Kvika Banki Hf · OMXICE:KVIKA
Kvika Banki Hf — Q3 2024 Earnings Presentation
25 slides from Kvika Banki Hf's earnings presentation, Nov 7, 2024
Slide 1: Kvika banki hf. Q3 2024 Financial Results
Kvika banki hf. Q3 2024 Financial Results 07 November 2024
Slide 2: Q3 2024 Summary
Q3 2024 Summary Profit before tax from continuing operations ISK 1,813 million Profit before tax, ISK 1,813 m. Profit before tax from continuing operations amounts to ISK 1,813 million in Q3 2024, compared to ISK 234 million in continuing operations Q3 2023, Profit after tax, including TM insurance
Slide 3: Commercial Banking Segment highlights
Commercial Banking Segment highlights Corporate accounts under the Auður brand attracted over 400 customers in the first month • Net interest income grows across all brands despite prevailing high interest rates • Milestone quarter for deposit offering Auður, surpassing 50,000 customers and introduc
Slide 4: Investment Banking Segment highlights
Investment Banking Segment highlights A robust loan portfolio and increased market activity in the period • Lending remains primarily supported by property-backed loans, a core focus in recent quarters. A strong pipeline indicates healthy growth in the coming months • The environment in capital mark
Slide 5: Asset Management Segment highlights
Asset Management Segment highlights Marketing for UK PE fund Harpa to commence as quarter is marked by market optimism • Marketing of new private equity fund Harpa about to commence, the fund is in collaboration with KSL and will invest in the UK • Credit funds are nearly fully invested, with plans
Slide 6: UK Segment highlights
UK Segment highlights Continued strong performance from UK operations across both lending and investments • Another robust performance in Q3 driven by pleasing results at Ortus Secured Finance maintaining NIM in line with prior quarters and a strong contribution from KSL • Approval received to mark
Slide 7: Financials
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Slide 8: Income Statement Q3 2024
Income Statement Q3 2024 Income Statement ISK m. Q3 2024 Q3 2023 Diff. Q2 2024 Diff. • Net Operating Income: Increased by 47% year-over-year Net interest income 2,429 1,849 580 2,428 1 (YoY), reflecting substantial gains across all income lines Net fees and commissions 1,552 1,324 228 1,351 201 Othe
Slide 9: Income Statement 9M 2024
Income Statement 9M 2024 Income Statement • Profit before tax from continuing operations: ISK 4,217 ISK m. million, a 59% year-over-year (YoY) increase. This growth is 9M 2024 9M 2023 Diff. driven by a 26% rise in net interest income, a 5% increase in Net interest income 7,183 5,690 1,493 fee and co
Slide 10: Net Interest Income
Net Interest Income Robust 26% growth year on year Net interest income Net interest margin development Q3 2023 to Q3 2024 / ISK m. ISK m. 798 403 2,429 (26) (275) 3.9% 1,849 3.8% 3.8% 3.7% • Net interest income in Q3 2024 up 31% from Q3 2023 and (319) up 26% from 9M 2023 to 9M 2024 3.2% • Increase i
Slide 11: Net Fee and Commission Income
Net Fee and Commission Income Improvement in fee and commission income for all business units Net fee and commission income Net fee and commission income Q3 2023 to Q3 2024 / ISK m. ISK m. 148 1,552 Asset Management Cards and payments Other 70 (11) 1,324 29 Capital markets and corporate finance Loan
Slide 12: Other Net Operating Income
Other Net Operating Income Rebound in net financial income Other net operating income Other net operating income Q3 2023 to Q3 2024 / ISK m. Composition / ISK m. 665 Net financial income Other operating income 474 0 Profit from associates (43) 474 70 217 94 109 71 403 113 86 86 120 • Other net opera
Slide 13: Operating Expenses
Operating Expenses Efficient cost management Employee development Cost to core income Full time employees at the end of each period ISK m. / restated comparative information 276 270 249 244 249 83.0% 71.1% 72.3% 67.3% 58.9% • Salaries and related expenses decrease by 11% from Q3 2023 and other opera
Slide 14: Capital Position
Capital Position Strong capital position well above regulatory requirements Capital position and requirements Capital ratio 30.9.2024 / (%) 30.9.2024 / (%) • CAR of 23.5% at the end of September 2024, above management target 23.5% 23.1% 23.5% 20.9-22.9% 22.6% 22.1% 22.1% • CAR of 22.5% excluding una
Slide 15: Liquidity and Funding Ratios
Liquidity and Funding Ratios Continued strong liquidity position Liquidity coverage ratio (LCR) Net stable funding ratio (NSFR) 30.9.2024 / ISK bn. 30.9.2024 / ISK bn. • High Quality Liquid Assets (HQLA) ISK 88.9 bn. excluding mandatory reserves and collateral to the Central Bank High quality liquid
Slide 16: Loans to Customers
Loans to Customers Well diversified loan book Loan book development 145.9 146.7 146.0 ISK bn. 136.3 Commercial Banking Vehicles 34.6 34.8 35.4 Commercial vehicles & equipment 123.7 Unsecured loans 34.5 33.5 16.2 18.1 18.1 15.5 7.3 6.7 6.8 15.5 7.7 Investment Banking 6.9 33.5 33.6 34.6 Real estate 31
Slide 17: Credit Quality
Credit Quality Increase in stage 3 loans in Q3 is due to well secured loans Loans to customers risk stage allocation Impairment loss allowance Net loan book / (%) ISK bn. Stage 1 Stage 3 Stage 1 Stage 3 Stage 2 FVTPL Stage 2 % of gross loan book • Stage 3 loans increase from 3.6% to 4.3% between qua
Slide 18: Diversified Funding Program
Diversified Funding Program Solid investment grade rating by Moody’s Development of market funding Issue Currency 30.9.2024 / ISK bn. 30.9.2024 83 82 76 78 ISK 73 22.8% 14 14 14 14 GBP • Kvika is an active issuer of bonds in the public bond markets 14 9 22 13 15 34.8% in Iceland, Norway and Sweden f
Slide 19: Financial Targets
Financial Targets Target 9M 2023 Q3 2024 Return on Tangible >20% 18.1% 22.4% Equity Pre-tax Capital Adequacy Ratio 200-400 bps. 460 bps. 460 bps. (CAR) Buffer Over Requirement (basis points) Dividend Payout Ratio 25% 25% 25% Dividends and Share Buybacks as % of Profit after Tax
Slide 20: Appendix
tl Appendix eRe TRS ——
Slide 21: Balance Sheet: Assets
Balance Sheet: Assets Over 33% of the balance sheet consists of liquid assets Assets Cash and financial instruments ISK bn. 30.9.2024 / ISK bn. Liquid assets ISK 122.4 billion Cash and balances with Central Bank Intangible assets Financial Instruments Other assets 38.9 Cash and balances with CB Loan
Slide 22: Balance Sheet: Liabilities
Balance Sheet: Liabilities Significant growth in retail deposits Liabilities and equity Maturity of deposits ISK bn. 30.9.2024 / (%) Equity Subordinated liabilities On demand Other Borrowings 1-3 months 4.2% 3.5% Deposits Debt issuance 3-12 months 6.2% • Liabilities increase by ISK 28 bn. since year
Slide 23: TM Insurance
TM Insurance Asset held for sale Income statement Combined ratio ISK m. (%) 9M 2024 9M 2023 95.8% 94.0% 95.9% 89.1% Net interest income 566 779 Net fee and commission income 1 84 • Profit from insurance operations increases materially year on year, mainly attributable to a rebound in net financial I
Slide 24: 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
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