates .................................................................................................................
Public entities ......................................................................................................................
Public entities ......................................................................................................................
The Group's deposit base is divided into different categories depending on customer type according to the LCR methodology. Different run off
rates are applied on each category representing their level of stickiness, which measures the stability of the deposit. Deposits with maturity over 30
days are defined as term deposits within the LCR calculations, other as demand deposits. Run off rates are applied on each category of demand
deposits and the expected cash outflow over the next 30 days under stressed conditions calculated. The higher the run off rate, the more high
quality liquid assets the Group must hold to ensure it can meet its obligations and maintain stability during a crisis.
The table below shows the Group's deposit base divided into different categories depending on customer type and run off rates according to the
LCR methodology.
Individuals ...........................................................................................................................
Small and medium sized corporates ...................................................................................
*Pledged deposits do not have any run off rate according to liquidity rules.
Financial entities .................................................................................................................
Other * .................................................................................................................................
Large corporates .................................................................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 36
===== SIDA 40 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
45
46. Liquidity risk (cont.)
d. Maturity analysis of financial assets and financial liabilities
30.6.2025 Up to 1 1-3 3-12 1-5 Over 5 Gross inflow/ Carrying
Financial assets by type month months months years years (outflow) amount
Non-derivative assets
30,933 - - - - 30,933 30,919
18,771 8,167 279 629 - 27,846 27,729
19,906 9,251 62,085 104,802 13,852 209,896 172,101
8,088 8,192 7,349 28,644 3,967 56,238 56,238
24,949 - 3,347 - - 28,296 28,296
7,227 - - - - 7,227 7,227
9,657 700 1,455 217 - 12,029 12,029
119,530 26,310 74,515 134,291 17,818 372,464 334,539
Derivative assets
Inflow ....................................................... 7, 859 10,422 1,973 20, 345 1,078 41,677
Outflow .................................................... (6,689) (9,301) (1,943) (19,820) (928) (38,682)
1,169 1,120 30 525 150 2,995 2,318
Up to 1 1-3 3-12 1-5 Over 5 Gross inflow/ Carrying
Financial liabilities by type month months months years years (outflow) amount
Non-derivative liabilities
(148,322) (12,781) (18,146) (1,550) (638) (181,436) 180,249
- (267) (856) (15,684) - (16,807) 13,514
(179) (459) (21,445) (65,760) (2,605) (90,447) 80,225
- - (359) (1,436) (9,447) (11,242) 5,861
- - - - - - -
(104) - - - - (104) 104
(2,544) (7,549) (1,336) (2,229) - (13,658) 13,607
(151,150) (21,056) (42,141) (86,658) (12,690) (313,695) 293,560
Derivative liabilities
Inflow ....................................................... 3, 863 9,293 9,727 10,678 - 33,561
Outflow .................................................... (4, 056) (10,487) (10,139) (10,680) - (35,362)
(193) (1,194) (412) (2) - (1,801) 1,124
Unrecognised financial items
Inflow ....................................................... 106 771 2,350 2,309 - 5,537
Outflow .................................................... (5,209) - - - - (5,209)
Inflow ....................................................... 142 3 201 212 7 565
Outflow .................................................... (565) - - - - (565)
(5,526) 774 2,551 2,522 7 328
Summary
119,530 26,310 74,515 134,291 17,818 372,464
1,169 1,120 30 525 150 2,995
(151,150) (21,056) (42,141) (86,658) (12,690) (313,695)
(193) (1,194) (412) (2) - (1,801)
unrecognised items (30,643) 5,181 31,992 48,155 5,279 59,963
(5,526) 774 2,551 2,522 7 328
Net assets (liabilities) (36,169) 5,955 34,543 50,677 5,286 60,291
Derivative assets ............................................
Derivative liabilities .......................................
Non-derivative assets ....................................
Non-derivative liabilities ...............................
Other liabilities ..............................................
Loan commitments
Financial guarantee contracts
Net unrecognised items ................................
Net assets (liabilities) excluding
Issued bonds ..................................................
Subordinated liabilities ..................................
Short positions used for hedging ..................
Short positions held for trading ....................
Cash and balances with Central Bank ...........
Shares and other variable income securities
Fixed income securities .................................
Securities used for hedging ...........................
Loans to customers ........................................
Other assets ...................................................
Loans to credit institutions ............................
Deposits ........................................................
Borrowings .....................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 37
===== SIDA 41 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
45
46. Liquidity risk (cont.)
31.12.2024 Up to 1 1-3 3-12 1-5 Over 5 Gross inflow/ Carrying
Financial assets by type month months months years years (outflow) amount
Non-derivative assets
18,595 - - - - 18,595 18,593
9,726 - - 1,804 - 11,530 11,530
10,753 13,421 52,863 98,218 4,718 179,974 150,203
17,597 10,341 7,442 25,482 3,932 64,795 64,795
1,681 - 3,751 - - 5,432 5,432
12,601 - - - - 12,601 12,601
2,736 2,397 1,543 3 - 6,680 7,704
73,689 26,160 65,600 125,507 8,650 299,606 270,857
Derivative assets
Inflow ....................................................... 13,279 143 2,346 920 1,036 17,724
Outflow .................................................... (12,289) (98) (2,329) (796) (940) (16,453)
989 45 17 124 95 1,271 1,197
Up to 1 1-3 3-12 1-5 Over 5 Gross inflow/ Carrying
Financial liabilities by type month months months years years (outflow) amount
Non-derivative liabilities
(134,688) (15,130) (10,447) (3,739) (547) (164,551) 163,378
(1) (301) (1,132) (17,271) - (18,705) 14,390
(17) (535) (3,319) (34,010) (2,557) (40,439) 37,123
- - (336) (1,399) (9,304) (11,039) 5,629
(153) - - - - (153) 153
(42) - - - - (42) 42
(1,418) (9,219) (1,122) (1,927) - (13,686) 13,635
(136,320) (25,185) (16,355) (58,347) (12,407) (248,615) 234,350
Derivative liabilities
Inflow ....................................................... 12,104 142 6,321 24,413 - 42,981
Outflow .................................................... (12,968) (145) (6,240) (26,506) - (45,858)
(864) (2) 81 (2,092) - (2,877) 2,932
Unrecognised financial items by type
Loan commitments
Inflow ....................................................... 147 49 2,796 3,722 - 6,714
Outflow .................................................... (6,060) - - - - (6,060)
Inflow ....................................................... - 1 756 37 7 801
Outflow .................................................... (801) - - - - (801)
(6,714) 50 3,552 3,759 7 654
Summary
73,689 26,160 65,600 125,507 8,650 299,606
989 45 17 124 95 1,271
(136,320) (25,185) (16,355) (58,347) (12,407) (248,615)
(864) (2) 81 (2,092) - (2,877)
unrecognised items (62,506) 1,018 49,343 65,191 (3,662) 49,385
(6,714) 50 3,552 3,759 7 654
Net assets (liabilities) (69,220) 1,068 52,896 68,950 (3,655) 50,039
Non-derivative liabilities ...............................
Deposits ........................................................
Borrowings .....................................................
Subordinated liabilities ..................................
Short positions held for trading ....................
Short positions used for hedging ..................
Other liabilities ..............................................
Derivative assets ............................................
Issued bonds ..................................................
Financial guarantee contracts
Non-derivative assets ....................................
Other assets ...................................................
Cash and balances with Central Bank ...........
Shares and other variable income securities
Securities used for hedging ...........................
It should be noted that the Group's expected cash flows sometimes vary considerably from the contractual cash flows, most significantly in that
demand deposits from customers are expected to remain stable or increase in the long term. In this case the presentation used reflects the worst
case scenario from the Group's perspective. Furthermore, the analysis does not consider any measures that could be taken to convert long-term
assets to cash through sale.
Cash flows relating to unrecognised balance sheet items (unused loan commitments and financial guarantee contracts) are presented separately
from financial assets and financial liabilities. Both contractual outflows and inflows are shown, to fully reflect the nature o f these items.
Derivative liabilities .......................................
Net unrecognised items ................................
Net assets (liabilities) excluding
Maturity analysis of financial assets and financial liabilities is based on contractual cash flows or, in the case of held for trading securities, exp ected
cash flows. If an amount receivable or payable is not fixed, e.g. for inflation indexed assets and liabilities, the maturity analysis uses estimates
based on current conditions.
Loans to customers ........................................
Fixed income securities .................................
Loans to credit institutions ............................
Condensed Interim Consolidated Financial Statements 30 June 2025 38
===== SIDA 42 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
46
47. Market risk
a. Definition
b. Management
48. Interest rate risk
a. Definition
b. Management
49. Interest rate risk associated with trading portfolios
a. Breakdown
Up to 1 1-3 3-12 1-5 Over 5
month months months years years 30.6.2025
10 48 409 2,464 1,501 4,433
- - - - - -
Net imbalance 10 48 409 2,464 1,501 4,433
Up to 1 1-3 3-12 1-5 Over 5
month months months years years 31.12.2024
22 54 548 3,181 1,538 5,343
(1) (7) (1) (29) (116) (153)
Net imbalance 21 48 547 3,152 1,422 5,190
b. Sensitivity analysis
Shift in 30.6.2025 31.12.2024
basis points Downward Upward Downward Upward
50 60 (57) 53 (51)
100 58 (54) 67 (64)
Total 117 (111) 120 (115)
The Group performs monthly sensitivity analysis on financial assets and liabilities in trading portfolios that are subject to interest rate risk. Th e
sensitivity analysis assumes a shift in the yield curves for all currencies. A parallel shift in yield curves would have the following impact on the
Group's pre-tax profit and equity, assuming all other risk factors remain constant:
Indexed .....................................................................................................
Non-indexed .............................................................................................
Market risk constitutes risk due to changes in the market prices of financial instruments and comprises interest rate risk, currency risk and other
price risk. Notes 48-53 relate to market risk exposure.
The Group has a strict policy on controlling market risk and to keep the exposure within set limits. The risk management unit monitors market risk
limits on a daily basis and reports regularly to the ALCO committee and to the CEO.
The Group's exposure to interest rate risk is twofold. On the one hand, the Group has a proprietary portfolio of bonds, where market rates affect
prices and any fluctuations are recognised in the income statement. On the other hand, the Group has mismatch in assets and liabilities with
fixed interest terms. These include loans and swap contracts for securities on the asset side and borrowings and deposits on the liability side. This
mismatch does not create an immediate effect on the income statement but nevertheless affects the Group's economic value.
The Group takes measures to minimise interest rate risk by matching the interest rate profile and duration of assets with the Group's liabilities as
well as using derivative and non-derivative financial instruments to manage effectively the risk of an adverse impact on the Gr oup's earnings.
Proprietary positions which are subject to interest rate risk fall under the scope of the Group's market risk management.
Fixed income securities ....................................................
Short positions - fixed income securities .........................
Fixed income securities ....................................................
Short positions - fixed income securities .........................
The breakdown of financial assets and liabilities in trading portfolios by the earlier of interest repricing time or maturity i s specified as follows:
Condensed Interim Consolidated Financial Statements 30 June 2025 39
===== SIDA 43 =====
Kvika banki hf. Amounts are in ISK millions
Notes to the Condensed Interim Consolidated Financial Statements
46
50. Interest rate risk associated with non-trading portfolios
a. Breakdown
30.6.2025
Financial assets Up to 1 1-3 3-12 1-5 Over 5
month months months years years Total
30,919 - - - - 30,919
27,729 - - - - 27,729
158,416 2,441 5,258 5,696 289 172,101
2,903 8,190 9,336 27,828 3,549 51,805
Financial assets excluding derivatives 219,968 10,631 14,594 33,524 3,838 282,555
15,386 51,420 1,840 25,072 916 94,634
Total 235,355 62,051 16,434 58,596 4,754 377,189
Financial liabilities Up to 1 1-3 3-12 1-5 Over 5
month months months years years Total
148,282 13,065 17,303 1,346 252 180,249
13,514 - - - - 13,514
12,722 24,562 1,316 39,238 2,387 80,225
- - 1,567 4,295 - 5,861
- - 81 161 - 241
Financial liabilities excluding derivatives 174,518 37,627 20,267 45,039 2,639 280,090
14,039 68,476 3,570 - - 86,084
Total 188,557 106,103 23,837 45,039 2,639 366,174
Total interest repricing gap 46,798 (44,051) (7,403) 13,557 2,115 11,015
31.12.2024
Financial assets Up to 1 1-3 3-12 1-5 Over 5
month months months years years Total
18,593 - - - - 18,593
11,530 - - - - 11,530
136,380 3,761 3,955 5,748 358 150,203
11,158 10,434 9,184 25,308 3,368 59,451
Financial assets excluding derivatives 177,661 14,195 13,138 31,056 3,726 239,777
23,021 23,306 8,408 928 890 56,553
Total 200,682 37,501 21,546 31,984 4,616 296,330
Financial liabilities Up to 1 1-3 3-12 1-5 Over 5
month months months years years Total
135,370 14,930 9,594 3,259 225 163,378
14,390 - - - - 14,390
17 28,435 84 6,501 2,085 37,123
- - 2,963 2,666 - 5,629
Financial liabilities excluding derivatives 149,777 43,366 12,642 12,425 2,310 220,520
20,828 17,231 10,151 - - 48,210
Total 170,605 60,597 22,793 12,425 2,310 268,730
Total interest repricing gap 30,077 (23,096) (1,246) 19,558 2,306 27,600
b. Sensitivity analysis
Shift in 30.6.2025 31.12.2024
Currency basis points Downward Upward Downward Upward
50 1 1 (25) 26
100 399 (390) 450 (439)
20 (34) 34 (4) 4
Total 366 (355) 422 (410)
Issued bonds .....................................................................
Other liabilities .................................................................
Subordinated liabilities ....................................................
Loans to customers ..........................................................
Fixed income securities ....................................................
Issued bonds .....................................................................
Effect of derivatives ..........................................................
Borrowings .......................................................................
Loans to credit institutions ...............................................
Cash and balances with Central Bank ..............................
Fixed income securities ....................................................
Loans to customers ..........................................................
Loans to credit institutions ...............................................
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 ..........................................................
Effect of derivatives ..........................................................
Deposits ...........................................................................
Borrowings .......................................................................
Condensed Interim Consolidated Financial Statements 30 June 2025 40
===== SIDA 44 =====