Kvika banki (KVIKA) Q2 2025 earnings summary

Executive summary

• Pre-tax profit reached ISK 2,025 million in Q2 2025, up 70.3% year-over-year, and after-tax profit was ISK 1,439 million, a 21.9% increase.

• Net operating income for 6M 2025 was ISK 9,577 million, up 18.8% year-over-year; profit after tax, including discontinued operations, totaled ISK 3,525 million.

• Sale of TM tryggingar hf. finalized in February 2025 for ISK 32.2 billion, removing the financial conglomerate designation.

• Merger discussions with Arion banki hf. are ongoing, with Kvika shareholders expected to hold 26% in the combined entity.

• Auður brand entered the mortgage market in May 2025, offering non-indexed housing loans with competitive rates.

Financial highlights

• Net interest income rose 21.9% in Q2 to ISK 2,962 million; for 6M 2025, it was ISK 5,879 million.

• Net fee and commission income surged 43.2% in Q2 to ISK 1,935 million; 6M net fee income was ISK 3,455 million.

• Administrative expenses increased 9.1% year-over-year in Q2 and to ISK 6,071 million for 6M 2025.

• Net operating income for Q2 2025 was ISK 5,128 million, up 28.3% year-over-year.

• Debt issuance rose with a EUR 200 million bond in May, diversifying the funding base.

Outlook and guidance

• Lending momentum is accelerating, with over ISK 3 billion in new mortgages in Q2 and ISK 15 billion in the pipeline.

• Merger with Arion banki hf. expected to enhance risk distribution, revenue diversity, and efficiency.

• Implementation of CRR III is projected to reduce risk-weighted exposure by 14%, positively impacting capital ratios.

• Covered bond issuance is planned for Q4, with further international issuance to pre-fund 2026 maturities.

• Auður’s mortgage entry expected to increase competition in housing finance.