Kvika banki hf.: Earnings release for the first nine months of 2019

At a meeting of the Board of Directors on 14 November 2019, the Board and CEO approved the interim financial statements of the Kvika banki hf. group for the period from 1 January to 30 September 2019.
Good results for first nine months of the yearProfit before taxes amounted to ISK 1,996 millionProfit after taxes amounted to ISK 1,913 millionReturn on equity was 20.3%Net operating income amounted to ISK 5,615 millionOperating expenses amounted to ISK 3,899 millionTotal assets amounted to ISK 112.6 billionThe group’s equity amounted to ISK 14.8 billionThe equity ratio at the end of September was 22.9%, but 23.6% when profit for the quarter is taken into accountThe Liquidity Coverage Ratio (LCR) was 260%Total assets under management amounted to ISK 417 billionThe number of full-time employees at the end of September was 122A presentation for market participants and shareholders will be held at Kvika’s headquarters at Borgartún 25 on Friday 15 November at 08:30 hrs.Good results and growth in all revenue streamsKvika’s earnings before tax in the first nine months of 2019 amounted to ISK 1,996 million, compared to ISK 1,444 million in the first nine months of 2018, increasing by 38%. Profit after taxes amounted to ISK 1,913 million compared to ISK 1,403 million in the first nine months of 2018. The bank’s return on equity amounted to 20.3% and was well over the bank’s long-term target of 15% return on equity.All of the bank’s revenue streams increased compared to the same period in 2018. Net interest income increased by 7%, net fee and commission income rose by 30% and investment income rose by 51%.Operating expenses increased by 34%, due to increased activities during the year, in accordance with estimates.Kvika’s earnings forecast expects profit this year to range between ISK 2,500 – 2,800 million before tax. At the beginning of the year, the bank’s earnings forecast had been ISK 1,990 million before tax, but this estimate has been revised three times since then.Marinó Örn Tryggvason, CEO of Kvika:“Kvika performed well in the first nine months of the year. It is particularly satisfying to see the bank’s good performance in the third quarter, despite difficult market conditions. The bank’s income generation has been good so far this year and operating expenses have been successfully kept in line with estimates. Profitability is good and far exceeds the bank’s long-term objective.GAMMA has been part of the Kvika group since March. At the end of September the poor position of two funds managed by GAMMA was announced. The position of these funds came as a disappointment to us, but the bank has placed an emphasis on supporting GAMMA to protect the interests of the owners of the funds and maximise the value of their assets.During the year it was satisfying to see the reception which Auður’s savings accounts received and the impact on competition in the deposits market. This is a good example of how banking services are changing. Participating in those changes brings great opportunities, with the potential to continue improving our customers’ terms.“AttachmentKvika – Condensed Consolidated Interim Financial Statements 30.09.19

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