Financial Results for Q2 2024

At a board meeting on 14 August 2024, the Board of Directors and the CEO approved the interim financial statements of the Kvika banki hf. (“Kvika” or “the bank”) for the second quarter and first six months of 2024.

In Kvika’s financial statements for the period the insurance subsidiary TM tryggingar hf. (“TM”) is classified as held for sale. As a result, and in accordance with international financial reporting standards, the Group reports income from operations of TM in a single line in the consolidated income statement as profit after tax from discontinued operations. The comparative figures of operations from 2023 have been restated accordingly.

Highlights of performance in the second quarter (Q2 2024)

• Post-tax profit of the group as a whole amounts to ISK 1,256 million in Q2 2024, compared to ISK 745 million in Q2 2023 and increases by 69% year-on-year.
• Profit before tax from continuing operations amounts to ISK 1,189 million, compared to ISK 1,517 million in Q2 2023 and decreases by 22% from year on year.
• Net interest income amounted to ISK 2,428 million in Q2 2024, compared to ISK 1,856 million in Q2 2023 and increased by 31% from previous year.
• Net interest margin was 3.8% in Q2 2024, compared to 3.4% in Q2 2023.
• Net fee and commission income was ISK 1,351 million in Q2 2024, compared to ISK 1,526 million in Q2 2023 and decreased by 11% from previous year.
• Other net operating income was amounted to by ISK 217 million in Q2 2024, compared to ISK 954 million in Q2 2023. Financial income from a revaluation of shares in Kerecis amounted to ISK 899 million in Q2 2023.
• Administrative expenses were ISK 2,733 million in Q2 2024, compared with ISK 2,738 million in Q2 2023 and is nearly unchanged from previous year.
• Pre-tax return on tangible equity (RoTE) of continuing operations amounts to 14.6%
• Earnings per share amount to ISK 0.27 in Q2 2024, compared to ISK 0.15 in Q2 2023.

Income from assets held for sale:

• Post-tax profit of TM insurance is summarized in the income statement as asset held for sale and amounted to ISK 480 million in Q2 2024, compared to a loss of ISK 319 million in Q2 2023.
• Combined ratio of insurance operations was 101.5%, compared to 95.3% in the second quarter of 2023. Excluding the effects of a single major claim in the period, TM’s combined ratio would have been 94.1% in Q2 2024.

Key balance sheet figures: