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Kvika banki hf.: Financial Results for Q3 2024
At a board meeting on 6 November 2024, the Board of Directors and the CEO approved the interim financial statements of Kvika banki hf. (“Kvika” or “the bank”) for the third quarter and first nine 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 third quarter (Q3 2024)
Income from assets held for sale:
Key balance sheet figures:
Highlights of the 9M 2024 Interim Financial Statements:
Income from assets held for sale:
Ármann Þorvaldsson, CEO of Kvika:
"I am very pleased to see the substantial turnaround in the bank's operations recently, as reflected in the third-quarter results. The bank is meeting its profitability targets for continuing operations as profit before tax for the quarter multiplies year-over-year, amounting to ISK 1,813 million, which corresponds to a 22.4% return on tangible equity before tax.
There is significant growth across all revenue streams compared to the previous year. Growth in the loan book and an increase in net interest margin led to an increase of nearly ISK 600 million in interest income year-over-year. Additionally, there was a notable turnaround in net financial income, which amounted to over ISK 400 million for the quarter, compared to negative figures for the same period last year. This rebound in financial income is largely due to the strong performance of the bank's unlisted investments in Iceland and the UK during the quarter. Net fee and commission income grew by 17% year-over-year, mainly driven by increased activity from Straumur and increased lending fees.
The bank's performance in managing costs has been exceptionally strong over the past year, with challenging cost-control measures yielding substantial results. Operating expenses for the quarter decreased by nearly ISK 300 million compared to the same quarter last year, which is an impressive outcome given the high inflation and wage increases.
The bank's capital position remains very robust and its liquidity ratio is at an all-time high. All business units are delivering results in line with or exceeding the company's projections, and it is particularly good to see the turnaround in the bank's operations in the UK.
TM's operations also performed very well during the quarter, both in terms of insurance operations and investments, with the company's profit increasing by over ISK 300 million year-over-year.
The Financial Supervisory Authority of the Central Bank of Iceland granted its approval for Landsbankinn's acquisition of TM during the quarter though approval from the Competition Authority is still pending. The expected sale of TM will significantly strengthen the bank's capital position and enable it to take advantage of numerous growth opportunities going forward, as we will discuss further in Kvika's Capital Markets Day held November 7th.”
Presentation for shareholders and market participants
A presentation for shareholders and market participants will be combined with Kvika's Capital Markets Day which will be held the next day, at 12:00 on Thursday 7 November in Harpa's Northern Lights Hall. During the event, Kvika's management will present the company's strategic priorities following the expected sale of TM and provide an overview of the key highlights from the third quarter financial results.
The presentation will be conducted in Icelandic, with a live stream available on the following website: https://kvika.is/fjarfestadagur2024/
Attached is the investor presentation. Additionally, a recording with English subtitles will be made available on Kvika's website.
Attachments
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