Kvika banki hf.

Financial results for the first nine months of 2020 - Seite 2

Equity amounted to ISK 17.8 billion and the capital adequacy ratio was 26.9%, taking the Bank’s dividend policy, which states that 25% of profits should be paid out as dividend, into account (27.6% taking into account the unaudited results of Q3), compared to 24.1% at year-end 2019. The capital adequacy ratio was well above the 20.6% minimum regulatory requirement, which was last updated by supervisory authorities on 18 March 2020.

Earnings estimate has been upwardly revised

Kvika's guidance for the year has been revised. The median for earnings before tax estimate has been increased by ISK 150 million and earnings before tax for the year are now expected to range between ISK 2,000 – 2,300 million. The revision in the earnings estimate can be mainly attributed to improved results from asset management operations, strong project pipeline of the Corporate Finance division and increase in net financial income.

Discussions on the merger of Kvika banki hf. and TM hf.

On 28 September the Board of Directors of Kvika banki and the Board of Directors of TM hf. agreed to commence discussions on the merger of the two companies. also It is expected that TM‘s shareholders will receive a 55% share in the merged company in return for their shares in TM, based on the companies‘ issued share capital on 28 September. The discussions are progressing well and the aim is to reach a conclusion within a few weeks.

Marinó Örn Tryggvason, CEO of Kvika:

Kvika’s operations have been going well, and it is very pleasing to see the bank’s success despite the challenges caused by the pandemic.

I would especially like to thank our employees for their perseverance over the last few months. I am proud to work alongside this dedicated and collaborative group.

Kvika’s capital ratio is strong and the bank’s liquidity well above internal goals. Financial strength has been important during these uncertain times. Recent news suggesting that a vaccine for COVID-19 is on the horizon gives optimism for the future and I believe there are exciting times ahead. The bank’s strength puts it in an ideal position to serve an important role in the turnaround of the economy.

Discussions with TM on a merger are ongoing. The discussions are progressing well and should conclude in the coming weeks.

Attachments

• 2020-11-12 Kvika Q3 2020
• Kvika - Condensed Consolidated Interim Financial Statements 30.09.20