Kvika banki (KVIKA) Q4 2025 earnings summary

Executive summary

• Completed sale of TM tryggingar hf. to Landsbankinn for ISK 32.3 billion and finalized full acquisition of Ortus, enabling integration and lower funding costs.

• Launched Auður Heima mortgages, reaching ISK 23.2 billion in the loan book by year-end.

• Achieved record distribution to shareholders of ISK 27 billion and completed Iceland's largest share offering, raising ISK 90.5 billion.

• Initiated merger negotiations with Arion following a competitive bidding process, with potential for 26% ownership in the combined entity.

• Operations span Iceland and the UK, focusing on asset management, payments, and online banking for individuals, businesses, and investors.

Financial highlights

• Net operating income for 2025 was ISK 19,411 million, up from ISK 17,184 million in 2024.

• Profit before tax for Q4 2025 was ISK 1,522 million, a 4.9% decrease YoY; profit before tax for 2025 was ISK 6,217 million.

• Loans to customers increased 38.2% to ISK 207,560 million; deposits rose to ISK 172,787 million.

• Administrative expenses increased 13.9% YoY in Q4 and 13.8% YoY for 12M 2025, partly due to merger-related costs.

• Basic EPS was ISK 1.39 (2024: ISK 1.73).

Outlook and guidance

• Loan book forecast to reach ISK 280-300 billion by 2027, with continued capital return to shareholders expected.

• Capital optimization in 2026 may release up to ISK 15 billion, supporting a 20% ROTE target.

• Merger process with Arion ongoing, with regulatory discussions in progress.

• Positive operational outlook for 2026, with continued loan book expansion and improved net interest margin.

• Dividend proposal of ISK 0.36 per share (ISK 1,566 million), 25% of profit after tax.