Kvika Banki Hf · OMXICE:KVIKA
Kvika Banki Hf — FY2021 Earnings Presentation
20 slides from Kvika Banki Hf's earnings presentation, Feb 24, 2022
Slide 1: 12M 2021 Financial Results
Kvika 12M 2021 Financial Results 24 February 2022 Confidential
Slide 2: Disclaimer
Disclaimer This presentation and the information contained therein has been prepared by Kvika banki hf. on a best knowledge basis. Any statements or assumptions are set forth by Kvika alone and not by any third party. Forward looking statements may deviate from what is presented in this presentation
Slide 3: Highlights 12M 2021
Highlights 12M 2021 Merger with TM and Lykill concluded at end of March 2021 Third quarter of combined operations successful and currently above track in achieving anticipated cost synergies Strategic formulation for combined entity in final stages Profit before tax (PBT) for 12M 2021 ISK 10,487 mil
Slide 4: 3 Year goals
3 Year goals Significant developments in 2021 Increase the number of customers Having a real and measurable UK operations will account for at Grow asset management of fintech solutions that use three effect on Iceland’s carbon footprint least 20% of the group’s profit operations faster than the dome
Slide 5: Innovation and development in 2021
Innovation and development in 2021 Investing in development is a prerequisite for increased competition and profitable growth TM: Cyber Monday – Online insurance offers TM: Automation and improvements ▪ Discount on insurance via online- ▪ Automatic risk assessment of life and health insurance sales
Slide 6: Innovation and development in 2021
Innovation and development in 2021 Investing in development is a prerequisite for increased competition and profitable growth Kvika Asset Management: Online sales channel for investment funds Lykill: Fully automated process for car loans online ▪ The first ever electronic car loan registration in Ic
Slide 7: Sustainability highlights
Sustainability highlights Having a real and measurable effect 2021 Key developments Digital solutions and sustainability ▪ First annual report to the UN PRI (voluntary) ▪ Digital solutions are at the core of Kvika’s ▪ Director of Sustainability appointed and group-wide Committee on Corporate Social
Slide 8: Acquisition of Ortus Secured Finance Completed
Acquisition of Ortus Secured Finance Completed Alternative credit provider specialising in property backed lending to borrowers in the United Kingdom ▪ Acquisition of a majority share in Ortus TIMELINE OF KVIKA INVOLVEMENT ORTUS SECURED FINANCE AT A GLANCE Secured Finance has been completed 31.12.20
Slide 9: Financials
Financials Confidential
Slide 10: Total profit before tax since year-start ISK 12,004 million
Total profit before tax since year-start ISK 12,004 million History of delivering value-creation through successful consolidations ▪ TM is part of Kvika’s consolidated PROFIT BEFORE TAX 1 DIVERSIFIED INCOME ACROSS SEGMENTS financial statements as of 31st March PBT development / ISK m. Net operating
Slide 11: Operations Q4 2021
Operations Q4 2021 Return on weighted tangible equity of 25.6% during the quarter PRE-TAX PROFIT NET INTEREST INCOME (NII) NET FEE AND COMMISSION INCOME (NFC) ISK m. ISK m. ISK m. Significant impact of loan book composition, indexation and favorable Strong quarter despite one-off OPEX Strong recurri
Slide 12: Operations 12M 2021
Operations 12M 2021 Return on weighted tangible equity of 34.7% during the year PRE TAX PROFIT (LOSS) BRIDGE INCOME STATEMENT FROM 12M 2020 to 12M 2021 ISK m. ISK m. 12M 2021 12M 2020 Net interest income 4,646 1,800 Net fees and commissions 6,828 5,956 546 4,839 Net premiums and claims 4,247 0 (21)
Slide 13: Insurance operations
Insurance operations Combined ratio of 88.7% in 2021 ▪ Combined ratio for 12M PREMIUMS COMPOSITION CLAIMS COMPOSITION (%) (%) 2021 88.7% should TM be included from January 1st 5% 5% 2% 4% 13% 20% 12% ▪ One of the best years in TM’s 12% 23% 12% 23% 21% operations, significant decrease 11% 7% 8% 7% in
Slide 14: Insurance investments
Insurance investments Return on investment of 17.7% in 2021 (2020: 14.8%) ▪ Outstanding return on investment INVESTMENT ASSET INCOME INSURANCE INVESTMENT ASSETS ISK m. 31.12.2021 / ISK m. assets in 2021 of 17.7% (2020: 2021: 5,326m. 14.8%) ▪ Positive performance in most asset 1,713 Cash and term dep
Slide 15: Assets
Assets Considerable increase in assets post merger ▪ TM, Lykill and subsidiaries are ASSETS CASH AND FINANCIAL INSTRUMENTS 31.12.2020 to 31.12.2021 / ISK bn. 31.12.2021 / ISK bn. part of the Consolidated Financial Statements as of 31st March 2021 Cash and balances with Central Bank Liquid assets ISK
Slide 16: Loans to customers
Loans to customers Increased diversification of loans to customers ▪ Loan book increases CREDIT QUALITY OF LOAN BOOK LOAN BOOK COMPOSITION Book value / 31.12.2021 / ISK bn. 31.12.2021 / ISK bn. considerably following TM and 71.6 Lykill merger 1.8 Framtíðin 2.5 1.4 ▪ Loans to individuals almost 3.1 3
Slide 17: Liabilities
Liabilities Funding continues to be strong ▪ TM and Lykill and their LIABILITIES AND EQUITY MATURITY OF DEPOSITS 31.12.2020 to 31.12.2021 / ISK bn. 31.12.2021 subsidiaries are part of the consolidated financial statements as Debt issuance 6.9% 1.8% of 31st March 2021 Borrowings 8.4% On demand Subord
Slide 18: Solvency and capital
Solvency and capital Consolidated solvency and capital adequacy ratios well above regulatory requirements ▪ Capital adequacy is calculated on a CAR AND SOLVENCY CAPITAL POSITION AND REQUIREMENTS 31.12.2021 / ISK bn. 31.12.2021 consolidated level as the solvency ratio of the financial conglomerate Mi
Slide 19: Outlook 2022
Outlook 2022 PBT of ISK 8,000-9,000 million ▪ With the acquisition of Ortus Secured OUTLOOK 2022 ISK million Finance, Kvika UK will become the fifth business unit of the group, further Pre-merger 2022 estimate 2022 Outlook diversifying income streams 8,376-9,376 8,000-9,000 ▪ It is expected that Kvi
Slide 20: Confidential
Confidential