The Board of Directors of Kvika banki hf. („Kvika“ or „the bank“) and the bank‘s CEO, Marino Orn Tryggvason, have today reached an agreement on the CEO’s retirement. Discussions regarding the retirement were initiated by the CEO. The retirement has become effective.


The Board of Kvika has engaged Armann Thorvaldsson as the bank’s CEO, effective as of today. Armann previously held the position as CEO of Kvika, in the years 2017-2019 and was deputy CEO between 2019-2022. He has decades of experience in the financial market. Armann graduated with an MBA degree from Boston University in 1994 and has an BA degree in history from the University of Iceland.

“I started working at Kvika over six years ago and have been the company's CEO for the last four years. During this time, the bank’s operations have changed considerably. Today the bank is one of the largest and most valuable companies in the country. I am proud ofhow the team of Kvika banki has managed to strengthen its operations and growth.

The company is at a certain turning point, where investments of recent years, such as the expansion of fintech activities, are beginning to pay off. Kvika has also increased competition in the domestic financial market, bringing great benefits to the society. There are manyopportunities ahead for further growth and development of the bank on these foundations.

In recent weeks, I have contemplated on whether I believe it is right that I lead the company in its future development. My conclusion isthat I have requested to retire, which I consider to be a reasonable conclusion for both me and the company.

I would like to thank the board and the bank’s employees for their good cooperation in recent years. The company has a strong team and I will miss my coworkers, but at the same time it am excited to watch them achieve continued success.”

Sigurdur Hannesson, chairman of the Board of Kvika:

"Kvika has grown stronger since Marino took over as the bank's CEO, and the bank's operations rest on more diverse foundations today. At this point in time, the board of Kvika would like to thank Marino for his work in the interest of the bank, and the board wishes him continued success in his work.

It is also a pleasure to be able to announce the appointment of Armann Thorvaldsson as CEO of the bank. Armann immediately assumes the position as CEO, but few people are as well aware of Kvika's operations as him. Armann's experience and knowledge of the financial market means that he will be a strong leader and able to make the most of the many opportunities that Kvika faces."

“I am very excited to be taking over as the CEO of Kvika from Marino, after his successful management, under which the group has strengthened and expanded significantly. I see many opportunities for Kvika’s further development, and it will be the task of coming months to work towards those opportunities to the benefit of the bank's shareholders.

I am not completely unfamiliar with the job, but Kvika has changed quite a bit since I held the ranks, and I am very excited to lead this strong company and the wonderful people who work there.”

The Board of Kvika banki has engaged Armann Thorvaldsson as the bank’s CEO, effective as of today.

Armann Thorvaldsson new CEO of Kvika banki

In the past months negotiations on the possible merger of Islandsbanki and Kvika banki have continued and the companies, along with foreign and domestic advisors, have worked on evaluating possible synergies and the position of a merged company on the market. 

As a result of that work, Kvika banki's board of directors is of the opinion that a merger would create significant value. The discussions between the companies have been good, though they have not yet led to a muntual conclusion on exchange rates. 

In light of the events of the past few days and the fact that a shareholder meeting will likely be called at Islandsbanki with a possible election of its board of directors, Kvika banki's board of directors have decided to discontinue merger negotiations. However, it is clear that the benefits of a merger of the companies could be significant, and Kvika banki's board has expressed its willingness to restart negotiations if conditions arise.

In light of the events of the past few days and the fact that a shareholder meeting will likely be called at Islandsbanki with a possible election of its board of directors, Kvika banki's board of directors have decided to discontinue merger negotiations.

Kvika banki decides to discontinue merger negotiations with Islandsbanki

At a board meeting on 15 February 2023, the Board of Directors and the CEO approved the consolidated financial statements of Kvika banki hf. for the year 2022.

Highlights of the 2022 Consolidated Financial Statements

Pre-tax profit amounted to ISK 5,621 million

Pre-tax return on tangible equity was 13.1%

Earnings per share for the year were ISK 1.02

The group’s equity amounted to ISK 81 billion

The solvency ratio of the financial conglomerate was 1.36 and its capital adequacy ratio (CAR) for operations excluding insurance was 23.5% at year-end 2022

Total liquidity coverage ratio (LCR) was 320%

Assets under management were ISK 462 billion

Kvika’s Board of Directors proposes a dividend payment of ISK 0.4 per share or ISK 1,912 million to shareholders for the operating year 2022

Kvika’s Sustainability Report for the year 2022 is published parallel to the publishing of the Consolidated Financial Statements

Attached is the investor presentation. Additionally, a recording with English subtitles will be made available on Kvika’s website.

Earnings Excluding Net Financial Income in line with Expectations

Kvika’s pre-tax profit amounted to ISK 5,621 million for the year 2022 and ISK 1,613 million for the fourth quarter. Return on tangible equity before taxes (RoTE) was 13.1% for the year 2022 and 15.3% for the fourth quarter.

Net interest income amounted to ISK 7,675 million, increasing by 65% compared to the year before. The increase in net interest income is primarily driven by the increased size of the loan portfolio, the acquisition of Ortus Secured Finance and altered composition of liquid assets. Net impairment amounted to ISK 532 million during the period, compared to positive ISK 139 million in the year 2021. Net financial income amounted to ISK 0.3 million during challenging circumstances in capital markets. Net fee and commission income amounted to ISK 6,408 million, a decrease of 6% from the prior year. Operating expenses amounted to ISK 13,076 million for the year, in line with expectations.

TM’s Combined Ratio in line with Target but Challenging Conditions in Capital Markets

The combined ratio of TM was 95.3% for the year 2022, compared with 88.7% in the prior year, and the combined ratio in Q4 2022 amounted to 93.6%. TM's investment income amounted to ISK 426 million for the year 2022, making the return on the asset portfolio 1.2% over the year compared to 17.7% return in the prior year. TM's investment income in Q4 2022 amounted to ISK 972 million making the return on the asset portfolio 3.0% compared to 3.7% in Q4 2021.

Strong Balance Sheet and Solid Liquidity Position

Total assets increased by 23% or ISK 57 billion during the year 2022 and amounted to ISK 303 billion at the end of December. Loans to customers grew by almost ISK 36 billion over the year and amounted to 107 billion at the end of the year. The increase is partly attributable to the acquisition of Ortus Secured Finance Ltd. as well as organic growth. Balances with banks and the Central Bank of Iceland, together with government-guaranteed securities, amounted to ISK 95 billion and total liquid assets were ISK 116 billion, increasing by ISK 17 billion over the year 2022. The group’s total liquidity coverage ratio (LCR) amounted to 320% at year-end 2022, well above the 100% minimum requirement.

The group’s total equity amounted to ISK 81 billion at the end of the year, compared to ISK 78 billion at the end of 2021. Kvika’s Board of Directors will propose to the Annual General Meeting on 30 March 2023 that a dividend of ISK 0.4 per share or ISK 1,912 million, taking into account treasury shares held by the group, will be paid for the year 2022. The dividend payment amounts to about 40% of Kvika’s profit after tax in 2022. Taking this proposed dividend payment into consideration the solvency ratio of the financial conglomerate was 1.36 at the end of the year 2022 and the group's risk-weighted capital adequacy ratio (CAR), excluding the effect of TM, amounted to 23.5%. Kvika’s capital requirement, including capital buffers, is 17.9%.

Kvika’s earnings outlook for the next four quarters assumes a pre-tax profit of ISK 9.4 billion which equates to 21.6% return on tangible equity. Further assumptions can be found in the attached investor presentation.

“I am happy with the financial results. Our focus on diversified income streams continues to prove its value as the group's strong core operations deliver solid returns for the group despite low investment income during the year.

Kvika is in a strong position, and I am pleased to disclose that together with the publication of the financial results, we are introducing an expansion of the bank's services. Our strategy in recent years has been to see opportunities in increasing competition in the Icelandic financial market. We want to do that by offering services that others do not, as exampled by our online savings account platform Auður, which began offering significantly higher interest rates than competitors. We will continue on the same path and are now preparing to expand our product offering in the Aur app, which currently has over 100 thousand users.

Two weeks ago, Kvika contacted the board of directors of Íslandsbanki hf. and requested to initiate discussions about a merger of the two companies. I am happy that the board of Íslandsbanki is ready to explore this possibility with us, and formal negotiations are about to begin. If the boards come to an agreement, and shareholders and regulators approve, I see multiple opportunities in the merger. I believe that it will be possible to continue to increase competition, e.g. with Aur and other financial technology solutions as well as utilising financial strength to continue innovation. I also have expectations that the merger will make the company an even more interesting investment option, which can, among other things, lead to more cost-effective financing, which creates an opportunity to succeed in competition.”

Kvika banki hf. Financial Results for the year 2022 and Earnings Outlook for the Next Four Quarters

Financial services

Asset Management

Corporate Finance

„Long-term focus is at the core of Kvika's strategy. Establishing reliable business relations takes time. Our emphasis is on servicing current clients and on repeat business, thus making our clients’ interests the first priority.“

News

Armann Thorvaldsson new CEO of Kvika banki

20 August 2023

Kvika banki decides to discontinue merger negotiations with Islandsbanki

30 June 2023

Kvika banki hf. Financial Results for the year 2022 and Earnings Outlook for the Next Four Quarters

15 February 2023

Kvika Securities Ltd.