Consolidated Financial Statements
31 December 2024
Kvika banki hf. • Katrínartún 2 • 105 Reykjavík • Iceland • Reg. no. 540502-2930
Kvika banki hf.
Table of Contents
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Appendix - unaudited
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EU Taxonomy Regulation ..................................................................................................................................................
Statement on the Corporate Governance of Kvika banki hf. 2024 ...................................................................................
- General information ......................................................................................................................................................
Consolidated Statement of Cash Flows ............................................................................................................................
- Significant accounting policies .......................................................................................................................................
- Risk management ..........................................................................................................................................................
- Financial assets and financial liabilities .........................................................................................................................
- Income statement ..........................................................................................................................................................
- Statement of Financial Position .....................................................................................................................................
- Other information ..........................................................................................................................................................
- Segment information .....................................................................................................................................................
Independent Auditor's Report ..........................................................................................................................................
Notes to the Consolidated Financial Statements .............................................................................................................
Consolidated Income Statement ......................................................................................................................................
Endorsement and Statement by the Board of Directors and the CEO .............................................................................
Kvika highlights .................................................................................................................................................................
Consolidated Statement of Comprehensive Income .......................................................................................................
Consolidated Statement of Financial Position ..................................................................................................................
Consolidated Statement of Changes in Equity .................................................................................................................
Consolidated Financial Statements 31 December 2024
Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
About the Bank
Operations during the year 2024
Financial position
Status of the TM sales process
Operational outlook
The Group's external environment is expected to turn increasingly supportive. Growth is likely to recover in key markets, while market pricing suggests
that nascent rate cutting cycles will continue throughout 2025 both in Iceland and the UK, which we expect to provide a further tailwind to the Group's
operations via continued loan book growth, improved net interest margins and increased market activity.
Additionally, in July 2024, Kvika issued ISK 500 million in Tier-2 subordinated bonds to further strengthen the Bank's capital base. This issuance was a
tap on subordinated bonds originally issued in December 2023.
These are the Consolidated Financial Statements of Kvika banki hf. ("Kvika" or the "Bank") and its subsidiaries (together the "Group") for the year 2024.
Kvika operates as well as a house of brands that are highly focused and excel in their field. The main brands are Kvika, Kvika Asset Management, Auður,
Aur, Lykill, Netgíró, and Straumur, as well as Ortus Secured Finance in the UK.
Kvika is a specialized financial institution strategically positioned to increase competition and transform financial services in Iceland. Operating without
a branch network, Kvika provides businesses, investors, and individuals with investment banking, insurance, asset management, payment, and banking
services. The Bank is listed on the main list of Nasdaq OMX Iceland.
Kvika operates in four business segments, two which are operated under the Kvika Bank brand, Commercial Banking and Investment Banking, and two
in own-brand subsidiaries, Kvika Asset Management and Kvika Securities Ltd., the Group's operations in the UK. The insurance segment, operated
through the subsidiary TM tryggingar hf. ("TM") has been sold to Landsbankinn hf. This transaction is currently pending approval from the Icelandic
Competition Authority.
Profit before taxes from continuing operations for the fourth quarter amounted to ISK 1,601 million (Q4 2023: ISK 363 million) and for the year it
amounted to ISK 5,817 million (2023: ISK 3,009 million). Pre-tax annualised return on weighted tangible equity (RoTE) from continuing operations was
18.5% for the quarter and 18.8% for the full year compared to 10.2% in 2023, based on the tangible equity position of Kvika, net of TM, at the beginning
of the year adjusted for changes in share capital and transactions with treasury shares during the year. Profit after taxes, including discontinued
operations, for the fourth quarter amounted to ISK 3,447 million (Q4 2023: ISK 1,578 million) and for the year it amounted to ISK 8,150 million (2023: ISK
4,034 million).
According to the Consolidated Statement of Financial Position, equity at the end of the year amounted to ISK 89,517 million (31.12.2023: ISK 81,958
million), and total assets amounted to ISK 354,594 million (31.12.2023: ISK 335,397 million).
The Group's statement of financial position grew by ISK 19 billion or 5.7% during the year 2024. Loans to customers grew by ISK 14.0 billion or 10.3%
during the year. Liquid assets amounted to ISK 105.7 billion at end of December 2024, which is equal to 28.9% of total assets and 70.3% of loans to
customers.
On 30 May 2024 the Bank announced that it had signed a purchase agreement with Landsbankinn hf., in which Landsbankinn hf. purchased 100% of the
share capital in TM. On 17 March 2024, the Bank announced that it had received binding offers for the purchase of the share capital of TM. Due
diligence review has been completed, and the purchase agreement has been signed with standard conditions of approval from The Financial
Supervisory Authority of the Central Bank of Iceland and the Icelandic Competition Authority ("ICA"). On 26 September 2024, the Financial Supervisory
Authority of the Central Bank of Iceland has published the results of its assessment, finding that Landsbankinn is eligible to control a qualifying holding
in TM. The ICA has yet to conclude its review of the transaction. The purchase price according to the purchase agreement is ISK 28.6 billion and
Landsbankinn hf. will pay for the share capital in cash. The purchase price is based on TM's balance sheet at the end of 2023. The final purchase price
will be adjusted for changes in TM's tangible equity from the beginning of the year 2024 to the completion date, and the amount of the change will be
added to or subtracted from the price according to the purchase agreement.
The outlook for Kvika in 2025 is positive, underpinned by Kvika's multiple operating segments across its key markets in Iceland and the UK, which
provide a diversified source of income. Kvika aims to build on its success in 2024, having already achieved revenue growth driven by loan book
expansion, improved interest margins and a recovery in fees and commissions, while managing costs.
The Group's net operating income during the year was ISK 17,184 million (2023: ISK 14,852 million). Net interest income amounted to ISK 9,681 million
(2023: ISK 8,021 million). Net fee income amounted to ISK 6,137 million (2023: ISK 5,916 million). Other operating income amounted to ISK 1,367 million
(2023: ISK 915 million). Administrative expenses during the period amounted to ISK 10,608 million (2023: ISK 10,785 million). During the period, the
Group had a net impairment charge of ISK 605 million (2023: ISK 1,027 million).
Previously, in May 2024, Kvika tapped an additional SEK 500 million in floating-rate bonds, priced at a 240-basis-point spread over the 3-month STIBOR.
Compared to the 410-basis-point spread on issuances in 2023, both the May 2024 and the January 2025 transactions represent a significant
improvement in Kvika's bond pricing.
In mid-January 2025, Kvika completed the sale of 3.25-year floating-rate bonds totalling SEK 600 million and NOK 400 million. These bonds were priced
at a spread of 200 basis points over 3-month STIBOR (for the SEK tranche) and 3-month NIBOR (for the NOK tranche). With over 20 investors
participating, it marked Kvika's largest international bond issuance to date.
Kvika's financial position remains strong, with robust liquidity and capital buffers well above regulatory requirements. It is expected to strengthen
further following the sale of its insurance business, TM. The divestment will transform Kvika's capital position, allowing it to retain significant capital to
take advantage of growth opportunities by expanding its loan book across all business units, while utilising internal infrastructure more efficiently.
Growth in mortgage lending is expected to reduce the average risk weight of the loan book and positively impact NPL ratios in the coming year.
Consolidated Financial Statements 31 December 2024 2
Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
Economic outlook
Capital adequacy and dividends
Growth in the Icelandic economy slowed markedly in 2024, with the economy unlikely to expand meaningfully for the year as a whole. Tight monetary
policy has curbed domestic demand while exporting sectors have faced challenges due to slowing growth in tourism, weak capelin stocks and electricity
rationing to heavy industry. However, the slowdown is expected to give way to a robust recovery, with growth projected to reach nearly 2% in 2025 and
average 2.5% annually in subsequent years. Key drivers include a rebound in private consumption supported by stronger real wage growth and interest
rate cuts, continued growth in tourism and green shoots in nascent exporting sectors.
While global economic conditions remain uncertain, Iceland's economic outlook stands out favourably. Among advanced economies, growth prospects
for Iceland compare positively, particularly against the backdrop of muted performance in the euro area. Iceland's energy independence, underpinned
by its reliable renewable base load power, provides a significant competitive advantage. This stability has facilitated large investments in export-
oriented sectors, particularly pharmaceuticals and land-based fish farming, which are expected to yield meaningful growth over a medium-term
horizon. These developments underscore Iceland's strong positioning for sustainable growth and resilience in the face of global challenges.
Asset markets have already seen a degree of recovery, with equities delivering strong returns towards the end of 2024, expected to drive increased
trading volumes and rebounding performance-related fees in asset management. Furthermore, spreads on peers' Eurobonds have tightened markedly
in the last year, potentially offering opportunities to lower funding costs by refinancing non-ISK debt in international markets in the coming year.
Declining inflation is expected to allow the Group to maintain a lean cost base even as its operations grows, and balance sheet expands.
Additionally, the Icelandic labour market has shown remarkable resilience amid the economic slowdown. While growth in employment has moderated
compared to recent years, job creation remains positive, and unemployment seems to be stabilising at relatively low levels. This reflects the flexibility of
the Icelandic labour market, which has benefitted from migration flows and close integration with the European labour market.
Iceland's inflationary pressures have eased significantly over the past year. Headline inflation measured 4.8% in December, reflecting a three-
percentage-point decline compared to the previous year. This progress has been broad-based, supported by slowing pressures on housing and goods
prices. Encouragingly, inflation expectations have also moderated across various horizons. The outlook suggests a continued deceleration, with inflation
expected to approach the Central Bank's 2.5% target by mid-2026. This environment is expected to support growth in purchasing power and provide a
stronger foundation for economic growth and financial stability.
A milestone was reached as the Central Bank initiated its first rate cut in over four years in October. With the key interest rate now at 8.0%, monetary
policy has entered a phase of gradual easing. This shift marks a response to declining inflation and an evolving economic landscape. A downward
sloping yield curve anticipates further rate reductions over the coming year, signalling optimism about a more accommodative monetary environment.
These changes bode well for the Bank's lending and investment activities, as headwinds from restrictive policy subside.
The Icelandic economy enters the coming year at an inflection point in the business cycle. The economy has remained resilient throughout a challenging
period of disinflation and is on track to achieve a soft landing. Although growth has slowed markedly in the last year as restrictive monetary policy has
weighed on domestic demand, Iceland is widely expected to avoid a recession and enter recovery from this year onward. Recent developments point to
an encouraging trajectory for disinflation, setting the stage for greater economic stability, lower interest rates, and a more supportive backdrop for the
financial sector.
Despite the benign outlook, several risks warrant vigilance. Externally, geopolitical tensions, increased trade fragmentation, weak growth in key trading
partners and the potential for renewed global inflationary pressures could pose challenges. Domestically, the labour market's response to evolving
economic conditions, coupled with the pace of disinflation, will be critical. Additionally, fluctuations in tourism activity and global commodity prices
remain pivotal factors influencing Iceland's economic trajectory. The Bank remains committed to monitoring these dynamics and ensuring
preparedness to navigate any headwinds effectively.
As Iceland hopefully enters a new period of growth, its disinflationary progress, the onset of monetary easing, and the anticipated economic recovery
present opportunities for the Bank to continue driving value for stakeholders.
The Group's solvency ratio at 31.12.2024 was 1.33 (31.12.2023: 1.25) with a regulatory minimum requirement of 1.0.
The Bank's 2024 Annual General Meeting ("AGM") approved a motion from the Board of Directors ("BOD") permitting the Bank to purchase up to 10%
of own shares subject to regulatory approvals. This authorisation applies until the next annual general meeting in 2025. In July 2024, the BOD decided
to exercise a part of that authorisation and established a buy‐back programme to carry out the purchase of shares for a total consideration amount of
ISK 1 billion but for no higher nominal amount than 100,000,000 shares. The buy-back programme was completed in September 2024 when the Bank
had purchased shares for ISK 1 billion.
The Central Bank's Resolution Authority presented the Group with their first minimum requirement for own funds and eligible liabilities (MREL) in
January 2025. The MREL requirements, including the combined buffer requirement, are 28.4% of RWEA and 6.0% of total exposure amount ("TEM"). At
the end of 2024 these ratios were 41.1% and 31.1% respectively.
The Financial Supervisory Authority of the Central Bank published the results of the Supervisory Review and Evaluation Process ("SREP") for Kvika based
on financial information at year-end 2023 on 10 July 2024. The capital requirement under Pillar II changed to 3.6% of total risk-weighted exposures
amount ("RWEA"), a decrease of 0.4pp from the year before. On 4 December 2024 the systemic risk buffer decreased by 0.8pp due to a decrease by the
Central Bank of Iceland. As of 31 December 2024, the systemic risk buffer decreased by a further 0.1pp due to changes in composition of risk weighted
exposure amount between Iceland and UK. Hence Kvika's total capital requirement at 31.12.2024, taking into account all capital buffers, amounted to
18.0%. Kvika's capital adequacy ratio was 22.8% at the end of December 2024 (31.12.2023: 22.6%). Kvika's CET1 requirement was 12.9% compared to a
CET1 ratio of 19.9% at the end of December 2024.
Consolidated Financial Statements 31 December 2024 3
Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
Share capital and shareholders
Shareholder 31.12.2024 31.12.2023
9.17% 9.56%
7.93% 7.89%
7.09% 7.01%
5.64% 5.43%
5.58% 6.00%
2.59% 2.55%
2.55% 3.54%
2.39% 1.28%
2.33% 2.30%
2.32% 2.31%
47.60% 47.86%
Risk management
Corporate governance
Lífsverk lífeyrissjóður .....................................................................................................................................
Lífeyrissjóður starfsmanna ríkisins A-deild ....................................................................................................
Stoðir hf. .........................................................................................................................................................
Gildi - lífeyrissjóður ........................................................................................................................................
Lífeyrissjóður verzlunarmanna ......................................................................................................................
The BOD proposes that a dividend of 0.44 ISK per share for a total amount of ISK 2,050 million, taking into account treasury shares held by the Group,
will be paid in the year 2025 on 2024 operations. The dividend payment amounts to 25% of Profit after tax for the year, which is in line with the Bank's
dividend policy. Additionally, the BOD will decide on a extraordinary dividend upon receipt of the purchase price for TM as well as initiating a share buy
back programme, for which the Bank has received an approval from the Central Bank of Iceland that is contingent on the finalisation of the TM sale.
Birta lífeyrissjóður ..........................................................................................................................................
Stapi lífeyrissjóður .........................................................................................................................................
Landsbankinn hf. ............................................................................................................................................
Almenni lífeyrissjóðurinn ...............................................................................................................................
Frjálsi lífeyrissjóðurinn ...................................................................................................................................
Further information about the shareholders of the Bank is provided in note 67.
The objective of risk management is to promote a good and efficient culture of risk awareness within the Group and to increase the understanding of
employees and management on the Group's risk taking, in addition to an assessment process related to risk and capital position. An emphasis is placed
on being up to speed on the latest developments and adoption of rules related to risk management, such as regarding capital- and liquidity
management. The Group faces various risks associated with its operations as a financial conglomerate that arise from its day-to-day operations. Active
risk management entails analysing risk, measuring it and taking actions to limit it, as well as monitoring risk factors across the Group. The Group's risk
management and main operations are described in the notes accompanying the Consolidated Financial Statements. Refer to notes 42-58 on the
analysis of exposure to various types of risk.
Kvika is obliged to observe recognised corporate governance guidelines, pursuant to Par. 7 of Article 54 of Act No. 161/2002, on Financial Undertakings.
The Bank complies with chapter VII of Act No. 161/2002 and in most respects with the Guidelines on Corporate Governance issued jointly in February
2021 by the Chamber of Commerce, Confederation of Icelandic Enterprise (SA) and Nasdaq Iceland. The Bank's annual general meeting in March 2024
approved a proposal to establish a Nomination Committee. The committee serves as an advisory role to facilitate informed decision-making be
shareholders when selecting board members. Kvika has three times been recognized as a company which has achieved excellence in corporate
governance following a formal assessment based on the Icelandic Guidelines on Corporate Governance issued by the Icelandic Chamber of Commerce,
Confederation of Icelandic Enterprise (SA) and Nasdaq Iceland, first in 2018, in 2021 and in 2024. The recognition applies for three years at a time unless
there have been significant changes to the BOD or the ownership of the Bank. The BOD intends to have such an assessment carried out on a regular
basis and maintain the aforementioned recognition. Additionally, Kvika complies with Guidelines of the European Banking Authority (EBA) on Internal
Governance (EBA/GL/2021/05), cf. Art. 15 of Regulation of the European Parliament and of the Council no. 1093/2010, which was incorporated into
Icelandic law with Act no. 24/2017 on European Supervisory System on the Financial Market.
In accordance with the Bank´s articles of association, five members and two alternate members are elected to the BOD each year at the annual general
meeting. The eligibility of members of the BOD is subject to statutory law. It is the Bank´s policy concerning election of the BOD that the BOD
collectively has sufficient knowledge, competency and experience to understand the Bank´s operations, including the main risk factors. The ratio of
each gender of members of the BOD and alternate members shall be at least 40%. The election of BOD members and their eligibility is furthermore
governed by the provisions of the Act on Public Limited Liability Companies No. 2/1995 and the Act on Financial Undertakings No. 161/2002.
The Bank's issued share capital amounted to ISK 4,722 million as at 31 December 2024 (31.12.2023: ISK 4,781 million). At the end of the year the Bank
held ISK 62 million treasury shares (31.12.2023: ISK 59 million). The shares were acquired through a share buy-back programme. The net change in the
Bank's issued share capital amounted to a reduction in nominal value of ISK 59 million during the year (ISK 148 million reduction during the year 2023).
The Bank had 2,741 shareholder at year-end 2024 (2023: 2,876), none of which held more than 10% of shares in the Bank (2023: 0). The ten largest
shareholders are as follows:
The 2024 AGM also approved a motion from the BOD to, subject to approval from the Financial Supervisory Authority of the Central Bank of Iceland,
decrease the share capital of the Bank by 58,952,375 shares by cancelling treasury shares held by the Bank. In March 2024, the share capital reduction
was carried out. Furthermore, the 2024 AGM approved a motion from the BOD that no dividend will be paid in the year 2024 on 2023 operations.
Through the purchase of own shares in 2024, the Bank's dividend policy was met. The dividend policy states that the aim is for shareholders to be
returned an annual dividend of at least 25% of last year's profit after taxes, whether in the form of dividends or through the purchase of own shares.
In 2024, changes were made to the risk management framework regarding sustainability risk. Previously, sustainability risk was categorized under
operational risk, but it has now been elevated within the risk management framework and is considered an independent risk factor.
Consolidated Financial Statements 31 December 2024 4
Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
Further information about the Bank's corporate governance can be found in an appendix to these financial statements which contains a corporate
governance statement. A copy of the statement is available on the Bank's website, www.kvika.is.
Sustainability and non-financial reporting
Kvika's strategy is to increase competition in financial services and simplify customers' financial affairs. Its core values are long-term thinking, simplicity,
and courage. One of the guiding principles of the Group is to be a responsible participant in society and in 2022 a sustainability policy was issued, which
remains in effect for Kvika Bank and the Group based on Kvika's ownership policy for key subsidiaries. Relevant supporting policies were subsequently
developed or updated, such as policies on education and career development, equality, health, and human resources, as well as a response plan
against bullying, harassment, and violence. There has been no need for a separate human rights policy at Kvika, given that the Group primarily operates
in Iceland, where there is a clear legal framework for human rights issues.
Kvika supports the UN Sustainable Development Goals (SDGs) and has selected six as priority areas: goal no. 3 – good health and well-being; goal no. 4 –
quality education; goal no. 5 – gender equality; goal no. 9 – industry, innovation, and infrastructure; goal no. 13 – climate action; and goal 17 –
partnerships for the goals. The Bank monitors progress on initiatives within the Group that align with these goals.
Kvika is committed to reducing its carbon footprint and progress was made in the year 2024 in reducing greenhouse gas (GHG) emissions. Scope 1
emissions decreased by 38% year-over-year and Scope 3 by 51%. These reductions are attributed to initiatives such as transitioning from fossil-fuel-
powered to electric vehicles, reducing employee flights and other measures. Overall, Kvika's total GHG emissions for 2024 were 282 tCO₂e.
The main aspects of internal and external control and the Bank's management in connection with the accounting process are described in detail in the
Statement on the Corporate Governance of Kvika.
The BOD is responsible for the Group's risk management framework. It approves the Kvika Banki Group risk policy, which provides an efficient and
transparent framework for managing risk and risk appetite in relation to identified risk factors.
The Bank´s articles of association may be amended at lawfully convened shareholders´ meetings, provided that the notice of the meeting specifies that
proposals for such amendments are scheduled and outlines the main substance of the amendments. An amendment takes effect only if approved by at
least 2/3 of the votes cast and by shareholders controlling at least 2/3 of the shares represented at the meeting. However, the provisions of the articles
of association regarding the voting rights of shareholders and equality among them cannot be amended except with the consent of all the shareholders
who are subject to the curtailment of rights, cf. paragraph 3 of Article 94 of the Act on Public Limited Liability Companies No. 2/1995.
The Board determines compensation for the CEO. The BOD emphasizes good corporate governance and adherence to accepted guidelines on corporate
governance. The Board has laid down comprehensive rules in which the authority of the Board is defined and its scope of work in conjunction with the
CEO. They address e.g. the competence of Board members to participate in individual decisions, confidentiality and information disclosure between the
CEO and the Board. All Board members are independent of the Bank and its major shareholders, and no executive directors are on the Board. The Bank
aims to promote gender equality, and two out of five board members are women.
The BOD has delegated certain tasks to three separate subcommittees, the Risk Committee, Audit Committee and Remuneration Committee. The
appointment of committee members shall always comply with currently applicable law. It is not permitted to appoint employees of the Bank to any
subcommittee. Members shall have the necessary experience and knowledge for each committee's tasks according to applicable laws and rules. Each
committee has incorporated procedural rules which have been confirmed by the BOD.
A new sustainability risk policy for Kvika was approved by the Bank's BOD in the year that aligns with the guidelines from the Financial Supervisory
Authority of the Central Bank of Iceland and the draft regulatory framework of the European Banking Authority (EBA) on sustainability risk
(EBA/CP/2024/02). Sustainability risk according to the policy includes both Kvika's external risk exposure to various stakeholders and sustainability risk
factors (inside-out risk) as well as the risk posed to Kvika by sustainability factors (outside-in risk). Sustainability risk may impact other risk categories
within the Bank. No changes have been made to the sustainability risk policies of Kvika Asset Management and TM since 2023.
The first step in the risk management process for monitoring sustainability risk is identifying key sustainability topics within Kvika's operations. This was
achieved through a double materiality assessment (DMA) conducted in 2024, marking the first time Kvika has undergone such a process. The DMA is
currently voluntary in Iceland as the analysis follows the requirements of the Corporate Sustainability Reporting Directive (CSRD), which is expected to
be transposed into Icelandic law in the near future. The findings highlight the most significant sustainability topics for Kvika's operations and shape
Kvika's approach to sustainability reporting.
In line with these findings, Kvika is now publishing its first sustainability report considering the European Financial Reporting Advisory Group´s (EFRAG)
standards known as the European Sustainability Reporting Standards (ESRS). These standards align with the CSRD and define rules for sustainability
disclosures. Kvika aims to fully comply with all relevant data points in the ESRS when the CSRD becomes legally binding in Iceland. Kvika's sustainability
disclosures under these requirements supplements the current legal requirements for non-financial reporting as outlined in Article 66 d of the Act on
Annual Accounts no. 3/2006.
The CEO reports to the Board and verifies the effectiveness of internal controls and risk management in the Consolidated Financial Statements. Internal
controls and risk management applied in the preparation of the Consolidated Financial Statements are organised with a view to preventing any
significant deficiencies in the accounting process. Kvika's BOD and control units regularly verify the effectiveness of internal controls and risk
management.
The Risk Committee has an advisory and supervisory role for the Bank's BOD, among other things, in determining its risk policy and risk appetite. The
Audit Committee is intended to play an advisory and supervisory role for the Bank's BOD by, among other things, ensuring the quality of financial
statements and other financial information from the Bank and the independence of its auditors. The Audit Committee supervises accounting
procedures and the effectiveness of internal controls as well as internal and external auditing. The Remuneration Committee has an advisory and
monitoring role for the BOD in relation to remuneration at the company and its Group and that they support its goals and interests.
Consolidated Financial Statements 31 December 2024 5
Kvika banki hf.
Endorsement and Statement
by the Board of Directors and the CEO
Statement by the Board of Directors and the CEO
Sigurður Hannesson, Chairman
Helga Kristín Auðunsdóttir, Deputy Chairman
Ingunn Svala Leifsdóttir
Guðjón Reynisson
Sigurgeir Guðlaugsson
Chief Executive Officer
Ármann Þorvaldsson
The Consolidated Financial Statements of Kvika banki hf. for the year ended 31 December 2024 are electronically certificated by the Board of Directors
and the CEO.
The Bank has established a policy on measures against financial crime, rules on managing conflicts of interest, regulations on gifts, rewards, and
incentive payments, as well as policies concerning reputational and conduct risk. They state that no employee or third party acting on behalf of the
Group shall give, promise, request, accept, or receive bribes or other undue benefits intended to influence decision-making in their professional
capacity. Kvika has also implemented internal rules and procedures to strengthen its defences against bribery and corruption. Additionally, rules have
been set regarding the segregation of duties, personal trading by employees, and whistleblower protection. These rules and policies, largely established
at the Group level, form the foundation—along with the Bank's code of ethics—of Kvika's anti‐corruption and anti‐bribery measures.
Through these measures Kvika seeks to prevent its operations and those of its subsidiaries from being used for financial or economic crimes. The Bank
regularly conducts and reviews risk assessments related to money laundering across its operations and business relationships, utilizing the information
technology system Lucinity, which employs modern technology and artificial intelligence to detect suspicious behaviour.
The Consolidated Financial Statements of Kvika banki hf. for the year 2024 have been prepared in accordance with International Financial Reporting
Standards as adopted by the EU, and additional requirements, as applicable, in the Act on Annual Accounts no. 3/2006, the Act on Financial
Undertakings no. 161/2002 and rules on accounting for credit institutions no. 834/2003.
To the best of our knowledge these Consolidated Financial Statements give a true and fair view of the Group's assets, liabilities and financial position as
at 31 December 2024 and the financial performance of the Group and changes of cash flows for the year 2024. Furthermore, in our opinion the
Consolidated Financial Statements and the 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 and describe the principal risks and uncertainties faced by the Group.
In our opinion, the Consolidated Financial Statements of Kvika banki hf. for the year 2024 identified as "254900WR3I1Z9NPC7D84-2024-12-31-en" are
prepared in all material respects, in compliance with the European Single Electronic Format Regulation (ESEF).
The Board of Directors and the CEO of the Bank have today discussed the Consolidated Financial Statements for the year 2024 and confirmed them by
the means of their signatures.
Reykjavík, 12 February 2025.
Board of Directors
At Kvika, work has been carried out to implement the requirements of the Taxonomy Regulation and the Group publishes now for the second time
information in accordance with Article 8 of the Taxonomy Regulation To comply with the regulation's provisions, an analysis of the Group's assets was
conducted with regards to the Taxonomy Regulation's technical criteria, and the proportion of green assets (Green Asset Ratio or GAR) was calculated.
This ratio represents the Group's assets that involve financing and investment in environmentally sustainable economic activities according to the
criteria of the Taxonomy Regulation. Information on Kvika´s GAR can be found in an unedited appendix to this annual report.
Kvika's Green Funding Framework was updated in 2024 to better align with the European Union's Taxonomy Regulation. By year-end 2024 Kvika's total
green commitments amounted to ISK 8,526 million, covering issued green bonds and green deposits offered by the Bank. The Green Funding
Framework enables Kvika to direct capital towards sustainable development and support the green transition in the economy. So far, all green
commitments have been allocated within the asset category of clean transportation, specifically to Lykill's green car loans. Kvika's green assets at the
end of 2024 amounted to ISK 10,530 million.
Further information on sustainability and non-financial disclosures can be found in Kvika's 2024 Sustainability Report, which accompanies this annual
account and is available on the Bank's website, www.kvika.is. Deloitte provides a limited assurance on selected data points in Kvika´s Sustainability
Report for 2024 and on the disclosure in Kvika´s impact and allocation report that is a part of the Sustainability Report.
Consolidated Financial Statements 31 December 2024 6
Kvika banki hf.
Independent Auditor's Report
To the Board of Directors and Shareholders of Kvika banki hf.
Opinion
Basis for Opinion
Key Audit Matters
Key Audit Matters How the matter was addressed in our audit
Impairment charges for loans
•
• •
• •
• •
•
Our examination included the following elements:
Testing of key controls over assumptions used in the expected credit loss
models.
Obtaining and substantively testing the evidence behind valuation of collateral
with particular focus on post-model adjustments applied to collateral value.
Measurement of loan impairment charges for loans and provisions for
guarantees is deemed a key audit matter as the determination of
assumptions for expected credit losses is highly subjective due to the
level of judgement applied by Management.
Substantively testing the PD models, related methodology and how they have
been applied in the expected credit loss models.
During our audit we have evaluated whether the Groups expected credit loss
models are compliant to IFRS 9.
We have audited the Consolidated Financial Statements of Kvika banki hf. for the year ended December 31, 2024 which comprise, the consolidated income
statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes
in equity, the consolidated statement of cash flows for the year then ended and the notes to the consolidated financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying Consolidated Financial Statements give a true and fair view of the consolidated financial position of Kvika banki hf. as at
December 31, 2024, and 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 EU and additional requirements, as applicable, in the Act on Annual Accounts, the Act on Financial
Undertakings and rules on accounting for credit institutions.
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.
Key audit matters are those matters that, in our professional judgement, 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.
Book value of loans to customers amounted to ISK 150,203 million at
year end (2023: ISK 136,323 million) and the total expected credit loss
for the group amounted to ISK 2,345 million (2023: ISK 2,234 million)
against loans at amortized cost, unused credit facilities and guarantees
at 31 December 2024.
Based on our risk assessment and industry knowledge, we have examined the
impairment charges for loans and provisions for undrawn loan commitments and
evaluated the methodology applied as well as the assumptions made according
to the description of the key audit matter.
Our opinion in this report on the Consolidated Financial Statements is consistent with the content of the additional report that has been submitted to the
company´s audit committee in accordance with the EU Audit Regulation 537/2014 Article 11.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of Kvika banki hf. in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional
Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Iceland, and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the IESBA.
Based on the best of our knowledge and belief, no prohibited services referred to in the EU Audit Regulation 537/2014 Article 5.1 has been provided.
Post-model adjustments for particular high-risk exposures, which are
not appropriately captured in the expected credit loss model.
The most significant judgements are:
Timely identification of exposures with significant increase in credit
risk and credit impaired exposures.
Valuation of collateral and assumptions of future cash flows on
manually assessed credit-impaired exposures.
We have reviewed the disclosures to the Consolidated Financial statements to
confirm compliance with IFRS.
Testing the appropriateness of forward looking information and how they
have been applied in the expected credit loss models.
Management has provided further information about expected credit
losses and provisions for guarantees in notes 22, 46 and 82 to the
Consolidated Financial Statements.
Assumptions used in the expected credit loss models to incorporate
macroeconomic uncertainties.
Consolidated Financial Statements 31 December 2024 7
Kvika banki hf.
Independent Auditor's Report
Other information
Responsibilities of the Board of Directors and the CEO for the Consolidated Financial Statements
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
•
•
•
•
•
•
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism 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 sufficient 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 effectiveness of Kvika banki hf.'s internal control.
In preparing the Consolidated Financial Statements, the Board of Directors and the CEO are responsible for assessing Kvika banki hf.’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 the Board of Directors
and the CEO either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors and the CEO are responsible for the other information. Other information comprises the report of board of directors, Statement of
the Corporate Governance and Non-Financial information
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.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an
opinion on the Consolidated and Separate Financial Statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon, except the
confirmation regarding report of the board of directors as stated below.
In accordance with Paragraph 2 article 104 of the Icelandic Financial Statement Act no. 3/2006, we confirm to the best of our knowledge that the
accompanying report of the board of directors includes all information required by the Icelandic Financial Statement Act that is not disclosed elsewhere in
the financial statements.
The Board of Directors and the CEO are responsible for the preparation and fair presentation of the Consolidated Financial Statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the EU and additional requirements in the Icelandic Financial Statement Act, and for such
internal control as the Board of Directors and the CEO determines is necessary to enable the preparation of Consolidated Financial Statements that are free
from material misstatement, whether due to fraud or error.
The board of directors and the audit committee are responsible for overseeing the Kvika banki hf. financial reporting process.
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.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the 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.
We have nothing to report in this regard.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
management.
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.
Consolidated Financial Statements 31 December 2024 8
Kvika banki hf.
Independent Auditor's Report
Report on other legal and regulatory requirements
Report on European single electronic format (ESEF Regulation)
Deloitte ehf.
State Authorized Public Accountant
We also provide the Board of Directors and the Audit Committee with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with the Board of Directors and the 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.
Kópavogur, 12 February 2025.
In addition to our work as the auditors of Kvika banki hf., Deloitte has provided the firm with permitted additional services such as review of interim
financial statements, other assurance engagements and consultation on tax matters. Deloitte has in place internal procedures in order to ensure its
independence before acceptance of additional services. Deloitte has provided to the audit commitee written confirmation that Deloitte is independent of
Kvika banki hf.
Deloitte was appointed auditor of Kvika banki hf. by the general meeting of shareholders on March 21st 2024. Deloitte have been elected since the general
meeting 2016.
Guðmundur Ingólfsson
As part of our audit of the Consolidated Financial Statements of Kvika banki hf. we performed procedures to be able to issue an opinion on whether the
Consolidated Financial Statements of Kvika banki hf. for the year 2024 with the file name „254900WR3I1Z9NPC7D84‐2024‐12‐31‐en.zip“is prepared, in all
material respects, in compliance with laws no. 20/2021 disclosure obligation of issuers of securities and the obligation to flag 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.
Management is responsible for preparing the Consolidated Financial Statements in compliance with laws no. 20/2021 disclosure obligation of issuers of
securities and the obligation to flag. This responsibility includes preparing the Consolidated Financial Statements in a XHTML format in accordance to 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 is
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 Kvika banki hf. for the 2024 with the file name „254900WR3I1Z9NPC7D84‐2024‐12‐31‐en.zip“ is
prepared, in all material respects, in compliance with the ESEF Regulation.
We communicate with the Board of Directors and the 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.
The Consolidated Financial Statements of Kvika banki hf. for the year ended 31 December 2024 are electronically certificated by the auditor.
Consolidated Financial Statements 31 December 2024 9
Kvika banki hf. Amounts are in ISK thousands
Consolidated Income Statement
For the year 2024
Notes Q4 2024 Q4 2023 2024 2023
(4,307,148 ) (3,755,508 ) (19,183,996 ) (14,404,510 )
Net interest income
5
(164,320 ) (114,583 ) (651,104 ) (539,199 )
Net fee and commission income
6
7 507,425 (10,613 ) 1,054,384 442,389
25 15,770 18,234 41,350 35,756
Other net operating income
Net operating income
9-12 (2,864,054 ) (2,778,784 ) (10,607,762 ) (10,784,684 )
13 (91,084 ) (826,818 ) (604,972 ) (1,027,489 )
(109,927 ) (33,713 ) (154,247 ) (31,048 )
Profit before taxes from continuing operations
14 (45,016 ) 264,324 (766,485 ) (389,673 )
15 18,919 32,918 (109,019 ) (82,026 )
16 (46,816 ) (71,988 ) (252,056 ) (233,414 )
Profit for the year from continuing operations
Discontinued operations
3 1,918,966 989,816 3,460,071 1,730,389
Profit for the year
Notes Q4 2024 Q4 2023 2024 2023
24 (3 ) (3,178 ) 6,527 15,772
Profit for the year
Earnings per share 17
Quarterly information is unreviewed.
The notes on pages 17 to 76 are an integral part of these Consolidated Financial Statements.
Diluted earnings per share (ISK per share) .....................................................................
Income tax ......................................................................................................................
Attributable to the shareholders of Kvika banki hf. .......................................................
Attributable to non-controlling interest ........................................................................
Special tax on financial institutions ................................................................................
Special tax on financial activity ......................................................................................
Basic earnings per share (ISK per share) ........................................................................
Profit after tax from discontinued operations ...............................................................
Other operating income .................................................................................................
Administrative expenses ................................................................................................
Net impairment ..............................................................................................................
Revaluation of contingent consideration .......................................................................
Share in profit of associates, net of income tax .............................................................
Interest income ..............................................................................................................
Interest expense .............................................................................................................
Fee and commission income ..........................................................................................
Fee and commission expense ........................................................................................
Net financial income (expense) ......................................................................................
Consolidated Financial Statements 31 December 2024 10
Kvika banki hf. Amounts are in ISK thousands
For the year 2024
Notes Q4 2024 Q4 2023 2024 2023
Profit for the year 3,446,780 1,578,498 8,149,970 4,034,276
(13,951 ) 28,621 893 77,089
Changes to reserve for financial assets at fair value through OCI
(59,381 ) 48,359 (7,055 ) 28,808
Total comprehensive income for the year
Notes Q4 2024 Q4 2023 2024 2023
(3 ) (3,178 ) 6,527 15,772
Total comprehensive income for the year
Quarterly information is unreviewed.
The notes on pages 17 to 76 are an integral part of these Consolidated Financial Statements.
Consolidated Statement of Comprehensive Income
Attributable to the shareholders of Kvika banki hf. ..................................................
Attributable to non-controlling interest ....................................................................
Exchange difference on translation of foreign operations .....................................
Changes in fair value of financial assets through OCI, net of tax ............................
Realized net (gain) loss transferred to the Income Statement, net of tax ..............
Other comprehensive income that is or may be reclassified subsequently to
profit and loss
Consolidated Financial Statements 31 December 2024 11
Kvika banki hf. Amounts are in ISK thousands
Consolidated Statement of Financial Position
As at 31 December 2024
Assets Notes 31.12.2024 31.12.2023
18 28,319,192 23,681,453
19 64,794,561 64,977,406
20 5,432,254 3,857,480
21 12,601,026 16,852,313
22 150,202,696 136,323,481
23 1,196,744 2,497,877
25 112,855 96,194
26 21,693,399 21,906,363
27 215,168 530,144
14, 28 2,273,265 2,902,580
29 9,507,492 10,401,128
3 57,702,377 50,752,652
Total assets
Liabilities
50 163,377,879 142,565,905
30 14,389,515 15,024,098
31 37,123,285 45,715,427
32 5,628,982 5,993,084
33 153,001 131,745
34 42,035 4,230
23 2,932,429 2,196,904
28 466,096 272,615
35 13,634,905 16,594,010
3 27,329,028 24,941,611
Total liabilities
Equity
36 4,660,180 4,722,073
Total equity attributable to the shareholders of Kvika banki hf.
24 78,646 72,119
Total equity
Total liabilities and equity
The notes on pages 17 to 76 are an integral part of these Consolidated Financial Statements.
Non-controlling interest .....................................................................................................................
Short positions held for trading .........................................................................................................
Short positions used for hedging .......................................................................................................
Share capital .......................................................................................................................................
Share premium ...................................................................................................................................
Other liabilities ...................................................................................................................................
Liabilities associated with assets classified as held for sale ..............................................................
Deferred tax liabilities ........................................................................................................................
Derivatives ..........................................................................................................................................
Cash and balances with Central Bank ................................................................................................
Other assets ........................................................................................................................................
Deferred tax assets .............................................................................................................................
Subordinated liabilities ......................................................................................................................
Derivatives ..........................................................................................................................................
Fixed income securities ......................................................................................................................
Shares and other variable income securities .....................................................................................
Securities used for hedging ................................................................................................................
Loans to customers ............................................................................................................................
Investment in associates ....................................................................................................................
Intangible assets .................................................................................................................................
Property and equipment ....................................................................................................................
Assets classified as held for sale ........................................................................................................
Deposits .............................................................................................................................................
Borrowings .........................................................................................................................................
Other reserves ....................................................................................................................................
Retained earnings ...............................................................................................................................
Issued bonds .......................................................................................................................................
Operating lease assets ........................................................................................................................
Consolidated Financial Statements 31 December 2024 12
Kvika banki hf. Amounts are in ISK thousands
Consolidated Statement of Changes in Equity
For the year 2024
Deficit Trans- Restricted Total share- Non-
Share Share Option reduction Fair value lation retained Retained holders' controlling Total
1 January 2024 to 31 December 2024 Notes capital premium reserve reserve reserve reserve earnings earnings equity interest equity
(7,055 ) (7,055 ) 0 (7,055 )
(63,624 ) (936,376 ) (1,000,000 ) (1,000,000 )
66 (59,921 ) 102,654 42,733 42,733
Equity as at 31 December 2024
The notes on pages 17 to 76 are an integral part of these Consolidated Financial Statements.
(8,974,725) 19,421,065 109,131 1,124,606 (5,242,998) 79,090 8,438,311 27,468,129 78,646
Restricted due to development costs ..........................................................
Treasury shares acquired as part of a buy-back programme ...................
Other reserves
Profit for the year ........................................................................................
Restricted due to subsidiaries and associates .............................................
Translation of foreign operations
Exchange difference on translation of foreign operations .......................
Equity as at 1 January 2024 .........................................................................
Total comprehensive income for the year ..................................................
Realized net loss transferred to the Income Statement ..............................
Changes in fair value of financial assets through OCI .................................
Share options exercised ............................................................................
Transactions with owners of the Bank
Share options ............................................................................................
Consolidated Financial Statements 31 December 2024 13
Kvika banki hf. Amounts are in ISK thousands
Consolidated Statement of Changes in Equity
For the year 2023
Deficit Trans- Restricted Total share- Non-
Share Share Option reduction Fair value lation retained Retained holders' controlling Total
1 January 2023 to 31 December 2023 Notes capital premium reserve reserve reserve reserve earnings earnings equity interest equity
(433,002 ) (433,002 ) (433,002 )
Translation of foreign operations
(58,952 ) (941,048 ) (1,000,000 ) (1,000,000 )
(1,912,410 ) (1,912,410 ) (1,912,410 )
66 17,654 73,997 91,651 91,651
Equity as at 31 December 2023
The notes on pages 17 to 76 are an integral part of these Consolidated Financial Statements.
Restricted due to development costs ..........................................................
Other reserves
Dividend paid to shareholders ..................................................................
Changes in fair value of financial assets through OCI .................................
Realized net loss transferred to the Income Statement ..............................
Profit for the year ........................................................................................
Exchange difference on translation of foreign operations .......................
Total comprehensive income for the year ..................................................
Treasury shares acquired as part of a buy-back programme ...................
Acquisition of non-controlling interest via merger ...................................
Share options ............................................................................................
Restricted due to subsidiaries and associates .............................................
Transactions with owners of the Bank
Other transactions
Equity as at 1 January 2023 .........................................................................
Consolidated Financial Statements 31 December 2024 14
Kvika banki hf. Amounts are in ISK thousands
Consolidated Statement of Cash Flows
For the year 2024
Cash flows from operating activities Notes 2024 2023
(41,350 ) (35,756 )
(9,680,795 ) (8,020,729 )
(3,488,141 ) 445,029
(2,172,537 ) (828,401 )
Changes in:
(5,246,477 ) 227,425
(11,224,223 ) (29,420,426 )
(2,689,526 ) 8,286,647
(18,851,441 ) (13,561,855 )
(614,333 ) (494,455 )
Net cash from (to) operating activities
Cash flows from investing activities
26 (608,412 ) (1,539,716 )
(90,974 ) (342,664 )
Net cash from (to) investing activities
Cash flows from financing activities
(2,072,443 ) (4,191,498 )
(8,592,142 ) 10,821,525
(300,000 ) 2,000,000
(1,000,000 ) (1,000,000 )
(407,716 ) (424,085 )
Net cash (to) from financing activities
(12,345,879 ) 5,293,532
(539,354 ) 403,554
Cash and balances with Central Bank at the end of the year, including asset held for sale
(2,072,147 ) (995,561 )
Cash and balances with Central Bank at the end of the year
18 28,319,192 23,681,453
The notes on pages 17 to 76 are an integral part of these Consolidated Financial Statements.
Net interest income ...................................................................................................................................
Income tax and special tax on financial activity and institutions .............................................................
Profit for the year .........................................................................................................................................
Adjustments for:
Indexation and exchange rate difference .................................................................................................
Share in profit of associates, net of income tax ........................................................................................
Depreciation and amortisation .................................................................................................................
Net impairment .........................................................................................................................................
Other assets ...............................................................................................................................................
Operating lease assets ...............................................................................................................................
Derivatives - liabilities ...............................................................................................................................
Deposits ....................................................................................................................................................
Insurance contract liabilities .....................................................................................................................
Short positions ...........................................................................................................................................
Other liabilities ..........................................................................................................................................
Other adjustments .....................................................................................................................................
Adjustment relating to assets held for sale ...............................................................................................
Derivatives - assets ....................................................................................................................................
Fixed income securities .............................................................................................................................
Shares and other variable income securities ............................................................................................
Securities used for hedging .......................................................................................................................
Loans to customers ....................................................................................................................................
Effects of exchange rate fluctuations on cash and balances with Central Bank .........................................
Cash and balances with Central Bank at the beginning of the year, including assets held for sale ...........
Cash and cash equivalents due to assets held for sale ................................................................................
Net change in cash and balances with Central Bank ...................................................................................
Repayment of lease liabilities ......................................................................................................................
Issued bonds ................................................................................................................................................
Dividend paid to shareholders .....................................................................................................................
Subordinated loans ......................................................................................................................................
Borrowings ...................................................................................................................................................
Dividend from associates .............................................................................................................................
Disposal (Acquisition) of subsidiary and associates, net of cash .................................................................
Interest received ..........................................................................................................................................
Sale of own shares due to share options .....................................................................................................
Acquired own shares ....................................................................................................................................
Additions of intangible assets ......................................................................................................................
Net acquisition of property and equipment ................................................................................................
Interest paid .................................................................................................................................................
Income tax paid ............................................................................................................................................
Consolidated Financial Statements 31 December 2024 15
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
0
General information Page Risk management Page
1 Reporting entity ............................................................................ 17 42 Risk management framework ........................................................ 37
2 Basis of preparation ..................................................................... 17 43 Hedging ........................................................................................... 38
3 Discontinued operations .............................................................. 18 44 Credit risk - overview ...................................................................... 39
45 Maximum exposure to credit risk .................................................. 40
Segment information 46 Credit quality of financial assets .................................................... 40
4 Business segments ....................................................................... 19 47 Loan-to-value ................................................................................. 45
48 Collateral against exposures to derivatives ................................... 45
Income statement 49 Large exposures .............................................................................. 45
5 Net interest income ...................................................................... 21 50 Liquidity risk ................................................................................... 46
6 Net fee and commission income .................................................. 21 51 Market risk ...................................................................................... 50
7 Net financial income (expense) .................................................... 22 52 Interest rate risk ............................................................................. 50
8 Foreign currency exchange difference ......................................... 22 53 Interest rate risk associated with trading portfolios ...................... 50
9 Administrative expenses .............................................................. 22 54 Interest rate risk associated with non-trading portfolios .............. 51
10 Salaries and related expenses ...................................................... 22 55 Exposure towards changes in the CPI ............................................ 52
11 Employment terms of the Board of Directors and management 23 56 Currency risk ................................................................................... 52
12 Auditor's fees ................................................................................ 23 57 Equity risk ....................................................................................... 54
13 Net impairment ............................................................................ 24 58 Operational risk .............................................................................. 54
14 Income tax .................................................................................... 24
15 Special tax on financial activity .................................................... 24 Financial assets and liabilities
16 Special tax on financial institutions .............................................. 24 59 Accounting classif. of financial assets and financial liabilities ....... 55
17 Earnings per share ........................................................................ 25 60 Financial assets and financial liabilities measured at fair value .... 56
61
Financial assets and financial liabilities
Statement of Financial Position not measured at fair value ............................................................. 58
18 Cash and balances with Central Bank .......................................... 26
19 Fixed income securities ................................................................ 26 Other information
20 Shares and other variable income securities ............................... 26 62 Pledged assets ................................................................................ 59
21 Securities used for hedging .......................................................... 26 63 Related parties ............................................................................... 59
22 Loans to customers ...................................................................... 27 64 Remuneration policy ...................................................................... 60
23 Derivatives .................................................................................... 27 65 Incentive scheme ............................................................................ 60
24 Group entities ............................................................................... 28 66 Share-based payments ................................................................... 60
25 Investment in associates .............................................................. 28 67 Shareholders of the Bank ............................................................... 62
26 Intangible assets ........................................................................... 28 68 Others matters ............................................................................... 62
27 Operating lease assets .................................................................. 29 69 Events after the reporting date ...................................................... 62
28 Deferred tax assets and liabilities ................................................ 29
29 Other assets .................................................................................. 30 Significant accounting policies 63
30 Borrowings ................................................................................... 30
31 Issued bonds ................................................................................. 30
32 Subordinated liabilities ................................................................ 31
33 Short positions held for trading ................................................... 31
34 Short positions used for hedging ................................................. 31
35 Other liabilities ............................................................................. 31
36 Share capital ................................................................................. 32
37 Solvency of financial conglomerate ............................................. 33
38 Capital adequacy ratio (CAR) ........................................................ 34
39 Solvency of insurance activities ................................................... 35
40 Leverage ratio ............................................................................... 35
41
Minimum requirements for own funds
and eligible liabilities (MREL) ....................................................... 36
Consolidated Financial Statements 31 December 2024 16
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
0
General information
Consolidated Financial Statements 31 December 2024 17
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
0
Consolidated Financial Statements 31 December 2024 18
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
0
3. Discontinued operations (cont.)
Consolidated Financial Statements 31 December 2024 19
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
0
4. Business segments (cont.)
-
Consolidated Financial Statements 31 December 2024 20
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
4
Consolidated Financial Statements 31 December 2024 21
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
4
Consolidated Financial Statements 31 December 2024 22
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
4
Consolidated Financial Statements 31 December 2024 23
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
4
Consolidated Financial Statements 31 December 2024 24
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
4
Consolidated Financial Statements 31 December 2024 25
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
17
Consolidated Financial Statements 31 December 2024 26
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
17
Consolidated Financial Statements 31 December 2024 27
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
17
Consolidated Financial Statements 31 December 2024 28
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
17
26. Intangible assets (cont.)
Consolidated Financial Statements 31 December 2024 29
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
17
Consolidated Financial Statements 31 December 2024 30
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
17
Consolidated Financial Statements 31 December 2024 31
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
17
35. Other liabilities (cont.)
Consolidated Financial Statements 31 December 2024 32
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
17
Consolidated Financial Statements 31 December 2024 33
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
17
Consolidated Financial Statements 31 December 2024 34
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
17
Consolidated Financial Statements 31 December 2024 35
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
17
Consolidated Financial Statements 31 December 2024 36
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
41
Consolidated Financial Statements 31 December 2024 37
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
42
42. Risk management framework (cont.)
Consolidated Financial Statements 31 December 2024 38
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
42
Consolidated Financial Statements 31 December 2024 39
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
44
Consolidated Financial Statements 31 December 2024 40
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
46
46. Credit quality of financial assets (cont.)
Consolidated Financial Statements 31 December 2024 41
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
46
46. Credit quality of financial assets (cont.)
88,207
Consolidated Financial Statements 31 December 2024 42
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
46
46. Credit quality of financial assets (cont.)
Consolidated Financial Statements 31 December 2024 43
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
46
46. Credit quality of financial assets (cont.)
Consolidated Financial Statements 31 December 2024 44
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
46
Consolidated Financial Statements 31 December 2024 45
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
49
Consolidated Financial Statements 31 December 2024 46
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
49
50. Liquidity risk (cont.)
Consolidated Financial Statements 31 December 2024 47
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
49
50. Liquidity risk (cont.)
1
Consolidated Financial Statements 31 December 2024 48
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
49
50. Liquidity risk (cont.)
Consolidated Financial Statements 31 December 2024 49
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
50
Consolidated Financial Statements 31 December 2024 50
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
50
Consolidated Financial Statements 31 December 2024 51
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
50
Consolidated Financial Statements 31 December 2024 52
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
56
56. Currency risk (cont.)
1
1
Consolidated Financial Statements 31 December 2024 53
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
56
56. Currency risk (cont.)
Consolidated Financial Statements 31 December 2024 54
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
58
Consolidated Financial Statements 31 December 2024 55
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
58
Consolidated Financial Statements 31 December 2024 56
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
58
60. Financial assets and financial liabilities measured at fair value (cont.)
Consolidated Financial Statements 31 December 2024 57
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
58
60. Financial assets and financial liabilities measured at fair value (cont.)
Consolidated Financial Statements 31 December 2024 58
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
61
Consolidated Financial Statements 31 December 2024 59
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
61
Consolidated Financial Statements 31 December 2024 60
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
61
66. Share-based payments (cont.)
Consolidated Financial Statements 31 December 2024 61
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
61
Consolidated Financial Statements 31 December 2024 62
Kvika banki hf. Amounts are in ISK thousands
Notes to the Consolidated Financial Statements
0
Significant accounting policies Page
70 Basis of consolidation ............................................................................
64
71 Foreign currency ....................................................................................
65
72 Interest income and expense .................................................................
65
73 Fee and commission income and expense ............................................
65
74 Net financial income (expense) .............................................................
66
75 Dividend income ....................................................................................
66
76 Administrative expenses ........................................................................
66
77 Employee benefits .................................................................................
66
78 Income tax ..............................................................................................
66
79 Financial assets and financial liabilities .................................................
67
80 Offsetting ...............................................................................................
68
81 Determination of fair value ....................................................................
68
82 Impairment ............................................................................................
69
83 Cash and balances with Central Bank ....................................................
71
84 Fixed income securities ..........................................................................
71
85 Shares and other variable income securities .........................................
71
86 Securities used for hedging ....................................................................
71
87 Loans to customers ................................................................................
72
88 Derivatives ..............................................................................................
72
89 Investments in associates ......................................................................
72
90 Intangible assets ....................................................................................
72
91 Operating lease assets ...........................................................................
73
92 Property and equipment ........................................................................
73
93 Other assets ...........................................................................................
74
94 Deposits .................................................................................................
74
95 Borrowings .............................................................................................
74
96 Issued bonds ..........................................................................................
74
97 Subordinated liabilities ..........................................................................
74
98 Short positions held for trading .............................................................
74
99 Short positions used for hedging ...........................................................
74
100 Other liabilities .......................................................................................
74
101 Assets and disposal groups held for sale ...............................................
74
102 Right of use asset and lease liability ......................................................
75
103 Financial guarantees ..............................................................................
75
104 Share capital ...........................................................................................
75
105 Nature and purpose of equity reserves .................................................
75
106 Earnings per share ..................................................................................
75
107 New standards and interpretations .......................................................
76
108 Use of estimates and judgements .........................................................
76
Consolidated Financial Statements 31 December 2024 63
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these Consolidated Financial Statements, and
have been applied consistently by Group entities.
Consolidated Financial Statements 31 December 2024 64
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
Consolidated Financial Statements 31 December 2024 65
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
Consolidated Financial Statements 31 December 2024 66
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
Consolidated Financial Statements 31 December 2024 67
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
79.
Financial assets and financial liabilities (cont.)
Consolidated Financial Statements 31 December 2024 68
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
Consolidated Financial Statements 31 December 2024 69
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
82. Impairment (cont.)
is the 12 month PD
). The Group monitors the
Consolidated Financial Statements 31 December 2024 70
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
82. Impairment (cont.)
Consolidated Financial Statements 31 December 2024 71
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
Consolidated Financial Statements 31 December 2024 72
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
90. Intangible assets (cont.)
Consolidated Financial Statements 31 December 2024 73
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
92. Property and equipment (cont.)
Consolidated Financial Statements 31 December 2024 74
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
Consolidated Financial Statements 31 December 2024 75
Kvika banki hf.
Notes to the Consolidated Financial Statements
69
Consolidated Financial Statements 31 December 2024 76
Appendix 1:
Statement on the Corporate
Governance of Kvika banki hf. 2024
Unaudited
Kvika banki hf.
Statement on the Corporate Governance of Kvika banki hf. 2024
0
Business strategy and values
Kvika banki hf. (hereinafter referred to as “Kvika” or the “Bank”) is categorized as a financial conglomerate by the Financial Supervision of the Central
Bank of Iceland (hereinafter referred to as “FME”). Kvika’s purpose is to increase competition and simplify customers’ finances by utilizing
infrastructure and financial strength. Kvika’s vision is to transform financial services in Iceland with mutual benefits in mind. On that journey, Kvika is
guided by three values that contribute to the development of robust business relationships, long-term results, and active innovation. Kvika’s values are
long-term thinking, simplicity, and courage. In accordance with those values the Bank places emphasis on thinking of the future and contributing to a
sustainable community through active participation. Emphasis is placed on putting ourselves in the customer’s shoes, rethinking things and selecting
projects that provide the most long-term value for customers and the Bank.
Kvika offers its customers diversified financial services through four business segments: Commercial Banking, Investment Banking, Asset Management
and UK operations. The business segments Asset Management and the UK operations are operated in the subsidiaries Kvika eignastýring hf. and Kvika
Securities Ltd. Kvika is also the owner of the insurance company TM tryggingar hf. In May 2024 the company was sold to Landsbankinn hf. and the
company is treated as an asset held for sale until the sales process is concluded.
Sustainability
Kvika’s purpose, as previously stated, is to increase competition in financial services and simplify customers’ finances. The Bank emphasizes long-term
thinking and promoting a sustainable society through active participation. In 2022, a specific sustainability policy was established, and relevant
supporting policies formulated or updated, such as education and professional development policy, gender equality, health, and human resources
policy.
Kvika takes the independence of its licenced subsidiaries, both with regards to management and day-to-day operations, seriously. However, Kvika, as a
parent company, is responsible for internal governance on a consolidated basis. In that context Kvika has laid down ground rules for its subsidiaries,
both in terms of administrative structure and internal governance, through ownership policies for its significant subsidiaries and requires regular and
ad hoc information from the subsidiaries to the parent company. Kvika requires harmonized and professional work ethics within the Kvika group,
harmonized corporate culture, coordinated human resources working under the same conditions and that Kvika’s values are maintained within the
group to the extent allowed by law. Further reference is made to annual reports of the Bank’s subsidiaries, available at www.skatturinn.is.
Asset Management emphasises on offering clients a broad range of services for investing in Iceland as well as in foreign markets. Its aim is to provide
the best asset and fund management services, guided by clients’ long‐term interests. Asset and fund management operations are mostly handled by
Kvika’s subsidiary, Kvika eignastýring hf. (hereinafter referred to as “KES”).
Return on equity is determined by decisions made in accordance with the Bank’s risk appetite, which reflects its profitability targets. Consequently,
decisions regarding the optimal composition of the balance sheet to generate income are restricted by risk appetite. Kvika’s target is a return on
tangible equity of at least 20% and keeping the capital adequacy ratio (CAR) 2-4% above legal and regulatory requirements set by FME.
Kvika’s objective is to deliver to shareholders an annual compensation equivalent to a minimum of 25% of profit, whether in the form of dividend
payments or share repurchases, under a formal buy-back programme, as authorised by applicable laws and decisions made at shareholders’ meetings.
When deciding on the amount of dividends or, as the case may be, the funds allocated for share buy-backs, care is taken to maintain Kvika’s strong
financial position, bearing in mind risks in the internal and external environment and growth prospects, to ensure that the Bank maintains a solid
capital ratio and liquidity for the future. Dividend payments are always subject to assessments of the opportunities offered by reinvesting profits in
Kvika’s operations and growth.
Commercial Banking provides businesses, institutions, and investors with general banking services. Customer’s daily banking transactions are handled
mostly via Kvika’s online banking system. Kvika’s specialized brands provide diverse financial services to customers. Aur provides individuals with
access to a variety of banking services and Auður offers the same group with a selection of savings accounts. In 2024, Auður also began offering
corporate accounts for legal entities and announced plans to start mortgage lending under the Auður brand in 2025. Lykill makes financing in the form
of loan and lease agreements for cars, machinery, and equipment available for individuals and companies. Kvika also operates the brand Framtíðin
exclusively online and provides mortgages to individuals in the form of secondary mortgages. Lastly, Kvika provides payment services to customers
through its brands Netgíró and Straumur.
The Sustainability policy adopts six of the United Nations Sustainable Development Goals (SDGs) to focus on in Kvika’s operations: SDG 3 on good
health and safety; SDG 4 on quality education; SDG 5 on gender equality; SDG 9 on industry, innovations, and infrastructure; SDG 13 on climate action
and SDG 17 on partnership for the goals.
Investment Banking provides a range of professional services in the fields of specialised financing, securities and foreign exchange transactions and
corporate finance services. Capital Markets provide customers with comprehensive services in securities and foreign exchange brokerage. The
Corporate Finance segment provides advice on the acquisition, sale and merger of companies and business entities, financing businesses via stock or
bond auctions, listing and delisting stocks and bonds. The Corporate Lending segment provides businesses, institutions, and investors with specialised
lending to finance such things as real estate, real estate development, securities transactions and other investments. The division also uses the Bank’s
infrastructure to distribute loans to other institutional investors.
Kvika’s UK operations are operated through the subsidiary Kvika Securities Ltd. (hereinafter referred to as “KSL”). KSL, established in 2017, is a
subsidiary regulated in the United Kingdom by the Financial Supervisory Authority. KSL’s focus is on corporate finance, as well as fund and asset
management services. Further, the property lender Ortus Secured Finance Lmited, is a subsidiary of KSL and specializes in property backed lending in
the UK.
A special sustainability committee is in place at Kvika and is now composed of the CEO, CFO and managing directors of most divisions of the bank and
KES, as well as the Director of Sustainability. The subject area falls under the Operation and Development Division.
In 2024, a sustainability risk policy for the Kvika group was approved by the BOD, replacing the sustainability risk framework for the Kvika group from
2023. The policy forms part of the Bank’s overall risk management framework, with the Risk Management Division overseeing sustainability risk. As
part of the updates to the risk management framework in 2024, a position of a specialist in sustainability risk was added to the Risk Management
Division. Additionally, sustainability risk was elevated within the framework, becoming an independent risk factor and one of the Bank’s key risk
factors.
Consolidated Financial Statements 31 December 2024 78
Kvika banki hf.
Statement on the Corporate Governance of Kvika banki hf. 2024
0
A proposal to create a Nomination Committee was accepted at the Bank’s annual general meeting in March 2024. The committee’s rules of procedure
were also adopted, and the Bank’s Articles of Association were amended to reflect the decision. The Nomination Committee serves as an advisory body
to help shareholders make well-informed decisions when choosing board members. The goal is to guarantee that board members have a wide range of
experience and knowledge that can help the business in its strategic planning and management, taking into account the operating environment. The
majority of the three members of the Nomination Committee must be independent of the business and its top executives. They are selected to one-
year terms. Helga Melkorka Óttarsdóttir and Jóhann Ásgeir Baldurs were elected to the Nomination Committee at the Annual General Meeting.
According to the rules of procedure, the newly elected board also appointed Jakobína Hólmfríður Árnadóttir.
Furthermore, Kvika’s activities comply with the recognised standards and rules of the European Banking Authority (EBA), including guidelines on
internal governance (EBA/GL/2021/05), cf. Article 15 of regulation of the European Parliament and of the Council No. 1093/2010, which was
incorporated into Icelandic law with act no. 24/2017 on a European Financial Supervisory System (hereinafter “EBA Guidelines”). The EBA Guidelines
can be found on FME’s website www.fme.is and on EBA’s website https://www.eba.europa.eu/homepage.
Kvika awards a variety of grants that have a positive social impact, and the selection of projects reflects the six UN SDGs that have been adopted. In
recent years, support has been provided to UNICEF in Iceland; women and innovation with FrumkvöðlaAuður, and industrial studies and teacher
training with allocations from Kvika’s Incentive Fund. Educational support is considered to be one of the best long-term investments for both societies
and individuals. The year 2024 marked the final round of grants awarded by Kvika’s Incentive Fund, as applications for industrial studies and teacher
training programs have increased significantly since the fund’s establishment, achieving the objective for its founding.
A more detailed discussion of the scope, position, and impact of the group regarding environmental, social and governance matters (also known as
“ESG factors”) can be found in Kvika’s sustainability report, which is published together with Kvika’s annual financial statement. The report is largely
based on the European Sustainability Reporting Standards of the CSRD legislation (Corporate Sustainability Reporting Directive), which has not yet
been implemented in Iceland.
Compliance with corporate governance guidelines
In 2024, work began with external consultants on a double materiality assessment, which is the first step in the Risk Management Division’s risk
management process for monitoring sustainability risk. The result of the double materiality assessment will form the foundation for further work in the
sustainability area in the coming year and will also serve as the basis for Kvika’s sustainability reporting for 2024.
In 2024, as part of the Model Company in Corporate Governance (“Fyrirmyndarfyrirtæki í stjórnarháttum”), the bank hired consultants to conduct a
corporate governance review. Based on the review’s findings, Kvika was recognized in August for good corporate governance.
Kvika is obliged to observe recognised corporate governance guidelines, pursuant to Par. 7 of Article 54 of Act No. 161/2002, on Financial Undertakings.
The Bank complies with chapter VII of Act No. 161/2002, on Financial Undertakings, and with the Guidelines on Corporate Governance issued jointly in
February 2021 by the Chamber of Commerce, NASDAQ Iceland, and SA – Business Iceland. The Guidelines are available on the website of the Chamber
of Commerce www.vi.is.
Kvika is a member of the United Nations Principles for Responsible Investment (UN PRI) and is working on integrating the principles of the UN PRI into
it’s operations, particularly within KES. Kvika is one of the founding members of IcelandSIF, an organisation for responsible investments, is a member of
Festa Centre for Sustainability and supports Grænvangur, which is a co-operation forum between industry and government on climate issues and green
solutions. Kvika is a member of the Partnership for Carbon Accounting Financials (PCAF), an industry-led initiative to enable financial institutions to
consistently measure and disclose GHG emissions financed by their loans and investments. In 2024, Kvika conducted its second assessment of
estimated financed emission using the PCAF methodology and, for the first time, released a report detailing greenhouse emissions financed through its
loans and investments for the years 2021 and 2022.
Regulatory framework
Kvika is a financial undertaking subject to provisions of Act No. 161/2002, on Financial Undertakings, Act No 61/2017, on Additional Supervision of
Financial Conglomerates, Act No. 115/2021, on The Market for Financial Instruments, Act No. 60/2021, on Measures against Market Abuse, Act No.
108/2007, on takeovers, Act No. 45/2020, on Alternative Investment Funds, Act No. 116/2021 on undertakings for collective investment in transferable
securities, Act No. 14/2020, on Prospectus for Public Offering or Admission to Trading on a Regulated Market, Act No. 33/2013, on Consumer Lending,
Act No. 118/2016, on mortgage lending to consumers, Act No. 100/2016 on Insurance Activity, Act No. 2/1995 on Limited Liability Companies, the
Competition Act, No. 44/2005, Act No. 114/2021, on Payment Services, Act No. 3/2006, on Annual Financial Statements, Act No. 140/2018, on
Measures against Money Laundering and Terrorist Financing and others. Moreover, Kvika is obliged to guarantee the safety of the personal data it
processes in its activities, in accordance with Act No. 90/2018, on the Protection of Privacy as regards the Processing of Personal Data and follows Act
No. 25/2023 on Sustainable Finance Disclosure. Kvika has an operating licence from FME, which supervises the activities of the Bank. Kvika’s activities
are therefore governed by the rules and instructions of the FME and Central Bank of Iceland. Kvika is also subjective to further extensive legislation and
secondary acts that apply to the financial market, mostly originated from Europe, and incorporated in Icelandic law through various means. More
details about FME and an overview of the principal legislation and rules that apply to the Bank at any given time can be found on the website of FME
www.fme.is.
Consolidated Financial Statements 31 December 2024 79
Kvika banki hf.
Statement on the Corporate Governance of Kvika banki hf. 2024
0
The BOD is the supreme authority in the affairs of the Bank between shareholders’ meetings. Its main duties are to supervise all of Kvika’s operations
and ensure that they are in good order at all times. The BOD is responsible for Kvika’s policy making and shall ensure that the accounting and handling
of the Bank’s assets is properly supervised. The BOD prepares plans for Kvika in line with the Bank’s objectives and in accordance with its Articles of
Association and determines the strategies to be followed to achieve the objectives set. The BOD appoints the CEO and supervises his work, e.g., by
receiving regular reports from the CEO at board meetings. The BOD annually evaluates the CEO’s work in a documented manner. The BOD also
represents the Bank before courts and government authorities and allocates authority to sign and to commit the Bank.
Kvika’s BOD and control units regularly verify the effectiveness of internal controls and risk management.
Composition and activities of the BOD, Executive Committee, and sub-committees
Each year Kvika’s annual general meeting elects the BOD consisting of five board members and two alternates.
Board members come from varied backgrounds, and all possess extensive experience and expertise. In accordance with the Act on Limited Liability
Companies No. 2/1995, the Bank’s Articles of Association and Kvika’s policy for assessing the eligibility of its board members and CEO care is taken to
ensure at least 40% representation of each gender on the BOD and mong the alternates. The BOD is currently comprised of three men and two women.
In 2024, Guðmundur Örn Þórðarson, deputy chairman of the BOD, was appointed to the new position of Managing Director of Business Development
and stepped down as board member simultaneously. Sigurgeir Guðlaugsson, alternate board member, assumed his position as board member and
Helga Kristín Auðunsdóttir was elected deputy chairperson of the BOD.
Regular board meetings are generally held once a month and, as the case may be, additional meetings in between to discuss specific matters. In 2024,
21 board meetings were held and all current board members attended all board meetings, except for two meetings where one board member was
absent in each instance. The Chairman attended all meetings of the BOD.
Kvika’s BOD has three sub‐committees, the Audit Committee, Risk Committee and Remuneration Committee.
The members of the Audit Committee are Helga Kristín Auðunsdóttir, as chairperson, Ingunn Svala Leifsdóttir and Margrét G. Flóvenz. The committee is
intended to play an advisory and supervisory role for Kvika’s BOD by, among other things, ensuring the quality of financial statements and other
financial information from the Bank and the independence of its auditors. The committee supervises accounting procedures and the effectiveness of
internal controls as well as internal and external auditing. The committee met nine times in 2024 and all members attended all meetings .
The members of the Risk Committee are Ingunn Svala Leifsdóttir, as chairperson, Sigurgeir Guðlaugsson, which assumed a seat in the committee after
he became board member in August 2024, and Sigurður Hannesson. The committee has an advisory and supervisory role for the Bank’s BOD, among
other things, in determining its risk policy and risk appetite. The committee also monitors the organisation and effectiveness of risk management,
management of credit risk, market risk, liquidity risk, operating risk, reputational risk, and other risks, as the case may be. The committee met 11 times
in 2024 and all members attended all meetings. Guðmundur Þórðarson, previous committee member and chairman, attended seven meetings and
Sigurgeir Guðlaugsson attended four meetings.
The main elements of internal control, risk management and accounting
The BOD is responsible for ensuring that an active system of internal control is in place within the Bank, which is based on three lines of defence. The
first line of defence consists of the management and the employees of business and supporting units in charge of the Bank’s daily management and
organization. The main responsibility of the first line of defence is to ensure the functionality and implementation of internal control measures in daily
operations. The second line of defence is comprised of the internal control units of the Bank, principally the Compliance Officer and Risk Management.
The Compliance Officer is responsible for the training of employees and the BOD, monitors and regularly assesses compliance with relevant legislation,
monitors compliance risk, as well as consulting on implementation of laws and regulations in Kvika’s operations. Risk Management, among other
things, measures and assesses risk according to the Bank’s risk appetite and carries out regular reporting to supervisory entities. Other units may also
be assigned a supervisory role in the second line of defence, in line with Kvika’s policy on internal control. The third line of defence is the internal
auditor, operating independently from other units within Kvika’s organization and directly under the control of the BOD, according to a formal
statement of duties and job description of the internal audit function. The internal audit function assesses the effectiveness of risk management,
control methods and internal governance in an independent and objective manner and in accordance with internal auditing standards. Among other
things, the function prepares independent audits, verifications, and advice to the BOD and the Audit Committee.
The implementation and functioning of internal control are the responsibility of the management of the Bank. Internal control is based on risk
assessments and control measures intended to reduce risk factors in the operations of the Bank. Internal control includes documented and formal
procedures which Kvika’s employees follow in their daily work, and which are reviewed by the control units.
The BOD determines the risk policy and risk appetite of the group within Kvika Group’s Risk Policy, which also defines main risk factors in Kvika’s
operations, including their nature and acceptable volume. The purpose of the policy is to establish an effective and transparent framework for
managing the group’s risk and risk appetite, ensuring that risk management is aligned across the group on a consolidated basis. The Kvika Group Risk
Policy stipulates that the Bank and its subsidiaries must ensure that the policy is implemented in their daily operations where applicable. It further
states that Kvika and its subsidiaries shall establish risk policies addressing the main risk factors relevant to their activities. These policies must define a
risk appetite within the framework of the risk appetite outlined in the Kvika Group Risk Policy.
The CEO reports to the BOD and verifies the effectiveness of internal controls and risk management in the Consolidated Financial Statements. Internal
controls and risk management applied in the preparation of the Consolidated Financial Statements are organised with a view to preventing any
significant deficiencies in the accounting process.
Kvika’s Finance division prepares annual financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the
EU, and additional requirements, as applicable, in the Act on Annual Accounts no. 3/2006, the Act on Financial Undertakings no. 161/2002 and rules on
accounting for credit institutions no. 834/2003. The annual financial statements are audited by Kvika’s external auditors, Deloitte.
The BOD hires an Internal Auditor, signs his/her formal statement of duties, and annually approves the internal audit plan. The CEO appoints the
Compliance Officer, and the BOD confirms the appointment. The CEO appoints the Managing Director of the Risk Management function. The reports
and findings of the internal control function are presented directly to the BOD.
Consolidated Financial Statements 31 December 2024 80
Kvika banki hf.
Statement on the Corporate Governance of Kvika banki hf. 2024
0
The members of Kvika’s Executive Committee, in addition to the CEO are the following employees: Anna Rut Ágústsdóttir, Managing Director of
Operations and Development, Bjarni Eyvinds Þrastarson, Managing Director of Investment Banking, Elísabet Guðrún Björnsdóttir, Managing Director of
Risk Management, Eiríkur Magnús Jensson, CFO, Guðmundur Þórðarson, Managing Director of Business Development, Halldór Snæland, Managing
Director of Commercial Banking, and Lilja Jensen, General Counsel. Additionally in the group’s Executive Committee is Hannes Frímann Hrólfsson, CEO
of KES. More details about the Executive Committee are accessible on Kvika’s website www.kvika.is.
The CEO can provide more detailed information on the rules of procedure and the operations of the BOD and sub-committees.
Information on Board members
Sigurður Hannesson is the chairman of the BOD. He was appointed to Kvika’s BOD in March 2020. He was born in 1980 and is currently the Director
General of the Federation of Icelandic Industries. From 2013-2017, Sigurdur worked as a managing director of Kvika’s (previously MP Bank’s) asset
management division. In 2015, Sigurdur was the Vice-Chairman of the Government Task Force on lifting of capital controls and in 2013 the Chairman of
the Expert Group on household debt relief. From 2010-2013, Sigurdur worked as CEO of Jupiter fund management company, now Kvika eignastýring,
and in Capital Markets at Straumur Investment Bank from 2007-2010. Sigurdur holds a DPhil degree in mathematics from the University of Oxford, a BS
degree in mathematics from the University of Iceland and is a certified securities broker. Sigurður also sits on the boards of Iceland Symphony
Orchestra, Grænvangur (Green by Iceland), Reykjavík University, Skólastræti and the Icelandic Cancer Society. Sigurður owns 8,550,107 shares in the
Bank through shareholding in the private limited company BBL 39 ehf., but does not have interest links with major clients, competitors, or big
shareholders in the sense of the corporate governance guidelines and is also independent from the bank in sense of the guidelines.
Kvika has adopted a policy for assessing the eligibility of its board members and CEO as provided for in EBA guidelines and pursuant to Art. 52 of Act
No. 161/2002 on Financial Undertakings, provisions of Rules No. 150/2017 on assessment of eligibility of managing directors and directors of financial
undertakings and the guidelines. It addresses, inter alia, Kvika’s policy on the diversity of its BOD, Executive Committee, and senior management with
regard to age, gender and educational and professional background. The composition of the BOD is also dealt with in Kvika’s Articles of Association,
which state, among other things, that its BOD shall be so comprised that its members jointly possess adequate expertise, skills, and experience to
understand the activities of the Bank, including key risk factors. Kvika has also adopted a Human Resources Policy and Equality Policy. According to the
Bank’s Equality Policy, non-discrimination and diversity shall characterise all its operations. All employees should have the opportunity to make good
use of their abilities at work and be valued on their own merit, have equal opportunities, and enjoy the same rights in their work and for career
advancement, regardless of gender, age and origin. The status and opportunities of individuals shall be equal regardless of gender, race, nationality,
religion, age, or other irrelevant factors when it comes to employment in management positions and participation in working groups, boards and
committees.
Guðjón Reynisson was appointed to Kvika’s BOD in March 2018. He was born in 1963 and works as an independent investor and board member.
Between 2008 and 2017 he served as CEO of Hamleys of London. From 2003 to 2008, he served as managing director of the 10-11 stores. From 1998 to
2003 he was the managing director of the sales division of Tal, an Icelandic phone company. He graduated with an MBA degree from the University of
Iceland in 2002. He graduated with an Operations and Business degree from the Continuing Education Study of the University of Iceland in 1999 and
graduated with a degree as a licensed physical education teacher from the University of Iceland in 1986. Guðjón has been on the board of directors of
Festi hf. since 2014, of Securitas hf. since 2018 and of Dropp ehf. since 2020. In 2024 Guðjón also took seat on the board of the private equity fund
Harpa Capital Partners II. Guðjón controls 10,410,789 shares in Kvika through his private limited company, Hakk ehf., but does not have interest links
with major clients, competitors, or big shareholders in the sense of the corporate governance guidelines and is also independent from the bank in
sense of the guidelines.
Helga Kristín Auðunsdóttir is the deputy chairperson of the BOD. She was appointed to Kvika’s BOD in April 2021. She was born in 1980. Helga Kristín
is a doctor in Law from Fordham University in New York. In her doctoral studies at Fordham University she researched corporate governance and hedge
fund investments. Helga Kristín graduated with BS in Business Law from Bifröst University in 2004 and with a master’s degree in law from the same
university in 2006. She graduated with an LL.M degree in law from the University of Miami, with a focus on international business law and contracts in
2010. Helga Kristín is an assistant professor at the Department of Law at Reykjavík University. Before that, she worked as a director and assistant
professor at Bifröst University, as a lawyer for Stoðir hf., as a lawyer for FGM/Auðkenni, now part of the Central Bank of Iceland and as a lecturer at the
faculty of law at University of Miami. Helga Kristín has been a member of the board of directors of TM tryggingar hf. from 2023 and in the years 2020-
2021. She was also an appointed alternate on the board of directors of Tryggingamiðstöðin hf. in 2012-2015. Helga Kristín does not own shares in the
Bank and does not have interest links with major clients, competitors, or big shareholders in the sense of the corporate governance guidelines and is
also independent from the bank in sense of the guidelines.
The members of the Remuneration Committee are Guðjón Reynisson, as chairperson, Sigurður Hannesson, and Helga Kristín Auðunsdóttir. The
committee has an advisory and supervisory role for the Bank’s BOD regarding salaries and other remuneration, ensuring that this supports the Bank’s
objectives and interests. The committee met eight times in 2024 and all members attended all meetings.
All the BOD’s sub-committees have established rules of procedure prescribing the implementation of their tasks in detail and endorsed by the BOD.
The BOD appoints sub-committee members by majority vote from its own ranks and nominates the chairpersons. Because of the nature of the
committees, neither the CEO nor other employees can serve on them. The rules of procedure of the committees and the BOD are accessible on Kvika’s
website www.kvika.is.
Consolidated Financial Statements 31 December 2024 81
Kvika banki hf.
Statement on the Corporate Governance of Kvika banki hf. 2024
0
Communications between shareholders and the BOD
Information is provided to shareholders on a non-discriminatory basis and is mainly limited to shareholders’ meetings or the communication of
harmonised information to all shareholders simultaneously. News of the Bank’s operations are posted on Kvika’s website and press releases are issued
in accordance with disclosure obligations of issuers of shares when newsworthy events in the Bank’s operations take place. A detailed presentation of
the Bank’s operations over the past year is also provided at its AGM and information on the Bank’s operations is published in Kvika’s annual report and
financial statements.
This statement on the corporate governance practices of Kvika banki hf. was reviewed and approved by the BOD on 12 February 2025.
The BOD annually evaluates its performance. It evaluates the performance of tasks and work of the BOD for the previous year. The focus of the
assessment is on strategic planning, disclosure and future vision, the size and composition of the BOD, performance of board members, the work of
sub-committees and performance of the CEO, the internal auditor, and the secretary of the BOD. The development of the Bank is reviewed to assess
whether it is line with objectives. Following the annual performance assessment, the BOD defines tasks in areas where improvements are needed. The
last performance assessment was conducted in December 2024. The BOD also regularly conducts special self-assessments on its composition in
accordance with the guidelines of the European Banking Authority (EBA), and last did so in December 2024.
Information on the CEO of Kvika and his main duties
Ármann Þorvaldsson became CEO of Kvika in August 2023. Ármann was born in 1968 and previously worked as CEO in the years 2017-2019 and Deputy
CEO in the years 2019-2022. Ármann has worked in the financial market for nearly thirty years. From 1997 until 2005 he was Head of Corporate Finance
at Kaupthing and in 2005 until 2008 he was CEO of Kaupthing Singer & Friedlander in London. Later he worked at Ortus Secured Finance in London until
2015 when he joined Virðing. Ármann headed up Virðing’s Corporate Finance division before joining Kvika. Ármann has an MBA degree from Boston
University and a BA degree in history from the University of Iceland. Ármann controls 759.892 shares in Kvika and has also entered into call option
agreements with Kvika in accordance with Kvika’s remuneration policy and incentive scheme. Further, Ármann and his family own the company BMA
ehf. which controls 4,082,158 shares in the Bank. He does not have interest links with major clients, competitors or major shareholders as defined by
the corporate governance guidelines.
The CEO oversees the daily operations of Kvika and in so doing follows the policies and instructions which have been laid down by the Bank’s BOD.
Daily operations do not include unusual or major arrangements. The CEO shall ensure that Kvika’s accounts are kept in accordance with laws and
customs and that the Bank’s assets are handled in a secure manner. The CEO appoints and dismisses employees of the Bank. Furthermore, he is
required to follow all of the BOD’s instructions. The CEO shall provide Kvika’s external auditors with all requested information.
Information on violations of laws and regulations, determined by the relevant supervisory body or adjudicating entity
Kvika has not been subject to withdrawal, revocation or dismissal of registration, authorization, membership, or permissions to perform certain trades,
operations or work. Kvika was not fined by any supervisory body in the year 2023. As per usual the FME performed onsite inspections in 2024. Results
are still pending in individual cases. No court cases or arbitration proceedings which may have significant effects on the Bank, or the Group, were
ongoing or pending at the end of the year.
Ingunn Svala Leifsdóttir was appointed to Kvika’s BOD in September 2021. Ingunn was born in 1976. She graduated with a BS degree in Business from
the University of Iceland in 1999, with a focus on accounting and finance, and with a Cand. Oecon business degree from the same University in 2001,
with a focus on accounting and management. Ingunn Svala completed the Advanced Management program (AMP) from the IESE Business School in
New York in 2018. Ingunn Svala currently works as a chief executive officer at Olís. Prior to that she worked as a COO for Dohop and as an executive
director of operations at Reykjavík University. Ingunn Svala also has extensive experience from the financial sector. She worked for the Kaupthing’s
Resolution Committee as Chief Financial Officer from 2009 to 2011 as well as working as a Global Business Controller in Investment Banking at
Kaupþing bank in 2007 to 2009. Ingunn Svala also worked within the Actavis Group PTC consolidation in 2006 to 2007 as a CFO for four subsidiaries,
namely Actavis hf., Medís ehf., Actavis Group hf. and Actavis Group PTC ehf. Ingunn Svala has extensive experience of serving as a board member and
has previously served on the boards of Ósar – lifeline of health hf. and of its subsidiary, Parlogis ehf., as well as Slippurinn Akureyri and Lífís, a
subsidiary of VÍS. Ingunn Svala does not own shares in the Bank and does not have interest links with major clients, competitors, or big shareholders in
the sense of the corporate governance guidelines and is also independent from the bank in sense of the guidelines.
Main factors in the BOD’s performance evaluation
Helga Jóhanna Oddsdóttir is an alternate member of the BOD. In the opinion of the BOD, she is also an independent member of the BOD within the
meaning of the corporate governance guidelines.
The BOD considers all board members to be independent as defined by the corporate governance guidelines.
Sigurgeir Guðlaugsson, who was elected as an alternate board member at Kvika’s AGM in 2024, joined Kvika’s BOD in August 2024. Sigurgeir was born
in 1976. He graduated with a B.Sc. degree in international business from the Copenhagen Business School in 1999 and was CEO of biotechnology
company Genís hf. until at year-end 2024. Sigurgeir worked for the corporate banking division of Fjárfestingabanki atvinnulífsins, later Íslandsbanki,
between 1999-2003. He also worked for Actavis Group between 2003-2006 where he was head of global mergers and acquisitions. Sigurgeir was
managing director of investments in the healthcare industry for Novator between 2006-2009. He founded the consulting company Citalfort Consulting
slf. at year-end 2009 and worked for the company until year-end 2021, when he assumed the position of CEO of Genís, excluding the years between
2013-2016, when he was partner and employee of H.F. Verðbréf hf. in the year 2013, and CEO of biotechnology company Zymetech ehf. between 2014-
2016. Sigurgeir has, among others, been a member of the board of directors of Straumur fjárfestingarbanki hf., Coripharma Holding hf., Actavis Group
hf., Actavis Inc., Enzymatica AB, 3Z ehf., FlyOver Iceland ehf. and Scandinavian Biogas AB. Today Sigurgeir is the chairman of the board of directors of
Citalfort Consulting slf., Altius ehf., Citius ehf. and Ögurás ehf. Sigurgeir does not own any shares in the Bank and does not have interest links with
major clients, competitors, or big shareholders in the sense of the corporate governance guidelines and is also independent from the bank in sense of
the guidelines.
Consolidated Financial Statements 31 December 2024 82
Appendix 1:
EU Taxonomy Regulation
Unaudited
Kvika banki hf. Amounts are in ISK thousands
EU Taxonomy Regulation
Loans to companies
Loans to individuals
Limitations of the 2024 Reporting
2
The delegated regulation on the technical criteria that economic activities must meet to be considered as significantly contributing to climate change mitigation and adaptation, and determining when an economic activity causes significant harm to one or more of the regulation's
objectives.
During the year work continued on implementing Regulation (EU) No. 2020/852 (hereinafter referred
to as the "EU Taxonomy") and delegated regulations that have entered into force in Iceland into the
Bank's operations. The EU Taxonomy was incorporated into Icelandic law with Act No. 25/2023 on
Sustainability Disclosure in Financial Services and the Classification System for Sustainable
Investments. According to Article 8 of the EU Taxonomy companies subject to its provisions, including
Kvika, are required to disclose how and to what extent their activities are linked to economic activities
considered environmentally sustainable.
Kvika is now reporting its Green Asset Ratio (GAR) for the second time in accordance with the
requirements of the EU Taxonomy. The information is presented in templates specified in the annexes
to the EU’s delegated regulations,
1
as provided later in this document for the Bank and Kvika Asset
Management. The templates were recently updated and now reflect all six environmental objectives
of the EU Taxonomy. However, Kvika is only disclosing information for the first two environmental
objectives—climate change mitigation and climate change adaptation—as the remaining four
objectives did not take effect in Iceland until January 1, 2025. Information covering all six
environmental objectives will be included in the sustainability disclosures for the financial year 2025.
Eligible assets under the EU Taxonomy are assets linked to activities specified in the delegated
regulations of the EU Taxonomy, for which technical criteria exist to assess whether the activity is
environmentally sustainable and therefor taxonomy aligned. Kvika’s eligible assets, as defined by
Delegated Regulation (EU) No. 2021/2139,
2
include loans to companies subject to the non-financial
reporting obligation under Article 66(d) of the Annual Accounts Act No. 3/2006, as well as loans to
households (primarily loans for motor vehicles and residential real estate). For eligible assets to be
considered environmentally sustainable and included in Kvika’s GAR calculation, they must meet four
key criteria.
Companies subject to the non-financial reporting obligation under Article 66(d) of the Annual Accounts Act are those
considered large and of public interest. They are also required by law to disclose information and key performance
indicators in accordance with the requirements of the EU Taxonomy. Companies that fall under this definition published
such information for the first time in 2024 for the financial year 2023. Financial institutions are required to use
counterparty data to calculate their GAR and must therefore rely on the information from such companies that are
included in their investment and loan portfolios. Kvika’s loan portfolio is structured in such a way that a large portion of its
corporate loans are granted to small and medium-sized companies that do not meet the aforementioned criteria. As a
result, a very small portion of Kvika´s corporate loans are eligible to be put under the alignment test and Kvika´s GAR
calculation.
Loans related to motor vehicles (6.5: transport with motorcycles, passenger cars, and light commercial vehicles) are
considered eligible activities, as previously mentioned. A significant portion of Kvika’s loans to individuals fall under this
category. However, not all loans are included, as only those issued after June 1, 2023, qualify, which is when the EU
Taxonomy came into effect in Iceland. For a loan for motor vehicles to be classified as environmentally sustainable and as
significantly contributing to climate change mitigation, the emissions of the vehicles in question must be below 50g
CO₂/km. Additionally, the activity must not cause harm to other environmental objectives. To assess this, information on
various aspects of the underlying vehicles, such as their equipment and specifications, must be collected. However, such
information is not always readily available. For this reason, Kvika has not classified this type of loan as environmentally
sustainable and they are excluded from the Bank´s GAR.
Kvika maintains a relatively modest portfolio of real estate-backed loans. While these loans fall within the scope of the EU
Taxonomy as loans related to eligible activities, they are currently not considered environmentally sustainable and
taxonomy aligned. For a mortgage to be classified as environmentally sustainable, information on the energy efficiency of
the buildings associated with the loan is required. Energy efficiency is based on energy performance certificates as defined
in EU Directive No. 2010/31 on the energy performance of buildings. However, Iceland is exempt from implementing this
directive. No formal energy performance certificates have therefore been issued for Icelandic buildings. Due to this lack of
data, mortgages do not meet the technical screening criteria to be classified as environmentally sustainable and are
therefore excluded from Kvika’s GAR calculations.
- The activity related to the loan must significantly contribute to one or more of the environmental
objectives of the EU Taxonomy (so far only two of the six objectives have been considered at Kvika, as
required by law).
- The activity must comply with the technical screening criteria set out in the delegated regulations.
- The activity must be conducted in accordance with minimum safeguards.
- The activity must not significantly harm other environmental objectives established in the EU
Taxonomy.
The implementation and follow-up of the EU Taxonomy is still evolving, and it is anticipated it will take time to enhance
data flow and develop data collection, analysis, and reporting. As companies gain experience with the disclosure
requirements associated with the EU Taxonomy it will become clearer how effective key indicators, such as the GAR, will
be. The technical criteria tailored to different industries will also prove useful in considering green financing in the future.
Kvika will continue to monitor the development of the EU Taxonomy both in Iceland and in Europe as part of the
company’s sustainability journey.
1
The information has been prepared in accordance with the templates in the annexes to Delegated Regulation (EU) No. 2021/2178, which specifies the content and presentation of disclosures that companies must provide regarding environmentally sustainable economic activities
and the methodology for complying with this disclosure obligation. Regulation 2021/2178 was implemented in Iceland through Regulation 10/2024 on the classification system for sustainable investments. On January 1, 2024, Regulation 10/2024 was amended by Regulation
1207/2024, which, among other things, incorporated Delegated Regulation (EU) No. 2023/2486 on additions to the EU Taxonomy and Regulation (EU) 2021/2178. Regulation 2023/2486 introduces additions to the EU Taxonomy by establishing technical screening criteria to
determine the conditions under which economic activities are considered to contribute significantly to the sustainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention and control, or the protection and restoration of
biodiversity and ecosystems. It also defines whether such activities cause significant harm to any other overarching environmental objectives. Additionally, it includes amendments to Regulation (EU) 2021/2178 regarding specific public disclosure requirements for these economic
activities. The delegated regulation sets out the technical criteria that economic activities must meet to be considered as significantly contributing to climate change mitigation and adaptation, as well as when an economic activity causes significant harm to one or more of the
regulation’s objectives.
Consolidated Financial Statements 31 December 2024 84
Kvika banki hf. Amounts are in ISK thousands
Annex VI - Template for the KPIs of credit institutions
Name
* For credit institutions that do not meet the conditions of Article 94(1) of the CRR or the conditions set out in Article 325a(1) of the CRR
** Fees and Commissions and Trading Book KPIs shall only apply starting 2026. SMEs´inclusion in these KPI will only apply subject to a positive result of an impact assessment.
0. Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation
Total environmentally sustainable assets KPI**** KPI*****
% 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)
31.12.2024 Main KPI Green asset ratio (GAR) stock 0.0% 0.0% 65.2% 24.6%
31.12.2023 Main KPI Green asset ratio (GAR) stock 0.0% 0.0% - -
Total environmentally sustainable activities KPI KPI
% 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)
0.0% 0.0%
Trading book*
Financial guarantees 0.0% 0.0%
Assets under management 0,8% 1.0%
Fees and commissions income**
* For credit institutions that do not meet the conditions of Article 94(1) of the CRR or the conditions set out in Article 325a(1) of the CRR
**Fees and commissions income from services other than lending and AuM
*** % of assets covered by the KPI over banks´ total assets
****based on the Turnover KPI of the counterparty
*****based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used
Note 1: Across the reporting templates: cells shaded in black should not be reported.
548,621
0
0
2
GAR sector information
Template number
0
Summary of KPIs
1
Assets for the calculation of GAR
3
GAR KPI stock
4
GAR KPI flow
5
KPI off-balance sheet exposures
6**
KPI on fees and commissions income from services other than lending and asset management*
7**
KPI Trading book portfolio*
% coverage (over total
assets)***
% coverage (over total
assets)
75.4%
74.8%
0
38,4%
0
Consolidated Financial Statements 31 December 2024 85
Kvika banki hf. Amounts are in ISK thousands
1. Assets for the calculation of GAR - Turnover-based
a b c d e f g h i j k l m n o p
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
adaptation
Of which
enabling
Of which Use
of Proceeds
Of which
transitional/
adaptation
Of which
enabling
GAR - Covered assets in both numerator and
denominator****
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR
calculation
36,033,801 12,464,828 12,464,828
2 Financial undertakings
1,256,872
3 Credit institutions
1,665
4 Loans and advances
1,665
5 Debt securities, including UoP
0
6 Equity instruments
0
7 Other financial corporations
1,255,207
8 of which investment firms
0
9 Loans and advances
0
10 Debt securities, including UoP
0
11 Equity instruments
0
12 of which management companies
1,255,207
13 Loans and advances
1,255,207
14 Debt securities, including UoP
0
15 Equity instruments
0
16 of which insurance undertakings
0
17 Loans and advances
0
18 Debt securities, including UoP
0
19 Equity instruments
0
20 Non-financial undertakings
66,811
21 Loans and advances
66,811
22 Debt securities, including UoP
0
23 Equity instruments
0
24 Households*
33,209,208 12,464,828 12,464,828
25
of which loans collateralised by residential
immovable property
1,674,898 1,674,898 1,674,898
26 of which building renovation loans
0
27 of which motor vehicle loans**
20,089,250 10,789,929 10,789,929
28 Local governments financing
1,465,916
29 Housing financing
30 Other local government financing
1,465,916
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0
32
Assets excluded from the numerator for GAR
calculation (covered in the
denominator)*****
231,175,055
ISK Thousand
Disclosure 31.12.2024
Total gross
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Consolidated Financial Statements 31 December 2024 86
Kvika banki hf. Amounts are in ISK thousands
1. Assets for the calculation of GAR - Turnover-based (cont.)
a b c d e f g h i j k l m n o p
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
adaptation
Of which
enabling
Of which Use
of Proceeds
Of which
transitional/
adaptation
Of which
enabling
33 Financial and Non-financial undertakings
115,644,045
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
78,017,062
35 Loans and advances
78,017,062
36
of which loans collateralised by
commercial immovable property
30,408,596
37 of which building renovation loans
0
38 Debt securities
0
39 Equity instruments
0
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
37,626,982
41 Loans and advances
37,626,982
42 Debt securities
0
43 Equity instruments
0
44 Derivatives
13,797,770
45 On demand interbank loans
9,725,772
46 Cash and cash-related assets
15,737
47
Other categories of assets (e.g. Goodwill,
commodities etc.)
91,991,731
48 Total GAR assets
267,284,618 12,464,828 12,464,828
49 Assets not covered for GAR calculation******
87,339,675
50
Central governments and Supranational
issuers
63,335,139
51 Central banks exposure
18,577,682
52 Trading book
5,426,854
53 Total assets
354,594,543 12,464,828 12,464,828
54 Financial guarantees
33,177 0
55 Assets under management ***
73,033,583 10,563,881 548,621 468,457 10,563,881 548,621 468,457
56 Of which debt securities
26,444,660 1,619,340 542,001 461,837 1,619,340 542,001 461,837
57 Of which equity instruments
46,588,924 8,944,541 6,620 6,620 8,944,541 6,620 6,620
*Households include all retail loans issued to individuals
**Motor vehicle loans for households include cars in vehicle groups (M1) and (N1)
**For motor vehicle loans, only exposures generated after 1 June 2023 (the date of application of the disclosure) are included
*** Assets held within portfolios managed by Kvika Asset Management that are subject to Non-Financial Reporting Directive (NFRD) disclosure obligations
1) GAR - Covered assets in both numerator and denominator: Accounting categories of financial assets used for the calculation of the green asset ratio.
32)
49) Other assets not covered for GAR calculation: The exposures to central governments, central banks and supranational issuers shall be excluded from the calculation of the numerator and denominator of key performance indicators of financial undertakings.
Other assets excluded from the numerator for GAR calculation (covered in the denominator): Certain assets are excluded from the numerator e.g. financial assets held for trading, on-demand interbank loans, derivates and exposures to undertakings that are not obliged to
publish non-financial information pursuant to Article 19a or 29a of Directive 2013/34/EU.
Off-balance sheet exposures - Corporates subject to NFRD disclosure obligations
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
ISK Thousand
Disclosure 31.12.2024
Total gross
carrying amount
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Consolidated Financial Statements 31 December 2024 87
Kvika banki hf. Amounts are in ISK thousands
1. Assets for the calculation of GAR - Turnover-based
a b c d e f g h i j k l m n o p
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
adaptation
Of which
enabling
Of which Use
of Proceeds
Of which
transitional/
adaptation
Of which
enabling
GAR - Covered assets in both numerator and
denominator****
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR
calculation
36,234,799 8,921,941
2 Financial undertakings
1,938,213
3 Credit institutions
1,819
4 Loans and advances
1,819
5 Debt securities, including UoP
0
6 Equity instruments
0
7 Other financial corporations
1,936,393
8 of which investment firms
0
9 Loans and advances
0
10 Debt securities, including UoP
0
11 Equity instruments
0
12 of which management companies
1,936,393
13 Loans and advances
1,936,393
14 Debt securities, including UoP
0
15 Equity instruments
0
16 of which insurance undertakings
0
17 Loans and advances
0
18 Debt securities, including UoP
0
19 Equity instruments
0
20 Non-financial undertakings
61,267
21 Loans and advances
61,267
22 Debt securities, including UoP
0
23 Equity instruments
0
24 Households*
32,676,440 8,921,941 8,921,941
25
of which loans collateralised by residential
immovable property
1,930,717 1,930,717 1,930,717
26 of which building renovation loans
0
27 of which motor vehicle loans**
6,991,224 6,991,224 6,991,224
28 Local governments financing
1,558,880
29 Housing financing
30 Other local government financing
1,558,880
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0
32
Assets excluded from the numerator for GAR
calculation (covered in the
denominator)*****
214,574,302
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
ISK Thousand
Disclosure 31.12.2023
Total gross
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-
aligned)
Consolidated Financial Statements 31 December 2024 88
Kvika banki hf. Amounts are in ISK thousands
1. Assets for the calculation of GAR - Turnover-based (cont.)
a b c d e f g h i j k l m n o p
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
adaptation
Of which
enabling
Of which Use
of Proceeds
Of which
transitional/
adaptation
Of which
enabling
33 Financial and Non-financial undertakings
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
72,202,993
35 Loans and advances
72,202,993
36
of which loans collateralised by
commercial immovable property
0
37 of which building renovation loans
0
38 Debt securities
0
39 Equity instruments
0
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
29,436,644
41 Loans and advances
29,436,644
42 Debt securities
0
43 Equity instruments
0
44 Derivatives
19,350,190
45 On demand interbank loans
6,356,998
46 Cash and cash-related assets
20,055
47
Other categories of assets (e.g. Goodwill,
commodities etc.)
87,207,422
48 Total GAR assets
250,809,101 8,921,941 8,921,941
49 Assets not covered for GAR calculation******
84,588,331
50
Central governments and Supranational
issuers
63,426,450
51 Central banks exposure
17,304,400
52 Trading book
3,857,480
53 Total assets
335,397,432 8,921,941 8,921,941
54 Financial guarantees
2,500
55 Assets under management ***
105,753,957
56 Of which debt securities
66,417,080
57 Of which equity instruments
39,336,876
*Households include all retail loans issued to individuals
**Motor vehicle loans for households include cars in vehicle groups (M1) and (N1)
**For motor vehicle loans, only exposures generated after 1 June 2023 (the date of application of the disclosure) are included
*** Assets held within portfolios managed by Kvika Asset Management that are subject to Non-Financial Reporting Directive (NFRD) disclosure obligations
1) GAR - Covered assets in both numerator and denominator: Accounting categories of financial assets used for the calculation of the green asset ratio.
32)
49) Other assets not covered for GAR calculation: The exposures to central governments, central banks and supranational issuers shall be excluded from the calculation of the numerator and denominator of key performance indicators of financial undertakings.
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Off-balance sheet exposures - Corporates subject to NFRD disclosure obligations
Other assets excluded from the numerator for GAR calculation (covered in the denominator): Certain assets are excluded from the numerator e.g. financial assets held for trading, on-demand interbank loans, derivates and exposures to undertakings that are not obliged to
publish non-financial information pursuant to Article 19a or 29a of Directive 2013/34/EU.
ISK Thousand
Disclosure 31.12.2023
Total gross
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Consolidated Financial Statements 31 December 2024 89
Kvika banki hf. Amounts are in ISK thousands
1. Assets for the calculation of GAR - Cap-Ex based
a b c d e f g h i j k l m n o p
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
adaptation
Of which
enabling
Of which Use
of Proceeds
Of which
transitional/
adaptation
Of which
enabling
GAR - Covered assets in both numerator and
denominator****
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR
calculation
36,033,801 12,464,828 12,464,828
2 Financial undertakings
1,256,872
3 Credit institutions
1,665
4 Loans and advances
1,665
5 Debt securities, including UoP
0
6 Equity instruments
0
7 Other financial corporations
1,255,207
8 of which investment firms
0
9 Loans and advances
0
10 Debt securities, including UoP
0
11 Equity instruments
0
12 of which management companies
1,255,207
13 Loans and advances
1,255,207
14 Debt securities, including UoP
0
15 Equity instruments
0
16 of which insurance undertakings
0
17 Loans and advances
0
18 Debt securities, including UoP
0
19 Equity instruments
0
20 Non-financial undertakings
66,811 0
0
0
21 Loans and advances
66,811
22 Debt securities, including UoP
0
23 Equity instruments
0
24 Households*
33,209,208 12,464,828 12,464,828
25
of which loans collateralised by residential
immovable property
1,674,898 1,674,898 1,674,898
26 of which building renovation loans
0
27 of which motor vehicle loans**
20,089,250 10,789,929 10,789,929
28 Local governments financing
1,465,916
29 Housing financing
30 Other local government financing
1,465,916
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0
32
Assets excluded from the numerator for GAR
calculation (covered in the
denominator)*****
231,175,055
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
ISK Thousand
Disclosure 31.12.2024
Total gross
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-
aligned)
Consolidated Financial Statements 31 December 2024 90
Kvika banki hf. Amounts are in ISK thousands
1. Assets for the calculation of GAR - Cap-Ex based (cont.)
a b c d e f g h i j k l m n o p
Of which Use
of Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
adaptation
Of which
enabling
Of which Use
of Proceeds
Of which
transitional/
adaptation
Of which
enabling
33 Financial and Non-financial undertakings
115,644,045
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
78,017,062
35 Loans and advances
78,017,062
36
of which loans collateralised by
commercial immovable property
30,408,596
37 of which building renovation loans
0
38 Debt securities
0
39 Equity instruments
0
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
37,626,982
41 Loans and advances
37,626,982
42 Debt securities
0
43 Equity instruments
0
44 Derivatives
13,797,770
45 On demand interbank loans
9,725,772
46 Cash and cash-related assets
15,737
47
Other categories of assets (e.g. Goodwill,
commodities etc.)
91,991,731
48 Total GAR assets
267,284,618 10,607,330 10,607,330
49 Assets not covered for GAR calculation******
87,339,675
50
Central governments and Supranational
issuers
63,335,139
51 Central banks exposure
18,577,682
52 Trading book
5,426,854
53 Total assets
354,594,543 12,464,828 12,464,828
54 Financial guarantees
33,177 0
55 Assets under management ***
73,033,583 15,440,240 745,523 745,523 15,440,240 745,523 745,523
56 Of which debt securities
26,444,660 1,966,481 461,837 461,837 1,966,481 461,837 461,837
57 Of which equity instruments
46,588,924 13,473,759 283,686 283,686 13,473,759 283,686 283,686
*Households include all retail loans issued to individuals
**Motor vehicle loans for households include cars in vehicle groups (M1) and (N1)
**For motor vehicle loans, only exposures generated after 1 June 2023 (the date of application of the disclosure) are included
*** Assets held within portfolios managed by Kvika Asset Management that are subject to Non-Financial Reporting Directive (NFRD) disclosure obligations
1) GAR - Covered assets in both numerator and denominator: Accounting categories of financial assets used for the calculation of the green asset ratio.
32)
49) Other assets not covered for GAR calculation: The exposures to central governments, central banks and supranational issuers shall be excluded from the calculation of the numerator and denominator of key performance indicators of financial undertakings.
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Of which environmentally sustainable (Taxonomy-
aligned)
Off-balance sheet exposures - Corporates subject to NFRD disclosure obligations
Other assets excluded from the numerator for GAR calculation (covered in the denominator): Certain assets are excluded from the numerator e.g. financial assets held for trading, on-demand interbank loans, derivates and exposures to undertakings that are not obliged to
publish non-financial information pursuant to Article 19a or 29a of Directive 2013/34/EU.
ISK Thousand
Disclosure 31.12.2024
Total gross
carrying amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Of which towards taxonomy relevant sectors (Taxonomy-eligible)
Consolidated Financial Statements 31 December 2024 91
Kvika banki hf. Amounts are in ISK thousands
2. GAR sector information
a b c d e f g h i j k l m
ISK
Thousand
Of which
environmentally
sustainable (CCM)
ISK Thousand
Of which
environmentally
sustainable (CCM)
ISK
Thousand
Of which
environmentally
sustainable (CCA)
ISK
Thousand
Of which
environmentally
sustainable (CCA)
ISK Thousand
Of which
environmentall
y sustainable
(CCM + CCA)
ISK
Thousand
Of which
environmentally
sustainable
(CCM + CCA)
31.12.2024
1
C2442 - Aluminium production 7,517 7,517
31.12.2023
1
C2442 - Aluminium production 8,902 8,902
TOTAL (CCM + CCA)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not subject
to NFRD
Non-Financial corporates (Subject
to NFRD)
Climate Change Adaptation (CCA)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
4. This table only covers exposures to non-financial corporates subject to disclosure obligations according to article 8 of the EU Taxonomy. For the first reporting year the Group cannot disclose which corporates classify as an activity under the objectives of "climate change
mitigation" (CCA) og "climate change adaptation" (CCA), as that is dependent on the public disclosures by said corporates, and therefore the results are published as a total for both objectives.
1. Credit institutions shall disclose in this template information on exposures in the banking book towards those sectors covered by the Taxonomy (NACE sectors 4 levels of detail), using the relevant NACE Codes on the basis of the principal activity of the counterparty.
2. The sector breakdown by activity is only applicable to activities covered by the delegated acts that have been adopted in Iceland.
3. The breakdown by sector is based on ISAT 2008 mapping onto NACE codes, by the principal activity of the counterparty available in public records, the Group expects this to possibly change next year as more companies publish their Taxonomy disclosures in 2024.
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Gross carrying amount
Breakdown by sector - NACE 4 digits level (code and label)
Climate Change Mitigation (CCM)
Consolidated Financial Statements 31 December 2024 92
Kvika banki hf. Amounts are in ISK thousands
3. GAR KPI stock - Turnover-based
a b c d e f g h i j k l m n o p
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
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR
calculation
34.6% 34.6% 10.2%
2 Financial undertakings 0.0% 0.0% 0.4%
3 Credit institutions 0.0% 0.0% 0.0%
4 Loans and advances 0.0% 0.0% 0.0%
5 Debt securities, including UoP 0.0% 0.0% 0.0%
6 Equity instruments 0.0% 0.0% 0.0%
7 Other financial corporations 0.0% 0.0% 0.4%
8 of which investment firms 0.0% 0.0% 0.0%
9 Loans and advances 0.0% 0.0% 0.0%
10 Debt securities, including UoP 0.0% 0.0% 0.0%
11 Equity instruments 0.0% 0.0% 0.0%
12 of which management companies 0.0% 0.0% 0.4%
13 Loans and advances 0.0% 0.0% 0.4%
14 Debt securities, including UoP 0.0% 0.0% 0.0%
15 Equity instruments 0.0% 0.0% 0.0%
16 of which insurance undertakings 0.0% 0.0% 0.0%
17 Loans and advances 0.0% 0.0% 0.0%
18 Debt securities, including UoP 0.0% 0.0% 0.0%
19 Equity instruments 0.0% 0.0% 0.0%
20 Non-financial undertakings 0.0% 0.0% 0.0%
21 Loans and advances 0.0% 0.0% 0.0%
22 Debt securities, including UoP 0.0% 0.0% 0.0%
23 Equity instruments 0.0% 0.0% 0.0%
24 Households 37.5% 37.5% 9.4%
25
of which loans collateralised by residential
immovable property
100.0% 100.0% 0.5%
26 of which building renovation loans 0.0% 0.0% 0.0%
27 of which motor vehicle loans 53.7% 53.7% 5.7%
28 Local governments financing 0.0% 0.0% 0.4%
29 Housing financing 0.0% 0.0% 0.0%
30 Other local government financing 0.0% 0.0% 0.4%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0% 0.0% 0.0%
32
Total GAR assets 4.7% 4.7% 75.4%
% (compared to total covered assets in the
denominator)
Disclosure 31.12.2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
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 covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)
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)
Consolidated Financial Statements 31 December 2024 93
Kvika banki hf. Amounts are in ISK thousands
3. GAR KPI stock - Turnover-based
a b c d e f g h i j k l m n o p
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
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR
calculation
24.6% 24.6% 10.8%
2 Financial undertakings 0.0% 0.0% 0.6%
3 Credit institutions 0.0% 0.0% 0.0%
4 Loans and advances 0.0% 0.0% 0.0%
5 Debt securities, including UoP 0.0% 0.0% 0.0%
6 Equity instruments 0.0% 0.0% 0.0%
7 Other financial corporations 0.0% 0.0% 0.6%
8 of which investment firms 0.0% 0.0% 0.0%
9 Loans and advances 0.0% 0.0% 0.0%
10 Debt securities, including UoP 0.0% 0.0% 0.0%
11 Equity instruments 0.0% 0.0% 0.0%
12 of which management companies 0.0% 0.0% 0.6%
13 Loans and advances 0.0% 0.0% 0.6%
14 Debt securities, including UoP 0.0% 0.0% 0.0%
15 Equity instruments 0.0% 0.0% 0.0%
16 of which insurance undertakings 0.0% 0.0% 0.0%
17 Loans and advances 0.0% 0.0% 0.0%
18 Debt securities, including UoP 0.0% 0.0% 0.0%
19 Equity instruments 0.0% 0.0% 0.0%
20 Non-financial undertakings 0.0% 0.0% 0.0%
21 Loans and advances 0.0% 0.0% 0.0%
22 Debt securities, including UoP 0.0% 0.0% 0.0%
23 Equity instruments 0.0% 0.0% 0.0%
24 Households 27.3% 27.3% 9.7%
25
of which loans collateralised by residential
immovable property
100.0% 100.0% 0.6%
26 of which building renovation loans 0.0% 0.0% 0.0%
27 of which motor vehicle loans 100.0% 100.0% 2.1%
28 Local governments financing 0.0% 0.0% 0.5%
29 Housing financing 0.0% 0.0%
30 Other local government financing 0.0% 0.0% 0.5%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0% 0.0% 0.0%
32
Total GAR assets 3.6% 3.6% 74.8%
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
% (compared to total covered assets in the
denominator)
Disclosure 31.12.2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
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 covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)
Proportion
of total
assets
covered
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Consolidated Financial Statements 31 December 2024 94
Kvika banki hf. Amounts are in ISK thousands
3. GAR KPI stock - Cap-Ex based
a b c d e f g h i j k l m n o p
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
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR
calculation
34.6% 34.6% 10.2%
2 Financial undertakings 0.0% 0.0% 0.4%
3 Credit institutions 0.0% 0.0% 0.0%
4 Loans and advances 0.0% 0.0% 0.0%
5 Debt securities, including UoP 0.0% 0.0% 0.0%
6 Equity instruments 0.0% 0.0% 0.0%
7 Other financial corporations 0.0% 0.0% 0.4%
8 of which investment firms 0.0% 0.0% 0.0%
9 Loans and advances 0.0% 0.0% 0.0%
10 Debt securities, including UoP 0.0% 0.0% 0.0%
11 Equity instruments 0.0% 0.0% 0.0%
12 of which management companies 0.0% 0.0% 0.4%
13 Loans and advances 0.0% 0.0% 0.4%
14 Debt securities, including UoP 0.0% 0.0% 0.0%
15 Equity instruments 0.0% 0.0% 0.0%
16 of which insurance undertakings 0.0% 0.0% 0.0%
17 Loans and advances 0.0% 0.0% 0.0%
18 Debt securities, including UoP 0.0% 0.0% 0.0%
19 Equity instruments 0.0% 0.0% 0.0%
20 Non-financial undertakings 0.0% 0.0% 0.0%
21 Loans and advances 0.0% 0.0% 0.0%
22 Debt securities, including UoP 0.0% 0.0% 0.0%
23 Equity instruments 0.0% 0.0% 0.0%
24 Households 37.5% 37.5% 9.4%
25
of which loans collateralised by residential
immovable property
100.0% 100.0% 0.5%
26 of which building renovation loans 0.0% 0.0% 0.0%
27 of which motor vehicle loans 53.7% 53.7% 5.7%
28 Local governments financing 0.0% 0.0% 0.4%
29 Housing financing 0.0% 0.0%
30 Other local government financing 0.0% 0.0% 0.4%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0% 0.0% 0.0%
32 Total GAR assets 4.7% 4.7% 75.4%
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
% (compared to total covered assets in the
denominator)
Disclosure 31.12.2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
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 covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)
Proportion
of total
assets
covered
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Consolidated Financial Statements 31 December 2024 95
Kvika banki hf. Amounts are in ISK thousands
4. GAR KPI flow - Turnover-based
a b c d e f g h i j k l m n o p
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
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR
calculation
100.0% 100.0% 38.4%
2 Financial undertakings 0.0% 0.0% 0.0%
3 Credit institutions 0.0% 0.0% 0.0%
4 Loans and advances 0.0% 0.0% 0.0%
5 Debt securities, including UoP 0.0% 0.0% 0.0%
6 Equity instruments 0.0% 0.0% 0.0%
7 Other financial corporations 0.0% 0.0% 0.0%
8 of which investment firms 0.0% 0.0% 0.0%
9 Loans and advances 0.0% 0.0% 0.0%
10 Debt securities, including UoP 0.0% 0.0% 0.0%
11 Equity instruments 0.0% 0.0% 0.0%
12 of which management companies 0.0% 0.0% 0.0%
13 Loans and advances 0.0% 0.0% 0.0%
14 Debt securities, including UoP 0.0% 0.0% 0.0%
15 Equity instruments 0.0% 0.0% 0.0%
16 of which insurance undertakings 0.0% 0.0% 0.0%
17 Loans and advances 0.0% 0.0% 0.0%
18 Debt securities, including UoP 0.0% 0.0% 0.0%
19 Equity instruments 0.0% 0.0% 0.0%
20 Non-financial undertakings 100.0% 100.0% 0.2%
21 Loans and advances 100.0% 100.0% 0.2%
22 Debt securities, including UoP 0.0% 0.0% 0.0%
23 Equity instruments 0.0% 0.0% 0.0%
24 Households 39.1% 39.1% 38.1%
25
of which loans collateralised by residential
immovable property
100.0% 100.0% 0.7%
26 of which building renovation loans 0.0% 0.0% 0.0%
27 of which motor vehicle loans 100.0% 100.0% 37.4%
28 Local governments financing 0.0% 0.0% 0.0%
29 Housing financing 0.0% 0.0% 0.0%
30 Other local government financing 0.0% 0.0% 0.0%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0% 0.0% 0.0%
32
Total GAR assets
15.5% 15.5%
38.4%
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
% (compared to flow of total eligible assets)
Disclosure 31.12.2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
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 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)
Consolidated Financial Statements 31 December 2024 96
Kvika banki hf. Amounts are in ISK thousands
4. GAR KPI flow -Turnover-based
a b c d e f g h i j k l m n o p
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
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR
calculation
2 Financial undertakings
3 Credit institutions
4 Loans and advances
5 Debt securities, including UoP
6 Equity instruments
7 Other financial corporations
8 of which investment firms
9 Loans and advances
10 Debt securities, including UoP
11 Equity instruments
12 of which management companies
13 Loans and advances
14 Debt securities, including UoP
15 Equity instruments
16 of which insurance undertakings
17 Loans and advances
18 Debt securities, including UoP
19 Equity instruments
20 Non-financial undertakings
21 Loans and advances
22 Debt securities, including UoP
23 Equity instruments
24 Households
25
of which loans collateralised by residential
immovable property
26 of which building renovation loans
27 of which motor vehicle loans
28 Local governments financing
29 Housing financing
30 Other local government financing
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
32
Total GAR assets
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
% (compared to flow of total eligible assets)
Disclosure 31.12.2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
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 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)
Consolidated Financial Statements 31 December 2024 97
Kvika banki hf. Amounts are in ISK thousands
4. GAR KPI flow - Cap-Ex based
a b c d e f g h i j k l m n o p
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
1
Loans and advances, debt securities and equity
instruments not HfT eligible for GAR
calculation
66.9% 66.9% 38.4%
2 Financial undertakings 0.0% 0.0% 0.0%
3 Credit institutions 0.0% 0.0% 0.0%
4 Loans and advances 0.0% 0.0% 0.0%
5 Debt securities, including UoP 0.0% 0.0% 0.0%
6 Equity instruments 0.0% 0.0% 0.0%
7 Other financial corporations 0.0% 0.0% 0.0%
8 of which investment firms 0.0% 0.0% 0.0%
9 Loans and advances 0.0% 0.0% 0.0%
10 Debt securities, including UoP 0.0% 0.0% 0.0%
11 Equity instruments 0.0% 0.0% 0.0%
12 of which management companies 0.0% 0.0% 0.0%
13 Loans and advances 0.0% 0.0% 0.0%
14 Debt securities, including UoP 0.0% 0.0% 0.0%
15 Equity instruments 0.0% 0.0% 0.0%
16 of which insurance undertakings 0.0% 0.0% 0.0%
17 Loans and advances 0.0% 0.0% 0.0%
18 Debt securities, including UoP 0.0% 0.0% 0.0%
19 Equity instruments 0.0% 0.0% 0.0%
20 Non-financial undertakings 100.0% 100.0% 0.2%
21 Loans and advances 100.0% 100.0% 0.2%
22 Debt securities, including UoP 0.0% 0.0% 0.0%
23 Equity instruments 0.0% 0.0% 0.0%
24 Households 39.1% 39.1% 38.1%
25
of which loans collateralised by residential
immovable property
100.0% 100.0% 0.7%
26 of which building renovation loans 0.0% 0.0% 0.0%
27 of which motor vehicle loans 100.0% 100.0% 37.4%
28 Local governments financing 0.0% 0.0% 0.0%
29 Housing financing 0.0% 0.0% 0.0%
30 Other local government financing 0.0% 0.0% 0.0%
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
0.0% 0.0% 0.0%
32
Total GAR assets
15.5% 0.0%
38.4%
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
% (compared to flow of total eligible assets)
Disclosure 31.12.2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
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 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)
Consolidated Financial Statements 31 December 2024 98
Kvika banki hf. Amounts are in ISK thousands
5. KPI off-balance sheet exposures
a b c d e f g h i j k l m n o
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
1 Financial guarantees (FinGuar KPI) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2 Assets under management (AuM KPI) 0.14 0.01 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.14 0.01 0.00 0.00 0.01
1 Financial guarantees (FinGuar KPI) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2 Assets under management (AuM KPI) 0.21 0.01 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.21 0.01 0.00 0.00 0.01
1. Institution shall dislcose in this template the KPIs for off-balance sheet exposures (financial guarantees and AuM) calculated based on the data disclosed in template 1, on covered assets, and by applying the formulas
proposed in this template.
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
% (compared to flow of total eligible assets)
Disclosure 31.12.2024
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
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 covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
31.12.2024 - Turnover-based
31.12.2024 - Cap-Ex based
Consolidated Financial Statements 31 December 2024 99
Kvika banki hf. Amounts are in ISK thousands
Disclosure by credit institutions under EU Taxonomy Regulation Article 8 and underlying Delegated Act (EU) 2021/2178, Article 10.
Annex XI
QUALITATIVE DISCLOSURES FOR ASSET MANAGERS, CREDIT INSTITUTIONS, INVESTMENT FIRMS AND
INSURANCE AND REINSURANCE UNDERTAKINGS
Additional or complementary information in support of the financial undertaking’s
strategies and the weight of the financing of Taxonomy-aligned economic
activities in their overall activity.
For credit institutions that are not required to disclose quantitative information
for trading exposures, qualitative information on the alignment of trading
portfolios with Regulation (EU) 2020/852, including overall composition, trends
observed, objectives and policy.
The disclosure of quantitative KPIs shall be accompanied by the following qualitative information to support the financial
undertakings’ explanations and markets’ understanding of these KPIs:
Contextual information in support of the quantitative indicators including the
scope of assets and activities covered by the KPIs, information on data sources
and limitation.
The Group has derived that the following assets can be considered as
taxonomy‐eligible; loans and advances to financial and non‐financial corporates
that are subject to non‐financial disclosures according to Article 66 d of the
Annual Accounts Act and loans to households, in particular motor vehicle loans
(activity 6.5: Purchase, financing, renting, leasing) and residential real estate
(mortgages, activity 7.7: Acquisition and ownership of buildings). Kvika has
employed external data sourced from a third party, adhering to the criteria
outlined in Article 66 d of the Annual Accounts Act. This information has been
complemented, where needed, with data directly collected from the annual
reports of corporate customers and counterparties. Kvika’s estimation of how
and to what extent its activities are associated with taxonomy-aligned economic
activities is dependent upon and limited to its counterparties’ reporting.
Explanations of the nature and objectives of Taxonomy-aligned economic
activities and the evolution of the Taxonomy aligned economic activities over
time, starting from the second year of implementation, distinguishing between
business-related and methodological and data-related elements.
Not applicable for financial year 2024
Description of the compliance with Regulation (EU) 2020/852 in the financial
undertaking’s business strategy, product design processes and engagement with
clients and counterparties.
In 2024, Kvika updated it Green Funding Framework to better adhere to recent
developments in sustainability related regulations, including the EU Taxonomy.
The updated Framework, which follows the most recent market practice,
supports Kvika's strategic goal to have a real and measurable impact on Iceland's
carbon footprint and climate issues. Kvika has mapped applicable categories to
EU environmental objectives and example of economic activities under the EU
Taxonomy. Where possible, applicable eligibility criteria have been designed to
comply with the technical screening criteria set out in the EU Taxonomy
Delegated Act as at the time of this Framework publication.
Consolidated Financial Statements 31 December 2024 100
Kvika banki hf. Amounts are in ISK thousands
Kvika Asset Management
Turnover-based: % 0.1% Turnover-based: [monetary amount] 617,517
CapEx—based: % 0.2% CapEx-based: [monetary amount] 952,792
Coverage: % 88.8% The value in monetary amounts of derivatives. 399,311,281
Percentage (%) 0.1% [monetary amount]
397,438
For non-financial undertakings: 40.4% For non-financial undertakings: [monetary amount] 161,191,879
For financial undertakings: 22.9% For financial undertakings: [monetary amount]
91,503,580
For non-financial undertakings: 4.3% For non-financial undertakings: [monetary amount] 17,303,212
For financial undertakings: 4.4% For financial undertakings: [monetary amount]
17,400,149
For non-financial undertakings: 8.5% For non-financial undertakings: [monetary amount] 33,853,335
For financial undertakings: 10.6% For financial undertakings: [monetary amount]
42,151,736
Percentage (%) 8.9% [monetary amount]
35,509,952
Percentage (%) 56.0% [monetary amount]
223,743,143
Percentage (%) [monetary amount]
The weighted average value of all the investments 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 that are directed at funding, or
are associated with taxonomy-aligned economic activities, with following weights
for investments in undertakings per below:
Additional, complementary disclosures: breakdown of denominator of the KPI
The percentage of derivatives relative to total assets covered by the KPI.
The value in monetary amounts of derivatives.
Kvika Asset Management publishes the following information pursuant to Article 8 of the EU Taxonomy. The information is set forward in a template from
Annex IV and Annex XI of the Delegated Regulation No. 2021/2178, as subsequently changed with Delegated Regulation (EU) No. 2023/2486, covering
asset managers, alongside Kvika Asset Management annual accounts for 2024. The calculation of key figures is based on the data used in Kvika Asset
Management’s financial statement for 2024.
Key performance indicators published for the first time in 2024
According to the Delegated Regulation no. 2021/2178 asset managers are to disclose the proportion of investment in taxonomy‐aligned economic
activities out of the total value of all investments managed by them. This ratio is based on key performance indicators of investees (turnover and capex),
which they published according to the EU Taxonomy for the first time in Iceland in 2024 for the financial year 2023. Kvika Asset Management is dependent
upon and limited to the investees’ taxonomy disclosures, and therefore publishes now for the first time the ratio of investments in environmentally
sustainable economic activities.
ANNEX IV
TEMPLATE FOR THE KPI OF ASSET MANAGERS
Standard template for the disclosure required under Article 8 of Regulation (EU) 2020/852 (asset managers)
The value of all the investments that are funding economic activities that are not
taxonomy-eligible relative to the value of total assets covered by the KPI:
Value of all the investments that are funding economic activities that are not
taxonomy-eligible:
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:
Value of all the investments that are funding Taxonomy eligible economic
activities, but not taxonomy aligned:
The proportion 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:
The proportion of exposures to other counterparties over total assets covered by
the KPI:
Value of exposures to other counterparties:
The percentage of assets covered by the KPI relative to total investments (total
AuM). Excluding investments in sovereign entities.
The monetary value of assets covered by the KPI.
Excluding investments in sovereign entities.
The proportion 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:
The proportion of exposures to EU 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 EU financial and non-financial undertakings not subject to
Articles 19a and 29a of Directive 2013/34/EU:
Consolidated Financial Statements 31 December 2024 101
Kvika banki hf. Amounts are in ISK thousands
Kvika Asset Management
Turnover-based: % 0.1% Turnover-based: [monetary amount] 617,517
CapEx—based: % 0.2% CapEx-based: [monetary amount] 952,792
For financial undertakings: For financial undertakings:
Turnover-based: % 0.0% Turnover-based: [monetary amount] 0
CapEx—based: % 0.0% CapEx-based: [monetary amount] 0
Turnover-based: % 0.0% Turnover-based: [monetary amount] 0
CapEx—based: % 0.0% CapEx-based: [monetary amount] 0
Turnover: 0.1% Transitional activities: A% (Turnover; CapEx) 0.0%
Capex: 0.2% Enabling activities: B% (Turnover; CapEx) 100.0%
Turnover: 0.0% Transitional activities: A% (Turnover; CapEx) 0.0%
Capex: 0.0% Enabling activities: B% (Turnover; CapEx) 0.0%
Turnover: 0.0% Transitional activities: A% (Turnover; CapEx) 0.0%
Capex: 0.0% Enabling activities: B% (Turnover; CapEx) 0.0%
Turnover: 0.0% Transitional activities: A% (Turnover; CapEx) 0.0%
Capex: 0.0% Enabling activities: B% (Turnover; CapEx) 0.0%
Turnover: 0.0% Transitional activities: A% (Turnover; CapEx) 0.0%
Capex: 0.0% Enabling activities: B% (Turnover; CapEx) 0.0%
Turnover: 0.0% Transitional activities: A% (Turnover; CapEx) 0.0%
Capex: 0.0% Enabling activities: B% (Turnover; CapEx) 0.0%
Explanatory notes
'taxonomy-aligned activities'
'not taxonomy-aligned'
'taxonomy-eligible activities'
For credit institutions that are not required to disclose quantitative information for
trading exposures, qualitative information on the alignment of trading portfolios
with Regulation (EU) 2020/852, including overall composition, trends observed,
objectives and policy.
Does not apply to asset managers.
economic activities that do not qualify as environmentally sustainable under EU
Taxonomy i.e. do not fulfil the criteria set out in the delegated acts
activity that has a corresponding criteria in the EU Taxonomy delegated acts to be
assessed against
ANNEX XI
QUALITATIVE DISCLOSURES FOR ASSET MANAGERS, CREDIT INSTITUTIONS, INVESTMENT FIRMS AND INSURANCE AND REINSURANCE UNDERTAKINGS
The disclosure of quantitative KPIs shall be accompanied by the following qualitative information to support the financial undertakings’ explanations and markets’
understanding of these KPIs:
Contextual information in support of the quantitative indicators including the scope
and activities covered by the KPIs, information on data sources and limitation.
The calculation of key indicators uses total assets under management (AuM),
excluding exposures to central governments, central banks and supranational
issuers. Investments in companies which are not obliged to disclose non‐financial
information under the Act on Annual Accounts should also be excluded.
Furthermore, the calculations of Kvika Asset Management’s Taxonomy KPIs
depend upon and are limited to investee companies’ 2024 Taxonomy disclosures
for the financial year 2023.
Explanations of the nature and objectives of Taxonomy-aligned economic activities
and the evolution of the Taxonomy-aligned economic activities over time, starting
from the second year of implementation, distinguishing between business-related
and methodological and data-related elements.
As according to investee companies’ 2024 Taxonomy disclosures, all Taxonomy-
aligned economic activities are enabling activities, i.e. they all enable other
activities to make a substantial contribution to climate change mitigation.
Description of the compliance with Regulation (EU) 2020/852 in the financial
undertaking’s business strategy, product design processes and engagement with
clients and counterparties.
Kvika Asset Management expects to increasingly consider the EU Taxonomy e.g.
in product development as well as in communication with customers, additionally
there has been increased education to employees on the topic.
5) Pollution prevention and control
6) The protection and restoration of biodiversity and
ecosystems
economic activities that qualify as environmentally sustainable under EU
Taxonomy
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
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:
Breakdown of the numerator of the KPI per environmental objective
Taxonomy-aligned activities –:
ANNEX IV (cont.)
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 2013/34/EU:
For non-financial undertakings:
For non-financial undertakings:
Consolidated Financial Statements 31 December 2024 102
Kvika banki hf. Amounts are in ISK thousands
Group alignment
Computation of weighted averages of KPIs on Taxonomy-aligned activities of Groups
ISK Thousand Revenue*
Proportion of total
group revenue
KPI (Turnover) KPI (CapEx)
KPI (Turnover)
weighted
KPI (CapEx)
weighted
Asset management 2,597,493 15.12% 0.14% 0.21% 0.021% 0.032%
Banking activities 14,586,947 84.88% 0% 0% 0% 0%
Insurance undertakings - - 0% 0% 0% 0%
Total 17,184,440
Average KPI
0.021% 0.032%
KPI per business segment
Consolidated Financial Statements 31 December 2024 103