Kvika banki (KVIKA) Q1 2025 earnings summary

Executive summary

• Q1 2025 featured the sale of TM insurance to Landsbanki and full acquisition of Ortus Secured Finance, resulting in significant non-recurring items impacting reported results.

• Underlying business performance was strong, with normalized profit before tax at ISK 1,590 million, up 31% year-over-year.

• Net operating income for Q1 2025 was ISK 4,449 million, up 9% year-over-year.

• Profit after tax, including discontinued operations, reached ISK 2,086 million, nearly doubling from Q1 2024, mainly due to the TM sale.

• Largest international bond issuance completed in January 2025, raising SEK 600 million and NOK 400 million.

Financial highlights

• Normalized profit before tax ISK 1,590m (up from ISK 1,215m in Q1 2024); reported profit before tax ISK 701m due to non-recurring items.

• Net interest income ISK 2,917m, up 25.4% year-over-year; net fee and commission income ISK 1,520m, down 6.9% year-over-year.

• Administrative expenses ISK 3,091m (up 15.9% YoY), with ISK 225m in one-off costs related to the TM sale.

• Net impairment charge was ISK 65m, down from ISK 188m in Q1 2024.

• Loans to customers grew by ISK 10.4bn (6.9%) during the quarter; deposits increased to ISK 168.0bn.

Outlook and guidance

• Focus on stable earnings post-insurance exit, with a step-up in net interest income and reduced volatility.

• Mortgage lending to launch in Q2, entering a new asset class.

• Continued growth expected in corporate, property, and UK lending, supported by robust pipelines.

• Board authorized to repurchase up to 10% of own shares until the next AGM in 2026; a buy-back program of ISK 5bn was initiated.

• Dividend of ISK 5 per share paid in April 2025, following the TM sale.