29. August 2016

Good results 1H 2016

At a board meeting on 29 August 2016, the Board and the CEO approved the condensed consolidated interim financial statements of Kvika banki hf. for the period 1 January 2016 to 30 June 2016.

Sigurður Atli Jónsson, CEO of Kvika:

“It is gratifying to present the financial statement of Kvika for the first half of 2016. Kvika has reached the operational targets set when Straumur Investment Bank and MP banki merged. Behind us is a successful merger that was based on respect and collaboration of those involved. The performance of Kvika is good and in line with expectations, after only one year of operation. The bank has great financial strength. We build on that foundation and leverage the knowledge and skills of Kvika's staff to move forward.

It is very positive that Iceland will again be part of international financial markets. Kvika is ready for those changes, as the bank has provided extensive foreign investment services to its customers in recent years.

When long-term planning and a job well done meet, optimism for the future follows.”

Good performance in line with expectations

The profit of Kvika during the first six months of 2016 amounted to ISK 378 million. Return on equity was 12.3%. Net operating income was ISK 2,164 million during the period, compared to ISK 2,535 million in the second half of 2015. Fee incomes decreases somewhat compared to 2H 2015, mainly due to seasonality and fluctuations in performance related fee income.

Operating expenses amounted to ISK 1,668 million during the first half of 2016. Operating expenses decreased in line with expectations by 13% from the second half of 2015, taking merger costs in the previous period into account.

At the end of June 2016, Kvika's consolidated assets totalled ISK 77,825 million compared to ISK 61,614 million at the end of 2015, which equals an increase of 26% during the period. Loans to customers amounted to ISK 23 billion. General deposits and money market deposits increased significantly, by over ISK 14 billion, or 30%, during the period. At the same time, the bank has improved funding cost.

The total capital ratio at the end of June was 18.0% versus 23.5% at the end of 2015. The reduction is in line with expectations and is mainly due to the decrease of share capital, approved at the shareholders' meeting earlier this year. The bank's liquidity is strong, LCR is 211%, and the bank is well positioned to deal with possible capital outflow as a result of the abolition of capital controls.

Interim Financial Statement 1H 2016