SKAGI HF.

Consolidated

Financial

Statements

1 January – 31 December 2025

Vátryggingafélag Íslands hf.

Consolidated Financial Statements 31 December 2025

Consolidated

Financial Statements

____________________________________

1 January to 31 December 2025

Table of Contents

Report and Endorsement by the Board of Directors and the CEO 2

Independent Auditor’s Report 8

Consolidated Statement of profit or loss 14

Consolidated Statement of Comprehensive Income 15

Consolidated Statement of Financial Position 16

Consolidated Statement of Changes in Equity 17

Consolidated Statement of Cash Flows 18

Notes to the Consolidated Financial Statements 19

Appendix 1: Non-financial and sustainability reporting (Unaudited) 83

Appendix 2: EU Taxonomy Regulation 109

Consolidated Financial Statements 31 December 2025 2

Report and Endorsement

by the Board of Directors and the CEO

The consolidated financial statements of Skagi hf. ("the Company”or“Skagi”) for the year 2025 consist of the

financial statements of the Company and its subsidiaries. Subsidiaries include VÍS tryggingar hf. and

Líftryggingafélag Íslands hf. (“Lífís”) (together referred to as “VÍS”), Fossar fjárfestingarbanki hf. (“Fossar” or “the

bank”) and Íslensk verðbréf hf. (“ÍV”), collectively with the Company referred to as "the Group". The Group’s

operations consist of insurance activities, investment banking, asset and fund management. The financial

statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the

EU and the additional requirements for companies listed on a regulated securities market.

Operating and Financial position

According to the Statement of profit or loss the Group's profit for the year amounted to ISK 1,902 million and return

on equity was 8.6%. The Group's assets at year-end amounted to ISK 85,035 million and equity amounted to ISK

23,984 million according to the Statement of financial position.

Insurance

Continued operational improvement is taking place in the insurance business. Results were supported by strategic

and profitable growth of the insurance portfolio which, combined with emphases on automation, has improved

economy of scale. Insurance business generated 9.5% (2024: 10.2%) insurance revenue growth and life and health

insurance growth of 12.2%. Cost ratio continues to improve at 18.1% in 2025 (2024: 19.1%) and claims and

reinsurance ratio was at 72.6% (2024: 75.8%). This results in a combined ratio of 90.7% (2024: 94.9%). The

insurance service result was positive by ISK 2,970 million in 2025 (2024: ISK 1.479 million) and improves by ISK

1,491 million YoY.

Financial Services

Financial services activities generated growth of 36% in revenue in 2025 compared to prior year. Revenue of

financial activities totalled ISK 3,188 million, compared to ISK 2,344 million in 2024. Assets under management

(AuM) at the Skagi Group stand at ISK 253 billion at the end of 2025 (2024: ISK 227 billion) and grew 11% YoY.

Financial services delivered a profit before tax of ISK 238 million in 2025 (2024: ISK 18 million) and improves by ISK

220 million YoY despite significant consolidation and one-o expenses amounting to ISK 115 million incurred in

2025. Positive tax of ISK 61 million attributed to an after tax profit of ISK 299 million in 2025 in Financial Services.

Investments

The return on the insurance investment assets in 2025 was 5.2% (2024: 8.3%). Investments generated financial

income of ISK 2,355 million in 2025 (2024: ISK 3,555 million) and net financial income of ISK 20 million in 2025 (2024:

ISK 1,760 million), after taking into account net financial expenses of insurance contracts and other financial items

of ISK 2,026 million and operating expenses of investment portfolio of ISK 308 million.

Financial strength and long-term ROE target

Skagi continues to target a return of equity of above 15% each year for the Group. The Group's solvency ratio is 1,31

at year end 2025 compared to internal target of minimum 1.175. The solvency ratio does not account for potential

dividend or share repurchases. Further information on financial strength of the group and its subsidiaries can be

found in the notes to the account.

Financial Targets 2025

Guidance on target operating performance for the fiscal year 2025 was as follows, as updated on as updated on 14

October 2025:

• Combined ratio range 89.5%-92.5%

• Financial services revenue target is to be above 3,100 million (range 2,900 – 3,500 million)

• Expected return of insurance investments assets was 10%:

Consolidated Financial Statements 31 December 2025 3

Report and Endorsement

by the Board of Directors and the CEO

The Group met its target combined ratio in the insurance business unit as well as in the financial services business

unit. However, the return of the insurance investment assets was 5.2%, which was below the expected return of

10% set out at the beginning of the year.

Financial Targets 2026

Guidance on target operating performance for the fiscal year 2026 is as follows:

 Target combined ratio below 93.5% (range 92-95%)

 Financial services revenue target is to be above 3,500 million (range 3,300 – 3,800 million)

 Expected return of insurance investments assets is 9.5%.

Skagi will provide update on guidance if operating performance is not considered to be able to meet target range in

insurance business and financial services. No update is given in between quarterly reporting on Investment return

of insurance investments.

Transfer of Insurance operations to a subsidiary

Following approvals from the Financial Supervisory Authority of the Central Bank of Iceland (“FSA”), cf.

announcements by the Company on the Nasdaq Iceland on 23rd December and 30

December 2024, Skagi has,

on 1

of January 2025, completed the transfer of the VÍS insurance business to its subsidiary VÍS tryggingar hf. This

is in line with announcement made on 17

January 2024 following approval of a shareholders meeting of the

Company for the proposed transfer of the insurance portfolio and the insurance operations to a subsidiary, to which

all conditions have now been met and thus the transfer has been executed. At the request of Skagi, the Financial

Supervisory Authority on 4

July 2025 revoked Skagi’s insurance operating licence as all insurance activities have

been transferred to VÍS tryggingar and discontinued in the Parent Company.

Integration of financial services concluded

Following the acquisition of Íslensk verðbréf in late 2024, the Company prepared further consolidation of financial

services activities within the Group during 2025, including a merger of Íslensk verðbréf’s brokerage and custody

activities into Fossar and merger of SIV eignastýring hf. asset and fund management with ÍV sjóðir hf. These mergers

were concluded at the end of 1st quarter and are eective as of 1

January 2025. The merged entity of SIV and ÍV

sjóðir now operates under the name of Íslensk verðbréf hf., providing asset and fund management to clients. In the

beginning of 2026 Skagi exercised an option to buy 14,1% share in Íslensk verðbréf. Hence, Skagi now has 100%

shareholding in Íslensk verðbréf in addition to its 100% shareholding in Fossar.

Skagi and Íslandsbanki commenced merger discussions

On 6

October 2025 the board of directors of Skagi hf. and Íslandsbanki hf. approved the initiation of formal merger

negotiations, and both parties signed a Heads of Terms to that eect. Among other key commercial terms it outlines

that Skagi's shareholders will receive 323,859,440 new shares in Íslandsbanki, representing approximately 15%

ownership in the combined company. This indicates a share price of ISK 21.18 per Skagi share and ISK 124.00 per

Íslandsbanki share. Merger discussions remain subject to a final merger agreement upon which shareholders

approvals and relevant supervisory authority approvals will also be required, e.g. competition and financial

supervisory authorities.

Skagi and Íslandsbanki recognise significant value potential in the merger by creating an integrated financial

services model that utilises the strengths of both entities. The combined company will be a prominent player in

banking and insurance, while also strengthening its investment banking and asset management platforms, oering

numerous opportunities for further expansion. Together, the companies will be well-positioned to compete across

all areas of financial services and take a leading role in the ongoing development of the Icelandic financial

landscape.

Consolidated Financial Statements 31 December 2025 4

Report and Endorsement

by the Board of Directors and the CEO

The merger is expected to enhance customer service and boost profitability by creating a more eicient capital

structure and achieving greater scale in asset management. The transaction is also anticipated to generate

significant synergies, estimated at ISK 1.8-2.4 billion annually.

Skagi’s board of directors considers the proposed transaction an attractive opportunity for Skagi’s shareholders. It

aligns with Skagi’s strategy of actively engaging in the ongoing development of the financial services sector. The

Board also believes that the merger will enhance the long-term profitability of the combined company. Additionally,

the merged entity is anticipated to have considerable excess capital, oering further capacity for growth.

Further discussions on the detailed terms and structure of the merger are ongoing. Updates on the progress of the

negotiations will be provided as appropriate and in accordance with the companies’ legal disclosure obligations.

Non-financial and sustainability reporting

Skagi places emphasis on sustainability being integrated into the Group's operations. Information in our

sustainability reporting is based on a sustainability policy which emphasises certain priorities in ESG

(environmental, social and governance) areas that are relevant to the activities of the Group. The Company's Board

of Directors is responsible for the policy; the CEO and senior management are responsible for its implementation

and ensuring it is followed in the Company's operations.

Non-financial and sustainability reporting in Skagi consolidated account is reported in accordance with laws on

annual accounts. In the Annual and Sustainability Report of the Group a more detailed summary of non-financial

information about Skagi and its subsidiaries is provided. The summary is based on Nasdaq's ESG guidelines and

climate impact calculations are performed by third parties in accordance with the Greenhouse Gas Protocol

methodology. Annual and Sustainability Report for 2025 will be published on Skagi’s website www.skagi.is on 18

February 2025. Non-financial disclosure for the subsidiaries can also be found in their annual financial statements

and further sustainability information on their respective websites.

Skagi received 81 points in Reitun's ESG evaluation in 2025, which is an improvement by 1 point from the previous

year. Skagi continues to work towards improving it sustainability rating. With regards to that the Group has initiated

work for implementation of European Sustainability Reporting Standards (ESRS) in accordance with the Corporate

Sustainability Reporting Directive (CSRD). Accordingly, we publish further sustainability information on all

subsidiaries of the Group. We also provide further information in accordance with the EU Taxonomy regulation and

classification system. We continued to work on incorporating the ESRS standards, which included double

materiality assessment and updating our sustainability policy on group basis in the year 2025. Sustainability also

continues to be further incorporated into the corporate governance procedures, remuneration policy and risk

management of the Group.

Skagi is a member of Festa, a centre for social responsibility, IcelandSIF, an organisation that promotes responsible

investment, and a signatory of UN-PRI, the United Nations principles for responsible investment. Skagi is also a

signatory of the UN Global Impact on the implementation of responsible policies.

Non-financial and sustainability reporting for the Group can be found in appendix 1 (Non-financial and

sustainability reporting) and information in accordance with EU Taxonomy Regulation in appendix 2 (EU Taxonomy)

to these financial statements. Furthermore, non-financial disclosure on the Group and each subsidiary can also be

found on Skagi’s website www.skagi.is.

Consolidated Financial Statements 31 December 2025 5

Report and Endorsement

by the Board of Directors and the CEO

Corporate governance

Skagi places great emphasis on good corporate governance, which provides the foundation for responsible

management and well-conceived decision-making, while promoting reliable relations between shareholders, the

Board of Directors, management, employees and other stakeholders. The Company is committed to continually

enhance its governance practices to align with international standards and best practices within the Company and

the Group. These corporate governance requirements are articulated in Shareholder policies for its subsidiaries.

Skagi’s corporate governance practices are described in more detail in its Corporate Governance Statement which

is prepared in accordance Act No. 161/2002, on Financial Undertakings, and Guidelines on Corporate Governance,

6th edition, issued by the Icelandic Chamber of Commerce, NASDAQ Iceland hf. and the Confederation of Icelandic

Employers in February 2021. Corporate governance at Skagi complies with the guidelines with no exceptions. For

further information on Corporate Governance, we refer to the Corporate Governance statement which may be found

on Skagi’s homepage.

Remuneration Policy and equality

Skagi's remuneration policy is reviewed annually and presented to the general meeting for approval. The policy

complies with the provisions of Act No. 90/2003 on income tax, Act No. 2/1995 on limited liability companies, and

other applicable laws and regulations. Further information about the policy can be found on the company's website.

Information on the Group‘s employee incentive scheme and call options are detailed in note 10. In accordance with

articles of association of the Company the board has the right to issue new shares in the nominal amount of up to

55.6 million shares to meet its obligations under call options or share related payments. Full time employees were

240 at the end of year 2025. Gender representation on the board of directors of Skagi is 60% male and 40% female.

Skagi‘s Executive Committee gender ratio is 43% female and 57% male. Gender ratio of the Group in total is 40%

female and 60% male.

Risk management

Risk management is a core component of the Group, guided by the risk policy of Skagi and its subsidiaries. The

Group encounters a range of risks linked to its activities as a financial conglomerate, stemming from its daily

operations. Eective risk management involves assessing, measuring, and implementing actions to mitigate these

risks, along with ongoing monitoring of risk factors throughout the Group. Details about the Group's risk

management and core operations can be found in the notes to the Consolidated Financial Statements. For an

analysis of solvency, capital adequacy and exposure to dierent risk types, please refer to notes 31-35.

Consolidated Financial Statements 31 December 2025 6

Report and Endorsement

by the Board of Directors and the CEO

Shares and allocation of profits

The Company paid a dividend in the amount of ISK 500 million or ISK 0.2637 per share to shareholders on 2nd April

2025, as allocation of profits for the year 2024. In December 2025 the Company sold and issued 9.4 million new

shares at the strike price of 18.85 per share with total value of ISK 177 million to employees in relation to exercise

of general share option agreements.

At the end of the year 2025 the Company's nominal outstanding shares amounted to ISK 1.916,1 million (of which

own shares amounting to ISK 10.3 million), with each share having a nominal value of ISK 1. There were 901

shareholders at the beginning of the year and 908 shareholders at the end of year.

A proposal for allocation of profits and dividend for the fiscal year 2025 will be presented to shareholders at the

Company’s Annual General Meeting on 17

March 2026. The board’s proposal is to pay a dividend in the amount of

ISK 760 million or ISK 0.3966 per share which is equivalent to 40% of after tax profit in fiscal year 2025. Dividend

proposal is in line with dividend policy of 40% of after tax profit. The board reserves the right to propose an

extraordinary dividend to either the AGM or later dated shareholders' meeting. Top ten largest shareholders of Skagi

are:

Consolidated Financial Statements 31 December 2025 7

Report and Endorsement

by the Board of Directors and the CEO

To the best knowledge of the Board the consolidated financial statements of Skagi hf. give a true and fair view of the

consolidated financial performance of the Group for the year 2025, and its assets, liabilities, and financial position

as of 31 December 2025. The financial statements are prepared in accordance with IFRS® Accounting Standards as

adopted by the EU and the additional requirements for companies listed on a regulated securities market, and the

Act on Annual Accounts no. 3/2006. Further, in our opinion the consolidated financial statements and the report

and endorsement of the Board of Directors and the CEO give a fair view of the development and performance of the

Group's operations and its position at year end and describe the principal risks faced by the Group.

The Board of Directors and the CEO have today discussed the Company's Consolidated Financial Statements of

Skagi hf. for the period ended 31 December 2025 and confirm by means of their signatures.

Reykjavik, 18 February 2026

On the Board of Directors

Stefán Héðinn Stefánsson Vilhjálmur Egilsson

Chairman of the Board Vice-Chairman of the Board

Marta Guðrún Blöndal Ásgeir Helgi Reykfjörð Gylfason

Board member Board member

Hrund Rudolfsdóttir

Board member

CEO

Haraldur Þórðarson

Independent Auditor's Report

To the board of directors and shareholders of Skagi hf.

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Skagi hf. ("the Company"), which comprise the

consolidated statement of financial position as at 31 December 2025, the consolidated statements of profit or loss

and other comprehensive income, changes in equity and cash ﬂows for the year then ended, and notes, comprising

material accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated

financial position of the Company as at 31 December 2025, and of its consolidated financial performance and its

consolidated cash ﬂows for the year then ended in accordance with International Financial Reporting Standards

(IFRSs) as adopted by the European Union and additional disclosure requirements for listed companies in Iceland.

Our opinion is consistent with the additional report submitted to the Audit Committee and the Board of Directors.

Other matter

The consolidated financial statements of the Company as at and for the year ended December 31, 2024 were

audited by another auditor who expressed an unmodified opinion on those statements on February 26, 2025.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under

those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial

Statements section of our report. We are independent of the Company in accordance with the ethical requirements

that are relevant to audits of the consolidated financial statements of public interest entities in Iceland and we have

fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence

we have obtained is suicient and appropriate to provide a basis for our opinion.

We declare, to the best of our knowledge and belief, that we have not provided any prohibited non-audit services,

as referred to in Article 5(1) of the Regulation (EU) 537/2014 and that we remained independent in conducting the

audit.

We were first appointed as auditors by the Annual General Meeting on 27 March 2025 and we have been

uninterrupted since then.

Ársreikningur Skaga hf. 2025 9

Independent Auditor's Report

To the board of directors and shareholders of Skagi hf.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the

consolidated financial statements of the current period. These matters were addressed in the context of our audit

of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a

separate opinion on these matters.

Key audit matters

The Audit

Measurement of Insurance Contract Liabilities

The liability for insurance contracts amounted to ISK

30.3 billion at year‑end 2025 and represents 50% of the

Group’s total liabilities. The liability for insurance

contracts is divided into the liability for remaining

insurance coverage and the liability for incurred

claims. Reference is made to Note 39 regarding

accounting policies for insurance contracts and Note

25 for financial information.

The Group applied a simplified allocation approach in

measuring its insurance contract liabilities, in

accordance with IFRS 17.

The liability for remaining insurance coverage consists

of premiums received for insurance coverage relating

to future periods, as well as obligations associated

with the remaining insurance coverage.

The liability for incurred claims represents the Group’s

best estimate of the present value of expected future

cash outflows required to settle the obligation,

together with a risk adjustment reflecting the

uncertainty inherent in the measurement. The best

estimate incorporates both direct and indirect costs

attributable to the insurance coverage provided during

the contract period, in addition to obligations relating

to incurred claims.

A key area of focus in the audit is management’s

assessment of estimated outstanding claims, given

the significant inherent risk associated with

forecasting expected future payments for incurred

claims. Claims may take several years to be fully

settled, and the ultimate cost may depend on factors

that are unknown at the reporting date or outside of the

Group’s control. The estimation of incurred but not

reported (IBNR) claims is subject to the highest degree

of uncertainty. Claim estimates are based on the data

available and the assumptions applied in the valuation

process. Any changes to these assumptions may have

a material impact on the liability amount.

Our audit procedures were designed to evaluate the

assumptions applied by management in the

measurement of insurance contract liabilities.

We assessed and tested the Group’s internal controls

relating to the recording of claims and the data used to

determine the amounts of outstanding claims at

year‑end.

We evaluated and tested the Group’s internal controls

over the processes for calculating insurance contract

liabilities and the documentation of management’s

assessment.

We evaluated the design and implementation of the

systems used for claims registration, the flow of

information between the claims system and the

financial system, and tested the automated controls

within these systems.

Substantive sample testing was performed on

outstanding claims at year‑end to confirm their

existence and the appropriateness of claim valuations,

as well as to verify the accuracy of claim payments.

We verified reconciliations between the systems on

which the calculation of the claims liability is based.

We performed an independent recalculation on the

insurance liability with the assistance of actuarial

specialists.

We have verified the disclosures to confirm that the

insurance contract liabilities are presented in

accordance with the applicable accounting standards

and are adequate.

Ársreikningur Skaga hf. 2025 10

Independent Auditor's Report

To the board of directors and shareholders of Skagi hf.

Key audit matters

The Audit

Valuation of Unlisted Financial Instruments

Measured at Fair Value

The carrying amount of financial instruments totalled

ISK 55,9 billion. Thereof unlisted financial instruments

measured at fair value amount to ISK 15.7 billion.

Reference is made to Note 39 regarding accounting

policies and Note 34 for the related financial

information.

The financial instruments are measured at fair value,

and the majority of them are listed on active markets,

where observable market prices are available at the

reporting date.

There is, however, a degree of uncertainty associated

with the valuation of unlisted financial instruments

measured at fair value and are classified as Level 2 and

Level 3 in accordance with the applicable accounting

standards. In valuing these instruments, management

must apply assumptions regarding various factors that

influence the measurement. Valuation techniques for

unlisted financial instruments measured at fair value

may include recent arm’s‑length transactions,

discounted cash flow analysis, net asset values

published by fund managers of the relevant investment

funds, or other recognised valuation methodologies.

Accordingly, the valuation of unlisted financial

instruments is a key area of focus in the audit.

Our audit procedures were designed to evaluate the

assumptions applied by management in the valuation

of unlisted financial instruments.

We verified the net asset values of unlisted investment

funds using information obtained from the fund

managers of the respective investment funds in which

the Group has invested.

We assessed management’s valuation methodologies

and calculations for unlisted financial instruments

with the assistance of our valuation specialists.

We evaluated valuations based on recent transactions

and verified the authenticity and relevance of those

transactions.

We performed sample testing of purchases and sales

of financial instruments during the year and confirmed

that the transactions had been recorded accurately.

With the assistance of our valuation specialists, we

assessed the disclosures in Note 34 to confirm that the

financial assets are appropriately classified within the

correct fair value hierarchy levels and that the

presentation complies with the applicable accounting

standards.

Other information

The Board of Directors and CEO are responsible for the other information. The other information comprises the

information included in the annual report, but does not include the consolidated financial statements and our

auditor’s report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express

any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent with the

consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially

misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other

information, we are required to report that fact. The annual report is not available at our reporting date but is

expected to be made available to us after that date.

Ársreikningur Skaga hf. 2025 11

Independent Auditor's Report

To the board of directors and shareholders of Skagi hf.

Responsibilities of the Board of Directors and CEO for the Consolidated Financial Statements

The Board of Directors and CEO are responsible for the preparation and fair presentation of the consolidated

financial statements in accordance with IFRSs as adopted by the European Union and additional disclosure

requirements for listed companies in Iceland, and for such internal control as they determine is necessary to

enable the preparation of consolidated financial statements that are free from material misstatement, whether due

to fraud or error.

In preparing the consolidated financial statements, the Board of Directors and CEO are responsible for assessing

the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern

and using the going concern basis of accounting unless they either intend to liquidate the Company or to cease

operations, or has no realistic alternative but to do so.

The Board of Directors and CEO are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes

our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in

accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud

or error and are considered material if, individually or in the aggregate, they could reasonably be expected to

inﬂuence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional

skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether

due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit

evidence that is suicient and appropriate to provide a basis for our opinion. The risk of not detecting a

material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that

are appropriate in the circumstances, but not for the purpose of expressing an opinion on the eectiveness

of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates

and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and,

based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions

that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude

that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related

disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our

opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.

However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the consolidated financial statements,

including the disclosures, and whether the consolidated financial statements represent the underlying

transactions and events in a manner that achieves fair presentation.

Ársreikningur Skaga hf. 2025 12

Independent Auditor's Report

To the board of directors and shareholders of Skagi hf.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements, cont.:

Plan and perform the group audit to obtain suicient appropriate audit evidence regarding the financial

information of the entities or business units within the group as a basis for forming an opinion on the group

financial statements. We are responsible for the direction, supervision and review of the audit work

performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with The Board of Directors and audit committee regarding, among other matters, the planned

scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control

that we identify during our audit.

We also provide The Board of Directors and audit committee with a statement that we have complied with relevant

ethical requirements regarding independence, and communicate with them all relationships and other matters that

may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats

or safeguards applied.

From the matters communicated with The Board of Directors and audit committee, we determine those matters

that were of most significance in the audit of the consolidated financial statements of the current period and are

therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes

public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should

not be communicated in our report because the adverse consequences of doing so would reasonably be expected

to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

Report on European single electronic format (ESEF Regulation)

As part of our audit of the consolidated financial statements of Skagi hf. we performed procedures to be able to

issue an opinion on whether the consolidated financial statements of Skagi hf. for the year 2025 with the file name

213800QFQIHO7KG2P786-2025-12-31-en.xbri is prepared, in all material respects, in compliance with the Act on

disclosure obligation of issuers of securities and the obligation to ﬂag no. 20/2021 relating to requirements

regarding European single electronic format Regulation EU 2019/815 which include requirements related to the

preparation of the consolidated financial statements in XHTML format and iXBRL markup.

Board of Directors and CEO are responsible for preparing the consolidated financial statements in compliance with

the Act on disclosure obligation of issuers of securities and the obligation to ﬂag no. 20/2021. This includes

preparing the consolidated financial statements in an XHTML format in accordance with EU Regulation 2019/815

on the European single electronic format (ESEF Regulation).

Our responsibility is to obtain reasonable assurance, based on evidence that we have obtained, on whether the

consolidated financial statements are prepared in all material respects, in compliance with the ESEF Regulation,

and to issue a report that includes our opinion. The nature, timing and extent of procedures selected depend on the

auditor's judgement, including the assessment of the risks of material departures from the requirement set out in

the ESEF Regulation, whether due to fraud or error.

In our opinion, the consolidated financial statements of Skagi hf. for the year 2025 with the file name

213800QFQIHO7KG2P786-2025-12-31-en.xbri is prepared, in all material respects, in compliance with the ESEF

Regulation.

Ársreikningur Skaga hf. 2025 13

Independent Auditor's Report

To the board of directors and shareholders of Skagi hf.

Report on the report of the Board of Directors and CEO

Pursuant to the legal requirement under Article 104, Paragraph 2 of the Icelandic Financial Statements Act No.

3/2006, we confirm that, to the best of our knowledge, the report of the Board of Directors and CEO accompanying

the consolidated financial statements includes the information required by the Financial Statements Act if not

disclosed elsewhere in the consolidated financial statements.

The engagement partner on the audit resulting in this independent auditor’s report is Sigríður Soía Sigurðardóttir.

Reykjavík, 18 February 2026

KPMG ehf.

Sigríður Soía Sigurðardóttir

Matthías Þór Óskarsson

Consolidated Financial Statements 31 December 2025 14 All amounts are in thousands of ISK

Consolidated Statement of profit or loss

For the year 2025

*The presentation of comparative figures has been revised. For further details, refer to Note 2.

The notes on pages 19-82 are an integral part of these financial statements.

Notes 2025 2024

Insurance revenue .................................................................................................................. 31.959.386 29.182.080

Insurance service expenses ................................................................................................... (28.006.004) (26.754.044)

Net expenses from reinsurance contracts .............................................................................. (983.651) (948.562)

Insurance service result 6 2.969.732 1.479.475

Interest income ....................................................................................................................... 2.151.175 1.582.354

Interest expenses .................................................................................................................... (1.690.478) (1.345.297)

Net interest income 7 460.697 237.057

Fee and commission income .................................................................................................. 2.436.643 1.874.042

Fee and commission expenses .............................................................................................. (79.012) (58.371)

Net fee and commission income 8 2.357.631 1.815.671

Financial income ..................................................................................................................... 2.480.837 3.695.304

Net finance expenses from insurance contracts ..................................................................... (1.631.525) (1.121.708)

Other financial items ............................................................................................................... (502.467) (388.569)

Operating expense of the insurance investment portfolio ....................................................... (308.440) (285.019)

Net financial income

38.405 1.900.007

Share in profit of associates, after income tax ........................................................................ 20 110.950 0

Other operating income .......................................................................................................... 210.853 241.405

Net operating income 6.148.269 5.673.615

Operating expenses ................................................................................................................ 10 (3.508.235) (2.967.167)

Net credit impairments ............................................................................................................ 35 (6.627) (10.815)

Amortization of intangible assets ............................................................................................ (196.305) (150.374)

Profit before tax 2.437.102 2.545.258

Income tax expenses .............................................................................................................. 11 (534.637) (286.841)

Profit for the year

1.902.466 2.258.417

Attributable to shareholders of the parent company ............................................................... 1.900.657 2.264.210

Attributable to minority interest ................................................................................................ 1.808 (5.793)

Profit for the year

1.902.466 2.258.417

Earnings per share

Basic earnings per share ........................................................................................................ 12 1,00 1,19

Diluted earnings per share* ..................................................................................................... 12 1,00 1,19

Consolidated Financial Statements 31 December 2025 15 All amounts are in thousands of ISK

Consolidated Statement of Comprehensive Income

For the year 2025

The notes on pages 19-82 are an integral part of these financial statements.

2025 2024

Profit for the year

1.902.466 2.258.417

Other Comprehensive income

Items that are or may be reclassified subsequently to profit or loss

12.880 0

(8.483) (9.029)

Total comprehensive income for the year

1.906.863 2.249.389

1.905.054 2.255.181

1.808 (5.793)

Total comprehensive income for the year 1.906.863 2.249.389

Unrealised fair value changes ...................................................................................................................

Attributable to shareholders of the parent company ..................................................................................

Attributable to minority interest ..................................................................................................................

Reclassification of fair value changes to income statement .....................................................................

Consolidated Financial Statements 31 December 2025 16 All amounts are in thousands of ISK

Consolidated Statement of Financial Position

As at 31 December 2025

*The presentation of comparative figures has been revised. For further details, refer to Note 2.

The notes on pages 19-82 are an integral part of these financial statements.

Notes 31.12.2025 31.12.2024*

Assets

13 1.750.025 2.321.959

14 55.888.970 51.890.854

15 3.109.524 6.102.840

11.836.508 7.880.021

17 162.132 118.541

18 882.144 1.023.545

20 212.140 148.876

21 4.558.785 4.734.006

22 1.384.416 700.356

11 196.090 461.117

23 960.618 1.289.371

24 4.093.665 2.308.612

85.035.018 78.980.095

Liabilities

25 30.331.427 29.744.014

18 882.144 1.023.545

26 20.953.779 17.750.819

27 3.907.720 3.763.931

17 254.981 231.599

28 1.126.536 391.655

11 435.667 358.107

29 3.158.530 3.445.671

61.050.782 56.709.341

Equity

30 1.905.747 1.895.958

3.254.432 3.087.000

2.740.607 2.864.105

16.037.499 14.384.481

23.938.285 22.231.544

45.950 39.209

23.984.235 22.270.753

85.035.018 78.980.095

Total equity attributable to shareholders of the parent company

Total equity

Total liabilities and equity

Total liabilities

Retained earnings ...................................................................................................................

Minority interest .......................................................................................................................

Total assets

Cash and cash equivalents .....................................................................................................

Financial assets ......................................................................................................................

Securities used for economic hedging ....................................................................................

Derivatives ..............................................................................................................................

Loans to customers .................................................................................................................

Investments where investment risk is borne by life-insurance policyholders ..........................

Restricted reserves .................................................................................................................

Investment in associates .........................................................................................................

Intangible assets .....................................................................................................................

Property, plant and equipment ................................................................................................

Deferred income tax asset ......................................................................................................

Assets from reinsurance contracts held ..................................................................................

Other receivables ....................................................................................................................

Insurance contract liabilities ....................................................................................................

Investment contract liabilities ..................................................................................................

Subordinated bond ..................................................................................................................

Financial liabilities ...................................................................................................................

Derivatives ..............................................................................................................................

Lease liability ...........................................................................................................................

Deferred income tax liability ....................................................................................................

Accounts payable and other liabilities .....................................................................................

Share capital ...........................................................................................................................

Share premium .......................................................................................................................

Consolidated Financial Statements 31 December 2025 17 All amounts are in thousands of ISK

Consolidated Statement of Changes in Equity

For the year 2025

*The presentation of comparative figures has been revised. For further details, refer to Note 2.

The notes on pages 19-82 are an integral part of these financial statements.

Unrealised

profit of

Share Share Restricted subsidiaries Retained Minority Total

capital premium reserves and associates earnings interest equity

2025

Equity 1.1.2025 ............................................................................................................................. 1.895.958 3.087.000 2.684.635 179.470 14.384.481 39.209 22.270.753

Profit for the year .......................................................................................................................... 1.900.657 1.808 1.902.466

Other comprehensive income ...................................................................................................... 4.397 4.397

Total comprehensive income for the year .................................................................................... 0 0 0 0 1.905.054 1.808 1.906.863

Change of holding in subsidiary ................................................................................................... (4.932) 4.932 0

Share capital increase .................................................................................................................. 9.380 167.432 176.812

Treasury share allocation ............................................................................................................. 410 8.128 8.538

Dividends paid, ISK 0,264 per share ............................................................................................ (500.072) (500.072)

Effects of profit or loss of subsidiaries and associates ................................................................ 1.931.120 (1.931.120) 0

Change in fair value of securities ................................................................................................. (2.054.618) 2.054.618 0

Stock options ................................................................................................................................ 121.341 121.341

Equity 31.12.2025 ......................................................................................................................... 1.905.747 3.254.432 630.017 2.110.590 16.037.499 45.950 23.984.235

2024*

Equity 1.1.2024 ............................................................................................................................. 1.905.550 3.087.000 4.477.882 0 11.660.499 41.002 21.171.933

Profit for the year .......................................................................................................................... 2.264.210 (5.793) 2.258.417

Other comprehensive income ...................................................................................................... (9.029) (9.029)

Total comprehensive income for the year .................................................................................... 0 0 0 0 2.255.181 (5.793) 2.249.389

Change of holding in subsidiary ................................................................................................... 4.000 4.000

Treasury shares acquired ............................................................................................................ (27.813) (472.187) (500.000)

Stock options exercised during the period ................................................................................... 18.221 259.647 277.868

Dividends paid, ISK 0,524 per share ............................................................................................ (984.809) (984.809)

Effects of profit or loss of subsidiaries and associates ................................................................ 179.470 (179.470) 0

Change in fair value of securities ................................................................................................. (1.793.247) 1.793.247 0

Stock options ................................................................................................................................ 52.373 52.373

Equity 31.12.2024 ......................................................................................................................... 1.895.958 3.087.000 2.684.635 179.470 14.384.481 39.209 22.270.753

Other restricted equity

Consolidated Financial Statements 31 December 2025 18

Consolidated Statement of Cash Flows

For the year 2025

*The presentation of comparative figures has been revised. For further details, refer to Note 2.

The notes on pages 19-82 are an integral part of these financial statements.

Notes 2025 2024*

Operating activities

1.902.466 2.258.417

(460.697) (237.057)

(1.789.302) (3.268.371)

129.469 52.373

(110.950) 0

22 (2.190) (49.565)

22,28 550.837 545.118

219.633 (699.084)

(1.285.020) 1.117.064

245.990 109.411

2.170.259 (3.156.150)

(3.956.488) (6.207.301)

(1.490.251) (370.422)

17 (20.210) 40.678

775.146 2.299.690

54.586 1.068.712

Cash flows from (used in) operating activities before interest and tax (3.286.352) (5.797.402)

1.912.607 1.741.140

457.738 239.036

(1.887.001) (1.643.871)

(206.964) (142.148)

Cash flows from (used in) operating activities

(3.009.972) (5.603.245)

Investing activities

22 (178.108) (207.928)

22 19.900 66.337

21 (22.959) (32.161)

42.690 15.400

0 4.000

0 26.007

0 (1.383.474)

(138.477) (1.511.819)

Financing activities

0 (500.000)

0 277.856

(500.072) (984.809)

(141.439) (232.802)

26 (1.020.521) 6.436.036

26 6.197.865 6.662.083

26 (2.079.677) (4.478.115)

177.222 0

2.633.378 7.180.249

(515.072) 65.184

2.321.959 2.270.693

(56.863) (13.919)

1.750.025

2.321.959

Loans to customers, change ............................................................................................

Dividends received from associates ...................................................................................

Income taxes paid ...............................................................................................................

Securities, change ...........................................................................................................

Other receivables, change ...............................................................................................

Interest income received .....................................................................................................

Dividend received ...............................................................................................................

Sale of property and equipment ..........................................................................................

Financial expenses paid .....................................................................................................

Insurance contract liabilities, change ...............................................................................

Sale of treasury shares .......................................................................................................

Dividends paid ....................................................................................................................

Sale of shares in subsidiary ................................................................................................

Investments in intangible assets .........................................................................................

Purchase of treasury shares ...............................................................................................

Net cash flow from investment in subsidiary .......................................................................

Investment in associates ....................................................................................................

Cash and cash equivalents at year end ..............................................................................

Principal payments of lease liability ....................................................................................

Change in cash and cash equivalents ................................................................................

Effect of movements in exchange rates on cash held ........................................................

Cash and cash equivalents at the beginning of the year ....................................................

Short-term loans, change ...................................................................................................

Share capital increase ........................................................................................................

Issued bonds and bills ........................................................................................................

Repayment of bonds and bills .............................................................................................

Assets from reinsurance contracts held, change .............................................................

Net financial income .........................................................................................................

Profit for the year ................................................................................................................

Changes in operating assets and liabilities:

Financial assets, change ..................................................................................................

Operating items not affecting cash flows:

Net interest income ..........................................................................................................

Profit on sale of operating assets .....................................................................................

Derivatives, change ..........................................................................................................

Investments in property and equipment ..............................................................................

Accounts payable and other liabilities, change ................................................................

Depreciation and amortisation ........................................................................................

Share in profit of associate ..............................................................................................

Stock options, change ......................................................................................................

Consolidated Financial Statements 31 December 2025 19

Notes to the Consolidated Financial Statements

General information

1. Reporting entity ............................................... 20

2. Basis of preparation ......................................... 20

3. Functional and presentation currency .............. 21

4. Accounting estimates and judgements ............. 21

Segment information

5. Operating segment reporting ............................ 24

Income statement

6. Insurance service result ................................... 26

7. Net interest income ......................................... 27

8. Net fee and commission income ...................... 27

9. Net financial income ........................................ 28

10. Operating expenses ........................................ 29

11. Income tax ...................................................... 33

12. Earnings per share .......................................... 34

Statement of financial position

13. Cash and cash equivalents ............................. 34

14. Financial assets .............................................. 34

15. Securities used for economic hedging ............. 35

16. Loans to customers ........................................ 35

17. Derivatives ...................................................... 36

18. Investments where investment risk is borne by

the life-insurance policyholders ............................. 36

19. Share in subsidiaries ....................................... 36

Statement of financial position

20. Share in associates ........................................ 37

21. Intangible assets ............................................ 37

22. Property, plant and equipment ....................... 39

23. Assets from reinsurance contracts held .......... 40

24. Other receivables ........................................... 40

25. Insurance contracts ....................................... 41

26. Financial liabilities ......................................... 44

27. Subordinated bond ........................................ 45

28. Leases ........................................................... 45

29. Accounts payable and other liabilities ............ 45

30. Share capital and equity reserves ................... 46

31. Solvency of a financial conglomerate.............. 46

32. Solvency of insurance activities ...................... 47

33. Fossar Capital adequacy ratio ........................ 48

34. Financial instruments .................................... 49

35. Risk management .......................................... 53

Other information

36. Combined ratio .............................................. 68

37. Related parties ............................................... 69

38. Events after the reporting date ........................ 69

39. Material accounting policies ........................... 70

40. Quarterly statement (unaudited) .................... 82

Non-financial and sustainability reporting ............. 83

EU Taxonomy Regulation ...................................... 109

Consolidated Financial Statements 31 December 2025 20 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

1. Reporting entity

Skagi hf., the Parent Company, hereinafter referred to as "the Company" or "Skagi“, is a limited liability company and

operates on the basis of Act No. 100/2016 on Insurance Activities, Act No. 2/1995 on Limited Liability Companies

and Act No. 161/2002 on Financial Undertakings. The Company's headquarters are at Ármúli 3, Reykjavík.

The consolidated financial statements of the Company for the period 1 January to 31 December 2025 consist of the

financial statements of the Company and its subsidiaries. Subsidiaries include VÍS tryggingar hf. and Líftryggingafélag

Íslands hf. (“Lífís”) (together referred to as “VÍS”), Fossar fjárfestingarbanki hf. (“Fossar” or “the bank”) and Íslensk

verðbréf hf. (“ÍV”), collectively with the Company referred to as "the Group". The Group’s operations consist of

insurance activities, investment banking, asset and fund management. The Icelandic Financial Supervisory

Authority supervises the Group's operations based on Act No. 87/1998 on Official Supervision of Financial

Activities.

2. Basis of preparation

The consolidated financial statements have been prepared in accordance with IFRS® Accounting Standards as

adopted by the European Union and additional requirements according to the Icelandic Financial Statements Act

No. 3/2006. The financial statements were approved and authorized for publication at a meeting of the Board of

Directors on 18 February 2026. A summary of material accounting policies of the Group is provided in note 39.

Disclosure note: Changes in the statement of profit and loss

Certain items within the income statement have been reclassified to improve presentation.

Income relating to card and collection fees in the amount of ISK 102 million, previously presented within finance

income, is now presented under other income. Furthermore, certain expenses previously classified within finance

items in the amount of ISK 119 million have been reclassified to other expenses. The net effect of these reclassifications

is not material and has no impact on profit for the year.

In addition, a misstatement in the calculation of diluted earnings per share for 2024 has been corrected.

Adjustments relating to stock options were previously overstated. Diluted earnings per share for 2024 is ISK 1.19

compared to ISK 1.16 as previously reported.

Disclosure note: Changes in the statement of financial position

During the preparation of the financial statements, certain comparative figures in the Statement of Financial

Position and related disclosures have been reclassified to improve presentation and consistency.

Currency forwards amounting to ISK 499 million were previously presented under Other receivables and are now

classified as part of Financial assets. This reclassification affects Note 14 Financial assets, Note 24 Other

receivables and Note 34 Financial instruments. Reinsurance contract liabilities amounting to ISK 102 million

were previously presented under Accounts payable and other liabilities and are now included in Liabilities for

insurance contracts. This reclassification affects Note 23 Assets from reinsurance contracts held and Note 29

Accounts payable and other liabilities.

Liabilities arising from insurance contract operating expenses amounting to ISK 910 million were previously presented

under Accounts payable and other liabilities and are now included in Liabilities for insurance contracts. This

reclassification affects Note 25 Insurance contracts , Note 29 Accounts payable and other liabilities and Note 35.7

Liquidity risk.

These adjustments do not affect the insurance service result, profit for the year, or total equity. They improve the

classification and accuracy of the comparative information presented.

Consolidated Financial Statements 31 December 2025 21 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

3. Functional and presentation currency

The consolidated financial statements are prepared and presented in Icelandic krónur (ISK), which is the Company's

functional currency. All amounts are presented in thousands of ISK unless otherwise stated.

4. Accounting estimates and judgements

Preparing consolidated financial statements in accordance with IFRS Accounting Standards requires management

to make assumptions, estimates and apply judgements that affect the assets and liabilities at the reporting date,

disclosures in notes and income and expenses. Estimates and judgements are based on experience and various

other factors that are considered appropriate and form the basis of decisions made regarding the reported amounts

of assets and liabilities not evident by other means. Management distinguishes between areas involving significant

judgement—those requiring interpretation or choice between accounting treatments—and estimates, which involve

assumptions about future events and measurement uncertainty.

Estimates and assumptions are reviewed regularly. Changes in accounting estimates are recognized in the period

when they are revised. Key judgements and estimation uncertainties specific to Skagi’s operations are summarised

below.

Management has made assumptions and accounting estimates regarding the following items that materially impact

the Group's financial statements:

- Financial instruments, see notes no. 14. and 34.

- Loans to customers no. 16.

- Intangible assets, see note no. 21.

- Liability due to insurance contracts, see note no. 25.

Financial instruments

Business model assessment

The classification and measurement of financial instruments depend on the results of the SPPI and the business

model tests. Judgement is required in assessing the relevant evidence including how the performance of the

instruments is evaluated and their performance is measured, the risks that affect the performance of the

instruments and how these are managed and how the managers of the instruments are compensated. Refer to

notes 34 and 38.13 for further information regarding classification of financial instruments. Management regularly

reassesses the business model for each portfolio to ensure classification remains consistent with actual

management practices and strategic objectives.

Fair value measurement

In estimating the fair value of a financial asset or a liability, the Group uses market-observable data to the extent it is

available. Where quoted prices in active markets for identical assets are not available the Group uses other market

observable inputs and lastly unobservable inputs. Refer to notes 34 and 39.13 for more details on fair value

measurement.

Consolidated Financial Statements 31 December 2025 22 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

4. Accounting estimates and judgements (cont.)

Goodwill

Goodwill arises in business combinations. Goodwill is measured as the excess of the sum of the consideration

transferred, the amount of any non-controlling interest in the acquiree, and the fair value of the acquirer’s previously

held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets

acquired and the liabilities assumed. Goodwill is subject to annual impairment testing, or more frequently when

there is an indication of impairment.

Estimation uncertainty arises primarily from assumptions regarding future cash ﬂows, discount rates and growth

assumptions used in testing goodwill and other intangible assets for impairment. Management reviews these

assumptions at least annually to ensure they reﬂect current expectations and market conditions.

For impairment testing of goodwill, the Group estimates the value in use of certain cash-generating units (“CGUs”).

Value in use is the present value of estimated future cash ﬂows expected to arise from the CGU, and such an estimate

requires management to make certain assumptions. The methods, assumptions and key inputs applied in the

impairment testing of goodwill are further described in note 21.

Other intangible assets

Judgement is required in estimating the useful lives of intangible assets and capitalisation period of internally

generated intangible assets.

Customer relationships

Customer relationships have been acquired as part of recent acquisitions and are capitalized and amortized using

the straight-line method over their useful life of maximum 10 years.

Brands

Brands have been acquired as part of recent acquisitions and are capitalized and amortized using the straight-line

method over their useful life but not exceeding 20 years.

Software

Software comprises acquired software licences and external costs associated with the development of bespoke

applications.

Development cost that has been capitalized is amortized on the day that the product is launched using the straight-

line method over their useful life but not exceeding 10 years.

Consolidated Financial Statements 31 December 2025 23 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

4. Accounting estimates and judgements (cont.)

Insurance Contract Liabilities

The Group applies the Premium Allocation Approach (PAA) to the measurement of all insurance contracts as the

coverage period of each contract is one year or less. The Group applies a policy of expensing all insurance acquisition

cash ﬂows as they are incurred.

Judgement is required in estimating the insurance liability in accordance with the PAA method at period end,

including the assumptions about the discount rate used and the assumptions on the future inﬂation. Discounting

and adjustment for future inﬂation are, in particular, important for the long tailed claims such as claims in motor

liability, professional liability, workers’ compensation and personal accident.

Level of aggregation and the evaluation of contract boundary are significant assumptions as these define the use of

the premium allocation model’s simplified measurement model.

Premiums due to the Group for insurance contract services already provided in the period but not yet received at the

end of the reporting period are included in the Liability for Incurred Claims (LIC), in accordance with IFRS 17.

The Group has made an accounting policy choice not to adjust the carrying amount of the LRC to reflect the time

value of money and the effect of financial risk if, at initial recognition, the time between providing each part of the

services and the related premium due date is no more than one year.

When calculating the Liability for Incurred Claims (LIC), the fulfillment cash ﬂow is discounted using the discount

rate applied to the expected cash ﬂow for loss expenses at the time the claim is initially recognized. The liability is

subsequently remeasured using the discount rate applicable at each measurement date. Capital costs resulting

from the calculation of the LIC, such as interest, changes in interest rates for discounting purposes and inﬂation, are

recognized in the statement of profit or loss as insurance financial items, which are part of the investment result.

The Group considers a group of insurance contracts to be onerous if the fulfilment cash ﬂows that relate to the

remaining coverage of the group contract exceed the carrying amount of the liability for remaining coverage of the

group. If the expected fulfilment cash ﬂows allocated to the contract, any previously recognized acquisition cash

ﬂows, and any cash ﬂows arising from the contract at the date of initial recognition in total result in a net cash outﬂow,

the contract is considered onerous. The Group has not recognized any group of onerous contracts in the current or

previous reporting period.

For further information regarding judgements and estimates applied in measuring liability due to insurance contracts

please refer to notes 25, 35.8 and 39.5-7.

Consolidated Financial Statements 31 December 2025 24 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

5. Operating segment reporting

The Group operates through three primary operating segments: Insurance Operations, Insurance Investments, and

Financial Services. These segments have been identified based on the Group’s internal reporting structure, which

reflects the nature of products and services offered.

Insurance Operations comprises the Group’s core insurance activities, including the underwriting of life, health, and

general insurance products. The revenue of this segment primarily consists of premium income from policyholders.

Key expenses include claims incurred and insurance contracts operating expenses.

Insurance Investments includes the management of assets backing insurance liabilities as well as proprietary

investment activities. It covers investments in fixed income securities, equities and other financial instruments. The

primary source of revenue for this segment is investment income, including interest, dividends, and realized or

unrealized gains on financial assets.

The Financial Services segment comprises activities such as asset management, loans to customers, and other non-

insurance financial products. Revenue in this segment is generated through interest income, management fees,

advisory services, and other financial transactions. This segment supports the Group’s strategic objective of

diversifying income streams and expanding its presence in the broader financial sector.

Inter-segment transactions, where applicable, are conducted on an arm’s length basis, and segment performance is

assessed based on key financial metrics, including revenue, profit before tax, and return on capital.

The operating segments' results for the period 1 January to 31 December 2025 are specified as follows:

SkagiInsurance Insurance Financial Supporting unitsoperations investments services and eliminations TotalInsurance revenue ....................................................................... 31.959.386 31.959.386Claims incurred ........................................................................... (22.224.160) (22.224.160)Insurance contract operating expenses ...................................... (5.781.843) (5.781.843)Net expenses from reinsurance contracts .................................. (983.651) (983.651)Insurance service result .............................................................. 2.969.732 0 0 0 2.969.732Net interest income ..................................................................... 460.697 460.697Net fee and commission income ................................................. 2.533.879 (176.248) 2.357.631Financial income ......................................................................... 2.354.626 189.068 (62.858) 2.480.837Operating exp. of the insurance investment portfolio .................. (308.440) (308.440)Net finance expenses from insurance contracts ......................... (1.631.525) (1.631.525)Other financial items ................................................................... (394.743) (107.724) (502.467)Net financial income .................................................................... 0 19.919 189.068 (170.582) 38.405Other operating income ............................................................... 208.011 4.138 (1.296) 210.853Share in the profit of associates, after income tax ...................... 110.950 110.950Net operating income .................................................................. 3.177.743 19.919 3.187.783 (237.176) 6.148.269Operating expenses .................................................................... (160.961) (2.845.062) (502.213) (3.508.235)Allocated costs from supporting units ......................................... (246.979) (227.981) (75.960) 550.920 0Amortization of intangible assets ................................................. (22.505) (173.800) (196.305)Net credit impairment .................................................................. (6.627) (6.627)Profit (loss) before tax 2.769.803 (208.062) 237.630 (362.269) 2.437.102Income tax expenses ....................................................................................................................................................................................(534.637)1.902.466Profit for the year ...........................................................................................................................................................................................

Consolidated Financial Statements 31 December 2025 25 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

5. Operating segment reporting (cont.)

The operating segments' results for the period 1 January to 31 December 2024 are specified as follows:

Insurance operations consist of non-life and life insurance, and are specified as follows for the year 2025:

SkagiInsurance Insurance Financial Supporting unitsoperations Investments services and eliminations TotalInsurance revenue ........................................................................ 29.182.080 29.182.080Claims incurred ............................................................................. (21.178.419) (21.178.419)Insurance contract operating expenses ........................................ (5.575.624) (5.575.624)Net expenses from reinsurance contracts .................................... (948.562) (948.562)Insurance service result ................................................................ 1.479.475 0 0 0 1.479.475Net interest income ....................................................................... 237.057 237.057Net fee and commission income ................................................... 1.942.195 (126.524) 1.815.6710Financial income ......................................................................... 3.554.909 140.395 3.695.304Operating exp. of the insurance investment portfolio .................. (285.019) (285.019)Net finance expenses from insurance contracts ......................... (1.121.708) (1.121.708)Other financial items ................................................................... (388.569) (388.569)Net financial income .................................................................... 0 1.759.613 140.395 0 1.900.007Other operating income ................................................................ 224.481 23.892 (6.968) 241.405Share in the profit of associates, after income tax ........................ 0Net operating income .................................................................. 1.703.955 1.759.613 2.343.539 (133.492) 5.673.615Operating expenses .................................................................... (145.107) (2.294.014) (528.046) (2.967.167)Amortization of intangible assets ................................................. (20.319) (130.056) (150.374)Net credit impairment .................................................................. (10.815) (10.815)Profit (loss) before tax 1.558.849 1.759.613 18.391 (791.594) 2.545.258Income tax expenses ....................................................................................................................................................................................(286.841)2.258.417Profit for the year ...........................................................................................................................................................................................

Marine General Accident andProperty and cargo Vehicle liability healthinsurance insurance insurance insurance insuranceInsurance revenue ....................................................................... 6.259.996 598.496 17.934.298 1.733.495 2.983.829Insurance service expenses - Claims incurred ........................................................................ (3.963.612) (296.628) (14.312.771) (553.717) (2.102.580) - Operating expense of insurance .............................................. (1.391.597) (188.101) (2.613.922) (440.696) (656.831)Net expenses from reinsurance contracts .................................. (462.327) (77.538) (90.952) (242.603) (27.155)Insurance service result .............................................................. 442.461 36.230 916.653 496.479 197.262Health and Totalcritical illness direct ForeignLife insurance insurance insurance reinsurance TotalInsurance revenue ....................................................................... 994.258 1.455.028 31.959.401 (15) 31.959.386Insurance service expenses - Claims incurred ........................................................................ (340.647) (912.709) (22.482.664) 258.504 (22.224.160) - Operating expense of insurance .............................................. (208.307) (269.326) (5.768.779) (13.064) (5.781.843)Net expenses from reinsurance contracts .................................. (64.960) (18.116) (983.651) 0 (983.651)Insurance service result .............................................................. 380.344 254.877 2.724.308 245.424 2.969.732

Consolidated Financial Statements 31 December 2025 26 All amounts are in thousands of ISK

Note Notes to the Consolidated Financial Statements

5. Operating segment reporting (cont.)

Insurance operations consist of non-life and life insurance, and are specified as follows for the year 2024:

6. Insurance service result

Marine General Accident andProperty and cargo Vehicle liability healthinsurance insurance insurance insurance insuranceInsurance revenue ....................................................................... 6.045.707 553.593 15.887.781 1.669.081 2.842.849Insurance service expenses- Claims incurred ........................................................................ (4.356.528) (208.526) (12.675.327) (1.200.677) (2.007.606)- Operating expense of insurance .............................................. (1.278.270) (154.449) (2.671.099) (389.114) (607.890)Net expenses from reinsurance contracts .................................. (285.770) (115.162) (190.436) (58.996) (72.409)Insurance service result .............................................................. 125.139 75.455 350.919 20.294 154.944Health and Totalcritical illness direct ForeignLife insurance insurance insurance reinsurance TotalInsurance revenue ....................................................................... 921.789 1.261.129 29.181.930 150 29.182.080Insurance service expenses- Claims incurred ........................................................................ (296.188) (487.647) (21.232.499) 54.079 (21.178.419)- Operating expense of insurance .............................................. (213.887) (252.454) (5.567.164) (8.460) (5.575.624)Net expenses from reinsurance contracts .................................. (60.866) (164.922) (948.562) 0 (948.562)Insurance service result .............................................................. 350.848 356.106 1.433.706 45.769 1.479.475

Insurance revenue 2025 2024Insurance revenue............................................................................................................................................................ 31.959.386 29.182.080Insurance service expensesClaims incurred ................................................................................................................................................................ (22.224.160) (21.178.419)Insurance contract operating expenses ........................................................................................................................... (5.781.843) (5.575.624)Insurance service expenses.............................................................................................................................................. (28.006.004) (26.754.044)Net expenses from reinsurance contracts heldExpenses from reinsurance contracts held ...................................................................................................................... (1.079.347) (995.753)Reinsurers share in incurred claims ................................................................................................................................. 89.253 41.546Fee and commission income from reinsurance contracts held ....................................................................................... 6.443 5.645Net expenses from reinsurance contracts held................................................................................................................. (983.651) (948.562)2.969.732 1.479.475Insurance service result, total ..........................................................................................................................................

Consolidated Financial Statements 31 December 2025 27 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

7. Net interest income

Interest income and expenses above are from financial services operations. Net interest income presented in the

table above calculated in accordance with the effective interest rate method amounted to ISK 1.472 million (2024:

ISK 795 million). Interest income of insurance investments is allocated in the statement of profit or loss within

financial income along with all other income from the insurance investment asset portfolio. The breakdown of net

financial income is provided in Note 9.

8. Net fee and commission income

Fees earned from transaction-type services are recognised when the service has been completed (i.e., at a point in

time). Fees that are performance-linked are recognised when the relevant performance criteria are fulfilled (i.e., at a

point in time). Contractual fees, such as fees for asset management, are recognised over the period of the contract

as the services are provided (i.e., over time), usually on a straight-line basis.

There is not considered to be a significant financing component in contracts for commission income, as the credit

period for receivables is relatively short. Uncertainties regarding variable consideration for performance-based

income are generally resolved at the point in time when revenue is recognised.

The Company does not have significant contract assets or contract liabilities. Commission fee income under long-

term contracts is recognised on a straight-line basis over time and invoiced monthly in arrears. Performance-related

fees are mainly in relation to asset management services. For further information reference is made to note 40.9 (Fee

and commission income and expenses).

Interest income is specified as follows: 2025 2024Bank deposits, cash and other interest income ...............................................................................................................111.163 95.316Loans to customers ..........................................................................................................................................................1.140.344 465.563Interest on forward contract derivatives ...........................................................................................................................471.782 580.687Interest on financial assets at fair value ...........................................................................................................................207.182 206.404Interest on financial assets recorded at fair value through other comprehensive income ...............................................220.704 234.383Interest income, total ........................................................................................................................................................2.151.175 1.582.354Money market deposits and other borrowings .................................................................................................................(1.144.470) (1.019.977)Issued bonds and bills ......................................................................................................................................................(480.174) (307.849)Other interest expenses ...................................................................................................................................................(65.834) (17.471)Interest expenses, total ....................................................................................................................................................(1.690.478) (1.345.297)460.697 237.057Net interest income, total .................................................................................................................................................

2025 2024Capital markets and corporate finance ............................................................................................................................1.027.248 1.070.111Asset management fees ..................................................................................................................................................982.416 590.623Other net fee and commission income ............................................................................................................................347.967 154.937Net fee and commission income, total .............................................................................................................................2.357.631 1.815.671

Consolidated Financial Statements 31 December 2025 28 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

9. Net financial income

Fair value change of equities instruments includes ISK 239 million (2024: ISK 141 million) dividend income from

equity holdings.

Interest income and other investment income, net finance expenses and other financial items above are from

Insurance investment operations assets. Net interest income presented in the table above calculated in

accordance with the effective interest rate method amounted to ISK 254 million (2024: 259 ISK million).

2025 2024Interest income and other investment income ................................................................................................................. 277.631 281.872Fair value change of equities instruments ........................................................................................................................ (277.886) 478.026Fair value change of other financial assets....................................................................................................................... 2.481.092 2.935.406Fair value change of financial assets................................................................................................................................ 2.203.206 3.413.432Financial income, total...................................................................................................................................................... 2.480.837 3.695.304Net finance expenses from insurance contracts............................................................................................................... (1.631.525) (1.121.708)Other financial items......................................................................................................................................................... (502.467) (388.569)Operating expense of the insurance investment portfolio................................................................................................. (308.440) (285.019)Net financial income, total................................................................................................................................................. 38.405 1.900.007

Consolidated Financial Statements 31 December 2025 29 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

10. Operating expenses

The table below shows operating expenses as presented in the Consolidated statement for Profit or Loss.

The following table shows breakdown of total operating expenses, including Insurance contract operating expenses

cf. note 6.

Auditor's fee

10.1 Salaries and related expenses

2025 2024Financial services ............................................................................................................................................................. 2.845.062 2.294.014Skagi supporting units ...................................................................................................................................................... 502.213 528.046Other cost related to VÍS tryggingar ................................................................................................................................. 160.961 145.107Total.................................................................................................................................................................................. 3.508.235 2.967.167

2025 2024Salaries and related expenses ......................................................................................................................................... 5.969.726 5.417.296Other operating expenses ................................................................................................................................................ 3.274.260 3.015.770Depreciation and amortisation ......................................................................................................................................... 550.837 545.118Total.................................................................................................................................................................................. 9.794.823 8.978.184Centralized supporting units and eliminations .................................................................................................................. 502.213 528.046Operating expenses of financial services ........................................................................................................................ 2.845.062 2.294.014Insurance contract operating expenses ........................................................................................................................... 5.781.843 5.575.624Operating expenses of the insurance investment portfolio and other insurance cost ..................................................... 469.401 430.126Amortization of intangible assets ..................................................................................................................................... 196.305 150.374Operating expenses, total ................................................................................................................................................ 9.794.823 8.978.184

CurrentFormerauditorauditor Total 2025 2024Statutory audit of the financial statements ................................................................ 29.444 53.024 82.469 58.111Other permitted services, tax service and other assurance ..................................... 17.341 1.246 18.587 12.068Total fees paid to auditors ........................................................................................ 46.786 54.271 101.056 70.179

Salaries and related expenses are specified as follows: 2025 2024Salaries ............................................................................................................................................................................ 4.383.196 4.015.812Pension fund contributions ............................................................................................................................................... 659.046 582.297Incentive scheme ............................................................................................................................................................. 148.549 157.529Share option expenses .................................................................................................................................................... 121.341 55.424Special financial activities tax on salaries ........................................................................................................................ 257.182 259.190Other salary-related expenses ......................................................................................................................................... 400.411 347.044Salaries and salary-related expenses .............................................................................................................................. 5.969.726 5.417.296Number of fulltime employees during the year ................................................................................................................. 241 251

Consolidated Financial Statements 31 December 2025 30 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

10.1 Salaries and related expenses (cont.)

Salaries, benefits and contributions to pension funds to CEO, board members and key management personnel are

as follows:

The shareholdings of board members and management include shares held by spouses and dependent children,

as well as shares that they or their spouses own a majority stake in.

10.2 Remuneration policy

The Company's remuneration policy was approved at the Company's board meeting on 26 February 2025 upon the

recommendation of the remuneration committee. Subsequently, the Company's Annual General Meeting approved

the Company's current remuneration policy in March 2025. The Company's remuneration policy undergoes an

annual review and is presented to the Company's Annual General meeting for approval, either with or without

amendments. The remuneration policy complies with the provisions of Act no. 90/2003 on Income Tax, Act no. 2/1995

on Limited Liability companies, and other applicable laws and regulations. Additional information regarding the

policy can be found on the Company's website www.skagi.is.

20252024Salaries and Pension fund Salaries and Pension fundbenefits contributions benefits contributionsStefán Héðinn Stefánsson, Chairman of the Boardand member of the Risk committee and Remuneration committee .......................12.906 1.484 13.247 1.523Vilhjálmur Egilsson, Board memberand member of the Risk committee and Audit committee ......................................7.056 811 8.059 927Ásgeir Helgi Reykfjörð Gylfason, Board memberand member of the Remuneration committee ........................................................6.978 802 6.348 730Hrund Rudolfsdóttir, Board memberand member of the Remuneration committee and Audit committee ......................8.946 1.029 6.069 698Marta Guðrún Blöndal, Board member ...................................................................6.033 694 6.674 768Ragnheiður Hrefna Magnúsdóttir, alternate Board member ...................................507 58 622 72Sveinn Friðrik Sveinsson, alternate Board member ...............................................507 58 490 56Guðný Hansdóttir, former Board member ...............................................................0 0 1.989 229Valdimar Svavarsson, former Board member ........................................................0 0 240 28Haraldur Þórðarson, Group CEO of Skagi ..............................................................59.402 10.459 54.713 9.922Helgi Bjarnason, former CEO of Vátryggingafélag Íslands .....................................0 0 35.771 6.618Group senior management (7)* ..............................................................................304.115 48.046 245.822 43.354406.450 63.443 380.044 64.924

The members of the Board of Directors held 3,434,000 shares at year-end 2025. The CEO held 56,409,979 shares and management owned a total of

40,723,526 shares and stock options on 7,039,371 shares as shown in note 10.4.

* Group senior management team; Group CFO, Group General Counsel, Group Managing Director of HR, CEO of VIS Insurance, CEO of Fossar

Investment Bank, managing director of Íslensk verðbréf and the Group Managing Director of Risk Management, who was a member of the Group

management team until May 2025.

Consolidated Financial Statements 31 December 2025 31 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

10.3 Incentive scheme

Incentive scheme of the Skagi includes general share options, annual bonus scheme, and cash incentives for each

company within the Group, all in accordance with the company's remuneration policy and incentive scheme.

General share options: are call options provided to all employees which are not related to performance cf. note 10.4

which provides further details of General Share options.

Annual bonus scheme: approved by the Board of Directors annually based on performance criteria. Certain

employees of the Group are included in the annual bonus scheme, where the incentive is calculated as a percentage

of the annual salary, either up to 10% or up to 25% of the total annual salary, depending on the nature of the work. In

cases where the employee's maximum incentive is a fixed amount and under the deferral conditions of the law, it is

assumed that the entire amount will be paid out as a salary when the year's results are known. In cases where the

annual bonus is above 10% of total annual salary, it is assumed that a minimum of 40% of the incentive scheme will

be delivered in the form of share related payments, either shares or share options, that will be delivered after three

years have passed. Information on share options in relation to annual bonus incentive scheme can be found in note

10.4.

Cash incentives: For all employees of VÍS a cash incentive is in place, where cash incentives are paid equally to

employees in accordance with performance criteria. The maximum amount per employee according to the cash

incentive was 600,000 ISK per year.

Incentive scheme payments through profit and loss

10.4 Share options and share related payments

The Company has issued a general share options scheme and share options in relation to annual bonus scheme in

accordance with authorization of the Annual General Meeting and the Company’s remuneration policy. Both the

General share option scheme and the Share options in relation to the annual bonus scheme are equity-settled share-

based payment arrangements in accordance with IFRS 2.

General share options

General share options are call options issued by the Company to all employees of the Group in accordance with the

Company’s remuneration policy. The options are granted annually with a market value of ISK 1.5 million per employee

per year and are issued at a fixed exercise price per share. The issuance of general share options is approved by the

shareholders of the Company and the Icelandic Tax and Customs authorities.

At the Annual General Meeting held on 21 March 2024, the Board of Directors was authorised to implement a three-

year general share option plan and to enter into share option agreements with employees of Skagi and its subsidiaries

under this framework. The plan entitles option holders to purchase shares in the Company for up to ISK 1.5 million

per year over a three-year period, beginning 12 months after the signing of the agreement.

2025 2024Non-deferred .......................................................................................................................................................................(149.911) (94.164)Deferred ..............................................................................................................................................................................(5.284) (53.528)Salary related expenses .....................................................................................................................................................(46.563) (44.308)(201.758) (192.000)Total ....................................................................................................................................................................................Deferred incentive scheme payments in the statement of financial position 31.12.2025 31.12.2024220.527 238.599Deferred payments .............................................................................................................................................................

Consolidated Financial Statements 31 December 2025 32 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

10.4 Share options and share related payments (cont.)

The general share options vest solely based on continued employment, with no performance-related vesting

conditions. Options may be exercised after 12 months from the grant date, provided the employee remains employed

by the Group at the time of exercise. Options lapse if the employee leaves the Group prior to exercise or if the

employee elects not to exercise the options within the contractual term.

The total expense recognised in profit or loss in respect of general share options during 2025 amounted to ISK 115

million (2024: ISK 55 million) and is included in operating expenses.

The Company may settle its obligations under the general share option scheme through the issuance of new shares

and/or the use of treasury shares, in accordance with its Articles of Association.

Share options in relation to annual bonus scheme

Certain employees of the Group participate in the annual bonus scheme, under which a portion of the variable

remuneration is delivered in the form of share options, in accordance with the Company’s remuneration policy and

applicable laws and regulations governing incentive schemes for insurance companies.

Share options granted under the annual bonus scheme are equity-settled share-based payment arrangements in

accordance with IFRS 2. The options are granted annually based on performance in the preceding financial year and

form part of the employees’ deferred variable remuneration.

The options vest after three years of continuous service from the grant date and may be exercised thereafter, provided

the employee remains employed by the Group at the vesting date. There are no market-based vesting conditions.

Options lapse if the employee leaves the Group prior to vesting or if the options are not exercised within the

contractual term.

The exercise price of the options is determined based on the weighted average market price of the Company’s shares

prior to the grant date, adjusted for the risk-free interest rate and expected dividends, in accordance with the terms

of the scheme.

The fair value of the options granted under the annual bonus scheme is determined at the grant date using the Black-

Scholes valuation model. Key assumptions applied in the valuation include the share price at grant date, expected

volatility, expected option life, risk-free interest rate and expected dividend yield.

The total expense recognised in profit or loss in respect of share options granted under the annual bonus scheme

during 2025 amounted to ISK 8 million (2024: ISK 11 million) and is included in operating expenses.

The Company may settle its obligations under the annual bonus share option scheme through the issuance of new

shares and/or the use of treasury shares, in accordance with its Articles of Association.

Options outstanding and exercisable

General Bonus relatedshare optionsshare optionsTotalOutstanding at 1 January 2025 ........................................................................................................57.922 7.332 65.255Granted during the year ....................................................................................................................4.398 4.360 8.759Exercised during the year .................................................................................................................(9.380) 0 (9.380)Forfeited / lapsed ..............................................................................................................................(16.453) 0 (16.453)Outstanding at 31 December 2025 ..................................................................................................36.488 11.693 48.181Exercisable at 31 December 2025 ...................................................................................................0 0 0

Consolidated Financial Statements 31 December 2025 33 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

10.4 Share options and share related payments (cont.)

Exercise prices and remaining contractual life

11. Income tax

11.1 Calculated income taxes

Income taxes are calculated and recognized in the financial statements.

11.2 Deferred taxes

General Bonus relatedshare options share optionsExercise price range (ISK) ...............................................................................................................................................18,85-19,78 17,27 - 20,84Weighted average exercise price (ISK) ...........................................................................................................................18,85 18,88 Weighted average remaining contractual life (years) .......................................................................................................1,0 1,5 Expense recognised in profit or loss 2025 2024General share options ......................................................................................................................................................108.383 36.858Bonus-related share options ............................................................................................................................................7.989 11.000Total share-based payment expense ...............................................................................................................................116.372 47.858

Effective tax rate:20242025Amount % Amount %Profit before income taxes ...................................................................................... 2.437.102 2.545.258Income tax according to prevailing tax rate ............................................................ 487.420 20,0% 534.504 21,0%Fair value changes of financial assets .................................................................... 140.846 5,8% (226.863) -8,9%Share in profit of associates .................................................................................... (22.190) -0,9% 0 0,0%Share in profit of non-taxable companies ............................................................... 7.193 0,3% (8.442) -0,3%Dividends received .................................................................................................. (91.548) -3,8% (50.198) -2,0%Special tax on financial activity ............................................................................... 20.846 0,9% 28.951 1,1%Effect of temporary change in tax rate .................................................................... 0 0,0% 9.247 0,4%Other changes ........................................................................................................ (7.931) -0,3% (358) 0,0%Income taxes according to the statement of profit or loss ...................................... 534.637 21,9% 286.841 11,3%

Deferred tax asset and (liability) is specified as follows:20252024Deferred tax Deferred tax Deferred tax Deferred taxasset liability asset liabilityAt the beginning of the year ...................................................................................... 461.117 (358.107) 191.211 (271.629)Tax synergies ........................................................................................................... (200.105) 0 0 0Assumed deferred tax asset upon investment of subsidiary .................................... 0 0 68.000 0Acquired trademarks and business relationships ..................................................... 0 0 0 (102.000)Income taxes according to the statement of profit or loss ........................................ (91.352) (443.285) 31.171 (318.012)Effect of share in the results of non-independent taxable entities ............................ 0 7.193 0 (8.442)Taxes to be paid for the year .................................................................................... 94.628 290.331 170.733 341.974Total .......................................................................................................................... 264.290 (503.866) 461.117 (358.107)Deferred tax assets and liabilities offsetting ............................................................. (68.200) 68.200 0 0Net deferred income tax asset and (liability) at year end ........................................ 196.090 (435.667) 461.117 (358.107)The main terms of deferred income tax asset and (liability) are specified as follows:20242025Deferred tax Deferred tax Deferred tax Deferred taxasset liability asset liabilityOperating assets and software ...............................................................................222 (8.585) (2.332) 23.559Intangible assets .....................................................................................................(15.175) (388.896) (446) (326.602)Financial assets ......................................................................................................0 (99.722) 0 (55.339)Derivatives ..............................................................................................................18.570 0 22.612 0Tax loss carry-forward ............................................................................................190.719 30.695 440.526 0Other items .............................................................................................................1.754 30.841 756 274Deferred income tax asset and (liability) at year end ..............................................196.090 (435.667) 461.117 (358.107)

Consolidated Financial Statements 31 December 2025 34 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

11.2 Deferred taxes (cont.)

A deferred tax asset has been recognised in respect of ISK 191 million (2024: ISK 441 million) of unused tax losses

which management expects will be utilized against future taxable profits. Included in unused tax losses are losses of

ISK 974 million that will expire in 2034, ISK 1.068 million that will expire in 2033 and ISK 159 million that will expire in

the year 2031-2032.

12. Earnings per share

Basic earnings per share (EPS) is calculated based on earnings attributable to shareholders and the weighted average

number of shares outstanding during the reporting period. Diluted EPS is determined by adjusting the weighted

average number of shares outstanding to account for the potential conversion of all dilutive ordinary

shares, including share options granted to employees. The company has issued share options that have a dilutive

effect on EPS.

Earnings per outstanding share is calculated based on the following assumptions:

*The presentation of comparative figures has been revised.

13. Cash and cash equivalents

Cash and cash equivalents at year-end are specified as follows:

14. Financial assets

The table below shows Financial assets from the Consolidated statement of financial position for each operating

segment:

2025 2024*Profit for the year attributable to shareholders of the Parent Company ........................................................................... 1.900.657 2.264.210Weighted average number of outstanding shares ........................................................................................................... 1.897.042 1.895.993Adjustments for stock options .......................................................................................................................................... 2.069 84Diluted weighted average number of outstanding shares ................................................................................................ 1.899.111 1.953.915Basic earnings per share ................................................................................................................................................. 1,00 1,19Diluted earnings per share ............................................................................................................................................... 1,00 1,19

31.12.2025 31.12.2024Bank deposits in ISK ........................................................................................................................................................ 1.599.246 2.088.309Bank deposits in foreign currencies ................................................................................................................................. 150.779 233.650Cash and cash equivalents .............................................................................................................................................. 1.750.025 2.321.959

31.12.2025

Insurance Financial Shares in other companiesinvestmentsservicesTotalListed on domestic stock exchanges ................................................................................................3.797.389 459.228 4.256.618Listed on foreign stock exchanges ...................................................................................................3.518.905 0 3.518.905Other companies ..............................................................................................................................8.183.576 57.571 8.241.14615.499.870 516.799 16.016.669Other securitiesGovernment-backed securities, indexed ..........................................................................................2.500.633 307.614 2.808.247Government-backed securities, non-indexed ...................................................................................8.345.277 5.997.752 14.343.028Other bonds ......................................................................................................................................11.519.128 212.568 11.731.696Bond funds .......................................................................................................................................8.320.339 253.174 8.573.513Institutional investor funds ................................................................................................................2.103.653 0 2.103.65332.789.030 6.771.107 39.560.137Other financial assetsCurrency forwards ............................................................................................................................312.164 0 312.164Total financial assets ........................................................................................................................48.601.064 7.287.906 55.888.970

Consolidated Financial Statements 31 December 2025 35 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

14. Financial assets (cont.)

*The presentation of comparative figures has been revised. For further details, refer to Note 2.

15. Securities used for economic hedging

The Group, via Fossar, offers its clients exposures through derivative contracts on listed bonds and

equities instruments. To hedge these client exposures the bank holds the underlying securities for economic

hedging which are accounted for on its balance sheet. The carrying amount of securities held for this purpose is as

follows:

16. Loans to customers

Loans to customers are specified as follows:

Loans to customers includes both margin loans and credit loans and are all payable within 24 months. These loans

are non-indexed and secured by liens on the borrowers’ assets. Further analysis of loans to customers is provided in

notes 35.9 and 35.10.

31.12.2024Insurance Financial Shares in other companiesinvestmentsservicesTotalListed on domestic stock exchanges ................................................................................................4.650.350 464.211 5.114.561Listed on foreign stock exchanges ...................................................................................................3.400.052 0 3.400.052Other companies ..............................................................................................................................7.953.557 4.809 7.958.36616.003.959 469.019 16.472.978Other securitiesGovernment-backed securities, indexed ..........................................................................................3.790.116 428.568 4.218.684Government-backed securities, non-indexed ...................................................................................5.998.580 5.237.732 11.236.312Other bonds ......................................................................................................................................8.612.351 0 8.612.351Bond funds .......................................................................................................................................8.010.225 329.530 8.339.755Institutional investor funds ................................................................................................................2.511.653 0 2.511.65328.922.926 5.995.830 34.918.756Other financial assetsCurrency forwards* ...........................................................................................................................499.119 0 499.119Total financial assets ........................................................................................................................45.426.005 6.464.850 51.890.854

31.12.2025 31.12.2024Government bonds ............................................................................................................................................................. 124.439 1.068.281Equities instruments ............................................................................................................................................................ 2.453.276 4.721.242Other bonds ........................................................................................................................................................................ 531.809 313.3183.109.524 6.102.840

31.12.2025 31.12.2024Loans to customers .......................................................................................................................................................... 11.853.950 7.890.836Impairment of loans ......................................................................................................................................................... (17.442) (10.815)11.836.508 7.880.021

Consolidated Financial Statements 31 December 2025 36 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

17. Derivatives

Forward contracts derivatives are specified as follows:

The Group, via Fossar, offers its clients exposures through forward contracts derivatives on listed bonds and

equities instruments. To hedge these exposures Fossar holds the underlying securities which are accounted for on

its balance sheet cf. Note 15.

18. Investments where investment risk is borne by the life-insurance policyholders

The Group, via Lífís, offers life-insurance policies which consist of life insurance and contribution to

investments funds. The investment component in these contracts is considered distinct and therefore accounted

for separately applying IFRS 9. The cost of the life insurance decreases as the amount in the investment fund

increases and ceases by the time the amount in the investment fund exceeds the life-insured amount. The life-

insurance policyholder bears the investment risk.

19. Share in subsidiaries

VF Nord ehf. and Skagi ehf. are holding companies with no operations. ÍV sjóðir hf. (owned 100% by Skagi pre-merger),

SIV eignastýring hf. (owned 70% by Skagi pre-merger) and Íslensk verðbréf hf. (owned 100% by Skagi pre-merger)

were all merged, effective as of 1

January 2025, under the name Íslensk verðbréf hf. (owned 85,9% by Skagi post-

merger). Reference is made to announcement published by the Company on the NasdaqIceland on 6

January 2026

where Skagi exercised an option to acquire 14,1% share in Íslensk verðbréf hf. (ÍV). Skagi has an option to pay the

purchase price with issuance of new Skagi shares, equivalent to nominal amount of 24,231,800.-, issued at

average closing price of shares in Skagi traded on Nasdaq OMX Iceland ten days before exercise of option. Issue

of new shares in Skagi is subject to shareholders approval but Skagi also has the right to pay the purchase price in

cash. Issuance of new shares will be proposed at the next AGM of the Company.

Assets 31.12.2025 31.12.2024Derivatives, equities ......................................................................................................................................................... 153.201 113.267Derivatives, bonds ............................................................................................................................................................ 8.932 5.273162.132 118.541LiabilitiesDerivatives, equities ......................................................................................................................................................... 248.063 229.745Derivatives, bonds ............................................................................................................................................................ 6.918 1.854254.981 231.599

Balance at 01.01.2025 ................................................................................................................................................................................... 1.023.545Premiums ...................................................................................................................................................................................................... 24.392Claims ........................................................................................................................................................................................................... 322Pay out .......................................................................................................................................................................................................... (168.033)Return of investments ................................................................................................................................................................................... 10.701Premiums for life insurance & waiver of premium ......................................................................................................................................... (6.113)Cost (fees & discounts) ................................................................................................................................................................................... (2.670)Balance at 31.12.2025 ................................................................................................................................................................................... 882.144

31.12.2025 31.12.2024Principal activityVÍS tryggingar hf. .........................................................................100,0% 100,0%Insurance operationsFossar fjárfestingarbanki hf. ........................................................100,0% 100,0%Investment bankingVF Nord ehf. ................................................................................ 100,0% 100,0%Investing activitesSkagi ehf. ....................................................................................100,0% 0,0%Investing activitesLíftryggingafélag Íslands hf. ........................................................100,0% 100,0%Life insuranceÍslensk verðbréf hf. ...................................................................... 85,9% 100,0%Asset and fund managementSIV eignastýring hf. .....................................................................0,0% 70,0%Asset and fund management

Consolidated Financial Statements 31 December 2025 37 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

20. Share in associates

T plus hf. is an Icelandic financial services provider specializing in back office outsourcing for the financial services

sector. Services provided range from clearing and settlement of securities, custody services and pension fund

services. T plus hf. operates according to Act No. 161/2002 on Financial Undertakings and is under the supervision

of the Financial Supervisory Authority. Vex ehf. is an independent asset management company operating according

to Act No. on 45/2020 on Asset Management Companies for specialized funds and is under the supervision of the

Financial Supervisory Authority.

Changes in holdings in associates are specified as follows:

21. Intangible assets

Assets such as goodwill are subject to annual impairment testing, or more frequently when there is an indication of

impairment. Goodwill is allocated to cash generating units ("CGUs") for the purpose of impairment testing. Goodwill

has been allocated to the following CGUs; Insurance operations and Financial Services operations. The allocation

is made to those CGUs or groups of CGUs that are expected to benefit from the business combinations in which the

goodwill arose.

Book value Book valueShare 31.12.2025 31.12.2024Tplús hf. ............................................................................................................................................35,0% 158.378 135.994Vex ehf. ............................................................................................................................................33,3%53.762 12.883212.140 148.876

31.12.2025 31.12.2024Balance at beginning of year ............................................................................................................................................148.876 190.283Share reduction in accociates ..........................................................................................................................................0 (26.007)Share in profit of associate ...............................................................................................................................................110.950 0Received dividend ............................................................................................................................................................(47.686) (15.400)212.140 148.876

CustomerCost Goodwill relationships Brands Software TotalCost at 1.1.2024 .......................................................................... 2.242.583 936.195 310.146 3.984.335 7.473.259Additions during the year ............................................................ 861.008 217.000 316.000 9.661 1.403.669Cost at 31.12.2024 ...................................................................... 3.103.591 1.153.195 626.146 3.993.996 8.876.928Additions during the period .......................................................... 0 0 0 22.959 22.959Total cost 31.12.2025 .................................................................. 3.103.591 1.153.195 626.146 4.016.955 8.899.887AmortisationAccumulated amortisation as at 1.1.2024 ................................... 0 23.125 7.625 3.959.299 3.990.049Amortisation for the year ............................................................. 0 103.488 36.514 12.872 152.874Accumulated amortisation as at 31.12.2024 ............................... 0 126.613 44.139 3.972.171 4.142.923Amortisation for the period .......................................................... 0 118.949 63.725 15.506 198.180Accumulated amortisation as at 31.12.2025 ............................... 0 245.562 107.864 3.987.677 4.341.103Carrying amountCarrying amount at the beginning of the year 2024 .................... 2.242.583 913.070 302.520 25.036 3.483.211Carrying amount at year-end 2024 .............................................. 3.103.591 1.026.582 582.007 21.825 4.734.006Carrying amount as at 31.12.2025 .............................................. 3.103.591 907.633 518.282 29.279 4.558.785Amortisation rates ...................................................................... 0% 10% 10% 10-33%

Consolidated Financial Statements 31 December 2025 38 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

21. Intangible assets (cont.)

The goodwill impairment testing was made at the end of the fiscal year. Results of the impairment testing show that

the recoverable values exceed the carrying values of goodwill. In addition to the base case testing, additional

scenarios were tested where some key inputs had been stressed. In all scenarios tested the results show that there

is sufficient headroom and that there are no triggers indicating that impairment is required.

The cash ﬂow projections for the impairment testing are derived from the Group's three year business plan which has

been approved by the Board of Directors. In some instances, the Group's subsidiaries have prepared a three year

business plan which has been approved by the Board of Directors of those companies. Management prepares a cash

ﬂow projection for each CGU, which is derived from the three year business plan and is also based on management

assumptions. The following table shows the key assumptions used in the estimation of the recoverable amount. The

recoverable amounts are calculated by discounting the estimated future cash ﬂow of the CGUs and the terminal

value of which has been determined by use of a long-term growth rate. The time value of money and price of

uncertainty are based on external market information about market risk, interest rates and CGU specific elements

like country risk. It is management opinion that reasonable changes in key inputs would not lead to impairment of

goodwill.

Future Discount Goodwill31.12.2025growth rate rate book valueInsurance operations ........................................................................................................................5,0% 12,0%474.599Financial services .............................................................................................................................3,3% 13,1%2.628.992Total goodwill ....................................................................................................................................3.103.591Future Discount Goodwill31.12.2024growth rate rate book valueInsurance operations ........................................................................................................................5,0% 13,1%474.599Financial services .............................................................................................................................3,0% 15,5%2.628.992Total goodwill ....................................................................................................................................3.103.591

Consolidated Financial Statements 31 December 2025 39 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

22. Property, plant and equipment

The assessment value of properties at year-end 2025 amounted to ISK 146 million (2024: 126 million). The insurance

value of properties amounted to ISK 343 million. The insurance value of properties and equipment amounted to ISK

662 million.

Included in properties and land are Right-of-use assets from lease agreements in the amount of ISK 982 million

(2024: ISK 352 million). For further information on leases please refer to note 28.

Leases31.12.2025 31.12.2024Right of use asset at year end ......................................................................................................................................... 982.195 351.989

31.12.2025 31.12.2024Total property, plant and equipment at year end ........................................................................................................ 1.384.416 700.356

Property and equipment Computer,Buildings equipmentCostand land and vehicles TotalCost at 1.1.2024 ...............................................................................................................................113.840 1.521.427 1.635.270Additions during the year ..................................................................................................................0 207.928 207.928Sold and disposed of during the year ...............................................................................................(866) (15.905) (16.772)Total value 1.1.2025 .........................................................................................................................112.974 1.713.450 1.826.426Additions during the year ..................................................................................................................0 178.108 178.108Sold and disposed of during the year ...............................................................................................0 (17.710) (17.710)Total cost at 31.12.2025 ...................................................................................................................112.974 1.873.848 1.986.825Accumulated depreciationDepreciated 1.1.2024 .......................................................................................................................60.108 1.245.627 1.305.734Depreciation for the year ..................................................................................................................2.181 170.139 172.320Depreciated 1.1.2025 .......................................................................................................................62.289 1.415.766 1.478.054Depreciation for the year ..................................................................................................................1.521 105.023 106.544Depreciated 31.12.2025 ...................................................................................................................63.810 1.520.789 1.584.598Carrying amountCarrying amount at beginning of the year 2024 ................................................................................53.732 275.800 329.531Carrying amount at beginning of the year 2025 ................................................................................50.684 297.684 348.367Carrying amount at end of the year 2025 .........................................................................................49.164 353.058 402.221Depreciation rates ............................................................................................................................3% 10-33%

Consolidated Financial Statements 31 December 2025 40 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

23. Assets from reinsurance contracts held

*The presentation of comparative figures has been revised. For further details, refer to Note 2.

24. Other receivables

Other receivables are specified as follows:

*The presentation of comparative figures has been revised. For further details, refer to Note 2.

31.12.2025 31.12.2024*Assets from remaining coverage ..................................................................................................................................... 227.397 207.751Assets from incurred claims ............................................................................................................................................ 733.222 1.081.619Assets from reinsurance contracts held ........................................................................................................................... 960.618 1.289.371

Assets for incurred claimsAssets for Risk adjustmentremaining Future for non-financialcoverage cash flows risk TotalBalance as at 01.01.2025 (207.751) (905.034) (176.585) (1.289.371)Reinsurers' share of insurance revenue ..................................... 1.079.347 1.079.347Claims recovered & other directly attrib. income ......................... (6.443) (370.734) (73.789) (450.967)Run-off previous years adjustm. to the LIC ................................. 178.685 176.585 355.270Profit/loss on reinsurance contracts held .................................... 1.072.904 (192.049) 102.796 983.650Cash flowsReinsurance premiums paid ....................................................... (1.098.993) (1.098.993)Recoveries from reinsurance ...................................................... 6.443 437.652 444.095Total cash flows .......................................................................... (1.092.550) 437.652 0 (654.898)Balance as at 31.12.2025 (227.397) (659.432) (73.789) (960.618)Assets for incurred claimsAssets for Risk adjustmentremaining Future for non-financialcoverage cash flows risk TotalBalance as at 01.01.2024 (187.525) (1.041.630) (372.247) (1.601.402)Reinsurers' share of insurance revenue ..................................... 995.753 995.753Claims recovered & other directly attrib. income ......................... (5.645) (289.628) (176.585) (471.858)Run-off previous years adjustm. to the LIC ................................. 52.421 372.247 424.668Profit/loss on reinsurance contracts held .................................... 990.107 (237.207) 195.662 948.562Cash flowsReinsurance premiums paid ....................................................... (1.015.979) (1.015.979)Recoveries from reinsurance ...................................................... 5.645 373.803 379.448Total cash flows .......................................................................... (1.010.334) 373.803 0 (636.531)Balance as at 31.12.2024 (207.751) (905.034) (176.585) (1.289.371)

31.12.2025 31.12.2024*Prepaid taxes ................................................................................................................................................................... 712.946 456.136Prepaid expenses ............................................................................................................................................................ 246.856 549.001Receivables related to domestic operations and other receivables ................................................................................. 3.133.863 1.303.474Other receivables, total .................................................................................................................................................... 4.093.665 2.308.612

Consolidated Financial Statements 31 December 2025 41 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

25. Insurance contracts

25.1 Insurance contract liabilities

Insurance contract liabilities are specified as follows:

*The presentation of comparative figures has been revised. For further details, refer to Note 2.

31.12.2025 31.12.2024*Liability for remaining coverage ........................................................................................................................................ 2.758.248 2.608.357Liability for incurred claims ............................................................................................................................................... 27.573.179 27.135.657Liability for insurance contracts, total ............................................................................................................................... 30.331.427 29.744.014

Liability forLiabilities for incurred claimsremaining coveragefor contracts under the PAAPresent valueRisk adjustmentExcluding loss Loss of futurefor non-financialcomponent component cash flows risk TotalBalance as at 01.01.2025 2.608.357 0 26.516.885 618.774 29.744.014Insurance revenue ....................................................................... (31.959.386) (31.959.386)Incurred claims & other directly attrib. exp. ................................. 23.143.720 340.326 23.484.045Other cost for insurance services provided ................................. 5.781.843 5.781.843Run-off previous years adjustm. to the LIC ................................. (1.400.356) 140.472 (1.259.885)Profit/loss on gross business ...................................................... (31.959.386) 0 27.525.206 480.796 (3.953.382)Finance exp. from insurance contracts ....................................... 0 0 1.631.525 0 1.631.525Cash flowsInsurance revenue received 32.109.277 32.109.277Claims & other directly attrib. exp. paid ....................................... (23.228.373) (23.228.373)Insurance operational cash flows ................................................ (5.487.802) (5.487.802)Total cash flows .......................................................................... 32.109.277 0 (28.716.175) 0 3.393.102Reclassified to other balance sheet items ................................... (483.832) (483.832)Balance as at 31.12.2025 2.758.248 0 26.473.609 1.099.570 30.331.427The risk adjustment calculation corresponds to an 85% confidence interval as at 31 December 2025. Liability for Liabilities for incurred claimsremaining coverage for contracts under the PAAPresent valueRisk adjustmentExcluding loss Loss of futurefor non-financialcomponent component cash flows risk TotalBalance as at 01.01.2024 2.185.132 0 24.518.797 766.360 27.470.289Insurance revenue ....................................................................... (29.182.080) (29.182.080)Incurred claims & other directly attrib. exp. ................................. 21.966.745 273.912 22.240.657Other cost for insurance services provided ................................. 5.575.624 5.575.624Run-off previous years adjustm. to the LIC ................................. (640.740) (421.497) (1.062.237)Profit/loss on gross business ...................................................... (29.182.080) 0 26.901.629 (147.586) (2.428.036)Finance exp. from insurance contracts ....................................... 0 0 1.121.708 0 1.121.708Cash flowsInsurance revenue received ........................................................ 29.605.305 29.605.305Claims & other directly attrib. exp. paid ....................................... (20.423.661) (20.423.661)Insurance operational cash flows ................................................ (5.120.575) (5.120.575)Total cash flows .......................................................................... 29.605.305 0 (25.544.236) 0 4.061.069Reclassified to other balance sheet items ................................... (481.013) (481.013)Balance as at 31.12.2024 2.608.357 0 26.516.885 618.774 29.744.014The risk adjustment calculation corresponds to an 85% confidence interval as at 31 December 2024.

Consolidated Financial Statements 31 December 2025 42 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

25.2 Development of incurred claims

The table shows the Group's estimate of the total amount of claims for each claim year and how this estimate has

developed from year to year. The liability is based on paid claims, reported but unsettled claims and unreported

claims.

The following tables show the reinsurers' share of the liability and the liability net of reinsurance.

Total amounts in ISK million2018 2019 2020 2021 2022 2023 2024 2025 TotalEstimate of final claim expensesAt end of claim year ......................................... 14.555 16.404 16.105 17.046 18.860 22.354 23.160 24.170One year later .................................................. 16.331 18.351 15.377 16.532 19.610 22.267 23.081Two years later ................................................ 17.974 19.102 15.840 16.120 18.928 22.606Three years later ........................................... 18.374 19.507 15.618 15.984 18.498Four years later ................................................ 18.441 19.325 15.561 15.612Five years later ................................................ 18.265 19.439 15.566Six years later .................................................. 18.245 18.938Seven years later ............................................. 18.196Estimate of accumulated claimsat year-end 2025 .............................................. 18.196 18.938 15.566 15.612 18.498 22.606 23.081 24.170Accumulated paymentsAt year-end 2025 ............................................. 18.119 18.785 15.239 14.705 17.164 18.329 15.237 10.954Claims provision at year end 2025 ................... 77 153 327 907 1.335 4.277 7.844 13.216 28.137Discounting ...................................................... -6 -10 -26 -85 -110 -310 -614 -1.246 -2.409Provisions from 2017 and prior years ................................................................................................................................................................164Gross provisions for Claims, end of year ..........................................................................................................................................................25.892Debt releated to Liability for incurred claim (LIC) and other insurance liabilities ...............................................................................................1.681

Assets from reinsurance contracts held in ISK million2018 2019 2020 2021 2022 2023 2024 2025 TotalEstimate of final claim expensesAt end of claim year ......................................... 668 564 139 878 276 468 392 371One year later .................................................. 651 695 221 823 253 409 286Two years later ................................................ 889 708 194 813 232 457Three years later ........................................... 901 707 215 770 233Four years later ................................................ 900 664 210 641Five years later ................................................ 839 708 219Six years later .................................................. 612 643Seven years later ............................................. 614Estimate of accumulated claimsat year-end 2025 .............................................. 614 643 219 641 233 457 286 371Accumulated paymentsAt year-end 2025 ............................................. 614 643 210 142 232 426 252 228Claims provision at year end 2025 ................... 0 0 9 498 1 31 34 143 716Discounting ........................................................................................................................................................................................................0Recoverables from 2017 and prior years ..........................................................................................................................................................8Recoverabels for incurred claims, end of year ..................................................................................................................................................0Assets releated to incurred claim (LIC) and other insurance assets ................................................................................................................9

Consolidated Financial Statements 31 December 2025 43 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

25.2 Development of incurred claims (cont.)

25.3 Eiopa yield curves used on all contracts measured under PAA:

Net of own account in ISK million2018 2019 2020 2021 2022 2023 2024 2025 TotalEstimate of final claim expensesAt end of claim year ......................................... 13.887 15.840 15.966 16.168 18.584 21.886 22.769 23.799One year later .................................................. 15.680 17.656 15.156 15.709 19.357 21.858 22.795Two years later ................................................ 17.085 18.394 15.646 15.307 18.696 22.149Three years later ........................................... 17.473 18.799 15.402 15.214 18.266Four years later ................................................ 17.541 18.662 15.351 14.971Five years later ................................................ 17.426 18.732 15.347Six years later .................................................. 17.633 18.295Seven years later ............................................. 17.582Estimate of accumulated claimsat year-end 2025 .............................................. 17.582 18.295 15.347 14.971 18.266 22.149 22.795 23.799Accumulated paymentsAt year-end 2024 ............................................. 17.505 18.141 15.029 14.562 16.931 17.902 14.985 10.726Claims provision at year end 2025 ................... 77 153 318 409 1.334 4.246 7.810 13.073 27.420Discounting ...................................................... -6 -10 -26 -85 -110 -310 -614 -1.246 -2.409Net Provisions from 2017 and prior years .........................................................................................................................................................156Liability for incurred claims (LIC) and assets for incurred claims (AIC) ............................................................................................................25.168

2025 20241 year 5 years 10 years 1 year 5 years 10 years7,0% 6,5% 6,2% 8,2% 6,9% 5,9%

Consolidated Financial Statements 31 December 2025 44 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

26. Financial liabilities

Financial liabilities are specified as follows. For a detailed breakdown, refer to notes 26.1 and 26.2.

26.1 Borrowings

Borrowings are specified as follows:

26.2 Issued bonds and bills

Issued bonds and bills are specified as follows:

26.3 Reconciliation of Liabilities Arising from financing activities

In accordance with IAS 7,44D the table below provides reconcilation between the opening and closing balances of

liabilities arising from financing activities, distinguishing between cash flows and non-cash movements such as

new leases, accrued interest and foreign exchange differences.

31.12.202531.12.2024Borrowings ......................................................................................................................................................................12.342.90013.363.421Issued bonds and bills .....................................................................................................................................................8.610.8794.387.399Financial liabilities total ....................................................................................................................................................20.953.779 17.750.819

31.12.202531.12.2024Money market deposits ...................................................................................................................................................8.972.01510.663.421Liabilities to credit institutions ..........................................................................................................................................3.370.8842.700.000Total ................................................................................................................................................................................12.342.90013.363.421

1.508.772

1.523.767

Issued bonds and bills Issued MaturityType and terms of interest31.12.2025FOS 26 0311 ......................................................11.9.202511.3.2026Bill, discounted ..........................................................1.023.153FOS 26 0528 ......................................................28.11.202528.5.2026Bill, discounted ..........................................................908.819FOS 26 1 ............................................................10.7.202410.1.2026Bond, floating 1M Reibor +1.5% ...............................783.014FOS 27 1 ............................................................23.12.202523.6.2027Bond, floating 1M Reibor +1.7% ...............................2.805.907FOS 040728 .......................................................4.7.20254.7.2028Bond, fixed 9.03% .....................................................1.566.22028.10.202428.10.2026Bond, fixed 9.2% .......................................................FOS 281026 .......................................................1.523.7678.610.879Issued bonds and bills Issued MaturityType and terms of interest31.12.2024FOS 25 0311 ......................................................11.9.202411.3.2025Bill, discounted ..........................................................392.440FOS 25 0530 ......................................................29.11.202430.5.2025Bill, discounted ..........................................................962.420FOS 26 1 ............................................................10.7.2024 10.1.2026 Bond, floating 1M Reibor + 1.5% ..............................FOS 281026 .......................................................28.10.2024 28.10.2026 Bond, fixed 9.2% .......................................................4.387.399

Interest bearing Leaseborrowings liabilities TotalOpening balance as 1 January 2025 ................................................................................................ 21.514.751 391.655 21.906.406Cash flow from financing activities .................................................................................................... 2.868.018 (141.709) 2.726.310New leases ....................................................................................................................................... 0 827.287 827.287Accrued interest ................................................................................................................................ 444.987 0 444.987Other non cash movements ............................................................................................................. 33.742 49.302 83.045Closing balance at 31 December 2025 .............................................................................................24.861.498 1.126.536 25.988.034

Consolidated Financial Statements 31 December 2025 45 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

27. Subordinated bond

At the end of February 2016, the Company issued a subordinated bond in the nominal amount of ISK 2,500 million.

The bond is classified as Tier II capital and is included in the Company's solvency. The bond bears a fixed inﬂation-

indexed interest rate of 5.25%. Its maturity is 30 years but with a prepayment option and a step-up in interest rate to

6.25% ten years after the issue date.

28. Leases

The Group's right-of-use asset is recognised based on the provisions of leasing agreements, see note 39.21 for further

information. Total payments under lease agreements during the year amounted to ISK 192 million (2024: 201

million).

At 2024 year-end the remaining lease period for the Group's leases was 10-36 months.

Interest expenses in respect of the lease liability during the year, which are included in the operating expenses for the

year, amounted to ISK 51 million.

29. Accounts payable and other liabilities

Accounts payable are specified as follows:

*The presentation of comparative figures has been revised. For further details, refer to Note 2.

Changes in the subordinated bond from the beginning to the end of the year:31.12.2025 31.12.2024Balance at 1 January .......................................................................................................................................................3.763.9313.589.584Accrued interest and price indexation .............................................................................................................................341.475364.887Paid interests ...................................................................................................................................................................(197.687)(190.540)Balance at 31 December .................................................................................................................................................3.907.720 3.763.931

2025 2024Right-of-use Lease Right-of-use LeaseAsset Liability Asset LiabilityBalance at beginning of year ..........................................................351.989 391.655 584.453 636.966Change during the year ..................................................................827.017 827.287 (35.144) (36.676)Payment of liabilities ......................................................................(141.709) (232.802)Depreciation ...................................................................................(246.114) (221.488)Indexation .......................................................................................49.302 49.302 24.168 24.168Balance at year end .......................................................................982.195 1.126.536 351.989 391.655

31.12.2025 31.12.2024*Accounts payable ............................................................................................................................................................ 155.943 975.807Income tax payable ......................................................................................................................................................... 356.628 511.031Other liabilities ................................................................................................................................................................ 2.645.960 1.958.833Accounts payable and other liabilities, total ..................................................................................................................... 3.158.530 3.445.671

Consolidated Financial Statements 31 December 2025 46 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

30. Share capital and equity reserves

The share capital is specified as follows:

One vote is attached to each share of the nominal value of one Icelandic Krona in the Company.

Statutory reserve

According to the Limited Liability Companies Act, the Company is required to retain amounts corresponding to 25%

of the nominal value of shares in a statutory reserve that is prohibited from being distributed as dividends to

shareholders. Amounts in excess of 25% of the nominal value of shares are at the Company's disposal. Statutory

reserve in the amount of ISK 625 million is presented within restricted reserves in the statement of changes in equity,

and there were no changes in this reserve in 2024 and 2025.

Restricted reserve

According to the Financial Statements Act, the Company is to recognize unrealized fair value income of financial

assets designated at fair value through profit or loss in a restricted reserve among equity which is not distributable

as dividends. According to the Annual Accounts Act, the Company is to restrict the share in profit from a subsidiary

and associate in excess of dividends received.

Retained earnings

Retained earnings consist of accumulated profit or loss of the Company not distributed as dividends or contributed

to statutory reserve or other reserves. Retained earnings can be distributed to shareholders as dividends. However,

solvency requirements limit the amounts the Company can pay as dividends.

31. Solvency of a financial conglomerate

The Financial Supervisory Authority has specified that the Group is a financial conglomerate as defined in Article 3

of Act no. 61/2017 on Supplementary Supervision of Financial Conglomerates. The capital requirement and own

funds of the Group is calculated according to method 1 of Act no 61/2017. As the primary entity in the group is an

insurance company, method 1 requires that all assets and liabilities in Skagi, that do not belong to a subsidiary, are

included in the solvency calculations of the insurance activates in the computation of the solvency of the

conglomerate. The numbers in the current period in this note are therefore not fully comparable to the numbers from

the previous period.

The Group calculates the minimum capital requirements for companies that do not fall under the insurance

operations using applicable regulations while using the Solvency II framework to calculate own funds and minimum

own funds requirements for insurance activities.

Solvency is a measure of the Group's ability to absorb shocks, or in other words, an indication of its financial strength.

The Group's available capital and capital requirements are calculated on basis that the Group has now been defined

as a financial conglomerate, according to Articles 16, 17 and 18 of Regulation No. 61/2017 on Supplementary

Supervision of Financial Conglomerates. The Group's solvency ratio is 1.31 compared to the minimum requirement

in the Regulation, which is 1.0 and internal limit of 1.175. Group solvency ratio is after assumed dividend as of

reporting date in accordance with target dividend payout ratio of 40% of profits. Group solvency ratio is also shown

before assumed dividend.

31.12.2025 31.12.2024Share capital according to the Company's Articles of Association .................................................................................. 1.916.080 1.906.700Treasury shares .............................................................................................................................................................. (10.333) (10.742)Share capital according to annual financial statements .................................................................................................. 1.905.747 1.895.958

Consolidated Financial Statements 31 December 2025 47 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

31. Solvency of financial conglomerate (cont.)

The Group's solvency ratio as a financial conglomerate is specified as follows:

32. Solvency of insurance activities

The standard rule according to Act No. 100/2016 is applied to calculate the minimum solvency requirements of

insurance activities. The following tables specify how the solvency requirement is divided into subcomponents of

risk. Diversification effects are included since it is not assumed that all risks will be realized simultaneously. An

adjustment for the loss-absorbing capacity of deferred taxes is deducted upon realization of risks. The solvency ratio

of the insurance activities is 1.44 compared to internal limit of 1.35. Solvency ratio of the insurance activities is after

assumed dividend and/or share repurchase to Skagi parent company. Solvency ratio of the insurance activities is also

shown before assumed dividend.

The insurance activities solvency ratio is specified as follows:

Own funds 31.12.2025 31.12.2024Own funds for insurance activities .................................................................................................................................. 20.105.530 18.671.822Own funds for other activities .......................................................................................................................................... 3.288.461 2.791.057Total own funds (before assumed dividend or share repurchase) .................................................................................. 23.393.991 21.462.879Minimum own fund requirementsOwn funds requirements for insurance activities ............................................................................................................ 14.328.365 13.567.776Own fund requirements for other activities ...................................................................................................................... 2.935.881 2.335.62617.264.246 15.903.402Total minimum own fund requirements ...........................................................................................................................31.12.2025 31.12.2024Equity according to the statement of financial position ................................................................................................... 23.984.235 22.270.753Intangible assets ............................................................................................................................................................. (4.558.785) (4.734.006)Subordinated bond .......................................................................................................................................................... 3.907.720 3.763.931Assumed dividend plan ................................................................................................................................................... (760.000) 0Share repurchase program ............................................................................................................................................. 0 0Other ............................................................................................................................................................................... 60.822 162.200Calculated own funds ...................................................................................................................................................... 22.633.991 21.462.879Minimum own fund requirements .................................................................................................................................... 17.264.246 15.903.402Solvency ratio (after assumed dividend or share repurchase) ........................................................................................ 1,31 1,35 Solvency ratio (before assumed dividend or share repurchase) ..................................................................................... 1,36 1,35

Solvency capital requirements 31.12.2025 31.12.2024Base Solvency capital requirement (BSCR) .................................................................................................................... 15.714.987 14.961.935Operational risk ............................................................................................................................................................... 1.127.280 1.035.841Adjustment due to deferred taxes ................................................................................................................................... (2.526.170) (2.430.000)Total minimum solvency .................................................................................................................................................. 14.316.097 13.567.776Base Solvency capital requirement (BSCR) 31.12.2025 31.12.2024Market risk ....................................................................................................................................................................... 9.246.964 8.423.089Counterparty risk ............................................................................................................................................................ 1.902.212 1.914.552Life underwriting risk ....................................................................................................................................................... 184.216 251.393Health underwriting risk ................................................................................................................................................... 1.951.091 2.056.803Non-life underwriting risk ................................................................................................................................................. 8.727.296 8.516.322Diversification effects and other factors .......................................................................................................................... (6.296.792) (6.200.222)Total BSCR ..................................................................................................................................................................... 15.714.987 14.961.935Market riskInterest rate risk .............................................................................................................................................................. 700.832 577.915Equity risk ........................................................................................................................................................................ 8.077.662 7.315.682Property risk .................................................................................................................................................................... 268.610 175.456Spread risk ...................................................................................................................................................................... 1.037.481 633.718Foreign currency risk ....................................................................................................................................................... 396.282 507.974Concentration risk ........................................................................................................................................................... 599.090 712.935Diversification effects ...................................................................................................................................................... (1.832.994) (1.500.591)Total market risk ............................................................................................................................................................. 9.246.964 8.423.089

Consolidated Financial Statements 31 December 2025 48 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

32. Solvency of insurance activities (cont.)

33. Fossar Capital adequacy ratio

The capital adequacy ratio of Fossar is calculated in accordance with Act No. 161/2002 on Financial Undertakings.

The capital requirement due to credit, market, and operational risk is calculated using a standard method and the

bank's capital adequacy ratio is 24.0%.

The minimum required capital ratio of credit undertakings is 8% according to Article 84 of the Act No. 161/2002 on

Financial Undertakings. The bank shall as of 31 December 2024 maintain an additional capital requirement of 9.1%

of the risk exposure amount. In addition to the minimum required capital base, the Bank must maintain certain

capital buffers, specified by the Financial Supervisory Authority of the Central Bank of Iceland from time to time,

which today consist of a countercyclical capital buffer and a capital conservation buffer, which total 5.0%. The

banks overall capital requirement, taking into account capital buffers, is 22.1%.

Solvency

Minimum own fund requirements .................................................................................................................................... 14.316.097 13.567.776Calculated own funds (before assumed dividend or share repurchase) ......................................................................... 21.794.430 18.671.822Solvency ratio (before assumed dividend or share repurchase) ..................................................................................... 1,52 1,38 Calculated own funds (after assumed dividend or share repurchase) ............................................................................ 20.594.430 18.671.822Solvency ratio (after assumed dividend or share repurchase) ........................................................................................ 1,44 1,38

31.12.2025 31.12.2024Fossar total equity at period end ..................................................................................................................................... 3.182.493 2.683.967Deduction items .............................................................................................................................................................. (236.870) (408.387)Own funds ....................................................................................................................................................................... 2.945.623 2.275.580Risk weighted exposures:Credit risk ........................................................................................................................................................................ 6.880.546 4.985.493Market risk ....................................................................................................................................................................... 2.478.240 2.128.398Operational risk ............................................................................................................................................................... 2.918.189 2.518.318Total risk exposure amount ............................................................................................................................................. 12.276.974 9.632.209Capital adequacy ratio for Fossar ................................................................................................................................... 24,0% 23,6%

Consolidated Financial Statements 31 December 2025 49 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

34. Financial instruments

The Group's financial instruments pertain to the following categories:

*The presentation of comparative figures has been revised. For further details, refer to Note 2.

The carrying amounts of financial instruments at amortised cost approximates their fair values. Loans to customers

are predominantly on ﬂoating interest and/or with short maturity (<12 months). Same applies to liabilities, including

money market deposits, bonds, bills and borrowings. Subordinated bond is redeemable at the company’s choice as

of 1

March 2026. Therefore, book value of those instruments is predominantly in line with fair value at the reporting

date.

31.12.2025Fair value Fair valuethrough through AmortisedFinancial instuments - assetsprofit or loss OCI cost TotalCash and cash equivalents .....................................................................................0 0 1.750.025 1.750.025Cash in escrow accounts and term deposits ...........................................................00 80.09680.096Other receivables (without prepayments) ................................................................00 3.099.3673.099.367Equity instruments and equity funds .......................................................................15.798.9440 015.798.944Debt instruments and other securities .....................................................................29.218.1480 029.218.148Secured debt instruments .......................................................................................00 3.271.8073.271.807Currency forwards ...................................................................................................312.164 0 0 312.164Bonds ......................................................................................................................3.628.506 3.142.602 0 6.771.107Equities and other securities ...................................................................................516.799 0 0 516.799Securities used for hedging .....................................................................................3.109.524 0 0 3.109.524Loans to customers .................................................................................................0 0 11.836.508 11.836.508Derivatives ...............................................................................................................162.132 0 0 162.132Total ........................................................................................................................52.746.218 3.142.602 20.037.803 75.926.623Financial instruments - liabilitiesMoney market deposits ...........................................................................................0 0 8.972.015 8.972.015Issued bonds and bills .............................................................................................0 0 8.610.879 8.610.879Borrowings ..............................................................................................................0 0 3.370.884 3.370.884Accounts payable and other liabilities (without unpaid taxes) .................................0 0 2.511.886 2.511.886Subordinated bond ..................................................................................................0 0 3.907.720 3.907.720Derivatives ...............................................................................................................254.981 0 0 254.981Long-term borrowings .............................................................................................0 0 19.575 19.575Total ........................................................................................................................254.981 0 27.392.960 27.647.94131.12.2024*Fair value Fair valuethrough through AmortisedFinancial instuments - assetsprofit or loss OCI cost TotalCash and cash equivalents .....................................................................................0 0 2.212.801 2.212.801Cash in escrow accounts and term deposits ...........................................................0 0 109.159 109.159Other receivables (without prepayments) ................................................................0 0 1.726.366 1.726.366Equity instruments and equity funds .......................................................................17.108.703 0 0 17.108.703Debt instruments and other securities .....................................................................25.411.137 0 0 25.411.137Secured debt instruments .......................................................................................0 0 2.407.045 2.407.045Currency forwards ...................................................................................................499.120 0 0 499.120Bonds ......................................................................................................................3.496.218 2.499.612 0 5.995.830Equities and other securities ...................................................................................469.019 0 0 469.019Securities used for hedging .....................................................................................6.102.840 0 0 6.102.840Loans to customers .................................................................................................0 0 7.880.021 7.880.021Derivatives ...............................................................................................................118.541 0 0 118.541Total ........................................................................................................................53.205.578 2.499.612 14.335.391 70.040.582Financial instruments - liabilitiesMoney market deposits ...........................................................................................0 0 10.663.421 10.663.421Issued bonds and bills .............................................................................................0 0 4.387.399 4.387.399Borrowings ..............................................................................................................0 0 2.700.000 2.700.000Accounts payable and other liabilities (without unpaid taxes) .................................0 0 3.382.695 3.382.695Subordinated bond ..................................................................................................0 0 3.763.931 3.763.931Derivatives ...............................................................................................................231.599 0 0 231.599Long-term borrowings .............................................................................................0 0 23.394 23.394Total ........................................................................................................................231.599 0 24.920.839 25.152.439

Consolidated Financial Statements 31 December 2025 50 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

34. Financial instruments (cont.)

Fair value measurement – valuation techniques and inputs

The Group measures financial instruments at fair value using valuation techniques consistent with its internal

investment valuation procedures. Valuation techniques are applied in the order of priority described below,

depending on the availability and reliability of observable inputs.

Valuation methods and inputs by instrument class:

Instrument class

Fair

value

level

Valuation

method

Significant

observable

inputs

Significant

unobservable inputs

Listed equity securities

Level 1

Quoted market prices on an

active market (Method 1)

Quoted closing

prices

–

Listed debt securities

Level 1 /

Level 2

Quoted market prices on an

active market; where not

available, valuation based on

comparable market yields

(Methods 1 and 6)

Quoted prices,

yield curves,

observable

market

spreads

–

Derivatives (interest

rate swaps, FX

forwards)

Level 2

Market

standard valuation

models (discounted cash

ﬂow / forward pricing

models)

Yield curves, FX

rates, forward

curves

–

Holdings

in investment

funds (UCITS, AIFs,

limited partnerships)

Level 2 /

Level 3

Net asset value (NAV)

provided by fund manager

(Method 3)

Reported NAV

Adjustments to NAV

where applicable

Unlisted equity

instruments

Level 3

Discounted cash ﬂow

models and/or valuation

based on comparable

companies or transactions

(Methods 5 and 6)

Comparable

multiples

(EV/EBITDA,

P/E), market

benchmarks

Forecast cash ﬂows,

discount rates, terminal

growth rates, discounts

for lack of marketability

Unlisted debt

instruments

Level 2 /

Level 3

Discounted cash ﬂow

models and/or valuation

based on comparable debt

instruments (Methods 5 and

Benchmark

interest rates

Credit spreads,

probability of default

(PD), loss given default

(LGD), prepayment

assumptions

Equity instruments with

contractual exit prices

(put options /

shareholder

agreements)

Level 3

Valuation based on

contractual sale rights or

shareholder agreements

(Method 4)

Contractual

terms

Assumptions regarding

enforceability and timing

Other financial

instruments

Level 3

Cost as an approximation of

fair value where no other

valuation technique is

reliable (Method 7)

–

Cost

based

assumptions

Consolidated Financial Statements 31 December 2025 51 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

34. Financial instruments (cont.)

Fair value hierarchy

The following table discloses financial instruments at fair value or held-to-maturity according to valuation

techniques. The valuation techniques are separated into three levels based on the significance of the assumptions

made in determining fair value. The levels are as follows:

Level 1: Quoted price in an active market for identical assets.

Level 2: Fair value is not based on quoted prices in an active market (level 1) but on inputs that are observable for the

asset, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Financial assets for which there is not an

active market are classified into level 2. The fair value assessment is based on recent transactions between unrelated

parties or bid prices of unrelated parties. Comparison to similar financial assets is also applied.

Level 3: Fair value measurement is based on significant inputs other than market value. Fair value measurement of

financial assets classified as level 3 is based on inputs such as valuation from fund managers of investment or

institutional investment funds, put options or the Company's valuation based on financial results or comparison to

other similar financial assets.

The fair value of loans and receivables that bear fixed interest is assessed using the discounted cash ﬂow method,

where the yield is based on the estimated market interest rate for the respective debt instrument on the reporting

date. The fair value of other financial assets and financial liabilities, including of those with variable interest rates, is

not considered significantly different from the carrying amounts at period-end.

31.12.2025Level 1 Level 2 Level 3 TotalListed equity securities ............................................................................................9.347.953 0 0 9.347.953Listed debt securities ...............................................................................................25.874.654 326.336 0 26.200.990Derivatives ...............................................................................................................0 474.296 0 474.296Holdings in investment funds ..................................................................................253.174 4.470.959 4.679.462 9.403.594Unlisted equity instruments .....................................................................................57.571 950.693 8.113.732 9.121.995Unlisted debt instruments ........................................................................................0 1.152.540 187.451 1.339.991Total investments at fair value ................................................................................35.533.352 7.374.823 12.980.645 55.888.82031.12.2024Level 1 Level 2 Level 3 TotalListed equity securities ............................................................................................12.937.933 0 0 12.937.933Listed debt securities ...............................................................................................22.725.568 209.769 0 22.935.337Derivatives ...............................................................................................................0 617.661 0 617.661Holdings in investment funds ..................................................................................329.530 4.298.195 4.666.316 9.294.041Unlisted equity instruments .....................................................................................0 1.093.877 7.275.677 8.369.553Unlisted debt instruments ........................................................................................0 1.104.744 445.921 1.550.665Total investments at fair value ................................................................................35.993.031 7.324.245 12.387.914 55.705.190

Changes that fall under level 3 during the period are specified as follows: 31.12.2025 31.12.2024Balance 1.1. .................................................................................................................................................................... 12.387.914 11.600.335Purchased .......................................................................................................................................................................2.609.823 2.678.684Sold / Repayments ..........................................................................................................................................................(2.726.364)(1.927.354)Interest and fair value changes* ......................................................................................................................................709.272 36.24912.980.645 12.387.914Balance at 31.12 .............................................................................................................................................................

*Of which ISK 97 million is realised and ISK 612 million is unrealised. Interest and fair value changes are recorded among net financial income in the

statement of profit or loss.

Consolidated Financial Statements 31 December 2025 52 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

34. Financial instruments (cont.)

Sensitivity analysis of fair value

The table below illustrates the fair value of Level 3 unlisted equity instruments that are measured using cost,

manager‑provided pricing, recent transaction data (Asset class 1), or valuation techniques based on peer multiples

or discounted cash flows (Asset class 2).

A 5% decrease in the fair value of asset class 1 and a 0.5‑percentage‑point increase in the cost of equity applied to

the valuation of asset class 2 would decrease total fair value by ISK 374 million.

A 5% increase in the fair value of asset class 1 and a 0.5‑percentage‑point decrease in the cost of equity for asset

class 2 would increase total fair value by ISK 381 million.

Governance and controls over valuation

The valuation of investment assets is reviewed at least quarterly. The Investment Committee of the insurance

business is responsible for the valuation of investment assets, while day-to-day monitoring is performed by the

investment function. Where deviations from third-party valuations occur, these are documented in formal

memoranda and approved by the Investment Committee, in accordance with the Group’s valuation procedures.

Fair value Asset Asset Asset class31.12.2025 class 1 class 2Change in cost of Cost of equity - 9,96%equityChange in value7.226.915 -5% / 5% 0,5% / -0,5%Unlisted equities ................................................................................................................................

Consolidated Financial Statements 31 December 2025 53 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35. Risk management

35.1 Risk management in general

The Group has implemented a policy for coordinated risk management. Its purpose is to ensure that the Group has

an effective system of risk management that includes, among other things, analysing, measuring, controlling and

monitoring the Group's risks. The objective of the policy is to establish and define in a clear and straightforward

manner risk policies, principles, governance structures, risk appetite and risk management systems, including the

Group's decision-making powers.

The Board of Directors establishes a framework for coordinated risk management and a written risk management

policy. The Board of Directors is responsible for ensuring implementation of risk policies and that they are followed.

The Board of Directors sets the risk appetite, including the Group's criteria, objectives and targets, and establishes a

framework for the CEO in accordance with the Board's approved criteria. The Board of Directors has established the

target for the Group's solvency ratio to be above 1.25.

The CEO is responsible for the effective implementation of the Group's risk policies and that they are followed. The

CEO shall provide information to the Board on the Group's risk-taking which is close to the risk appetite limits and

inform the Board without delay if risk-taking exceeds the risk appetite.

The Chief Risk Officer is responsible for enforcing provisions related to risk management. Risk management

ensures that the Group's risk management system is managed, including policies and risk appetite, assists the

Board and other divisions in the effective operation of risk management systems, monitors the Group's overall risk

profile and manages own risk and solvency assessment.

The Group's policy on equity and dividends is to ensure it has sufficient equity to fulfil its commitments and meet

minimum own fund requirements despite potential setbacks.

The Board sets targets for the Group's solvency ratio as a part of establishing a risk appetite for the Group. The

calculation of the minimum own fund requirements is risk-based and takes into account all the main risks applicable

to the Group´s operation. The Group calculates it´s risk profile at least monthly in accordance with the Group´s risk

policy and risk appetite.

Consolidated Financial Statements 31 December 2025 54 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.2 Own risk- and solvency assessment (ORSA)

The purpose of own risk and solvency assessment (ORSA) is to simplify the Group's optimization of solvency. The

objective of the ORSA is to inform how much solvency the Group needs compared to current and future risk-taking.

ORSA informs the Board, management and other relevant parties on the Group's risk profile, solvency need and risk

factors at any given time, thus enabling rational and well-informed decisions related to the Group's policies and risk-

taking.

ORSA is a continuous key process in the Group's operations and is inherent in its activities and thus enhances the

understanding of the relationship between the Group's risk profile, solvency and capital requirements for the shorter

and longer term.

The ORSA can be defined as the entirety of the processes and procedures employed to identify, assess, monitor,

manage, and report the short- and long-term risks which an insurance company faces or may be exposed to and to

determine the own funds necessary to ensure that the undertaking's overall solvency needs are met at all times. In

this connection, the Group has adopted an ORSA policy which has been approved by the Board.

35.3 Market risk

Market risk is the risk of loss or unfavourable change in financial position, which arise directly or indirectly from

ﬂuctuations in the market value of assets, provisions and financial instruments.

The main market risk factors that are specifically considered:

• Interest rate risk

• Equity risk

• Foreign exchange rate risk

35.4 Interest rate risk

Interest rate risk is the risk of loss from ﬂuctuations in fair value of financial instruments due to a change in interest

rate (required rate of return). The duration of the assets is in most cases not the same as the duration of the liabilities

due to insurance contracts and therefore interest rate risk can arise in the operation of the Group.

Interest sensitivity analysis

The following table discloses the effect that 50 and 100 bp increase in interest on net interest bearing assets and on

the discounting of insurance contract liabilities, would have on profit or loss and on equity at the reporting date. The

sensitivity analysis is presented for interest bearing assets and is based on the presumption that all other variables

remain constant. The sensitivity is presented post-tax and therefore reflects the effect on profit or loss and equity.

The effect on profit or loss and equity is the same since changes in the value of the underlying financial instruments

are in no cases recognised directly in equity. A positive number indicates an increase in profit and equity. A

decrease of interest rates would have the same effect in the opposite direction.

31.12.202531.12.202450 bp 100 bp 50 bp 100 bpNet impact on interest bearing assets ........................................(501.244) (992.034) (342.451) (678.945)Higher discounting of insurance contract liabliites ....................157.493 312.456 149.133 295.901Net Impact on profit and loss and equity ....................................(343.750) (679.579) (193.318) (383.044)

Consolidated Financial Statements 31 December 2025 55 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.5 Equity risk and other price risks of market securities

Equity risk is the risk of loss due to changes in the price of equities.

The Group's listed and unlisted equities are measured at fair value and therefore fluctuations in share prices have a

considerable effect on investment income. The management of the Group constantly monitors market developments to

be able to react to changes in equity risk.

The Group also invests in market debt securities to spread risk and even ﬂuctuations in accordance with the Group

policy on investments.

The effect of 5% and 10% increases in the market value of equities and debt securities on profit or loss is disclosed

below, net of 20% income tax. Accordingly, 5% and 10% decreases in market value would have the same effect but

in the opposite direction.

31.12.2025 31.12.2024Equities instruments and equity funds at fair value through profit or loss ........................................16.315.743 17.577.722Debt instruments and other securities at fair value through profit or loss ........................................36.268.342 35.509.315Derivatives at fair value through profit or loss ..................................................................................162.132 118.541

31.12.202431.12.20255% 10% 5% 10%Equities - impact on profit or loss ...............................................815.787 1.631.574 878.886 1.757.772Debt securities - impact on profit or loss ....................................1.450.734 2.901.467 1.420.373 2.840.745Derivatives - impact on profit or loss ..........................................6.485 12.971 4.742 9.483

Consolidated Financial Statements 31 December 2025 56 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.6 Foreign exchange rate risk

Foreign exchange rate risk is the risk of loss from ﬂuctuations in the exchange rates of foreign currencies. It arises if

there is a mismatch in position of assets and liabilities in individual foreign currencies.

The majority of the Group's assets and liabilities are denominated in ISK, but the Group also holds some foreign

financial assets. Information regarding those foreign currencies that have the largest impact on the Group's

operations is provided below.

Sensitivity analysis

The following table discloses the effect of 5% and 10% strengthening of the ISK against the respective foreign

currencies on profit or loss and equity. The analysis is based on the carrying amount of assets and liabilities

denominated in those currencies at the reporting date. The table above discloses those foreign assets and liabilities

on which the sensitivity analysis is based, which are mainly foreign denominated securities. The sensitivity analysis

is based on the assumption that all other variables remain constant. It is based on pre-tax effects, 20% income tax,

and reﬂects the impact on profit or loss and equity. The negative impact on profit or loss and equity is the same since

value changes of the underlying financial instruments are in no instances recognised directly in equity.

Impact on profit or loss and equity

A weakening of the ISK against the above mentioned foreign currencies would have a positive impact on profit and

equity.

Foreign exchange rate risk as at 31.12.2025Assets Liabilities Net positionUSD ........................................................................................................................1.474.990 14.6901.460.300 EUR ........................................................................................................................74.565 12.49462.071 GBP ........................................................................................................................46.402 046.402 DKK ........................................................................................................................3.560 44.353 (40.793)NOK .......................................................................................................................45.567 045.567 SEK ........................................................................................................................14.575 014.575 Total .......................................................................................................................1.659.659 71.538 1.588.122Foreign exchange rate risk as at 31.12.2024Assets Liabilities Net positionUSD ........................................................................................................................4.201.047 708.3163.492.731 EUR ........................................................................................................................1.863.022 662.1711.200.851 GBP ........................................................................................................................54.079 234.644 (180.565)DKK ........................................................................................................................786.331 0786.331 NOK .......................................................................................................................856.231 0856.231 SEK ........................................................................................................................6.829 06.829 Total .......................................................................................................................7.767.539 1.605.131 6.162.408

31.12.202531.12.20245% 10% 5% 10%USD ............................................................................................58.412 116.824 139.709 279.418EUR ............................................................................................2.483 4.966 48.034 96.068GBP ............................................................................................1.856 3.712 (7.223) (14.445)DKK ............................................................................................(1.632) (3.263) 31.453 62.906NOK ...........................................................................................1.823 3.645 34.249 68.498SEK ............................................................................................583 1.166 273 546

Consolidated Financial Statements 31 December 2025 57 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.7 Liquidity risk

Liquidity risk is the risk that the Group will not have enough liquid assets or not being able to sell assets in time and

therefore encounter difficulty in meeting its financial obligations when due.

The liquidity position, its development as well as the impact of market conditions and future outlook is monitored on

a regular basis. Particular emphasis is placed on there being always adequate liquid assets to meet expected

payments of both claims and other liabilities. The Group's expected payments are very well covered by its liquidity

position. The Group's policy on liquid assets is to have at a minimum enough liquid assets, including access to credit

lines, to cover the operating costs of the parent company for 3 months, in addition to at least ISK 500 million to

support subsidiaries if they run into difficulties. It is part of the Group’s risk policy that each subsidiary adheres to

its own liquidity risk policy.

Expected cash ﬂows of liabilities is specified as follows:

*The presentation of comparative figures has been revised. For further details, refer to Note 2.

The following table provides a maturity analysis of the Group´s liability in respect of insurance contracts, which

reﬂects the dates on which the cash ﬂows are expected to occur. Liabilities for remaining coverage measured under

the PAA have been excluded from this analysis.

Within31.12.2025 one year 1-5 years Over 5 years TotalFinancial liabilities ........................................................................................................18.415.422 4.372.127 22.787.549Subordinated bond .......................................................................................................203.796 815.750 7.040.097 8.059.643Lease liability ................................................................................................................230.072 1.090.985 1.321.057Accounts payable and other short-term liabilities ........................................................3.158.530 3.158.530Total .............................................................................................................................22.007.821 6.278.861 7.040.097 35.326.779Within31.12.2024 one year 1-5 years Over 5 years TotalFinancial liabilities ........................................................................................................14.718.281 3.032.539 17.750.819Subordinated bond .......................................................................................................194.648 781.843 6.937.446 7.913.937Lease liability ................................................................................................................204.774 204.059 408.833Accounts payable and other short-term liabilities* .......................................................3.445.671 3.445.67118.563.374 4.018.441 6.937.446 29.519.260Total .............................................................................................................................

Within31.12.2025 one year 1-2 years 2-3 years 3-4 years 4-5 years Over 5 years TotalLiabilities for incurred claims ......................................................13.153.135 8.184.786 3.834.434 1.502.196 768.242 727.114 28.169.906Within31.12.2024 one year 1-2 years 2-3 years 3-4 years 4-5 years Over 5 years Total13.665.350 7.890.586 3.624.669 1.455.811 729.505 705.832 28.071.753Liabilities for incurred claims ......................................................

Consolidated Financial Statements 31 December 2025 58 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.7 Liquidity risk (cont.)

Liquidity risk of financial services activities is specified as follows:

The main measure of the bank's liquidity risk is the liquidity coverage ratio (LCR) as defined in Rules No. 1520/2022

of the Central Bank of Iceland and the bank adheres to prudent internal standards regarding the minimum liquidity

coverage ratio. The bank's liquidity coverage ratio was 417% on 31.12.2025, while the minimum liquidity coverage

ratio according to the CBI's rules is 100%.

Time analysis of assets and liabilities in respect of Fossar financial liabilities and assets

The tables show non-discounted contractual interest and principal payments in respect of Fossar financial liabilities

and assets. The aggregates for each liability and asset type are therefore higher than the corresponding figures in the

consolidated statement of financial position. For contractual obligations, amounts are broken down by period

depending on when contractual principal payments and estimated interest payments occur. Liabilities which do not

have a contractual maturity date are classified based on the assumption that the customer will demand payment

from the Group at the first opportunity.

*The presentation of comparative figures has been revised.

Assets 31 December 2025:0-3 months 4-6 months 7-12 months 1-5 years Over 5 years TotalCurrent receivables ......................................... 2.364.104 2.364.104Cash and cash equivalents ............................. 496.987 496.987Derivatives ....................................................... 1.442.507 1.442.507Securities ......................................................... 2.984.478 1.445.867 4.287.174 1.329.760 10.047.280Loans to customers ......................................... 9.012.399 1.492.047 894.417 437.645 11.836.50816.300.477 1.492.047 2.340.285 4.724.819 1.329.760 26.187.387Liabilities 31 December 2025:0-3 months 4-6 months 7-12 months 1-5 years Over 5 years TotalMoney market deposits ................................... 8.993.053 8.993.053Issued bonds and bills ..................................... 1.951.775 1.073.050 1.764.825 4.699.000 9.488.650Borrowings ...................................................... 3.305.698 3.305.698Derivatives ....................................................... 750.473 750.473Other liabilities ................................................. 993.784 993.78415.994.783 1.073.050 1.764.825 4.699.000 0 23.531.658Net position ..................................................... 305.694 418.997 575.460 25.819 1.329.760 2.655.729Assets 31 December 2024:0-3 months 4-6 months 7-12 months 1-5 years Over 5 years TotalCurrent receivables ......................................... 1.359.216 1.359.216Cash and cash equivalents ............................. 138.777 138.777Derivatives ....................................................... 118.541 118.541Securities ......................................................... 6.338.280 2.520.442 2.539.308 606.551 12.004.580Loans to customers ......................................... 4.461.531 1.171.869 2.073.951 577.326 0 8.284.67712.416.343 3.692.311 2.073.951 3.116.634 606.551 21.905.790Liabilities 31 December 2024:0-3 months 4-6 months 7-12 months 1-5 years Over 5 years TotalMoney market deposits ................................... 10.140.691 627.522 10.768.213Issued bonds and bills ..................................... 400.000 1.000.000 3.402.554 4.802.554Borrowings ...................................................... 2.700.000 2.700.000Derivatives ....................................................... 231.599 231.599Other liabilities ................................................. 1.050.997 1.050.99714.523.288 1.627.522 0 3.402.554 0 19.553.364Net position ..................................................... (2.106.944) 2.064.789 2.073.951 (285.920) 606.551 2.352.426

Consolidated Financial Statements 31 December 2025 59 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.8 Insurance risk

Insurance risk compromises of underwriting risk and reserve risk. The underwriting risk is the risk that the insurance

premiums are not sufficient to cover the losses and other of the insurance contracts.

The underwriting risk is the risk that the insurance premiums collected are not sufficient to cover losses, claims, or

expenses arising from the insurance contracts. It can be broken down into life, health, and non-life insurance risks,

each of which can be further divided into sub-categories. The main risk drivers are increase in claims frequency,

claims inﬂation, large loss events and loss of a single large risk.

Mitigation measures for underwriting risk typically include rigours monitoring of the insurance risk, prudent risk

selection, well diversified business across many different risk groups, premium setting based on actuarial analysis,

policy terms, and the use of reinsurance to transfer a portion of the risk.

Reserve risk refers to the possibility that the technical provisions (reserves) held by the insurer are insufficient to

cover future claim obligations. Inadequate reserves may result from inaccurate estimates of future claims or

changes in assumptions such as inﬂation rates or legal settlements.

To mitigate reserve risk, the Group regularly reviews and reassesses technical provisions using actuarial

methodologies. This includes applying historical claims data, trend analyses, and stress-testing scenarios.

Independent actuarial assessments may also be used to ensure the adequacy of reserves.

The underwriting risk is mainly managed in the insurance guidelines and via business processes and underwriting

rules.

Reinsurance is used to manage part of the underwriting risk. The is mainly the risk of large claims or major events.

The reserve risk is managed through the insurance guidelines, in which the guidelines for reserving are set out.

Reserves for the long-tailed risk are subject to discounting and inﬂation risk. These risks are managed through groups

assets portfolio matching the financial risks.

Insurance categories - insurance revenue20252024Property insurance .....................................................................6.259.99619,6%6.045.70720,7%Marine and cargo insurance ......................................................598.4961,9%553.5931,9%Vehicle insurance .......................................................................17.934.29856,1%15.887.78154,4%Liability insurance .......................................................................1.733.4955,4%1.669.0815,7%Accident and health insurance ...................................................2.983.8299,3%2.842.8499,7%Life and health insurance ...........................................................2.449.2877,7%2.182.9187,5%Reinsurance ...............................................................................(15)0,0%1500,0%31.959.386 100,0% 29.182.080 100,0%Domestic and foreign operations - premiums earnedDomestic operations ..................................................................31.959.401100,0%29.181.930100,0%Foreign operations .....................................................................(15)0,0%1500,0%31.959.386 100,0% 29.182.080 100,0%

Consolidated Financial Statements 31 December 2025 60 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.8 Insurance risk (cont.)

Sensitivity analysis of claims in the insurance business

The following table shows the impact of a 1% change in claim amounts, the claims provision and premiums on the

Group's profit or loss and equity. A 1% decrease in claim amounts would have the same effect but in the opposite

direction.

The main risk factors involve mistakes in the processing and settlement of claims, wrong decision-making or fraud

by employees. There is also a risk that the claimant gives wrong information or exaggerates the effects of the loss,

i.e. insurance fraud. Other risks relate to the handling of sensitive personal information and that the Group's

contractors will go beyond their purview.

35.9 Credit and counterparty risk

The operations of the Group are based on three pillars: insurance, financial services and investments. Credit risk

exists in all three pillars and is mitigated using various approaches, including the monitoring of counterparty

exposures, collaterals, and credit ratings. Internal credit policies specify constraints on credit ratings of new

customers. Credit risk associated with insurance stems mainly from unpaid premiums, that are mitigated by short

maturities, and reinsurance exposures, that are mitigated by high credit ratings of reinsurance counterparties. The

Group considers counterparty risk to be a form of credit risk and therefore these risks are presented together in this

note.

The main components of credit and counterparty risks are the following:

• Risk of loss or unforeseeable change in financial position due to a counterparty's lower rating

• Risk of lower rating of a bond issuer (spread risk)

• The risk that a counterparty cannot meet a contractual obligation

The main sources of counterparty risk are:

• Primary insurance

• Reinsurance

• Lending

• Investments in debt securities

• Bank deposits

• Derivatives

The Group's counterparty risk is regularly monitored.

2025 2024Claim amounts ...................................................................................................................................186.853 169.095Claims provision ................................................................................................................................200.221 196.812Premiums based on no change in claims and cost ratios .................................................................9.884 9.028

Consolidated Financial Statements 31 December 2025 61 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.9 Credit and counterparty risk (cont.)

Counterparty risk is specified as follows:

The Group's maximum exposure to counterparty risk corresponds to the carrying amounts disclosed above.

35.9 a. Reinsurance counterparty risk

Reinsurance counterparty risk

Reinsurers' risk is among other things the risk that reinsurers do not meet their obligations of paying their share of

claims, the reinsurance amount is not adequate, there is a mismatch between primary insurance and reinsurance

and different interpretation between the insurer and the reinsurer regarding the reinsurance agreement. The

Group's reinsurance policy stipulates that its reinsurers shall have a rating from an international rating agency.

Limits are applied regarding reinsurance from each individual reinsurer. Ratings requirements depend on the

estimated settlement period of claims in each contract. In addition, the number of reinsurers in each contract and

the maximum risk exposure of each reinsurer is based on that reinsurer's rating. All sensitivities presented in

connection with insurance and reinsurance risk are shown after the effect of reinsurance. The applied 1% stress on

claims amounts reﬂects management’s assessment of the Group’s risk profile and portfolio composition, and is

intended to illustrate the impact of reasonable changes in key insurance risk parameters. The following table shows

the disaggregation of premiums to reinsurers based on their latest available credit rating.

31.12.2025 31.12.2024Marketable debt instruments, credit rating A .......................................................................................22.391.730 16.542.713Marketable debt instruments, credit rating BBB ................................................................................1.021.934 1.779.718Other marketable securities ...............................................................................................................16.659.174 17.648.394Reinsurance receivables ...................................................................................................................0 102.180Other receivables ...............................................................................................................................4.093.665 2.807.731Cash and cash equivalents ................................................................................................................1.750.025 2.321.959Total ...................................................................................................................................................45.916.528 41.202.694

2026 2025AA+ ....................................................................................................................................................0,6% 0,8%AA ......................................................................................................................................................23,1% 39,4%AA- .....................................................................................................................................................42,6% 22,1%A+ ......................................................................................................................................................24,4% 29,4%A ........................................................................................................................................................6,9% 6,7%A- .......................................................................................................................................................2,4% 1,6%100,0% 100,0%

Consolidated Financial Statements 31 December 2025 62 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.9 b. Credit risk of financial activities

Large exposures of the bank before risk adjusted mitigation

Collateral against exposures to derivatives

The Group applies the same valuation methods to collateral held as other comparable assets held by the

Group. Haircuts are applied to the market value of the collateral for liquidity and other factors which may affect the

applied collateral value of the asset.

Management regularly monitors the development of assets related to credit risk, and the company has implemented

policies and rules aimed at minimizing the likelihood of credit losses by, e.g., imposing stricter requirements for

security and choosing counterparties diligently. The underlying collateral is not taken into account when estimating

the maximum credit risk.

The maximum exposure to credit risk corresponds to the carrying amounts disclosed below:

Cash and cash equivalents are bank deposits with financial institutions that the bank considers to be trustworthy

and are also mostly insured, and management therefore assesses the credit risk of cash and cash equivalent as

being insignificant. Securities consist of government bonds and government bills where the credit risk is considered

insignificant. Management assesses credit risk due to accounts receivable, other receivables, receivables from

related entities and loans to customers on a case-by-case basis based on individual customers and receivables as

there are relatively few debtors.

31.12.2025 31.12.2024Number Amount Number Amount10-20% of capital base ..............................................................5 2.116.380 3 944.83020-25% of capital base ..............................................................0 0 0Exceeding 25% of capital base ..................................................0 0 0Total ...........................................................................................5 2.116.380 0 944.8305 2.116.380 3 944.830Large exposure net of risk adjusted mitigation ..........................

Market value of collateralFixed Variableincome income Total31.12.2025Deposits securities securities collateralFinancial institutions ...................................................................178.688 269.133 268.494 716.315Corporate customers .................................................................107.274 499.689 3.955.348 4.562.311Individuals ..................................................................................5.200 0 2.506 7.706291.162 768.822 4.226.348 5.286.332Market value of collateralFixed Variableincome income Total31.12.2024Deposits securities securities collateralFinancial institutions ...................................................................173.112 180.761 495.750 849.623Corporate customers .................................................................186.150 1.239.908 2.426.416 3.852.475Individuals ..................................................................................0 0 0 0359.262 1.420.669 2.922.166 4.702.097

31.12.2025 31.12.2024Cash and cash equivalents ................................................................................................................496.987 134.795Other receivables (without payments) ...............................................................................................2.389.467 917.051Securities used for hedging ...............................................................................................................3.109.524 6.102.840Loans to customers ...........................................................................................................................11.836.508 7.880.02117.832.486 15.034.707

Consolidated Financial Statements 31 December 2025 63 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.9 b. Credit risk of financial activities (cont.)

The tables below show changes in provisions by type of financial asset and level of the IFRS 9 impairment model.

Changes from Stage 1 to Stage 2 occur when there has been a significant increase in credit risk. A reassessment from

Stage1 and 2 to Stage 3 occurs when there is an objective indication of impairment. Reassessment from Stage 3

occur when there is no longer an objective indication of impairment or when the credit risk has decreased and is no

longer considered to have significantly increased since the initial classification (from Stage 2 to Stage 1).

A total of 417 m ISK were classified in Stage 2 as of 31 December 2025.

The table below shows the nominal value of financial assets and write-downs by age (number of days past maturity)

and classification:

2025 2024Impairment ImpairmentCarryover from prior year ...................................................................................................................10.815 0Reassessment of expected credit loss ..............................................................................................6.627 10.815Final loss ............................................................................................................................................0 0Total provisions at year-end ..............................................................................................................17.442 10.815

Nominal Expected Bookedvalue of claim credit losses balanceNot yet due .............................................................................................................11.853.950 (17.442) 11.836.508Default 1-30 days ...................................................................................................Default 31-60 days .................................................................................................Default 61-90 days .................................................................................................Default >90 days ....................................................................................................11.853.950 (17.442) 11.836.508

On and off balance sheet exposure for Fossar

The maximum exposure to credit risk for on‑balance sheet and off‑balance sheet items, for the Bank, before taking

into account any collateral held or other credit enhancements, is specified as follows:

31.12.2025Public Financial Corporateentities institutions customers Individuals TotalCash and cash equivalents ............................. 496.987 496.987Fixed income securities ................................... 5.773.556 323.417 420.960 6.517.934Loans to customers ......................................... 0 11.836.508 11.836.508Derivatives ....................................................... 162.132 162.132Other assets .................................................... 2.389.467 2.389.467Total ................................................................ 5.773.556 820.404 14.809.067 0 21.403.02831.12.2024Public Financial Corporateentities institutions customers Individuals TotalCash and cash equivalents ............................. 134.795 134.795Fixed income securities ................................... 7.008.612 44.560 7.053.173Loans to customers ......................................... 783.746 7.096.274 7.880.021Derivatives ....................................................... 118.541 118.541Other assets .................................................... 917.051 917.051Total ................................................................ 7.008.612 963.101 8.131.867 0 16.103.580

Consolidated Financial Statements 31 December 2025 64 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.10 Credit quality of financial assets

a. Breakdown of loans to customers by industry and type of collateral.

Collateral under the category Other is comprised mostly of land under development but also includes machinery and receivables.

Allocated collateralImpairment Listed UnlistedClaim to expected Carrying Total securities and securities and Commercial31.12.2025value credit loss amount collateral Deposits liquid funds other funds real estate OtherPublic entitiesFinancial institutionsCorporateReal estate activities 3.993.210 (12.268) 3.980.941 9.380.842 2.389 3.532.853 1.600 3.357.000 1.120.000Construction 484.381 (189) 484.192 1.733.715 0 0 228.000 1.020.715 0Service activities 0 0 0 0 0 0 0 0 0Accommodat. and Food Service Activit. 201.804 (108) 201.696 1.835.612 3.175 0 1.052.437 780.000 0Activities of Holding Companies 4.626.540 (623) 4.625.917 20.873.492 135.176 12.405.106 4.541.510 1.335.850 1.120.000Wholesale and Retail Trade 0 0 0 0 0 0 0 0 0Other 2.548.016 (4.254) 2.543.762 9.161.793 96.207 401.730 5.194.047 638.000 2.598.059IndividualTotal 11.853.950 (17.442) 11.836.508 42.985.454 236.947 16.339.689 11.017.594 7.131.565 4.838.059Allocated collateralImpairment Listed UnlistedClaim to expected Carrying Total securities and securities and Commercial31.12.2024value credit loss amount collateral Deposits liquid funds other funds real estate OtherPublic entitiesFinancial institutionsCorporateReal estate activities 3.129.150 (5.540) 3.123.610 7.188.322 0 2.937.682 1.120.800 1.701.940 1.427.900Construction 254.363 (634) 253.729 1.559.250 0 0 228.000 1.264.000 67.250Service activities 0 0 0 0 0 0 0 0 0Accommodat. and Food Service Activit. 235.024 (649) 234.375 2.551.335 0 0 2.091.335 460.000 0Activities of Holding Companies 3.079.210 (2.607) 3.076.603 7.988.212 190.078 3.479.218 2.896.226 569.000 853.690Wholesale and Retail Trade 0 0 0 0 0 0 0 0 0Other 1.193.089 (1.385) 1.191.704 2.956.928 250.299 860.829 1.120.800 185.000 540.000IndividualTotal 7.890.836 (10.815) 7.880.021 22.244.047 440.377 7.277.729 7.457.161 4.179.940 2.888.840

Consolidated Financial Statements 31 December 2025 65 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

b. Credit quality of loans to customers by credit quality band

The following tables show financial assets subject to the impairment requirements of IFRS 9 broken down by credit

quality bands where band I denotes the lowest and band IV the highest credit risk. The Bank has primarily used

adjusted external credit ratings to assess the default probability of its customers. The Bank’s impairment model uses

external credit ratings as one of its main inputs, while LGD is based on internal estimates that take into account

management judgement as well as economic outlook.

Credit quality of financial assets by credit quality band

31.12.2025Loans to customers: Stage 1 Stage 2 Stage 3 TotalCredit quality band I .....................................................................9.922.861 0 0 9.922.861Credit quality band II ....................................................................1.163.305 56.381 0 1.219.687Credit quality band III ...................................................................340.165 235.746 0 575.911Credit quality band IV ..................................................................10.483 125.009 0 135.492In default ......................................................................................0 0 0 0Non-Rated ...................................................................................0 0 0 0Gross carrying amount ................................................................11.436.813 417.137 0 11.853.950Expected credit loss ....................................................................(11.342) (6.100) 0 (17.442)Book value ...................................................................................11.425.472 411.037 0 11.836.50831.12.2024Loans to customers: Stage 1 Stage 2 Stage 3 TotalCredit quality band I .....................................................................7.760.750 7.760.750Credit quality band II ....................................................................130.086 130.086Credit quality band III ...................................................................Credit quality band IV ..................................................................In default ......................................................................................Non-Rated ...................................................................................Gross carrying amount ................................................................7.890.836 0 0 7.890.836Expected credit loss ....................................................................(10.815) (10.815)Book value ...................................................................................7.880.021 0 0 7.880.021

Consolidated Financial Statements 31 December 2025 66 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

c. Breakdown of loans to customers into not past due and past due

d. Allowance for expected credit loss on loans to customers and on loan commitments,

guarantees and unused credit facilities during the period

The following tables show changes in the expected credit loss allowance of loans to customers and for loan

commitments, guarantees and unused credit facilities during the period.

31.12.2025Expected credit loss allowance totalTransfer of financial assets: Stage 1 Stage 2 Stage 3 TotalBalance as at 1 January 202510.815 10.815 Transfer to Stage 1 ...................................................................0 Transfer to Stage 2 ....................................................................0 Transfer to Stage 3 ....................................................................0Net remeasurement of loss allowance ........................................2.037 3.101 5.139New financial assets, originated or purchased ............................1.512 2.464 3.976Derecognitions and maturities .....................................................(2.488) (2.488)Write‑offs .....................................................................................Balance as at 31 December 2025 11.876 5.565 0 17.44231.12.2024Transfer of financial assets: Stage 1 Stage 2 Stage 3 TotalBalance as at 1 January 20240 0 Transfer to Stage 1 ...................................................................0 0 Transfer to Stage 2 ....................................................................0 0 Transfer to Stage 3 ....................................................................0 0Net remeasurement of loss allowance ........................................2.646 2.646New financial assets, originated or purchased ............................8.169 8.169Derecognitions and maturities .....................................................Write‑offs .....................................................................................Balance as at 31 December 2024 10.815 0 0 10.815

31.12.2025Claim Expectedvalue credit loss Book valueNot past due .............................................................................................................11.853.950 (17.442) 11.836.508Past due 1-30 days ..................................................................................................Past due 31-60 days ................................................................................................Past due 61-90 days ................................................................................................Past due 91-180 days ..............................................................................................Past due 181-360 days ............................................................................................Past due more than 360 days ..................................................................................Total .........................................................................................................................11.853.950 (17.442) 11.836.50831.12.2024Claim Expectedvalue credit loss Book valueNot past due .............................................................................................................7.890.836 (10.815) 7.880.021Past due 1-30 days ..................................................................................................Past due 31-60 days ................................................................................................Past due 61-90 days ................................................................................................Past due 91-180 days ..............................................................................................Past due 181-360 days ............................................................................................Past due more than 360 days ..................................................................................7.890.836 (10.815) 7.880.021Total .........................................................................................................................

Consolidated Financial Statements 31 December 2025 67 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

e. Loan-to-value

The loan‑to‑value ratio (LTV) is the ratio of the gross amount of the loan to the value of the collateral, if any, for the

loans to customers of the Bank. Collateral position and the general creditworthiness of a customer are together

viewed as the most reliable indicators of credit quality of a loan. Besides collateral included in the LTV ratios the Bank

uses other risk mitigation measures, such as guarantees, negative pledge, cross‑collateral and collateralization of

non‑quantifiable assets.

The breakdown of loans to customers by LTV is specified as follows:

35.11 Operational risk

Operational risk consists of all risks that are related to regular operations of the Group and its subsidiaries and is

defined as a risk of direct or indirect loss due to insufficient or faulty internal systems or working procedures,

conduct of employees or external factors, such as legal risk. The Group's policy is to reduce operational risk, taking

the cost and effectiveness of preventive measures into account.

The main components of operational risk are the following:

• Organisational structure

• Documentation and contracting

• Information technology

• Employees

• External events

35.12 Concentration of risk

The Group is exposed to concentration of risk arising from insurance contracts within the scope of IFRS 17, which

could result in significant impacts from specific events or economic conditions affecting certain geographical

regions, insurance lines, or weather-related conditions. The primary sources of risk concentration include:

Geographical Risk: Exposure to regions prone to natural disasters, economic downturns, or regulatory changes.

Lines of Insurance Risk: Dependence on specific insurance products that may be susceptible to adverse claims

experience.

Weather-Related Risk: Increased exposure to extreme weather events such as severe storms, ﬂoods, and wildfires,

as well as severe winter conditions leading to higher incidences of car accidents and storms causing property

damage.

31.12.2025 % 31.12.2024 %Less than 50% .............................................................................3.520.710 30% 2.642.171 34%51-70% ........................................................................................6.055.787 51% 3.696.008 47%71-90% ........................................................................................2.260.012 19% 1.504.511 19%91-100% ......................................................................................0 0% 37.331 0%101-125% ....................................................................................0 0% 0 0%126-200% ....................................................................................0 0% 0 0%Greater than 200% ......................................................................0 0% 0 0%No or negligible collateral: ...........................................................0 0% 0 0% Other loans with no collateral ....................................................0 0% 0 0%Total .............................................................................................11.836.508 100% 7.880.021 100%

Consolidated Financial Statements 31 December 2025 68 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

35.12 Concentration of risk (cont.)

The Group actively manages these risks through diversification strategies, reinsurance arrangements, and

underwriting policies to mitigate potential financial impacts. Sensitivity analyses and stress testing are conducted

regularly to assess the resilience of the portfolio against risk concentrations.

35.13 Internal management and control

The Group's policy is to have a well-organized and reliable internal control framework. The framework is articulated

by the Board, the subsidiaries Board’s, their management and employees and is designed to give reasonable

assurance of the achievement of the Group's objectives on:

• Performance and efficiency of operations (operational

targets)

• Reliability of information data (accurate information target)

• Compliance with laws and regulations (compliance target)

To achieve those objectives, the Group's internal management and control systems are divided into the following five

components:

• Control environment

• Risk assessment

• Control procedures

• Information and communication

• Management controls

The policy is based on the COSO (Committee of Sponsoring Organisations of the Treadway Commission) Internal

Control– Integrated Framework, published in May 2013.

Internal management and control are reﬂected in the Group’s and subsidiaries’ procedures, practices, code of

conduct and human resources policy. It is a normal part of the Group's activities and is integrated with its operations.

However, internal management and control are subject to human limitations such as mistakes and the intention to

circumvent the Group's rules and other unforeseeable factors.

36. Combined ratio

The combined ratio is the sum of incurred claims, insurance contract operating expenses and net expenses from

reinsurance contracts as a proportion of insurance revenue. The claims ratio, insurance contracts expense ratio and

net reinsurance ratio are calculated as a proportion of the insurance revenue.

The following table shows the combined ratio and other key ratios of the insurance operations for the past five years.

2025 2024 2023 2022 2021Claims ratio .................................................................69,5% 72,6% 76,5% 70,8% 73,3%Net reinsurance ratio ..................................................3,1% 3,3% 0,7% 2,4% -0,8%Claims and net reinsurance ratio ................................72,6% 75,8% 77,2% 73,2% 72,5%Insurance contracts expense ratio ..............................18,1% 19,1% 22,3% 21,8% 23,0%Combined ratio .........................................................90,7%94,9%99,5%95,0%95,5%

Consolidated Financial Statements 31 December 2025 69 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

37. Related parties

Related parties are those parties, or their companies, that have a significant inﬂuence on the Group, whether directly

or indirectly. Related parties are board members of the Group, the CEOs of the Group, key management personnel,

associates as disclosed in note 20, close family members of individuals identified as related parties, as well as other

dependent parties directed by or under the inﬂuence of the Group. Transactions with related parties have been on

the same terms as with unrelated parties. Salaries and benefits of the board, CEOs and key management personnel

are disclosed in note 10.1.

Transactions and balances with related parties are specified as follows:

38. Events after the reporting date

No events have occurred after the end of the reporting period that require the Group to change these financial

statements. On 6

October 2025 the board of directors of Skagi hf. and Íslandsbanki hf. approved the initiation of

formal merger negotiations, and both parties signed a Heads of Terms to that eect. Among other key commercial

terms it outlines that Skagi's shareholders will receive 323,859,440 new shares in Íslandsbanki, representing

approximately 15% ownership in the combined company. This indicates a share price of ISK 21.18 per Skagi share

and ISK 124.00 per Íslandsbanki share. Merger discussion remain subject to a final merger agreement upon which

shareholders approvals and relevant supervisory authority approvals will also be required, e.g. competition and

financial supervisory authorities. Reference is made to note 19 (Share in subsidiaries) in relation to purchase of

shares in Íslensk verðbréf hf.

2025Income Expenses Assets LiabilitiesBoard of directors and key management ............................................. 8.181 8.274 2.652 0Associates ............................................................................................. 4.460 231.242 25 18.8602024 Income Expenses Assets LiabilitiesBoard of directors and key management ............................................. 25.425 15.501 128.592 845Associates ............................................................................................. 4.203 138.981 178 9.520

Consolidated Financial Statements 31 December 2025 70 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39. Material accounting policies

The accounting policies as set out below have been applied consistently for all periods described in the annual

financial statements and for all the Group's entities.

To increase the information value of the annual financial statements, notes are included based on their relevance

and importance for the readers of these statements. Therefore, information that is neither considered important nor

relevant for the readers of the annual financial statements is not included in the notes.

39.1 The Group

The Group's annual financial statements include the annual financial statements of the Parent Company and its

subsidiaries. Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to or

has rights to variable returns from its involvement with the entity and has the ability to affect those returns through

its control over the entity. The financial statements of subsidiaries are included in the consolidated financial

statements from the date on which control commences until the date on which control ceases.

The financial results of subsidiaries acquired or sold during the year are included in the consolidated financial

statements from the date of acquisition to the date of disposal, as applicable.

The consolidated financial statements include the revenue, expenses, assets and liabilities of the Group from

transactions with third parties. Intercompany transitions are eliminated in the consolidated accounts. Where

applicable, the financial statements of subsidiaries are adjusted to align them with the accounting policies of the

Group.

Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Profit or loss and

each component of other comprehensive income are attributed to the owners of the parent company and to the non-

controlling interests.

39.2 Associates

Associates are those companies in which the Company has significant inﬂuence, but not control, over their financial

and operating policy. Significant inﬂuence is usually present when the Company holds 20% to 50% of the voting

rights, including any potential exercisable voting rights. Interests in associates are accounted for using the equity

method.

Equity method

The equity method is an accounting policy whereby investments in associates are initially recognised at cost and the

carrying amount is subsequently adjusted in accordance with any changes in the Company's share of the net assets

of the associates. The Company's share of the profit of an associate is recognised as part of the Company's profit or

loss. If the Company's share of loss of an associate exceeds its carrying amount, the Company does not recognise

any further share of loss unless it has issued guarantees on behalf of the associate or financed its operations. In

subsequent periods, the Company does not recognise any share of the profit of associates until the unrecognised

share of loss has been equalised.

39.3 Goodwill

Goodwill that arises from acquisitions is recognised on the date the Company achieves control of the acquired

company. Goodwill is the difference between the acquisition price of a subsidiary and the acquirer's interest in the

net assets of the subsidiary, at fair value at the acquisition date. Goodwill is not amortised but tested annually for

impairment or more often if there is any indication of impairment. For the purpose of impairment testing, goodwill is

allocated to cash-generating units. Those cash-generating units to which goodwill has been allocated are tested for

impairment. Impairment has occurred if the carrying amount exceeds the recoverable amount. Impairment is first

recognised by the expense of goodwill and thereafter as a reduction of the carrying amount of other assets of that

cash-generating unit. Impairment losses of goodwill are not reversed in later periods.

Consolidated Financial Statements 31 December 2025 71 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39.4 Foreign currencies

Transactions in foreign currency are recognised at the prevailing exchange rate on the transaction date. Monetary

assets and liabilities in foreign currencies are recognised at the prevailing exchange rate at the end of the reporting

date. Foreign exchange differences are recognised in profit or loss.

39.5 Insurance Revenue

Insurance revenue is recognized over the coverage period in line with the transfer of insurance services to the

policyholder. Under the Premium Allocation Approach (PAA), insurance revenue reﬂects the release of the Liability

for Remaining Coverage (LRC) as services are provided over time.

Measurement of the Liability for Remaining Coverage (LRC)

Initial Recognition: At the inception of the contract, the LRC is measured as the premiums received (or

receivable), net of any acquisition cash flows if applicable. If a financing component exists, the LRC is

discounted accordingly.

Subsequent Measurement: The LRC is reduced over the coverage period as insurance services are

provided, with the corresponding amount recognized as insurance revenue. Adjustments are made for

changes in estimates of future premiums and expected claims.

Recognition of Insurance Revenue Insurance revenue for each reporting period is derived from the amount of the

LRC released as services are provided of the period. The Group allocates the revenue on a straight-line basis over

the coverage period. If the expected pattern of the release of service differs significantly from the straight-line basis,

then the allocation is changed to the expected pattern for release of service. The group changes the method if facts

and circumstance change.

Key considerations for recognizing insurance revenue:

Time-Based Recognition: If insurance coverage is provided evenly over the contract period, revenue is

recognized on a straight-line basis.

Alternative Systematic Approaches: If the risk profile changes over time, an alternative allocation method

is used to reflect the transfer of services more accurately.

Adjustments for Premium Changes: Revenue is adjusted for cancellations, modifications, and other

changes in premium estimates.

Premiums received in advance for future coverage periods are recorded as part of the LRC and recognized as revenue

when the coverage is provided. Insurance revenue is presented separately from the insurance service result, which

includes claims incurred, risk adjustments, and other related expenses.

39.6 Insurance service expenses

Insurance service expenses include both the operating expenses of insurance contracts, and the claims expensed

during the year. Claims expensed consist of claims incurred during the year as well as the effect of reassessment of

claims from previous years. The liability due to claims incurred consists of the total amount of reported and unsettled

claims as well as an actuarial estimation of incurred but unreported claims.

Consolidated Financial Statements 31 December 2025 72 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39.7 Insurance contracts

The Group issues contracts that transfer both financial and insurance risk from its customers to the Group.

Definition of insurance contracts

Insurance contracts are contracts under which the insurer agrees, in accordance with the term of the contract, to

compensate the policyholder for financial loss incurred due to an insured event.

The insured event is uncertain, it is not known if or when it occurs, and generally its financial consequences are not

known beforehand.

Classification of insurance contracts

Insurance contracts are classified into categories based on the nature of the insured risk, life insurance and non-life

insurance with non-life insurance contracts consisting of liability insurance contracts, accident insurance contracts

and property insurance contracts, including marine and cargo insurance contracts.

Liability insurance contracts protect the customer from the risk of causing harm to third parties as a result of their

legitimate activities. Accident insurance contracts compensate the insured own bodily injuries in accordance with

contractual provisions.

Property insurance contracts compensate the Group's customers for damage to or loss of property. Customers that

carry on commercial activities may also be entitled to compensation for a loss of earnings if their business is

curtailed or temporarily suspended due to damage to the insured property.

Life insurance contracts are related to human life, for instance death or living beyond the insurance period. Premiums

are recognized as revenue over the life of the contract. Compensation is expensed when an insured event occurs.

Within each category, it is assessed whether contracts can become onerous based on the assumption that pricing

or underlying risks will lead to a loss on the contract during the contract period. If a contract proves to be onerous,

the expected loss from the contract is recognised as an expense through profit or loss. No groups of agreements have

been identified at the Group that are considered onerous.

Contract boundaries

Contract boundaries define the cash ﬂows within the boundary of each insurance contract. The measurement of a

group of insurance contracts includes all future cash ﬂows arising within the contract boundary. In determining which

cash ﬂows fall within the contract boundary, substantive rights and obligations arising from the terms of the contract,

together with applicable laws and regulations, are considered.

The insurance contracts have a less than one-year contract boundary, typically until the next renewal date, i.e.

contract has one-year coverage period during which there are substantive rights and obligations.

The group uses the same principles for the contract boundaries of reinsurance contracts held.

Consolidated Financial Statements 31 December 2025 73 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39.7 Insurance contracts (cont.)

Insurance contract liabilities

Liability for remaining coverage:

The Group uses the premium allocation approach (PAA) to simplify the measurement of groups of insurance

contracts. On initial recognition of each group of contracts, the carrying amount of the liability for remaining coverage

is measured as the premiums received on initial recognition.

The insurance contracts issued by the group have a coverage period of one year or less. For contracts where the

coverage period is over one year, it is calculated that the obligation for remaining coverage will not deviate

significantly from the obligation that would have been arrived at by applying the general measurement model called

GMM, and therefore PAA will also be used for these contracts.

The Group has chosen to expense insurance acquisition cash ﬂows when they are incurred. The coverage period is

defined as the period when an insured event can occur.

Subsequently, the carrying amount of the liability for remaining coverage is increased by any premiums received and

decreased by the amount recognised as insurance revenue for services provided.

Services is usually provided based on passage of time.

If at any time during the coverage period, facts and circumstances indicate that a group of contracts is onerous, then

the Group recognises a loss in profit or loss and increases the liability for remaining coverage to the extent that the

current estimates of the fulfilment cash ﬂows that relate to remaining coverage exceed the carrying amount of the

liability for remaining coverage.

Liability for incurred claims:

Liability for Incurred claims is measured as the total of the expected fulfilment cash ﬂows, which comprise estimates

of future cash ﬂows, adjusted to reﬂect the time value of money and the associated financial risks, and a risk

adjustment for non-financial risk.

Claims and claims handling costs including expected claims handling costs are expensed in the statement of profit

or loss as incurred based on the estimated future cash ﬂows to policyholders or third parties to fulfil the obligations

toward policyholders.

Claims include direct claims handling costs that arise from events that have occurred up to the statement of financial

position date even if they have not yet been reported to the Group.

The Group recognises the liability for incurred claims of a group of insurance contracts at the amount of the fulfilment

cash flows relating to incurred claims. The future fulfilment cash flows are discounted (at current rates) and

adjusted for the effect of future inflation. Fulfilment cash flows are estimated using the assessments of individual

cases reported to the Group and statistical analyses of claims incurred but not reported. The provisions include

claims handling costs.

Assumptions and interdependencies

Level of aggregation and the evaluation of contract boundary are significant assumptions as these define the use of

the premium allocation model’s simplified measurement model. Discounting and adjustment for future inflation

affects in particular long tailed claims where the assessment of the actual claim takes time. This is the case for

claims in motor liability, professional liability, workers’ compensation, personal accident.

Consolidated Financial Statements 31 December 2025 74 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39.7 Insurance contracts (cont.)

Liability for incurred claims is determined for each line of business based on actuarial methods. Expected cash

flows are adjusted for the future effect of inflation. The models currently used are Chain-Ladder, Bornhuetter

Ferguson. In some instances, historic data used in the actuarial models need to be supplemented with predictions for

the expected future development of claims. This is used when there are structural changes in underlying insurance

risk. In this situation, the historical data is supplemented with an a priori estimate for the expected change in the

level of claims.

Measurement, reinsurance contracts held

The Group applies the same principles to measure a group of reinsurance contracts and insurance contracts

issued, adapted where necessary to reflect features that differ from those of insurance contracts.

The Liability for remaining coverage is measured using the PAA method. The reinsurance held have a coverage period

of one year or less. For contracts where the coverage period is over one year, the obligation for remaining coverage

will not deviate significantly from the obligation that would have been arrived at by applying the general measurement

model called GMM, and therefore PAA will also be used for these contracts.

If a loss-recovery component is created for a group of reinsurance contracts measured under the PAA, then the Group

adjusts the carrying amount of the asset for remaining coverage.

Risk adjustment for non-financial risk for reinsurance contracts are modelled using similar statistical models as for

direct insurance contract so that it represents the amount of risk being transferred by the holder of the group of

reinsurance contracts to the issuer of those contracts.

Principles for Discounting

Discounting under IFRS 17 involves adjusting future cash ﬂows to present value to reﬂect the time value of money.

Liability for incurred claims is discounted to reﬂect the time value of money and the associated financial risks at the

reporting date. Discount rate reﬂects the yield curve in the appropriate currency for instruments that expose the

holder to no or negligible credit risk, adjusted to reﬂect the liquidity characteristics of payment of future incurred

claims.

The EIOPA risk free discount meets these requirements and have been used.

Principles for Risk Adjustment

The risk adjustment represents the compensation an entity requires for bearing the uncertainty about the amount

and timing of the cash ﬂows that arises from non-financial risk as the entity fulfils insurance contracts. The risk

adjustment for non-financial risk (RA) reﬂects the compensation required by the insurer to bear the uncertainty of

the amount and timing of cash ﬂows arising from non-financial risk. Sources of the uncertainty about the amount

and timing of the cash ﬂows are linked to the determination of the LIC, stated above, and the estimation of the future

cash ﬂows, i.e. when the claims payments take place.

RA is calculated on a group level for the insurance business. A cost of capital approach is chosen, and risk

adjustment is chosen to represent a confidence level of 85 per cent. RA is presented in full in the insurance service

result.

Risk adjustment for non-financial risk for reinsurance contracts are modelled using similar statistical models as for

direct insurance contract so that it represents the amount of risk being transferred by the holder of the group of

reinsurance contracts to the issuer of those contracts.

Consolidated Financial Statements 31 December 2025 75 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39.7 Insurance contracts (cont.)

Principles for Level of Aggregation

Insurance contracts are aggregated into portfolios of insurance contracts. A portfolio comprises of insurance

contracts with similar risks that are managed together. These portfolios are further divided into annual cohorts, i.e.

contracts not issued more than one year apart based in a risk basis. Portfolios are determined based on a

segmentation of business, or a combination of line of business (as defined by the management), business area and

country.

No material onerous contracts have been identified.

Principles for Separation

Contracts that transfer a significant insurance risk are classified as insurance contracts. Contracts held by the group

under which it transfers significant insurance risk related to underlying insurance contracts are classified as

reinsurance contracts.

The Group issues certain group of life insurance policies, which included a life insurance part, and a separate unit

linked saving part. Using the principles for separation, these contracts are split into a savings and an insurance

component. The savings component is valued using IFRS 9, because the investment risk is borne by the policyholder,

and it is distinct from the insurance risk. The insurance component is valued using IFRS17.

These principles ensure that insurance contracts are measured accurately, transparently, and in a manner that

reﬂects the economic reality of the underlying risks and cash ﬂows.

Insurance acquisition cost

All insurance acquisition costs are recognized immediately in the statement of profit or loss as an expense in the

period in which they are incurred and are recognised under insurance service expense in the Income statement.

Reinsurance contracts held

The Group enters into reinsurance contracts with the purpose of mitigating its risk. Reinsurance contracts held are

either proportional or cover the total risk if the loss from a claim event exceeds the pre-agreed claim amount.

Premium on reinsurance contracts held are recognised as reinsurance expenses and on reinsurers held as claims

received. These consists of claims on reinsurers due to their share of the claims provision. The Group applies the

same accounting policies to measure a group of reinsurance contracts, adapted where necessary to reflect

features that differ from those of insurance contracts.

Risk adjustment for non-financial risk for reinsurance contracts are modelled using similar statistical models as for

direct insurance contract so that it represents the amount of risk being transferred by the holder of the group of

reinsurance contracts to the issuer of those contracts.

Net finance expenses from insurance contracts

Net finance expenses from insurance contracts comprise the insurance finance income and expenses recognised

in profit or loss during the period in accordance with IFRS 17 Insurance Contracts. These amounts arise from the

effect of the time value of money and financial risk related to insurance contracts issued.

Insurance finance income and expenses include the unwinding of discount rates applied to insurance contract

liabilities and the impact of changes in financial assumptions that relate to future cash ﬂows. Finance income and

expenses are determined using the discount rates applied on initial recognition of the insurance contracts and,

where applicable, updated discount rates reﬂecting current market conditions.

Net finance expenses from insurance contracts are presented within net financial income/expense in the statement

of profit or loss.

Consolidated Financial Statements 31 December 2025 76 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39.8 Interest income and expenses

Interest income is recognised in the statement of profit or loss as it accrues.

Interest expense on financial liabilities measured at amortised cost is recognised in the statement of profit or loss as

it accrues.

39.9 Fee and commission income and expenses

Fee and commission income is mainly due to the Company's services to clients in the field of asset management,

fund management and corporate consulting. Fee and commission income and expense for services provided over a

certain period are recognized as the services are provided. Fees earned from transaction type services are recognized

when the service has been completed, i.e. point in time. Fees that are performance linked are recognized when the

performance criteria are fulfilled, i.e. point in time. Contractual fees, such as fees for asset management, are

recognised over the period of the contract as the services are provided (i.e. over time), usually on a straight line basis.

There is not considered to be a significant financing component in contracts for commission income, as the credit

period for receivables is relatively short. Uncertainties regarding variable consideration for performance-based

income are commonly resolved at the point in time when revenue is recognised. The Company does not have

significant contract assets or liabilities on its balance sheet. Commission fee income according to long-term

contracts is recognised on a straight line basis over time and invoiced monthly in arrears. Performance-related fees

are recognized as income when the set target has been reached.

39.10 Net financial income

Net financial income, stems from insurance investment activities and consists of interest income from bank

deposits, exchange rate gains from monetary assets and liabilities and interest-bearing financial receivables, fair

value changes of financial assets through the statement of profit or loss, and

unwinding, interest and exchange rate change of technical provision. Dividend income from investments is

recognised on the date when the right to a dividend is established. Dividends are presented as a component of net

financial income.

Financial expenses consist of interest expenses on interest-bearing financial liabilities, exchange rate losses on

monetary assets and liabilities and fair value changes of financial assets. Financial expenses are recognised during

the period in which they are incurred.

39.11 Income taxes

Income taxes expensed consists of current taxes and deferred tax.

Current tax

Current taxes are the taxes expected to be payable on taxable income for the year, and any adjustment to taxes

payable in respect of previous years. Taxable income for the year is generally different from profit or loss before tax

according to the financial statements. Calculated income tax is based on the tax rates in effect at the reporting date.

Deferred income tax

Deferred income tax is due to a temporary difference between taxable income and profit or loss according to the fi

financial statements. This is because the Group's tax base is based on assumptions different from the financial

statements. Deferred income tax is not recognised on non-deductible goodwill.

A deferred tax asset is estimated at the reporting date and is recognised only to the extent that it is probable that

future taxable income will be available against which the tax asset can be utilised in the future.

Deferred income tax is expensed in profit or loss unless it is related to items recognised in other comprehensive

income or directly in equity, in which case the tax is also recognised in other comprehensive income or equity.

Consolidated Financial Statements 31 December 2025 77 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39.12 Cash and cash equivalents

Cash and cash equivalents consist of unrestricted deposits with financial institutions, and highly liquid financial

assets that are due within three months from the acquisition date and can easily be converted into cash where risk

of changes in their fair value is insignificant.

39.13 Financial assets

Initial recognition

Financial assets are recognised when the Group becomes a party to the contractual provisions of the instrument.

Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition

or issue of financial assets (other than financial assets at fair value through profit or loss) are added to or deducted

from the fair value of the financial assets, as appropriate, on initial recognition. Transaction costs directly attributable

to the acquisition of financial assets at fair value through profit or loss are recognised immediately in profit or loss.

Classification of financial assets

All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value,

depending on the classification of the financial assets. The classification of financial assets is based on the business

model within which they are held and their contractual cash ﬂow characteristics. All regular way purchases or sales

of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are

purchases or sales of financial assets that require delivery of assets within the time frame established by regulation

or convention in the marketplace.

Financial assets at amortised cost

A financial asset which is intended to hold to maturity and where the contractual payments on set due dates consist

only of payments of principal and interest shall be recorded at amortised cost unless the instrument is defined at fair

value through profit or loss in accordance with the fair value option. Such assets are initially recognised at fair value

plus any related transaction costs. After the initial recognition, such financial assets are valued at amortised cost

based on the effective interest rate, less impairment. All loans and receivables of Fossar are recognised at

amortised cost.

Financial assets at fair value

Debt instruments that are held within a business model whose objective is both to collect the contractual cash ﬂows

and to sell the debt instruments, and that have contractual cash ﬂows that are solely payments of principal and

interest on the principal amount outstanding, are measured subsequently at fair value through other comprehensive

income unless the fair value option is applied. All other debt investments and equity investments not measured at

amortised cost are measured subsequently at fair value through profit or loss. Derivatives are recorded at fair value

through profit or loss, except for derivatives that have been defined as hedging instruments in hedge accounting.

During the year ended 31 December 2025, the Group held debt instruments (bonds) classified as financial assets

measured at fair value through other comprehensive income (FVOCI). As at 31 December 2023, these instruments

had a carrying value of ISK 2.499.612 (2024: 2.499.612). The related unrealised fair value changes are recognised in

other comprehensive income and accumulated in the FVOCI reserve within equity.

Consolidated Financial Statements 31 December 2025 78 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39.13 Financial assets (cont.)

Impairment of financial assets

The Group's loans and receivables fall under the IFRS 9 impairment model. Estimates of expected credit losses are

updated at each reporting date, and the impairment model divides financial assets into three stages:

Stage 1

All financial assets at initial recognition, with a few exceptions. Expected credit losses are estimated based on the

probability of default in the next 12 months from the reporting date.

Stage 2

A significant increase in credit risk has occurred. Expected credit losses are estimated based on the probability of

default during the lifetime of the financial asset.

Stage 3

There are objective indications of impairment. Expected credit losses are estimated based on the probability of

default during the lifetime of the financial asset.

All financial assets within the scope of the impairment model are recorded at stage 1 at initial recognition, with the

exception of financial assets that are impaired at initial recognition and financial assets covered by the simplified

model of the standard (e.g. trade receivables with payment due in less than 12 months).

Since there are relatively few receivables (excluding insurance contracts for which credit risk is considered limited),

management assesses expected credit losses separately for individual receivables. Therefore, the Group does not

apply the presumption that the credit risk on a financial asset has increased significantly since initial recognition

when contractual payments are more than 30 days past due and that objective indicators of impairment exist when

payments are more than 90 days past due.

If the credit risk of a financial asset in level 2 or 3 decreases and the reasons for this are not considered short-term,

the relevant financial asset is lowered by a level, i.e. to level 1 or 2 depending on the circumstances.

Definition of default

Management believes that objective indications of impairment exist if it is considered likely that the debtor will not

be able to fully meet its obligations to the Group. The following are examples of circumstances where the Group

believes that objective indications of impairment exist:

- a debtor has applied for bankruptcy, a company has been deregistered, or if a company no longer operates on a

going concern

- it is considered unlikely that the debtor will meet his obligations due to violations of the terms of the loan agreement

or his financial restructuring

Final write-off of financial assets

Receivables are written off when there is information indicating that the debtor is in severe financial

difficulty and there is no realistic prospect of recovery.

Consolidated Financial Statements 31 December 2025 79 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39.14 Customer relationships

Customer relationships, recognised upon acquisition of operations, are amortised over the estimated useful life,

which is 10 years.

39.15 Software

Software is recognized at cost less accumulated amortisation and impairment. The cost price consists of the

purchase price and all direct costs associated with getting the software into use. Software is amortised using the

straight-line method over 3 to10 year from the date it is taken into use.

39.16 Property, plant and equipment

Property, plant and equipment are recognised when it is probable that economic benefits embodied in the asset will

ﬂow to the Group and its cost can be measured reliably. Property, plant and equipment assets are recognised at cost

value less accumulated depreciation and impairment. The cost of property, plant and equipment assets consists of

the purchase price and all directly attributable cost necessary to make the asset capable of generating revenue.

Property, plant and equipment are recognised at cost less accumulated depreciation and impairment.

Depreciation is recognised on a systematic basis over the expected useful life of the asset, taking into account its

estimated residual value. The depreciation method expected useful life and residual value are reviewed at least

annually.

Gain or loss on the sale of property, plant and equipment are calculated as the difference between the sale price

and carrying amount. It is recognised in profit or loss as part of other income.

39.17 Impairment of non-financial assets

At each reporting date, management reviews the carrying amount of tangible and intangible assets for indications of

impairment. If any such indication exists, the recoverable amount of the asset is estimated. The recoverable amount

of a cash-generating unit to which the asset belongs is estimated if it is not possible to test the asset individually for

impairment.

The recoverable amount is the higher of fair value less estimated cost to sell and value in use. Value in use is based

on estimated future cash ﬂows, discounted at the pre-tax rate of interest, where the interest rate reﬂects the market

assessment of time value of money at each time and the risk embodied in the asset.

Intangible assets with indefinite useful life and intangible assets not ready for use are tested for impairment annually

and more often if there is any indication of impairment.

If the recoverable amount of an asset is lower than its carrying amount, the carrying amount is reduced to the

recoverable amount. Impairment loss is recognised in profit or loss.

A recovery of the asset, subsequent to impairment recognition, is reversed. However, reversal is limited to the

amount of the asset not being recognised at an amount higher than its carrying amount prior to the impairment

recognition. Reversal of impairment of goodwill is prohibited.

Consolidated Financial Statements 31 December 2025 80 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39.18 Financial liabilities

Financial liabilities are recorded at fair value upon initial recognition. Transaction costs that are directly attributable

to the purchase or issuance of financial liabilities that are not recognized at fair value through profit or loss are added

to or deducted from fair value at initial recognition as appropriate. Transaction costs in respect of financial liabilities

that are recognised at fair value through profit or loss are immediately recognised in profit or loss.

Financial liabilities are valued at amortised cost based on the effective interest rate. The Group derecognises fi

financial liabilities only when the obligation associated with them no longer exists. Gains or losses due to the

derecognition are recorded in profit or loss.

39.19 Equity instruments

An equity instrument is a contract that evidences residual interests in assets of the Group after deduction of all its

liabilities. Equity instruments issued by the Group are recorded at cost less the direct costs of their issuance.

Purchases of own shares are recognised as a reduction in the total share capital. No gains or losses are recognised

through profit or loss due to the purchase, sale or issuance of own shares.

39.20 Provisions

A provision is recognised when the Group has a legal or constructive obligation due to a past event, payment is

probable, and the amount of the obligation can be reliably determined.

The amount of the provision is based on the best possible estimation of the liability at the reporting date. If the

amount of the provision is based on estimated future cash ﬂows, it is recognised at present value.

If the provision is recoverable from a third party, the recoverable amount is recognised as an asset.

39.21 Leases

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a

right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee,

except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets.

The lease liability is initially measured at the present value of the lease payments that are not paid at the

commencement date. For discounting the Group uses its incremental borrowing rate when the rate implicit in the

lease cannot be readily determined.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease

liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments

made.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset.

39.22 Earnings per share

The Group presents basic earnings per share and diluted earnings per share for ordinary shares in the statement of

profit or loss. Basic earnings per share are calculated as a percentage of the profit allocated to the ordinary

shareholders in the company, and the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share are calculated by taking into account all shares, whether issued or potential shares at the

reporting date, such as share options granted to employees.

Consolidated Financial Statements 31 December 2025 81 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

39.23 New standards, interpretations and amendments to standards

A number of new accounting standards are effective for annual reporting periods beginning after 1 January 2025

and earlier application is permitted. However, the Group has not early adopted the following new or amended

accounting standards in preparing these consolidated financial statements.

IFRS 18 Presentation and Disclosure in Financial Statements

IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies for annual reporting periods beginning on

or after 1 January 2027. The new accounting standard introduces the following key new requirements:

Entities are required to classify all income and expenses into five categories in the statement of profit or loss,

namely the operating, investing, financing, discontinued operations and income tax categories. Entities are

also required to present a newly-defined operating profit subtotal. Entities´ net profit will not change.

Management-defined performance measures (MPMs) are disclosed in a single note in the financial

statements.

Enhanced guidance is provided on how to group information in the financial statements.

In addition, all entities are required to use the operating profit subtotal as the starting point for the statement of cash

ﬂows when presenting operating cash ﬂows under the indirect method.

The Group is still in the process of assessing the impact of the new accounting standard, particularly with respect to

the structure of the Groups´ statement of profit or loss, the statement of cash ﬂows, and the additional disclosure

required for MPMs. The Group is also assessing the impact of how information is grouped in the financial statements,

including for items currently labelled as other.

Other accounting standards

The following new and amended accounting standards are not expected to have a significant impact on the Group´s

consolidated financial statements:

Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)

Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7)

Consolidated Financial Statements 31 December 2025 82 All amounts are in thousands of ISK

Notes to the Consolidated Financial Statements

40. Quarterly statement (unaudited)

Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024

Insurance revenue ........................................................ 8.204.617 8.368.737 7.854.521 7.531.512 7.546.073

Net interest income ....................................................... 137.845 122.830 91.633 108.389 77.244

Net fee and commission income .................................. 686.128 479.882 603.761 587.860 679.466

Net financial income ..................................................... 1.532.395 (252.962) (143.437) (1.097.590) 1.312.202

Share in profit of associates, after income tax ............. 59.500 0 26.366 25.084 0

Other income ................................................................ 125.420 13.685 46.472 25.276 162.816

Total income ................................................................. 10.745.905 8.732.173 8.479.315 7.180.530 9.777.802

Insurance service expenses ......................................... (7.985.855) (6.590.384) (6.026.185) (7.403.579) (6.800.948)

Net expenses from reinsurance contracts .................... (168.842) (307.324) (329.007) (178.478) (308.071)

Operating expenses ..................................................... (1.056.389) (726.349) (806.057) (919.441) (1.008.566)

Amortization of intangible assets .................................. (49.802) (49.170) (50.071) (47.262) (42.952)

Net credit impairments .................................................. (249) (2.309) (1.005) (3.064) (1.365)

Profit (loss) before income taxes .................................. 1.484.768 1.056.638 1.266.990 (1.371.294) 1.615.901

Income tax .................................................................... 80.681 (339.241) (294.647) 18.570 (57.558)

Profit (loss) for the period .............................................

1.565.449 717.397 972.343 (1.352.724) 1.558.343

Insurance operations

Claims ratio ................................................................... 78,6% 62,6% 58,3% 79,1% 72,9%

Net reinsurance ratio .................................................... 2,1% 3,7% 4,2% 2,4% 1,5%

Claims and net reinsurance ratio .................................. 80,7% 66,3% 62,5% 81,4% 74,4%

Insurance contracts expense ratio ................................ 18,7% 16,1% 18,4% 19,2% 19,8%

Combined ratio .............................................................

99,4% 82,4% 80,9% 100,7% 94,2%

Investment Operations

Insurance investment portfolio return ........................... 4,0% 1,0% 1,2% -1,1% 3,6%

Financial services

Financial Services revenue (excl. Interco. adj.) ............ 976 700 732 780 892

Assets under Management (AuM) ISKbn ..................... 253 236 232 225 227

Group

ROE on annual basis .................................................... 27,2% 13,2% 18,4% -25,1% 29,0%

Profit per share ............................................................. 0,82 0,38 0,51 -0,71 0,82

Consolidated Financial Statements 31 December 2025 83 All amounts are in thousands of ISK

Appendix 1

Non-Financial Disclosure 2025

CEO Statement

Skagi is a leading Icelandic Financial Services Group focused on sustainable and profitable growth in

insurance, investment banking, and asset management. Building on a long-standing legacy in insurance,

the Group has developed a strong track record in financial services and long-term investment

performance. Skagi consists of VÍS Insurance (“VÍS”), Fossar Investment Bank (“Fossar”), and Íslensk

verðbréf (“ÍV” or “ÍV Asset Management”). Skagi and all its subsidiaries are conscious of the importance

of sustainability in their operations and activities.

One of Skagi’s objectives is to open new dimensions in financial markets, by drawing on the combined

strength and distinct expertise of its three subsidiaries. By emphasizing quality growth, supporting

innovation, and expanding opportunities for clients with diverse needs and ambitions, Skagi aims to help

foster broader participation in financial markets and a more resilient economy. Sustainability plays an

integral role in achieving this objective. Integrating responsible business practices not only benefits the

environment and the society but supports the Group’s long-term success.

2025 was the first full year in which all three subsidiaries operated under Skagi, with Íslensk verðbréf

becoming fully merged with SIV eignastýring at the beginning of the year 2025. Following these changes

within the Group, emphasis was placed on developing a comprehensive sustainability policy for Skagi and

its subsidiaries. The policy was built based on a double materiality assessment, which was conducted on

a group-wide basis. The information presented in this year’s Sustainability Report reﬂects the priorities

identified through that assessment.

Skagi aims to contribute to sustainability and ESG through areas where the group holds a particular

advantage to provide value. For example, VÍS contributes significantly to accident prevention measures

through education, grants and gifts. Both ÍV and Fossar work to promote financial health of both its

customers and the economy in general by providing specialized services and supporting healthy

competition in the market.

This report is Skagi’s first in which EFRAG’s Voluntary Standards for SMEs, Basic Module, is used to provide

non-financial information, with European Sustainability Reporting Standards (ESRS) also used as a

reference point for disclosure. With the new presentation of the report, Skagi aims to increase

transparency and accountability in its sustainability-related disclosures for the Group.

General Disclosure

General Basis for Preparation of Sustainability Report

This Sustainability Report covers the period from 1 January 2025 to 31 December 2025. It provides insight

into the sustainability eorts of Skagi (the “Company”) and its subsidiaries (the “Skagi Group” or the

“Group”) on a consolidated basis for the relevant period. Skagi’s subsidiaries are VÍS tryggingar hf. (“VÍS

Insurance”, “VÍS”), Fossar fjárfestingarbanki hf. (“Fossar Investment Bank”, “Fossar”) and Íslensk verðbréf

hf. (“Íslensk verðbréf”, “ÍV” or “ÍV Asset Management”). All companies of the Group have a registered

address at Ármúli 3, 108 Reykjavík, Iceland.

In preparing the report, Skagi has for the first time referred to the European Financial Reporting Advisory

Group (“EFRAG”) standards known as the European Sustainability Reporting Standards (“ESRS”) when

Consolidated Financial Statements 31 December 2025 84 All amounts are in thousands of ISK

disclosing information for selected data points. However, Skagi has chosen to provide the required

information under EFRAG’s voluntary standards for small and medium-sized enterprises (Voluntary

Standards for SMEs, Basic Module). Information is provided on the matters assessed as material based

on the double materiality assessment conducted in the first half of 2025.

Skagi will continue to develop its sustainability disclosures in line with regulatory developments as they

occur. At the time of preparing this report, the EU’s Corporate Sustainability Reporting Directive (“CSRD”)

has not been implemented into Icelandic law. This report therefore complies with the current

requirements of Article 66(d) of Act no. 3/2006 on Annual Accounts, concerning non-financial reporting.

While the EU is drawing back on its sustainability disclosure framework for companies through its intended

Omnibus Regulation, Skagi chooses to reﬂect the prevailing best practices in sustainability-related

disclosures to ensure consistency, maintain transparency towards stakeholders and prepare the Group

for potential future developments in regulation and market expectations. Climate impact calculations are

performed by a third party in accordance with the Greenhous Gas Protocol methodology.

Non-financial disclosure for the subsidiaries can also be found in their annual financial statements. More

detailed non-financial disclosure, including numeric data, on the Group and each subsidiary can also be

found in Skagi’s Annual and Sustainability Report for 2025 which will be published on Skagi’s website

(www.skagi.is).

Double Materiality Assessment – Methodology and Results

General

A double materiality assessment involves evaluating both impact materiality, i.e. the eects that a

company’s operations have on the external environment and society, and financial materiality, i.e. the

ways in which sustainability matters aect a company’s operations, including whether they present

financial opportunities or risks for the company. A double materiality assessment makes it possible to

determine which ESRS sustainability topics are material for the Group.

The results of the group-wide double materiality assessment conducted in the first half of 2025 identified

material sustainability topics for the Group, namely impacts, risks and opportunities, that form the basis

for this financial year’s Sustainability Report. In carrying out the assessment, Skagi relied on EFRAG’s

guidance on double materiality while also taking into account the practices of comparable companies in

the Nordic region.

Figure 1: Double Materiality Methodology

Consolidated Financial Statements 31 December 2025 85 All amounts are in thousands of ISK

Methodology

To identify and assess the Group’s actual and potential impacts, risks, and opportunities, an initial

assessment was conducted of how the ESRS sustainability standards relate to the Group’s strategy and

organizational structure. This was followed by analytical work involving key personnel within the Group,

namely employees who, through their participation, were able to provide insight into the relevance and

impacts of sustainability matters for the Group. These participants reviewed the sustainability topics set

out in the ESRS standards and assessed additional factors that should be included in the assessment.

In assessing impact materiality, consideration was given to actual and potential, positive and negative

impacts that the Group has or may have on the external environment. The assessment covered the

operations of all entities within the Group, and the impacts were evaluated based on the following criteria:

(a) Scale: The extent to which the negative or positive impacts are, or could be, severe.

(b) Scope: The breadth or extent of the impacts, or the potential breadth thereof.

or remedy negative impacts.

(d) Likelihood: The probability that the impacts will materialize, whether positive or negative.

In assessing financial materiality, consideration was given to the financial risks and/or financial

opportunities that sustainability factors may create for the Group. Financial materiality encompasses

potential impacts on the Group’s financial position, including both direct financial impacts, such as costs

or revenues, and indirect impacts, such as changes in market conditions, the regulatory environment, or

eects on Skagi’s reputation. In the assessment of financial materiality, the following factors were

considered:

(a) Potential Scale: The potential magnitude of the financial consequences, i.e. the risk or

opportunity.

(b) Likelihood: As in the assessment of impact materiality, the probability that the risk or

opportunity will materialize.

The results of the impact materiality assessment and the financial materiality assessment were

subsequently combined, forming the Group’s double materiality assessment and thereby determining the

ESRS standards on which Skagi will provide disclosures. To validate the outcome of Skagi’s double

materiality assessment, the results were presented to key personnel within the Group for approval. Once

it becomes clear how EU sustainability legislation will be transposed into Icelandic law, Skagi will consider

how future materiality assessments for the Group should be conducted.

The double materiality assessment was based on available information and data on the Group’s

operations, as well as on the results of a workshop held with Group employees who, through their

participation, were able to provide insights into the relevance of sustainability topics for the Group. Skagi

will update the results of its double materiality assessment as needed and adapt it to developments within

the Group and, where applicable, to changes in the regulatory framework.

Results

The results of the double materiality assessment showed that the following sustainability topics were

assessed as material for Skagi’s operations:

E1 – Climate change

S1 – Own workforce

Consolidated Financial Statements 31 December 2025 86 All amounts are in thousands of ISK

S4 – Consumers and End-Users

G1 – Business Conduct

Figure 2: Skagi's Results from the Double Materiality Assessment

Skagi’s Operations and Sustainability Governance

Skagi’s main operations consist of insurance activities, investment banking activities and asset and fund

management, through the operations of its subsidiaries. Skagi operates as a financial conglomerate in the

insurance sector and a mixed holding company in financial activities pursuant to Act no. 61/2017 and as

such is subject to certain supervision and requirements imposed by the Financial Supervisory Authority.

Skagi operates as a public holding company pursuant to Act no. 2/1995 on Public Holding Companies.

Full-time employees numbered 240 at the end of the year 2025. Skagi’s turnover in 2025 was ISK 35,355

million and the balance sheet size was ISK 85,035 million at the end of year 2025. The country of primary

operations and location of significant assets of the Group is in Iceland. The Group solely operates in

Iceland, both in the capital and rural area.

Skagi’s Value Chain

Skagi’s value chain was analysed to identify where sustainability-related matters may arise within the

Group’s activities and business relationships, both in terms of impacts on people and the environment

and in terms of potential eects on Skagi’s financial position, performance and future prospects. The value

chain serves as a key reference point for Skagi’s sustainability governance and climate-related risk

management.

Consolidated Financial Statements 31 December 2025 87 All amounts are in thousands of ISK

Figure 3: Skagi's Value Chain

Skagi’s value creation is primarily driven by the provision of services, financial expertise and indirect

impacts through capital allocation and risk management. On that basis, the value chain was defined as

follows:

External environment (upstream)

The external environment comprises the operating conditions that shape Skagi’s activities but fall outside

the Group’s direct control. This includes the regulatory and supervisory framework, public authorities,

external business partners, financing and capital markets, investors and other capital providers. These

elements inﬂuence Skagi’s operating environment and inform the sustainability-related risks and

opportunities the Group must manage.

Internal operations (own operations)

Internal operations represent the areas over which the Group exercises direct control, primarily through

its subsidiaries and consist of Skagi’s core activities and internal supporting functions.

Skagi’s activities are organised into three main business areas: insurance operations, insurance

investments and financial services. Insurance operations comprise life and health insurance as well as

property and casualty (P&C) insurance. Insurance investments include investment of the insurance

portfolio assets. Financial services activities include asset and fund management, corporate finance

advisory, debt finance and market making. Fund management constitutes a dedicated activity focused on

the establishment and management of investment funds.

These activities are supported by Skagi’s internal functions, including its workforce, internal governance

structures, risk management, compliance and information technology. Together, these business areas

and internal functions form the foundation of Skagi’s value creation and enable the delivery of reliable

financial and insurance services.

Value creation (downstream)

Value creation materialises through the products and services delivered to customers and the outcomes

these support in society. Skagi’s oerings include insurance coverage and solutions, financial and

investment services and asset and fund management products, where sustainability considerations are

increasingly integrated into decision-making processes.

The stakeholder groups, sustainability impacts, risks and opportunities, as well as potential financial

eects associated with each part of the value chain form an important basis for Skagi’s ongoing

management of sustainability-related risks and opportunities.

Consolidated Financial Statements 31 December 2025 88 All amounts are in thousands of ISK

Sustainability Governance

In 2025, a new comprehensive sustainability policy was developed by Skagi and its subsidiaries. The policy

was built on the basis of the double materiality assessment discussed above, which was conducted on a

group-wide basis. The Company's Board of Directors is responsible for the policy; the CEO and senior

management are responsible for its implementation and ensuring it is followed in the Company's

operations.

Non- Financial Disclosure Report of Skagi is approved by Skagi’s Board of Directors. Reference is made to

the Independent Auditor's Report with regards to its confirmation of their best knowledge that the report

of the Board of Directors and CEO accompanying the consolidated financial statements includes the

information required by the Financial Statements Act if not disclosed elsewhere in the consolidated

financial statements.

Policies Related to Sustainability

Skagi and its subsidiaries have various policies in place that relate to sound governance and sustainability

factors. Following is an overview of various policies that relate to sound governance and sustainability

factors, both at parent company level and subsidiary level. In most cases the policies are approved on a

group-level basis by Skagi’s board, where the board of directors in each subsidiary also implements the

policy or solely on a subsidiary-level. Further, the subsidiaries may have other policies and procedures

tailored to their operations, which may relate to sustainability. It is therefore possible that additional

policies and internal rules may fall within this scope; however, analysis to that eect is ongoing within

Skagi and has not been completed at this time. Accordingly, the overview should not be regarded as

exhaustive. The table also includes a concise description of the content of each policy as well as to which

sustainability factors they connect.

Policies and Internal Rules

Scope in relation to Material Sustainability Factors and Sub

Factors

Sustainability Policy

1 Climate change

S-1 Own workforce

S-1 Working conditions

S-1 Equal treatment and opportunities for all

G-1 Corporate culture

S-4 Information related impacts for consumers and/or end

users

S-4 Personal safety of consumers and/or end-users

G-1 Business conduct

G-1 Corporate culture

G-1 Corruption and Bribery

Corporate Governance Policy

1 Business Conduct

G-1 Corporate culture

Remuneration Policy

1 Own workforce

S-1 Working conditions

S-1 Equal treatment and opportunities for all

G-1 Corporate culture

Code of Conduct

1 Own workforce

S-1 Working conditions

G-1 Business conduct

G-1 Corporate culture

Human Resources Policy

1 Own workforce

S-1 Working conditions

S-1 Equal treatment and opportunities for all

G-1 Corporate culture

E-1 Climate change

Risk Management Policy

1 Climate change

S-1 Own workforce

S-1 Working conditions

Consolidated Financial Statements 31 December 2025 89 All amounts are in thousands of ISK

1 Equal treatment and opportunities for all

G-1 Corporate culture

S-4 Information related impacts for consumers and/or end

users

S-4 Personal safety of consumers and/or end-users

G-1 Business conduct

G-1 Corporate culture

G-1 Corruption and Bribery

Internal Control Policy

1 Business conduct

G-1 Corporate culture

G-1 Corruption and Bribery

G-1 Whistle blower protection

Compliance Policy

1 Business conduct

G-1 Corporate culture

G-1 Corruption and Bribery

G-1 Whistle blower protection

S-4 Personal safety of consumers and/or end-users

Ownership Policy

1 Business conduct

G-1 Corporate culture

Data Protection and Privacy Policy

4 Personal safety of consumers and/or end

users

G-1 Corporate culture

Conflict of Interest Policy

1 Business conduct

G-1 Corporate culture

S-1 Own workforce

Policy on treatment of insider information and

management trading

1 Business conduct

G-1 Corporate culture

G-1 Corruption and bribery

G-1 Whistle blower protection

Competition Policy (subsidiary level)

1 Business conduct

G-1 Corporate culture

G-1 Corruption and bribery

Policy on IT Operations

4 Information related impacts for consumers and/or end

users

S-4 Personal safety of consumers and/or end-users

G-1 Corporate culture

Outsourcing and Service Procurement Policy

1 Business conduct

G-1 Corporate culture

S-4 Information related impacts for consumers and/or end

users

S-4 Personal safety of consumers and/or end-users

Internal Audit Policy

1 Business conduct

G-1 Corporate culture

G-1 Corruption and Bribery

Policy on measures against money laundering

and terrorist financing

1 Business conduct

G-1 Corporate culture

G-1 Corruption and Bribery

Operational Risk Policy

1 Climate change

S-1 Own workforce

S-1 Working conditions

S-1 Equal treatment and opportunities for all

G-1 Corporate culture

S-4 Information related impacts for consumers and/or end

users

S-4 Personal safety of consumers and/or end-users

G-1 Business conduct

G-1 Corporate culture

G-1 Corruption and Bribery

Policy and Response Plan for Bullying,

Harassment and Violence

1 Own workforce

S-1 Working conditions

S-1 Equal treatment and opportunities for all

G-1 Corporate culture

Information Policy

1 Business conduct

G-1 Corporate culture

Policy on Product Governance (subsidiary level)

1 Business conduct

Consolidated Financial Statements 31 December 2025 90 All amounts are in thousands of ISK

4 Information related impacts for consumers and/or end

users

S-4 Personal safety of consumers and/or end-users

Supplier Code of Conduct

1 Business conduct

G-1 Corporate culture

S-1 Own workforce

S-1 Working conditions

Policy on Responsible Investments (subsidiary

level)

1 Climate change

G-1 Corporate culture

Sustainability Focus

Sustainability Commitments

Skagi is a member of Festa, a centre for social responsibility, IcelandSIF, an organisation that promotes

responsible investment, and a signatory of UN PRI, the United Nations Principles for Responsible

Investment. Skagi is also a signatory of the UN Global Impact on the implementation of responsible

policies and the UN Women’s Empowerment Principles, where Skagi’s commitments reach to all

subsidiaries.

Fossar has been a pioneer in managing the issuance of sustainable bonds in Iceland, and Fossar has been

a leading consultant in the sustainable bond market. Fossar is also a direct member of IcelandSIF. VÍS,

now Skagi, was a signatory of the 2020 Declaration of Intent on Investments in Support of Sustainable

Development, as well as the 2015 Climate Declaration of Festa and the City of Reykjavík.

Skagi supports the United Nations Sustainable Development Goals and will use them as guiding principles

in its operations. The Group focuses in particular on the following goals:

 SDG 3, Good Health and Well-Being: Promote healthy living and well-being for all, from cradle to

grave.

 SDG 5, Gender Equality: Ensure gender equality and empower all women and girls.

 SDG 8, Decent Work and Economic Growth: Promote sustained, sustainable economic growth

and productive and decent employment opportunities for all.

 SDG 12, Responsible Consumption and Production: Ensure sustainable consumption and

production patterns.

Skagi Remains Above Market Average in Reitun’s ESG Evaluation

Skagi improved year-on-year in Reitun’s ESG assessment, receiving 81 points and a B1 rating. In Reitun’s

summary, it is noted that Skagi’s performance remains strong and is above average in all categories when

compared with 45 other domestic issuers. The market average shows an overall score of 73 out of a

possible 100 points, corresponding to rating category B2.

Skagi, together with its subsidiaries VÍS Insurance and Fossar Investment Bank, was also awarded the

designation of Outstanding Governance Company, a recognition granted by Stjórnvísi, the Iceland

Chamber of Commerce, the Confederation of Icelandic Enterprise, and Nasdaq Iceland.

Consolidated Financial Statements 31 December 2025 91 All amounts are in thousands of ISK

Topical Disclosure

Disclosure on Factors Identified as Material Based on the Materiality Assessment

1. Social Factors

Skagi places strong emphasis on ensuring an attractive working environment for its employees and on

promoting positive societal change by advancing diversity, equality, and human rights, both within its own

operations and in the wider community. The Group plays an important social role by providing individuals

with access to a range of services and by enhancing financial well-being through sound advice and

information, thereby supporting a well-functioning and competitive financial market.

Skagi received 92 points for the social component in Reitun's ESG evaluation. Skagi continues to pay close

attention to human resources, job satisfaction and customer satisfaction. The results of the double

materiality analysis revealed that Skagi can have the most positive impact on social factors through both

its human resources and end-users. Policies related to social factors are presented in the table on Policies

and Internal Rules.

Skagi’s social objectives primarily support SDG number 3, Good Health and Well-Being, SDG Goal number

5 on Gender Equality and Goal number 8 on Decent Work and Economic Growth.

Key Social Objectives for 2026:

S-1 Workforce

Skagi operates on the basis of an ambitious group-level human resources policy. The human resources

manager of Skagi is a member of the Group’s executive management, thereby ensuring a consistent

human resources policy and approach to HR matters across the organization. The workforce has been

identified as a material topic for Skagi through the Group’s double materiality assessment, reﬂecting both

the significance of people-related matters for Skagi’s long-term value creation and the impact of Skagi’s

practices on employees. Key material factors include attracting and retaining qualified employees,

ensuring equal opportunities and fair treatment, maintaining a healthy and safe working environment,

supporting employee wellbeing and professional development, and fostering an inclusive and

performance-oriented culture across all entities within the Group.

a. General Characteristics of Skagi’s Workforce

The table below presents key quantitative information relating to the composition of Skagi’s workforce in

2025.

Consolidated Financial Statements 31 December 2025 92 All amounts are in thousands of ISK

Skagi’s

workforce composition

Total Number of Employees

240

Men

144

Women

Number of Permanent Employees

232

Men

142

Women

Gender Ratio of Senior Management

Men

63%

Women

38%

Employee Turnover Rate

19,9 %

Number of Work

Related Accidents

Number of Employees Covered by Collective

Agreements

240

b. Equal Opportunities and Fair Treatment

Skagi is committed to being a desirable workplace that creates a healthy, safe and constructive work

environment for its employees. Each employee is appraised based on merit, competence and

performance, irrespective of gender, sex, race, colour, nationality, religion, political opinions, social

status, origin or other irrelevant factors or circumstances. Consideration is also given, where appropriate,

to diversity perspectives within the workforce. Through an active equality and equal pay policy, the Group

promotes the full utilization of the talents and capabilities of its entire workforce, where employees shall

be paid equal wages and enjoy the same terms for the same or equally valuable work.

Skagi complies with legislation on equal status and equal rights irrespective of gender, as laid out in Act

no. 150/2020. VÍS has an equal pay certificate and Fossar has equal pay confirmation, where the latter has

less stringent requirements and is aimed at smaller companies. Pay equity analysis has not been carried

out on a group-level. The most recent pay equity analysis at VÍS was conducted in 2025, and the results of

the wage analysis showed that the adjusted gender pay gap measured 0.10% in favour of women. In

connection with Fossar’s equal pay certification in 2024, a wage analysis was conducted which showed

that the adjusted gender pay gap measured 0.20% in favour of men.

Skagi’s Code of Conduct covers in detail good business practices, the quality of the working environment

and behaviour at the workplace, risk culture and non-discrimination. The Code of Conduct, as well as the

Group Sustainability Policy, provides that Skagi shall ensure equal opportunities for its employees. The

impacts of these commitments are reﬂected in a strong workplace culture, high employee satisfaction

and a positive working environment. Employee turnover was higher during the reporting period was among

other reasons due to internal organizational changes within the Skagi Group. Opportunities exist to further

strengthen this area and to promote gender balance in senior and managerial positions.

c. Employee Satisfaction and Professional Development

Skagi is a desirable workplace, with a strong majority of employees reporting that they are satisfied or very

satisfied in their roles. Skagi prioritizes that subsidiaries should preserve their individual cultures, while at

Senior Management is defined as the CEO and the Managing Directors of Skagi and its subsidiaries.

Meaning number of employees that receive pay that is equal or above applicable minimum wage according to the relevant

collecve agreement.

Consolidated Financial Statements 31 December 2025 93 All amounts are in thousands of ISK

the same time ensuring a coherent and shared employee culture across the Group. Continued emphasis

is placed on a result-oriented culture within the Group.

In the summer of 2025, a harmonized employee satisfaction survey was conducted across the Group. The

results indicate continued high levels of employee satisfaction across all entities within the Group. Skagi’s

HR department analyses the survey results and monitors developments over time. Surveys are conducted

at least annually, and the results provide insight into employees’ expectations, needs and views, and are

intended to raise awareness and encourage dialogue about the working environment and conditions.

Managers are also encouraged to have regular performance and feedback sessions with their employees

where purpose is to ensure a shared understanding between the manager and the employee regarding role

expectations as well as the employee’s needs. The format and frequency of these discussions vary

depending on managers and departments.

Skagi‘s operations are to a large extent dependent on the skills and contributions of qualified personnel.

A key factor in the Group‘s continued development is the retention of skilled employees and ensuring

appropriate training and continuing education. The Group strives to provide good working conditions and

competitive remuneration. In September 2025, it was announced that Skagi and Íslandsbanki hf. were in

ongoing merger discussions. Uncertainty during periods of strategic change can pose a risk to morale and

employee engagement, which in turn may impact wellbeing, productivity and retention if not managed

appropriately. Skagi has in place a communication plan to ensure clear engagement and consistent

management practices.

Opportunities lie in maintaining this competitive advantage and continuously strengthening workplace

culture, enhancing employee satisfaction and, consequently, supporting strong performance.

d. Health and Safety

Skagi focuses on promoting a healthy work–life balance, providing opportunities and attractive terms of

employment, supported by a robust occupational health and safety policy. Skagi complies with legislation

on working environment, health and safety, as laid out in Act no. 46/1980. Employee safety is ensured

through dedicated occupational health and safety committees and structured training programs that

facilitate knowledge sharing across the Group. These measures also contribute to the United Nations’ goal

related to labour rights and equality in the labour market.

Skagi condemns and will not tolerate bullying, harassment, violence or other inappropriate conduct in the

workplace and has established a policy and a response plan to address such situations in a safe and

eective manner. The policy and response plan have been developed in accordance with applicable laws

and regulations governing the working environment, health and safety. Employees are clearly informed of

reporting channels and procedures relating to the response plan. In this way, Skagi fosters a safe working

environment in which respect and equality among employees prevail.

By providing ﬂexible working hours where possible, Skagi wishes to ensure that the Company is a family-

friendly workplace and that dierent situations of employees are considered. Similarly, Skagi oers

employees a fitness membership allowance and commuting allowance for employees that wish to

commute. Inﬂuenza vaccination is oered every year, and employees have access to psychological

counselling annually. Skagi is committed to oering expectant parents the ﬂexibility to take parental leave

in ways that best suit their families. Employees are encouraged to utilize the vacation they are entitled to

by law. In addition to payments from the Icelandic Parental Leave Fund to which employees are entitled

during parental leave, all permanent employees are eligible to receive a supplementary employer

contribution from Skagi in accordance with SSF’s collective agreements.

Consolidated Financial Statements 31 December 2025 94 All amounts are in thousands of ISK

e. Remuneration, Collective Bargaining and Training

Skagi promotes job satisfaction and stability through fair and appropriate remuneration and maintaining

healthy incentive structures within the Group. Skagi's current remuneration policy aims to oer

competitive compensation to ensure the Group remains an attractive workplace for qualified individuals.

The Remuneration Committee for the Skagi Group serves in an advisory and monitoring role for the Board

of Directors, ensuring that remuneration practices support the Bank's goals and interests. Risk is

associated with regulatory restrictions on variable remuneration within the financial sector, which reduces

ﬂexibility and can adversely aect competitiveness.

Each employee spent an average of 3,5 hours in 2025 on online training and education. In addition, a

substantial portion of training is delivered on-site and in person, including workshops, internal training

sessions, and hands-on learning that is not captured in online training hours. Education and training have

always been key pillars in human capital development at Skagi, and its predecessor VÍS. The objective of

employee training is to strengthen and maintain employees’ professional knowledge.

Various educational material is available to employees, both optional and mandatory, which increases

their knowledge of the Bank's operations, regulations and culture. Due to the nature of their work, some

employees of Fossar and Íslensk verðbréf must have securities trading rights. Those who have acquired

securities trading rights are obliged to attend regular continuing education courses of their choosing,

which ensure that they maintain academic knowledge, professional competence and values. Skagi has

supported employees in acquiring these licenses where applicable as well as continuing education. For

example, Fossar has organized training that has been approved as continuing education by the

Examination Committee for securities trading rights.

S-4 Consumers and End-Users

As a financial conglomerate with operations in insurance, asset management and investment services,

Skagi has identified three closely linked, material topics for its customers: (i) financial health and grants

to the community, (ii) data protection and privacy, and (iii) cybersecurity.

a. Financial Health

Supporting the financial health of customers is a core part of Skagi’s value proposition and social role.

Skagi’s customers are a diverse group of individuals and business entities. Dierent customer groups have

distinct needs and preferences for various products and services within the Group, which range from

insurance services, investment funds, corporate finance services, asset management, lending, trading in

complex financial instruments and more.

Skagi’s products and services are designed to help households, companies and investors cope with

unexpected financial shocks, access capital and investment opportunities, and build long-term financial

security. Within the Group, insurance solutions play an important role as a financial safety net, protecting

customers against unforeseen events and losses. Investment banking services, covering lending,

brokerage, asset management and corporate finance services, enable investors and companies to

allocate capital eiciently, manage financial risk and support growth. Complementing these activities, the

Group’s fund management, within Íslensk verðbréf, provides professionally managed investment funds

that aim to deliver stable, long-term wealth accumulation for a broad range of customers.

Skagi seeks to promote financial health through clear and responsible communication, high level of

services and accessible information. Furthermore, the Group is at the forefront when it comes to

connecting Icelandic business with the global investment environment. For example, Fossar’s core

Consolidated Financial Statements 31 December 2025 95 All amounts are in thousands of ISK

strength lies in its strong service levels, achieved by providing customers with insights into their portfolios

and the financial markets through one-on-one communication, as applicable. To achieve this, Fossar

prioritizes deep knowledge and expertise within its sta, to ensure high-quality service. VÍS Insurance has

prioritized ensuring access to services, both in the capital area and across the country. In early 2025, VÍS

and Íslandsbanki hf. signed a partnership agreement, aimed to ensure that customers who do business

with both companies enjoy special benefits within loyalty programs within each company. As part of the

cooperation, VÍS started oering services with a visible presence across all of Íslandsbanki’s distribution

channels, including its website, mobile app, and online banking platform. The partnership’s objective is to

enhance customer service and support customer growth. In 2025, VÍS Insurance increased its score in the

Icelandic Customer Satisfaction Index, for the second year in a row, placing second for the first time in

seventeen years.

Risk related to financial health may materialize as operational risk in business relationships, including

reputational risk due to inadequate services, non-compliance with regulatory requirements or systematic

disruptions which could negatively aect Skagi’s products and services. Skagi sees an opportunity to

further expand initiatives that raise awareness of financial resilience, risk prevention and broader

participation in financial markets. With these objectives at the forefront, Skagi aims to increase

competition in the financial market.

b. Grants to the Community

Skagi and its subsidiaries are committed to being present in local communities throughout Iceland,

making a direct positive impact on their local community.

Íslensk verðbréf focuses on supporting children‘s and youth sports activities in its local community, mainly

in Northern Iceland, through financial contributions to local sport clubs.

During 2025, VÍS Insurance allocated more than ISK 7 million to community projects. This included grants

to sports clubs in the form of match programs, advertising boards, travel grants and naming rights for VÍS

Stadium, where Þór Akureyri plays its home football matches. Support was also provided to memorial

funds and the installation of memorials. VÍS additionally supported a range of social and prevention-

focused initiatives. This included support to Pieta, an organization that carries out prevention work against

suicide and self-harm and provides support to family members, as well as public health projects aimed at

increasing participation in breast cancer screening and the Bjössi Fire Safety Bear program. Various safety-

related products were purchased and distributed, such as reﬂective items and ice scrapers for car

windows. Free condoms were distributed at the Þjóðhátíð festival for the second consecutive year. In

2025, 1,630 rear-seat car mirrors were provided free of charge to new parents, as part of VÍS’s ongoing

focus on child and traic safety. Customers with children under the age of four were oered first aid

training, which was delivered on four occasions during the year. In addition, VÍS donated ten ﬂotation suits

to the Icelandic Safety School (Slysavarnaskóli Íslands) for the fifteenth time. VÍS also hosts the largest

B2B safety and prevention conference in Iceland, further strengthening its role in promoting risk

awareness, accident prevention and workplace safety across industries.

The most significant initiative in this regard by Fossar is Fossar’s Thanks Day, which has been held annually

since Fossar's inception in 2015. Since the first Thanks Day, over 170 million ISK has been raised. On this

day, all Fossar's fee and commission income along with direct donations are donated to a cause chosen

by the employees. Additionally, Nasdaq Iceland and T Plus waive all fees from Fossar's transactions and

contribute them to the cause. In 2025, the chosen cause was Ljósið, a rehabilitation and support center

for people who have been diagnosed with cancer and their families. A total of 32.3 million ISK was raised,

which will be used to build a new support center on new premises.

Consolidated Financial Statements 31 December 2025 96 All amounts are in thousands of ISK

c. Data Protection and Consumer Privacy

Given the volume and sensitivity of data processed in connection with customers, such as when handling

claims, providing advisory services and executing transactions, consumer privacy and data protection are

considered material. The Group has implemented policies, procedures and technical and organizational

controls aimed at protecting personal data in line with applicable data protection laws and regulatory

requirements, such as Act no. 90/2018. This includes governance for data access and use, confidentiality

obligations, training for employees who handle customer information and ongoing monitoring of

regulatory developments and evolving customer expectations. Protecting personal data is a fundamental

precondition for trust and long-term customer relationships, while breaches of data protection rules could

result in significant financial, legal and reputational consequences for the Group. Data protection

therefore remains a strategic priority in Skagi’s risk management and governance.

d. Cyber Security and Resilience

Cybersecurity threats are a growing risk for Skagi, reﬂecting the increasing digitalisation of financial

services and the handling of sensitive personal and financial data. A significant cyber incident could

disrupt services, compromise customer data and undermine confidence in the group.

Skagi invests in cybersecurity infrastructure to prevent, detect and respond to cyber threats. The group

maintains controls designed to protect critical systems and collaborates with specialised partners and

authorities where relevant. Cybersecurity is integrated into risk management and IT governance

processes, and Skagi aims to continuously adapt its defences to technological developments, changing

threat landscapes and regulatory evolvements.

The Group seeks to proactively identify, assess, and mitigate cybersecurity risks through appropriate

technical and organisational measures, regular monitoring, and ongoing awareness and training initiatives

across all sta. For example, 16 educational videos and questionnaires on cyber security were presented

to employees during the year, with close to full participation across all subsidiaries. In 2025, the core focus

was on implementing the EU Digital Operational Resilience Act (DORA), which took eect in Iceland in the

beginning of 2026.

VÍS Insurance holds an ISO 27001:2022 certification for its information security management system. Both

Fossar and Íslensk verðbréf outsource the operations of information systems to VÍS Insurance as well as

matters relating to information security. Thereby, a harmonized and comprehensive framework for

managing these matters has been established across the Skagi Group. This arrangement strengthens the

Group’s infrastructure and simplifies governance. It further ensures that uniform requirements, procedure

and oversight now apply to all companies within the Group.

Consolidated Financial Statements 31 December 2025 97 All amounts are in thousands of ISK

2. Governance Factors

Maintaining a robust governance framework with clearly defined roles and procedures is highly material

for a financial conglomerate such as Skagi. Through eective governance structures, robust risk

management, and adherence to applicable laws and regulations, the Group supports transparent,

accountable, and responsible business practices.

Skagi received 77 points for the governance component in Reitun's ESG evaluation. General governance

and business ethics were considered to be in good order at the Company. Following the formalisation of

the Skagi Group, governance practices have continued to be updated in line with the Group's new

structure.

Skagi’s double materiality assessment revealed that the most material factors within governance are

compliance culture and regulatory compliance, sound business conduct, engagement with suppliers,

anti-bribery and anti-corruption processes and risk management. Further, Skagi can have a positive

impact by focusing on oering responsible services and products. Policies related to governance factors

are presented in the table on Policies and Internal Rules.

Skagi's governance goals primarily support SDG number 5 on Gender Equality, SDG number 8 on Decent

Work and Economic Growth and SDG number 12 on Responsible Consumption and Production.

Key Governance Objectives for 2026:

G-1 Business Conduct

The primary objective of Skagi's management is to ensure that the Group’s activities are consistently

conducted in compliance with laws and regulatory requirements, as well as adhering to responsible

business practices within the financial services sector. The interests of the Group’s clients remain the

guiding principle in all operations.

a. General Characteristics of Skagi’s Governance Structure

Good corporate governance provides the foundation for responsible management and sound

decision-making, and supports strong relations between shareholders, the Board of Directors,

management, employees and other stakeholders. As with other areas, there is a risk that shortcomings

may arise in this area. The potential impacts may be wide-ranging and significant but continued focus on

governance practices is intended to mitigate such risks and limit potential impacts.

In recent years, Skagi has undergone a significant transformation process, starting with the merger of VÍS

and Fossar in 2023, the decision to transfer the insurance operations in 2024, which was finalized at the

beginning of 2025, and the acquisition and merger of Íslensk Verðbréf and ÍV sjóðir hf. into the Skagi Group,

Consolidated Financial Statements 31 December 2025 98 All amounts are in thousands of ISK

which was fully completed at the end of the first quarter of 2025 with accounting eect from 1 January

2025. The year 2025 is therefore the first year of the Group in its current form.

Skagi’s has implemented a Corporate Governance Policy, aimed at ensuring eective management of the

Company and establishing clear responsibilities within the governance system. Further, Skagi has

implemented a General Ownership Policy and specific ownership policies for all subsidiaries as well,

outlining owner expectations, corporate governance of the subsidiary within the group and KPIs of the

subsidiaries.

Skagi adheres to the guidelines set forth by the Icelandic Chamber of Commerce, Nasdaq Iceland, and

the Confederation of Icelandic Enterprise. This adherence is in accordance with the seventh paragraph of

Article 54 of Act No. 161/2002 on Financial Undertakings and Article 9 of Act no. 100/2016 on Insurance

Activities. Skagi’s subsidiaries adhere to these guidelines according to the size and scope of its operations,

which leads to certain deviations.

In 2025, Skagi, VÍS and Fossar all received recognition for good corporate governance and were awarded

the designation Exemplary Company in Corporate Governance (Fyrirmyndarfyrirtæki í góðum

stjórnarháttum). The recognition is jointly granted by Stjórnvísi, the Icelandic Chamber of Commerce,

Nasdaq Iceland, and the Confederation of Icelandic Enterprise.

Skagi’s corporate governance is focused on clarifying the roles and responsibilities of the Group’s

management, both internally and towards shareholders, thereby enabling them to achieve their

objectives. At Skagi, strong emphasis is placed on the continuous development and strengthening of good

corporate governance within the company, ensuring that processes are aligned with internationally

recognised best-practice standards in the field of corporate governance.

Gender Representation on Boards

Skagi

Group

VÍS

Insurance

Fossar

Íslensk

verðbréf

Share of women on the board (compared to men) 40% 40% 60% 33%

Share of women serving as committee chairs (compared to men) 67% 0% 100% N/A

Board Independence

Is the CEO prohibited from serving as Chair of the Board?

Yes Yes Yes Yes

Share of independent board members 100% 60% 60% 100%

Incentive Compensation

Do executive managers receive formal incentive compensation

linked to sustainability performance?

Yes Yes Yes Yes

The Board of Skagi has appointed two subcommittees of the board; Remuneration Committee and Audit

Committee. At subsidiary level, VÍS Insurance and Fossar have board-level Risk Committees. Fossar

further has a representative on Skagi’s Audit Committee, elected by shareholders. Íslensk verðbréf does

not have any board committees. In addition, Skagi has a Nomination Committee appointed by

shareholders.

Not prohibited inter-group.

Consolidated Financial Statements 31 December 2025 99 All amounts are in thousands of ISK

In 2025, Skagi updated it remuneration policy where performance in sustainability related matters is now

incorporated into the bonus criteria under the employee incentive scheme.

Further information on the key aspects of Skagi’s governance can be found in the Corporate Governance

Statement, which is published alongside the Group's financial statements and is available on Skagi’s

website.

b. Compliance Culture and Risk Management

Emphasis on compliance reduces legal risk and reputational risk, and thereby the company’s operational

risk. Compliance with laws and regulations is not only a legal obligation but also a key factor in building

trust, both internally and externally. Various measures are taken to promote a strong compliance culture

within the company; the Group operates dedicated training programs, and these aspects are also

incorporated into the subsidiaries’ bonus scheme. Adherence to and monitoring of both risk and internal

policies is essential, as significant risks may arise in this area.

The Board of Skagi is responsible for ensuring that an eective internal control system is in place. Skagi’s

internal control framework is structured around three lines of defence, with the objective of ensuring

eiciency and clear allocation of responsibilities within the Group.

Skagi has in place a Compliance Policy, with the purpose of outlining how Skagi shall work to identify the

risk of non-compliance with its legal and regulatory obligations. This policy sets out in more detail the tasks

of the compliance function, as well as its responsibilities and powers. Skagi further has set a Risk

Management Policy. To assess, measure, and manage the issuer’s risk-taking and to ensure compliance

with applicable laws and regulations, the bank relies on various policies and other internal rules.

c. Regulatory Environment

Skagi is a financial conglomerate in the insurance sector and a mixed holding company in financial

activities according to Act No. 61/2017 on supplementary supervision of financial conglomerates. VÍS

Insurance has a license as an insurance company pursuant to Act No. 100/2016 on Insurance

Undertakings. Fossar has a license to operate as a credit institution according to Act No. 161/2002 on

Financial Undertakings. Fossar’s operating license extends to receipt of repayable funds from the public,

granting of credit, investment services and investment activities. Íslensk verðbréf operates on the basis of

an operating license pursuant to Act No. 116/2021 on Undertakings for Collective Investment in

transferable Securities (UCITS) and Act No. 45/2020 on Alternative Investment Fund Managers. Íslensk

verðréf is also authorised to provide asset management services.

The following operating licenses entail that companies within the Group are bound by extensive and

complex regulatory requirements, which can cause risk within the Skagi Group. For example, there could

be risk of regulatory oversight, inadequate implementation of new legislation or sta not having adequate

knowledge of regulatory requirements. This can cause financial risk such as risk of higher cost of capital

or risk of fines and other sanctions by supervisory authorities. As detailed above, there are various policies

and procedures in place within the Skagi Group to promote compliance with applicable laws and

regulations as well as sound risk-management throughout Skagi’s operations.

All regulatory changes that could aect Skagi’s operations are monitored closely, but a constantly evolving

legal framework, gold-plating of EU legislation in Icelandic law and new interpretations by authorities and

courts can have negative eects on Skagi’s operations.

d. Measures Against Bribery and Corruption

Consolidated Financial Statements 31 December 2025 100 All amounts are in thousands of ISK

To mitigate risk related to bribery and corruption, the Group has established comprehensive rules and

policies to address conﬂicts of interest. These rules outline the Group's methods for analysing, preventing,

and managing conﬂicts of interest within its operations. They also aim to ensure that objectivity of the

Group’s employees, board of each subsidiary and management. Additionally, subsidiaries have

implemented rules on incentive payments, gifts and rewards, employees' own trading in financial

instruments, separation of work areas, and employees' other employment, all of which serve to prevent

bribery and corruption. The Group has clear rules relating to inter-group transactions.

The Group has formal procedures in place for reporting misconduct and protecting whistleblowers.

Furthermore, all subsidiaries have instituted a comprehensive policy on measures against money

laundering and terrorist financing. The policies encompass risk assessment, internal rules, and

processes. It is the Group's clear stance to combat money laundering and the financing of terrorism,

ensuring that the Bank's activities are not misused for such purposes.

Skagi operates within the framework of the EU Market Abuse Regulation (MAR) as a listed company and

ensures that all required information is disclosed to the market in a timely, accurate, and transparent

manner, in accordance with the Group’s information policy and policy on treatment of insider information

and management trading. In addition, the Group’s banking subsidiary has adopted a dedicated policy on

the prevention of market abuse, setting out clear requirements, controls, and procedures to mitigate risks

related to insider dealing and market manipulation.

During the reporting period, there were no convictions or reported incidents related to violations of

applicable anti-bribery and anti-corruption laws.

e. Suppliers

In 2025, Skagi implemented a comprehensive framework covering its supplier base with the objective of

establishing a practical, risk-based approach for identifying and managing sustainability-related risks

across the value chain.

As part of this framework, Skagi established a group-wide Supplier Code of Conduct applicable to all

subsidiaries and published on their respective websites. The Code of Conduct sets out minimum

requirements for suppliers in relation to responsible business practices and sustainability, while also

encouraging alignment with Skagi’s own standards. It covers, among other matters:

 compliance with applicable laws and regulations,

 human rights, labour rights and non-discrimination,

 health and safety,

 environmental management and climate-related impacts,

 business ethics, anti-corruption and fair competition,

 governance, transparency and responsible sourcing, including expectations towards

subcontractors.

To support implementation and oversight, Skagi introduced a formal supplier assessment, where the

scope is based on specified thresholds. The assessment is conducted using a structured questionnaire

aligned with the Supplier Code of Conduct, Skagi’s sustainability policy and broader sustainability criteria.

The process is designed to assess suppliers’ compliance with Skagi’s minimum requirements and to

identify potential sustainability- and climate-related risks within the value chain. Assessment results are

recorded in Skagi’s quality management system and escalation mechanisms are in place if a supplier does

not meet Skagi’s standards.

Consolidated Financial Statements 31 December 2025 101 All amounts are in thousands of ISK

The Supplier Code of Conduct is attached to all new supplier contracts and incorporated into existing

agreements upon renewal, progressively embedding ESG requirements into Skagi’s contractual

relationships.

During 2025, Skagi completed supplier assessments covering approximately 90% of in-scope suppliers

and obtained formal confirmation of adherence to the Supplier Code of Conduct from around 50% of in-

scope suppliers. Assessments of the remaining in-scope suppliers and continued collection of formal

confirmations will take place in 2026. Skagi will also further develop its remediation, follow-up and risk

mitigation processes as part of its ongoing non-financial risk management and sustainability governance.

f. Responsible Products and Services

In 2021, Skagi became a member of UN PRI, the United Nations Principles for Responsible Investment.

The Group has significant inﬂuence though its asset portfolio. By taking sustainability factors into

consideration in its investments, the Company minimizes the risks associated with sustainability while at

the same time encouraging other companies to improve their business practices.

Fossar and Íslensk verðbréf have continued to advance the implementation of EU’s SFDR Regulation and

sustainability provisions of MiFID II, relating to sustainability in financial services, for example by

integrating sustainability risk into investment decision-making processes and investment advice.

3. Environmental Factors

Skagi prioritizes environmental and climate-related matters and seeks to support the transition towards a

carbon-neutral economy while taking environmental impacts into account in its own operations. The

outcome of the Group’s double materiality assessment was that, among environmental sustainability

matters, E1 – Climate change was assessed as material. Policies related to environmental factors are

presented in the table on Policies and Internal Rules.

Skagi received 84 points for the environmental component in Reitun's ESG evaluation. In assessing

environmental factors, primary emphasis is placed on VÍS, as this is where the most significant

environmental impacts of the Group occur.

Skagi's environmental goals primarily support SDG number 12 on Responsible Consumption and

Production as well as SDG number 13 on Climate Action.

Key Environmental Objectives for 2026:

E-1 Climate Change

Consolidated Financial Statements 31 December 2025 102 All amounts are in thousands of ISK

a. Governance of Environmental Risk

Skagi is exposed to climate-related risks, which are divided into physical risks, which are further classified

as acute or chronic risks, and transition risks. Physical risks can for example arise as increased claims and

losses due to more frequent and severe extreme weather events, as well as gradual, long-term changes in

climate patterns that aect insured assets, operations and collateral values. Transition risks can arise as

greenwashing and broader regulatory, legal, market and technological developments associated with the

move towards a low-carbon economy, which may impact Skagi’s business model, product oering, asset

values and reputation.

The Board of Directors and management of Skagi are actively involved in climate-related matters

according to the Group’s formal sustainability policy. Skagi has not completed a formal climate-related

risk assessment at group-level but intends to conduct such assessment in year 2026. However, insurance

companies are subject to a strict regulatory framework regarding risk assessment and disclosure, and VÍS

therefore carries out a regular Own Risk and Solvency Assessment (ORSA). VÍS prepares an ORSA report

on an annual basis, which is submitted to the Board of Directors and to the Financial Supervisory Authority

of the Central Bank of Iceland. Climate-related risk assessment forms part of this report and covers both

VÍS’s insurance operations and its investment portfolio.

There is a risk that VÍS may experience increased claims severity or higher claims frequency as a result of

extreme weather events (physical risk) attributable to climate change. In addition, there is a risk that

climate change may have a negative impact on the return of the investment portfolio if climate-related

considerations are not taken into account in investment decisions (transition risk). The conclusion of VÍS’s

assessment of climate-related risks is that none of the identified risk factors are considered material. That

said, the majority of losses attributable to natural disasters caused by climate change fall under the

responsibility of the Icelandic Natural Catastrophe Insurance, and therefore do not constitute a significant

part of the Company’s risk exposure.

Fossar have initiated work to integrate ESG risk into the business model, taking into account the scale of

operations, and to assess it in connection with the assessment of other risk factors in the activities,

through traditional types of financial risk.

In 2026, the Group aims to conduct a group-wide risk assessment, extending from VÍS Insurance to all

subsidiaries. Further, opportunities may arise with the transition to a more climate resilient economy, such

as with increased demand for green products. Skagi subsidiaries have generated positive climate impacts

in this regard. For example, Fossar has been the leading advisor in the domestic green bond market in the

recent years. VÍS oers the product Ökuvísir, which encourages customers to drive responsibly. The aim

of Ökuvísir is to reduce the number of car accidents and lower greenhouse gas emissions, and the product

therefore delivers both environmental and social benefits.

b. Emissions from Own Operations and Carbon Osetting

Skagi places importance on minimizing the negative environmental impact and greenhouse gas emissions

from its activities. The Group aims to analyze the environmental impact of its operations and propose

actions to reduce this impact. Although a formal greenhouse gas emissions target has not yet been

established by the Group, Skagi measures and discloses statistics on its own greenhouse gas emissions

in accordance with a recognised methodology. The statistics cover both direct and indirect emissions from

the Group’s operations. In 2026, Skagi saw a dramatic decrease in emissions under Scope 1, and slight

increases under Scope 2 and 3. In 2026, Skagi aims to implement measurable target for decreasing

emissions on a group-wide basis.

Consolidated Financial Statements 31 December 2025 103 All amounts are in thousands of ISK

At Skagi's workplace, waste is sorted and recycled, and charging stations are accessible for employees

who commute in electric cars. Employees are encouraged to utilize local services as much as possible.

Skagi’s workplace is almost entirely electronic in regards of minimal paper usage.

Digitalisation at VÍS has proved to have positive environmental eects. A factor like increased self service

solutions which reduces oice visits has been assessed to reduce driven kilometres to the oice of about

200,000 km per year. All electronic process and documents also contribute environmentally by heavily

reduced paper usage.

VÍS works constantly on various prevention operations both through marketing and with collaboration and

risk assessment at companies. This part of the business contributes to the environmental factors by

reducing car and property claims which carry environmental costs. This is hard to measure but clearly a

factor worth mentioning, along with the beneficial factors on the society with fewer accidents and bodily

harm.

Continued good results were achieved during the year in increasing electronic and paperless transactions

to reduce paper consumption and reduce carbon emissions from employee and customer travel, whether

through increased electronic claim notifications, video calls to assess water damage or increased sales

through the vastly improved VÍS online store. During the year, VÍS increased its focus on providing more

sustainable options for consumers when it comes to shopping for insurance online. VÍS customers can

now buy insurance online in a matter of minutes, which saves time while also providing increased

transparency and convenience.

Figure 4: Overview of GHG Protocol Scopes and Emissions Across the Value Chain

For the fifth year in a row, Skagi oset emissions from operations of the Group with verified units. In 2025,

Skagi’s total greenhouse gas emissions amounted to 260.5 tCO₂e (including Scope 1, Scope 2 and

selected Scope 3 categories). To mitigate Skagi’s climate impact, 261 removal units were purchased

through Carbonmark, a global carbon credits marketplace, to support certified and registered projects by

the International Carbon Registry (ICR). Projects were chosen which support certain set of United Nations

Sustainable Development Goals (SDGs).

In parallel, Skagi procured approximately 82 Guarantees of Origin (GOs) to cover 100% of its annual

electricity consumption. By doing so, Skagi ensures that all reported electricity use is backed by certified

renewable energy on a market-based basis, thereby reducing Scope 2 emissions from electricity to zero.

Consolidated Financial Statements 31 December 2025 104 All amounts are in thousands of ISK

The combination of renewable electricity procurement and carbon removals reﬂects Skagi’s approach of

prioritizing emission reductions in its own operations and then compensating for residual emissions

through high-quality climate projects.

Total Greenhouse Gas Emissions

Unit Change 2025 2024

Scope 1 – Fuel tCO₂e

↓ -52%

19,4 40,8

Scope 2 – Electricity & Heating

tCO₂e

↑ 12%

14,9 13,3

Scope 3 – Other

tCO₂e

↑ 11%

228,5 205,1

Total Gross Emissions tCO₂e

↑ 1%

262,8 259,2

Effect of GO’s

tCO₂e -2,3 -2,4

Total net Emissions

tCO₂e

↑ 1%

260,5 256,8

Carbon Credits Offsets tCO₂e -261,0 -257,0

Net GHG Emissions (after offsets) tCO₂e

−

0,0 0,0

Energy Consumption

Energy Consumption by Type

Unit Change 2025 2024

Direct

Fuels

MWh

↓ -48 %

75,5 4% 146,3 9%

Indirect

–

Electricity & Heating

MWh

↑ 34 %

1973,7 96% 1463,0 91%

Total Energy Consumption

MWh

↑ 27%

2049,2 100% 1609,3 100%

GHG Emission Intensity

Unit Change 2025 2024

Emissions Intensity per Revenue

All Scopes

kgCO

₂e /

ISKm

−

7,4 7,4

Emissions Intensity per Revenue

of which Scopes 1-2

kgCO

₂e /

ISKm

↓ 37 %

1,0 1,5

Emissions Intensity per Employee

All Scopes

tCO₂e

−

1,1 1,1

Emissions Intensity per Employee

of which Scopes 1-2

tCO₂e

↓ 37 %

0,1 0,2

Locaon-Based emissions for electricity and heang.

Other indirect GHG emissions including purchased goods & services, employee commung, business travel and waste.

Eﬀects of Guarantees of Origins (GO’s) for Market-Based Electricity.

Total net emissions (tCO2) post oﬀseng by landlord. Total net emissions are then oﬀset by Skagi (260,5 tCO2) in year

2025 with purchase of 261 removal units.

Consolidated Financial Statements 31 December 2025 105 All amounts are in thousands of ISK

c. Emissions Related to Claims

A large share of VÍS’s emissions arises in connection with claims. Emissions specifically related to claims

are not measured separately, but VÍS’s Scope 3 emissions have increased year-on-year. Emissions

associated with claims handling, such as vehicle repairs, spare parts and waste, fall under such indirect

emissions. Although VÍS does not perform these repairs itself, the company inﬂuences how they are

carried out through its policies, terms and conditions, and choice of partners.

VÍS has undertaken various measures to generate positive impacts in this area. VÍS emphasizes accident

prevention as well as setting specific requirements for the disposal of damaged goods. Ökuvísir is another

example of a product aimed at having a positive impact in this category, as the project also aims to reduce

claims. There is likewise an opportunity to promote lower emissions by encouraging repairs rather than

replacement.

d. Emissions Related to Investments

Emissions associated with investments are not yet measured separately by the Group. Skagi recognizes

the importance of addressing indirect (financed) emissions from its asset portfolio, which constitutes the

largest emissions category (scope 3). Skagi has not yet initiated such an assessment but intends to explore

this further in the near term.

Íslensk verðbréf and Fossar follow EU’s SFDR Regulation, which is aimed promoting transparency within

the financial market for responsible and sustainable investments. Both subsidiaries have implemented a

policy on how sustainability risk, whether material or likely to be material, is integrated into its investment

decision-making process and investment advice. Íslensk verðbréf, further follows a responsible

investment policy, integrating environmental and social factors into its asset management investment

process.

E-5 Circular Economy

a. Reuse in claims handling and repairs

The materiality factor regarding a circular economy is most applicable to VÍS Insurance, due to its

operations as an insurance company. By placing greater emphasis on the circular economy, it is possible

to reduce waste, shorten supply chains, lower emissions and decrease the use of raw materials. The

biggest impact in this field is related to damaged cars and spare parts, given their portion in claims at VÍS.

VÍS has conducted auctions for decades and sold more than 1,000 damaged cars each year at auctions

where the cars are either repaired or disassembled to give spare parts a second life.

It is important for VÍS contribute to the circular economy and in all agreements with auto body repair shops

related to car claims and construction contractors related to property claims, it is especially stated that

they are expected to support the circular economy by reusing and repairing whatever is possible and in

accordance with industry standards. This applies e.g. to windshields and plastic repairs for cars. It is also

stated in those agreements that disposal of waste should be done in an environmentally friendly way. VÍS

has collaborated in special projects related to the circular economy and did so in 2024 with a company

which actively focused on increasing the use of used spare parts for damaged cars. That company stopped

operating in 2025 so as did the project. VÍS looks at such projects on ad hoc basis and keeps an open eye

for such collaboration.

VÍS emphasises repairing vehicles as much as possible instead of replacing parts. The proportion of

plastic and car window repairs is lower in Iceland than in comparison countries. VÍS has the goal of

Consolidated Financial Statements 31 December 2025 106 All amounts are in thousands of ISK

increasing the percentage of repairs instead of parts being replaced. The ratio of windshield repairs to

windshield replacements grew from 19% to 20% between 2024-2025, and the aim is to get closer to 30%.

For comparison the ratio was 10% in 2019. Estimated savings in carbon emissions are about 43.5 kgCO2

for each windshield that is repaired instead of replaced so 10% increase saves around 30 tons of carbon

emissions.

Minimum safeguards

Some of the criteria for environmentally sustainable economic activities concern social factors and

governance, also known as minimum safeguards. The minimum safeguards set out in the Taxonomy

Regulation refer to the processes that ensure minimum compliance with the standards of the Organization

for Economic Co-operation and Development (OECD) for multinational companies and of the United

Nations for human rights and business. They are intended to ensure that economic activities meet certain

minimum standards when it comes to human rights, corruption and bribery, tax matters and competition

matters.

Human rights

Skagi operates in accordance with applicable laws and regulations and respects human rights in all its

activities. The Group has a policy on qualifications, competence and diversity, equality policy and

occupational health and safety policy. Skagi’s equality and equal pay policy clearly states that Skagi is a

workplace where gender-based and sexual harassment, violence or bullying are not tolerated. Within the

Group, there is a clear channel for issues related to bullying and sexual harassment, and employees are

given clear information about the channels of communication and the progress of such cases. At Skagi, it

is understood that it is the joint task of all employees to follow the Group's equality and equal pay policy.

Each employee must be careful to show respect, openness and discretion in their dealings with others. It

is also the responsibility of each employee to be aware of their environment and their moral duty to act if

they witness what could be considered an EKKO incident (EKKO is an Icelandic abbreviation for bullying,

sexual harassment, gender-based harassment and violence).

The Group has a procedure in place for the handling of reports of misconduct and the protection of

whistleblowers in accordance with the Act on the Protection of Whistleblowers no. 40/2020. The

procedure is available on the website of subsidiaries, as required. The purpose of the procedure is to

document the method for handling and reporting alleged misconduct in relation to the Group's operations

and the protection of whistleblowers. The Compliance Oicer is responsible for ensuring that adequate

communication channels are in place for reporting alleged misconduct. On the websites of Skagi’s

subsidiaries, it is possible to submit a notification of potential misconduct in Skagi's activities. Notifiers

are encouraged to submit a notification under their own name, but the system also oers the ability to

send anonymous notifications.

The Group has implemented and ensured compliance with the Act on Data Protection and the Processing

of Personal Data. Skagi's Board of Directors has set a policy on the handling of personal data and a Data

Protection Oicer has been appointed for each subsidiary within the Group. Procedures have been

established and processes defined to ensure careful handling of personal data, and a committee for

information security and data protection operates within the Group. On the Company's and subsidiaries’

websites, customers can find information in the Company's Privacy Policy on how the Company processes

personal data and how they can exercise their rights under the Data Protection Act.

The Group has not violated any laws or rules imposed by regulators on human rights.

Corruption/Bribery

Skagi engages in honest and responsible business practices where any form of bribery, corruption,

criminal activity and money laundering is neither practiced nor tolerated. The Group has established and

Consolidated Financial Statements 31 December 2025 107 All amounts are in thousands of ISK

implemented internal processes, codes of conduct and procedures around compliance and has taken

measures to identify and prevent bribery. Skagi has established a Code of Conduct which all new

employees airm upon commencing work at the Company. The Board reviews and confirms the code of

ethics each year.

The Group has established a board-level policy on internal control and defined the internal control process

and procedures for the implementation of internal control. In addition, the Group has established a policy

on compliance that describes the way in which work should be done to identify the risk of failure by the

Group to fulfil obligations according to laws and regulations.

The Group has reporting channels for reporting possible misconduct, including acceptance of bribery, and

has a misconduct team whose role it is to receive and investigate reports received. All subsidiaries have

reporting channels for misconduct available on their website. Procedures have been established for perks

received by employees from customers, partners and suppliers, and employees must report all gifts, perks

or invitations.

The boards of all subsidiaries of the Group have established a policy on measures against money

laundering and the financing of terrorism, and procedures have been established based on the policy. The

subsidiaries have appointed a person in charge of measures against money laundering who are

responsible for the enforcement of the laws and regulations on measures against money laundering and

the financing of terrorism, who handle notifications of suspicious transactions and funds.

The Group has not violated any laws or rules imposed by regulators on corruption and bribery.

Taxes

Skagi does not have a defined tax policy that is set by the Board and published publicly. However, tax

procedures are well defined at the Group with the involvement of senior management. The Group CFO is

the person responsible, while the CFO of subsidiaries are responsible for following through on paying taxes

with the help of tax experts and the payment of public dues. The Group receives services from external

consultants in the field of tax matters who assist with calculation and review before tax returns are filed.

The Group's position is clear on the issue, and the Group complies with applicable laws and regulations in

every respect. The Group strives to set an example here as elsewhere.

The Group has reporting channels for reporting possible misconduct, including inappropriate behaviour

or actions related to taxes, and has a misconduct team whose role it is to receive and investigate reports

received. All subsidiaries have reporting channels available on their website.

The Group has not violated any laws or rules imposed by regulators on taxes.

Competition

Competition rules play an important role in a free market, as they are intended to ensure that consumers

and society as a whole benefit from the eicient use of production resources and thereby from active

competition. Competition laws are part of the regulatory environment in which the Group operates at any

given time. It is therefore a fundamental prerequisite for the Group's operations and structure to comply

with the rules of the Competition Act. The Board of VÍS has established a policy on competition matters

which is reviewed annually. Based on the policy, VÍS has also published a manual on competition rules for

employees. The Group attaches great importance to regular education of employees about competition

rules and that employees are well informed about the laws and regulations that apply to competition

matters. It is emphasized that competition law considerations are always considered in decision-making.

The CEO of Skagi and subsidiaries is responsible for the implementation of the policy on competition

matters and must ensure that appropriate measures are taken to ensure that it is followed, while the

Consolidated Financial Statements 31 December 2025 108 All amounts are in thousands of ISK

relevant General Counsel is the supervisor of the policy and the relevant Compliance Oicer is

responsible for ensuring that employees receive appropriate training on competition matters while

monitoring compliance with the policy.

The Group has not violated any laws or rules imposed by regulators on competition matters.

Consolidated Financial Statements 31 December 2025 109 All amounts are in thousands of ISK

Appendix 2

EU Taxonomy Regulation

On 1 June 2023, Regulation (EU) 2020/852 on a framework for sustainable investment was transposed into

Icelandic law through Act no. 25/2023 on Sustainable Financial Disclosure and Taxonomy for Sustainable

Investments. Companies that are subject to the obligation of Article 66d of the Annual Accounts Act no.

3/2006 on non-financial disclosure must now also provide disclosure according to the requirements of the

aforementioned regulation, also known as the EU Taxonomy Regulation. This includes VÍS and Fossar.

VÍS Insurance operations and insurance investments

According to Article 3 of the EU Taxonomy Regulation, an economic activity that qualifies as

environmentally sustainable must contribute substantially to one or more of the environmental objectives

set out in the Regulation while at the same time not significantly harm any other environmental objectives.

The activity shall also be carried out in compliance with minimum safeguards and technical screening

criteria. The technical screening criteria for non-life insurance: underwriting of climate-related perils, is

defined in section 10.1 of Annex II to Commission Delegated Regulation (EU) 2021/2139. In order to meet

this criteria, VÍS will continue to carry out a detailed analysis of its activities and make appropriate

improvements as required. The Company is committed to continue its work related to the EU Taxonomy

Regulation.

Key performance indicators are set out in Annex IX and XI to Commission Delegated Regulation (EU)

2021/2178.

In line with the requirements of Article 8 of the EU Taxonomy Regulation and the accompanying Delegated

Regulation (EU) 2021/2178, the company is obligated to report on specific key performance indicators

(KPIs). These indicators reﬂect both the share of the company’s investment portfolio that falls within the

scope of the Taxonomy Regulation and the portion of those investments that meet the criteria for

Taxonomy alignment.

The disclosure relies solely on information publicly disclosed by the entities in which the company has

invested, as required by the regulation. Icelandic companies subject to these reporting obligations

provided information on Taxonomy eligibility and alignment in their 2023 annual financial statements,

including details on the eligibility of their business activities under the Taxonomy framework and the extent

to which those activities align with its criteria.

Economic a ctivities (1)

Absolute

premiums,

year 2025 (2)

Proportion

pr emiums,

year 2025

(3)

Proportion

premiums,

year 2024 (4)

Climate

change

mitigation

(5)

Water and

marine

resour ces

(6)

Circular

economy

(7)

Pollution

(8)

Biodiversity

and

ecosystems

(9)

Minimum

sa feguards

(10)

Currency % % Y/N Y/N Y/N Y/N Y/N Y/N

A.1. Non-life insurance and reinsurance

underwriting Taxonomy-ali gned activi ties

(environmentally sustai nable)

A.1.1. Of which reinsured

A.1.2. Of which stemming from reinsurance activity

A.1.2.1. Of which reinsured (retrocession)

A.2. Non-life insurance and reinsurance

underwriting Taxonomy-eligible but not

environmentally sustainable activities (not

Taxonomy-aligned activities)

29.510.099 92% 26.999.162

B. Non-life insurance and reinsurance

underwriting Taxonomy-non-eligible a ctivities

2.449.287 8% 2.182.918

Total (A.1 + A.2 +B)

31.959.386 100% 29.182.080

Substantia l contribution to climate change

adaptation

DNSH (Do No Significant Harm)

Consolidated Financial Statements 31 December 2025 110 All amounts are in thousands of ISK

The methodology for calculating the KPIs is based on the company’s total investment portfolio, with

specific exclusions applied to ensure compliance with regulatory standards. These exclusions include:

- Holdings in sovereign debt, exposures to central banks, and investments in supranational

organizations.

- Investments in entities not required to disclose non-financial information under Articles 19a and

29a of Directive 2013/34/EU.

It is important to note that experience with EU Taxonomy reporting is still evolving, particularly regarding

the availability and consistency of data from issuers, which may aect the completeness and accuracy of

the company’s disclosures. Significant data gaps remain, as a number of companies that are required to

report under the Taxonomy Regulation have either not provided the necessary disclosures or have done so

inconsistently or incompletely.

The proportion of the insurance or reinsurance undertaking’s investments that are directed at

funding, or are associated with, Taxonomy-aligned in relation to total investments

1,6% Turnover-based: 557.463.848

1,6% Capital expenditures-based: 554.602.778

74% Coverage: 34.702.947.500

The weighted average value of all the investments of insurance or

reinsurance undertakings that are directed at funding, or are associated

with Taxonomy-aligned economic activities relative to the value of total

assets covered by the KPI, with following weights for investments in

undertakings per below:

The weighted average value of all the investments of insurance or

reinsurance undertakings that are directed at funding, or are

associated with Taxonomy-aligned economic activities, with following

weights for investments in undertakings per below:

Turnover-based:

Capital expenditures-based:

The percentage of assets covered by the KPI relative to total investments

of insurance or reinsurance undertakings (total AuM). Excluding

investments in sovereign entities.

The weighted average value of all the investments of insurance or

reinsurance undertakings that are directed at funding, or are associated

with Taxonomy-aligned economic activities, with following weights for

investments in undertakings per below:

Coverage ratio:

Consolidated Financial Statements 31 December 2025 111 All amounts are in thousands of ISK

The value in monetary amounts of derivatives. 0

27% For non financial undertakings: 9.289.915.173

28% For financial undertakings: 9.553.555.024

0% For non financial undertakings: 37.606.195

4% For financial undertakings: 1.250.056.578

16% For non financial undertakings: 7.423.720.898

15% For financial undertakings: 7.148.093.632

0% Value of exposures to other counterparties: 0

1,2%

Value of insurance or reinsurance undertaking’s

investments other than investments held in respect

of life insurance contracts where the investment

risk is borne by the policy holders, that are directed

at funding, or are associated with, Taxonomy-aligned

economic activities : 557.463.848

11,1%

Value of all the investments that are funding

󶂢

economic acvies that are not Taxonomy eligible:

3.849.906.850

8,7%

The value of all the investments that are funding

Taxonomy-eligible economic activities, but not

Taxonomy-aligned relative to the value of total

assets covered by the KPI:

3.016.350.200

󶂢

The proporon of exposures to financial and non financial undertakings

subject to Articles 19a and 29a of Directive 2013/34/EU over total assets

covered by the KPI:

󶂢

Value of exposures to financial and non financial undertakings subject to

Articles 19a and 29a of Directive 2013/34/EU:

Additional, complementary disclosures: breakdown of denominator of the KPI

The percentage of derivatives relative to total assets covered by

the KPI.

󶂢

The proporon of exposures to financial and non financial undertakings not

subject to Articles 19a and 29a of Directive 2013/34/EU over total assets

covered by the KPI:

󶂢

Value of exposures to financial and non financial undertakings not

subject to Articles 19a and 29a of Directive 2013/34/EU:

For non financial undertakings:

For financial undertakings:

󶂢

The proporon of exposures to financial and non financial undertakings

from non-EU countries not subject to Articles 19a and 29a of Directive

2013/34/EU over total assets covered by the KPI:

󶂢

Value of exposures to financial and non financial undertakings from non-

EU countries not subject to Articles 19a and 29a of Directive

2013/34/EU:

For non financial undertakings:

For financial undertakings:

For non financial undertakings:

For financial undertakings:

The proportion of exposures to other counterparties over total

assets covered by the KPI:

The proportion of the insurance or reinsurance

undertaking’s investments other than investments held in

respect of life insurance contracts where the investment risk is

borne by the policy holders, that are directed at funding, or are

associated with, Taxonomy-aligned economic activities:

The value of all the investments that are funding

󶂢

economic acvies that are not Taxonomy eligible relave to

the value of total assets covered by the KPI:

The value of all the investments that are funding Taxonomy-

eligible economic activities, but not Taxonomy-aligned relative

to the value of total assets covered by the KPI:

1,6% Turnover-based: 557.463.848

1,6% Capital expenditures-based: 554.602.778

0,0% Turnover-based: 0

0,0% Capital expenditures-based: 0

1,6% Turnover-based: 557.463.848

1,6% Capital expenditures-based: 554.602.778

0% Turnover-based: 0

0% Capital expenditures-based: 0

Turnover-based:

Additional, complementary disclosures: breakdown of numerator of the KPI

The proportion of Taxonomy-aligned exposures to financial and non-financial

undertakings subject to Articles 19a and 29a of Directive 2013/34/EU over

total assets covered by the KPI:

Value of Taxonomy-aligned exposures to financial and non-financial

undertakings subject to Articles 19a and 29a of Directive

For non financial undertakings: For non financial undertakings:

Capital expenditures-based:

For financial undertakings: For financial undertakings:

Turnover-based:

Capital expenditures-based:

The proportion of the insurance or reinsurance undertaking’s investments

other than investments held in respect of life insurance contracts where

the

investment risk is borne by the policy holders, that are directed at funding,

or are associated with, Taxonomy-aligned:

Value of insurance or reinsurance undertaking’s investments other than

investments held in respect of life insurance contracts where the

investment risk is borne by the policy holders, that are directed at

funding, or are associated with, Taxonomy-aligned:

Turnover-based:

Capital expenditures-based:

The proportion of Taxonomy-aligned exposures to other counterparties in

over total assets covered by the KPI:

Value of Taxonomy-aligned exposures to other counterparties over total

assets covered by the KPI:

Turnover-based:

Consolidated Financial Statements 31 December 2025 112 All amounts are in thousands of ISK

Fossar fjárfestingarbanki hf. - financial services operations

Companies in the financial services industry are required to disclose information on environmentally

sustainable assets, which is presented in a key performance indicator on the green asset ratio (GAR). The

indicator shows the proportion of the Fossar bank's assets that it finances and invests in economic

activities that fall under the taxonomy, i.e. which are considered environmentally sustainable according to

Article 3 of the EU Taxonomy Regulation.

When determining the extent to which the institution’s exposures are Taxonomy-eligible or Taxonomy-

aligned, the disclosure relies exclusively on information publicly disclosed by counterparties, as

mandated by the regulation. This applies to both financial and non-financial undertakings that fall within

the scope of the Corporate Sustainability Reporting Directive (CSRD) and related EU regulations.

However, data availability challenges persist, particularly regarding Taxonomy-aligned activities:

- For non-financial undertakings, significant data gaps remain, as a number of companies that are

required to report under the Taxonomy Regulation have either not provided the necessary

disclosures or have done so inconsistently or incompletely.

Key performance indicators are presented in accordance with Annex V and VI to Commission Delegated

Regulation (EU) 2021/2178.

The calculation of key performance indicators (KPIs) is based on the institution’s total assets covered by

the KPI, with specific exclusions to maintain consistency with regulatory guidelines. The following are

excluded from the calculations:

- Exposures to sovereign entities, central banks, and supranational organizations,

- Exposures to entities not required to disclose non-financial information under Articles 19a and 29a

of Directive 2013/34/EU.

The data used for the KPI calculations, including the determination of Taxonomy eligibility and alignment,

is sourced from the public 2024 financial reports of counterparties. Given the evolving nature of EU

Taxonomy reporting, particularly in relation to the consistency and completeness of data disclosures,

there may be limitations in the accuracy and scope of the reported figures.

As stated before, significant data gaps remain, as some counterparties required to report under the

Taxonomy Regulation have either not provided the necessary information or have done so in an incomplete

or inconsistent manner. This impacts the institution’s ability to fully capture Taxonomy alignment in its

investment and lending activities.

Turnover: 100% Transitional activities 1%, 1%

CapEx: 100%

Enabling activities:

20,5%, 17%

Turnover: 0%

Enabling activities:

0%,0%

CapEx: 0%

Turnover: 0%

Enabling activities:

0%,0%

CapEx: 0%

Turnover: 0%

Enabling activities:

0%,0%

CapEx: 0%

Turnover: 0%

Enabling activities:

0%,0%

CapEx: 0%

Turnover: 0%

Enabling activities:

0%,0%

CapEx: 0%

(5) Pollution prevention and control

(6) The protection and restoration of

biodiversity and ecosystems

Breakdown of the numerator of the KPI per environmental objective

(1) Climate change mitigation

(2) Climate change adaptation

(3) The sustainable use and protection of

water and marine resources

(4) The transition to a circular economy

Consolidated Financial Statements 31 December 2025 113 All amounts are in thousands of ISK

0. Summary of key performance indicators that credit institutions are required to disclose according to

Article 8 of the EU Taxonomy Regulation

1. Assets for the calculation of the green asset ratio

Additionally, columns b-aa are excluded from this report because the disclosure is limited to Taxonomy

alignment related to climate change mitigation. No reporting has been conducted on other environmental

objectives.

Furthermore, certain rows are not included in the disclosure because no investments were made by

Fossar in the corresponding asset categories. As a result, these sections are not applicable to the bank’s

asset composition.

These exclusions reﬂect both the evolving nature of EU Taxonomy reporting and the current structure of

Fossar’s investment activities.

Total environmentally

sustainable assets (turnover)

Total environmentally

sustainable assets (CAPEX) KPI**** KPI*****

% coverage (over total assets)***

% of assets excluded from

the numerator of the GAR

(Article 7(2) and (3) and

Section 1.1.2. of Annex V)

% of assets excluded from the

denominator of the GAR

(Article 7(1) and Section 1.2.4

of Annex V)

Main KPI Green asset ratio (GAR) stock 78.905.518 81.824.880 1,45% 1,50% 75% 54% 25%

Total environmentally sustainable activities

KPI KPI % coverage (over total assets)

% of assets excluded from

the numerator of the GAR

(Article 7(2) and (3) and

Section 1.1.2. of Annex V)

% of assets excluded from the

denominator of the GAR

(Article 7(1) and Section 1.2.4

of Annex V)

Additional KPIs GAR (flow) 76.655.573 78.340.310 1,41% 1,44%

Trading book* N/A N/A N/A

Financial guarantees N/A N/A N/A

Assets under management N/A N/A N/A

Fees and commissions income** N/A N/A N/A

a b c d e f ab ac ad ae af ag ah ai aj ak al bg bh bi bj bk

Of which Use of

Proceeds

Of which

transitional

Of which enabling

Of which Use

of Proceeds

Of which

transitional

Of which

enabling

Of which Use

of Proceeds

Of which

transitional

Of which

enabling

Of which Use

of Proceeds

Of which

transitional

Of which

enabling

GAR - Covered assets in bot h numerator and denominator

Loans and advances, debt securities and equity instruments not HfT

eligible for GAR calculation

5.441.879.770 52.093.642 76.655.573 766.556 13.798.003 5.441.879.770 52.093.642 76.655.573 766.556 5.401.176.893

2 Financial undertakings 1.902.250.761 2.400.949.870

3 Credit institutions 1.902.250.761 2.400.949.870

4 Loans and advances

5 D ebt securities, including UoP 447.572.367 215.724.755

6 Equity instruments 1.454.678.394 2.185.225.115

20 Non-financial undertakings 3.539.629.009 52.093.642 76.655.573 3.000.227.023 1.403.102.550 1.288.224 1.242.216 1.403.102.550 1.288.224 1.242.216

21 Loans and advances 3.000.227.023 1.403.102.550 1.288.224 1.242.216 1.403.102.550 1.288.224 1.242.216

22 Debt securities, including UoP 2.086.711.239 76.655.573 766.556 13.798.003

23 Equity instruments 1.452.917.770 52.093.642 3.000.227.023 1.403.102.550 1.288.224 1.242.216 1.403.102.550 1.288.224 1.242.216

24 Households -

25 of which loans collateralised by residential immovable property -

26 of which building r enovation loans -

27 of which motor vehicle loans -

28 Local governments financing -

29 Housing financing -

30 Other local government fin ancing -

Collateral obtained by taking possession: residential and

commercial immovable properties

Assets excluded from the numerator for GAR calculation (covered in

the denominator)

13.672.401.954

48 Total GAR assets 5.441.879.770 52.093.642 76.655.573 766.556 13.798.003 5.441.879.770 52.093.642 76.655.573 766.556 5.401.176.893 1.403.102.550 1.288.224 1.242.216 1.403.102.550 1.288.224 1.242.216

49 Assets not covered for GAR calculation 6.434.320.968

50 Central governments and Supranational issuers 6.429.804.988

51 Central banks exposure

52 Trading book 4.515.980

53 Total assets 25.548.602.692 21.781.096.000

Climate Change Mitigation (CCM)

Of which towar ds taxonomy relevant sectors (Taxonomy-eligible)

Of which environmentally sustainable (Taxonomy-aligned)

ISK

Of which towa rds taxonomy relevant s ectors (Taxonomy-eligible)

Of which environmentally sustainable (Taxonomy-aligned)

Total [gross]

carrying amount

Disclosure reference date 2024Disclosure reference date 2025

Total [gross] carrying amount

Of which environmentally sustainable (Taxonomy-aligned) Of which environmentally sustainable (Taxonomy-aligned)

Climate Change Mitigation (CCM) TOTAL (CCM + CCA + WTR + CE + PPC + BIO) TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

Of which towa rds taxonomy relevant s ectors (Taxonomy-eligible) Of which towards taxonomy relevant sectors (Taxonomy-eligible)

Consolidated Financial Statements 31 December 2025 114 All amounts are in thousands of ISK

2. Information on the green asset ratio by sector

a b c d y z aa ab

ISK

Of which

environmentally

sustainable (CCM)

ISK

Of which

environmentally

sustainable (CCM)

ISK

Of which

environmentally

sustainable (CCM

+ CCA + WTR + CE

+ PPC + BIO)

ISK

Of which

environmentally

sustainable (CCM +

CCA + WTR + CE +

PPC + BIO)

Manufacture of pharmaceutical preparations (21.20)

11.755.200 11.755.200

2 Other monetary intermediation (64.19) 1.778.095.522 1.778.095.522

3 Other non-specialised retail sale (47.12) 73.946.196 73.946.196

Non-specialised retail sale of predominately food,

beverages or tobacco (47.11)

82.495.998 82.495.998

Activities of holding companies and financing conduits

(64.2)

2.026.934.378 2.026.934.378

Other financial service activities, except insurance and

pension funding n.e.c. (64.99)

25.582.471 25.582.471

Telecommunication reselling activities and intermediation

service activities for telecommunication (61.20)

131.400.000 131.400.000

9 Retail sale of automotive fuel (47.30) 91.850.000 91.850.000

10 Steam and air conditioning supply (35.30) 84.236.893 76.655.573 84.236.893 76.655.573

11 Other credit granting (64.92) 124.155.239 124.155.239

12 Manufacture of soft drinks and bottled waters (11.07) 7.082.994 7.082.994

Breakdown by sector - NACE 4 digits level (code and label)

[Gross] carrying amount [Gross] carrying amount

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

Non-Financial corporates (Subject to SMEs and other NFC not subject to

Non-Financial corporates (Subject to

SMEs and other NFC not subject to

Climate Change Mitigation (CCM)

[Gross] carrying amount [Gross] carrying amount

a b c d y z aa ab

ISK

Of which

environmentally

sustainable (CCM)

ISK

Of which

environmentally

sustainable (CCM)

ISK

Of which

environmentally

sustainable (CCM

+ CCA + WTR + CE

+ PPC + BIO)

ISK

Of which

environmentally

sustainable (CCM +

CCA + WTR + CE +

PPC + BIO)

Manufacture of pharmaceutical preparations (21.20)

11.755.200 11.755.200

2 Other monetary intermediation (64.19) 1.778.095.522 1.778.095.522

3 Other non-specialised retail sale (47.12) 73.946.196 73.946.196

Non-specialised retail sale of predominately food,

beverages or tobacco (47.11)

82.495.998 82.495.998

Activities of holding companies and financing conduits

(64.2)

2.026.934.378 2.026.934.378

Other financial service activities, except insurance and

pension funding n.e.c. (64.99)

25.582.471 25.582.471

Telecommunication reselling activities and intermediation

service activities for telecommunication (61.20)

131.400.000 131.400.000

9 Retail sale of automotive fuel (47.30) 91.850.000 91.850.000

10 Steam and air conditioning supply (35.30) 84.236.893 78.340.310 84.236.893 78.340.310

11 Other credit granting (64.92) 124.155.239 124.155.239

12 Manufacture of soft drinks and bottled waters (11.07) 7.082.994 70.830 7.082.994 70.830

[Gross] carrying amount [Gross] carrying amount

Non-Financial corporates (Subject to

SMEs and other NFC not subject to

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

Non-Financial corporates (Subject to SMEs and other NFC not subject to

Breakdown by sector - NACE 4 digits level (code and label)

Climate Change Mitigation (CCM)

[Gross] carrying amount [Gross] carrying amount

Consolidated Financial Statements 31 December 2025 115 All amounts are in thousands of ISK

3. GAR KPI stock

4. GAR KPI ﬂow

Information on ﬂows for the year 2025 is estimated as the dierence between the position of equity

instruments and debt securities at year-end 2024 and year-end 2025, as detailed information on new

investments during the period was not available.

a b c d e aa ab ac ad ae af ag ai aj ak bf bg bh bi bj bk

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

GAR - Covered assets in both numerator and denominator

Loans and advances, debt securities and equity instruments not HfT

eligible for GAR calculation

0% 0% 0%

2 Financial undertakings 39,68% 0,12% 0,004% 39,68% 0,12% 0,004% 7,4% 0% 0% 0%

3 Credit institutions 39,68% 0,12% 0,004% 39,68% 0,12% 0,004% 7,4% 0% 0% 0%

4 Loans and advances 0%

5 Debt securities, including UoP 9,23% 0,02% 9,23% 0,02% 1,8% 0% 0% 0%

6 Equity instruments 30,46% 0,10% 30,46% 0,10% 5,7% 0% 0% 0%

20 Non-financial undertakings 1,47% 2,17% 0,02% 0,39% 1,47% 2,17% 0,02% 0,39% 13,9% 46,77% 0,04% 46,8% 0,04% 0,001% 46,8%

21 Loans and advances 0%

Debt securities, including UoP

2,17%

0,02%

0,39%

2,17%

0,02%

0,39%

8,2%

23 Equity instruments 1,47% 5,7% 0,001% 0%

32 Total GAR assets 14,83% 1,45% 0,01% 0,25% 0,01% 0,25% 21,30% 46,77% 0,04% 46,8% 0,04% 0,001% 46,8%

Disclosure reference date 2025

Climate Change Mitigation (CCM)

Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-

eligible)

Proportion of total covered assets funding taxonomy

relevant sectors (Taxonomy-aligned)

TOTAL (CCM + CCA + WTR + CE + PPC + BIO)TOTAL (CCM + CCA + WTR + CE + PPC + BIO) Climate Change Mitigation (CCM)

% (compared to total covered assets in the denominator)

Disclosure reference date 2024

Proportion

of total

assets

covered

Proportion

of total

assets

covered

Proportion of total covered assets funding taxonomy

relevant sectors (Taxonomy-aligned)

Proportion of total covered assets funding taxon omy

relevant sectors (Taxonomy-aligned)

Proportion of total covered assets funding taxonomy

relevant sectors (Taxonomy-aligned)

Proportion of total covered assets funding taxonomy relevan t

sectors (Tax onomy-eligible)

Proportion of total covered assets funding taxonomy relevant sectors

(Taxonomy-eligible)

Proportion of total covered assets funding taxonomy relevant sectors

(Taxono my-eligible)

a b c d e aa ab ac ad ae af ag ah ai aj ak bf bg bh bi bj bk

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

GAR - Covered assets in both numerator and denominator

Loans and advances, debt securities and equity instruments not HfT

eligible for GAR calculation

2 Financial undertakings 39,13% 0,18% 39,13% 0,18% 7,4%

3 Credit institutions 39,13% 0,18% 39,13% 0,18% 7,4%

4 Loans and advances

5 Debt securities, including UoP 7,61% 0,02% 0,003% 0,01% 7,61% 0,02% 0,003% 0,01% 1,8%

6 Equity instruments 31,53% 0,02% 5,7%

20 Non-financial undertakings 2,48% 2,22% 2,21% 0,002% 2,48% 2,22% 2,21% 0,002% 13,9% 49% 0,13% 0,004% 49% 0,13% 0,004% 49,21%

21 Loans and advances 0%

Debt securities, including UoP

2,21%

8,2%

23 Equity instruments 2,48% 0,002% 2,48% 0,002% 5,7% 49% 0,13% 0,004% 49% 0,13% 0,004% 49,21%

32 Total GAR assets 15,29% 1,50% 0,001% 0,003% 15,29% 1,50% 0,001% 0,003% 21,3% 49% 0,13% 0,002% 49% 0,13% 0,002% 49,21%

Proportion of total covered assets funding taxonomy

relevant sectors (Taxonomy-aligned)

Proportion

of total

assets

covered

Proportion of total covered assets funding taxonomy relevant

sectors (Taxonomy-aligned)

Proportion of total covered assets funding taxonomy

relevant sectors (Taxonomy-aligned)

Proportion of total covered assets funding taxonomy

relevant sectors (Taxonomy-aligned)

Proportion of total covered assets funding taxonomy relevant sectors

(Taxonomy-eligible)

Proportion of total covered assets funding taxonomy relevant

sectors (Taxonomy-eligible)

Proportio

n of total

assets

covered

Proportion of total covered assets funding taxonomy relevant

sectors (Taxonomy-eligible)

Climate Change Mitigation (CCM)

% (compared to total covered assets in the denominator)

Disclosure reference date 2025 Disclosure reference date 2024

Climate Change Mitigation (CCM) TOTAL (CCM + CCA + WTR + CE + PPC + BIO) TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-

eligible)

a b c d e aa ab ac ad ae af

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

GAR - Covered assets in both numerator and denominator

Loans and advances, debt securities and equity instruments not HfT

eligible for GAR calculation

1,6% 1,4% 1,6% 1,4% 3,8%

20 Non-financial undertakings 2,5% 2,2% 2,5% 2,2% 3,8%

21 Loans and advances

22 Debt securities, including UoP 0,7% 3,7% 0,7% 3,7% 3,3%

23 Equity instruments 3,8% 0,0% 3,8% 0,4%

32 Total GAR assets 1,6% 1,4% 1,6% 1,4% 3,8%

Proportion of total covered assets funding

taxonomy relevant sectors (Taxonomy-aligned)

% (compared to flow of total eligible assets)

Disclosure reference date 2025

Climate Change Mitigation (CCM) TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

Proportion of total covered assets funding taxonomy relevant sectors

(Taxonomy-eligible)

Proportion of total covered assets funding taxonomy

relevant sectors (Taxonomy-eligible)

Proportion

of total

new assets

covered

Proportion of total covered assets funding taxonomy

relevant sectors (Taxonomy-aligned)

a b c d e aa ab ac ad ae af

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

Of which

Use of

Proceeds

Of which

transitional

Of which

enabling

GAR - Covered assets in both numerator and denominator

Loans and advances, debt securities and equity instruments not HfT

eligible for GAR calculation

1,6% 1,4% 1,6% 1,4% 3,8%

20 Non-financial undertakings 2,5% 2,2% 2,5% 2,2% 3,8%

21 Loans and advances

22 Debt securities, including UoP 3,8% 3,8% 3,8% 3,8% 3,3%

23 Equity instruments 0,7% 0,0% 0,7% 0,0% 0,4%

32 Total GAR assets 1,6% 1,4% 1,6% 1,4% 3,8%

Proportion of total covered assets funding

taxonomy relevant sectors (Taxonomy-aligned)

Proportion of total covered assets funding taxonomy relevant

sectors (Taxonomy-eligible)

% (compared to flow of total eligible assets)

Disclosure reference date 2025

Climate Change Mitigation (CCM) TOTAL (CCM + CCA + WTR + CE + PPC + BIO)

Proportion of total covered assets funding taxonomy relevant sectors

(Taxonomy-eligible)

Proportion

of total

new assets

covered

Proportion of total covered assets funding taxonomy

relevant sectors (Taxonomy-aligned)