Kvika banki : Earnings higher than expected and changes in the management team of TM

Preliminary results for the Kvika banki hf. ("Kvika" or "the bank") group for the third quarter of 2021 are now available and indicate that net earnings before tax for the quarter will amount to ISK 3,200-3,300 million, which corresponds to 32.9%-34% annual return on tangible equity. The results are significantly higher than estimated for the group for the quarter.

Continued low combined ratio of TM and return on financial assets above expectations

TM's combined ratio was 83.3% during the third quarter and 89.1% during the first three quarters of the year. TM's net earnings before tax during the third quarter were approximately ISK 1,772 million.

Net fee and commission income for the group amounted to ISK 1,594 million during the quarter while net interest income amounted to ISK 1,136 million and there was a positive change to net loan impairments of ISK 80 million.

Net investment income during the quarter amounted to ISK 1,552 million, of which TM contributed ISK 1,181 million. Return on TM's financial assets was 3.6% during the quarter.

Considerable decrease in operating expenses between quarters

The group's operating expenses amounted to ISK 2,626 million during the quarter, which amounts to 21% decrease from the second quarter.

The financial statements are still being finalised and are subject to change until they are published.

Changes in TM's management team

Markús Hörður Árnason, Managing Director of Investments, has requested to resign from the company. Markús has worked for TM from the year 2008, originally as an investment specialist and later as head of investments. Since 2020 he has held the position of Managing Director of Investments and been a member of TM's management team. Markús will retire from the company in the coming weeks.

Ásgeir Baldurs has been appointed as the new Managing Director of Investment. Ásgeir has significant work experience, both as manager, consultant, investment manager and director. He has, among other things, held a position as CEO of VÍS, head of corporate finance, head of specialized investments and chief investment officer with Kvika and the bank's subsidiaries. Ásgeir will start working for TM in the coming days.

Sigurður Viðarsson, CEO of TM:

"I would like to thank Markús for his valuable contribution to TM during the thirteen years he has worked for the company. In this time return on financial assets has been outstanding. I wish Markús all the best.

At the same time as I say goodbye to Markús I welcome Ásgeir to TM's strong team of employees."