Core Viewpoint - ÍL Fund is conducting a switch auction on September 30, 2025, offering to purchase IBN 38 0101 at a clean price of 42.7676, yielding 3.45%, in exchange for the inflation-linked government bond series RIKS 34 1016 at a clean price of 104.1411, yielding 2.97% [1]. Group 1 - The auction will take place between 10:30 and 11:00 hrs, with results announced at 12:00 on the same day [1]. - Bids for the inflation-linked bond series must be submitted as nominal amounts, with a settlement date set for October 7, 2025 [2]. - ÍL Fund reserves the right to accept bids partially or reject all bids [2]. Group 2 - The arranger for the switch auction is Government Debt Management, a department of the Central Bank of Iceland [3]. - Primary dealers in government securities, including Arion banki hf., Fossar Investment Bank hf., Íslandsbanki hf., Kvika banki hf., and Landsbankinn hf., are invited to act as intermediaries [3]. - The Bloomberg trading and auction system will be utilized for the auction [3]. Group 3 - Owners of IBN 38 0101 interested in participating in the switch auction are advised to contact primary dealers in Treasury securities [3]. - Further information regarding the auction terms can be obtained from Government Debt Management [4].

Core Insights - Kvika banki hf. reported strong financial performance in Q2 2025, achieving a post-tax profit from continuing operations of ISK 1,439 million, an increase of 85.2% compared to Q2 2024 [5] - The bank's total assets reached ISK 361 billion at the end of Q2 2025, reflecting a solid growth trajectory [5] - The bank is engaged in merger discussions with Arion Banki and Íslandsbanki, with the aim of enhancing shareholder value and long-term growth [9][10] Financial Performance Highlights - Post-tax profit from continuing operations for Q2 2025 was ISK 1,439 million, up from ISK 777 million in Q2 2024, marking an increase of ISK 662 million or 85.2% [5] - Profit before tax for Q2 2025 was ISK 2,025 million, compared to ISK 1,189 million in Q2 2024, an increase of 70.3% [5] - Net interest income for Q2 2025 was ISK 2,962 million, a 22.0% increase from ISK 2,428 million in Q2 2024 [5] - Net fee and commission income rose to ISK 1,935 million in Q2 2025, up 43.2% from ISK 1,351 million in Q2 2024 [5] - Administrative expenses increased by 9.1% to ISK 2,981 million in Q2 2025 from ISK 2,733 million in Q2 2024 [5] Balance Sheet Overview - Customer deposits at the end of Q2 2025 amounted to ISK 180 billion, a 10.3% increase from ISK 163 billion at year-end 2024 [5] - Loans to customers increased by 14.7% to ISK 172 billion at the end of Q2 2025 from ISK 150 billion at year-end 2024 [5] - The capital adequacy ratio (CAR) was 23.3% at the end of Q2 2025, up from 22.8% at year-end 2024 [5] - Total liquidity coverage ratio (LCR) was 910% at the end of Q2 2025, significantly higher than 360% at year-end 2024 [5] Strategic Developments - Kvika Corporate Finance successfully led the sale of the government's stake in Íslandsbanki and completed its first EUR bond issuance [8] - A new ISK 8 billion institutional credit fund was launched within Kvika Asset Management, and a new mortgage product was introduced under the Auður heima brand [8] - The bank is currently focused on due diligence for the merger process, which is expected to take 9-12 months [10]

Group 1 - The Board of Directors of Kvika banki hf. will approve the financial statements for Q2 and the first half of 2025 on 13 August [1] - The financial results will be presented to shareholders and market participants on 14 August at 08:30 at the bank's headquarters [2] - The presentation will be conducted in Icelandic and streamed live, with a recording available later with English subtitles [2] Group 2 - Participants can send questions before or during the meeting via the provided email address [3] - The investor presentation will be made public prior to the meeting [3]

Merger Announcement - Kvika banki and Arion Bank have initiated discussions on merging, signing a letter of intent to combine their strengths and create a robust financial institution [1][2] Merger Process - The merger is one of the largest in the Icelandic financial market, with the process expected to take time and regular updates to be provided [2] - Initial steps include due diligence reviews and merger negotiations, with preliminary discussions planned with the Icelandic Competition Authority in August [3] - The aim is to finalize contracts and complete the due diligence review in the coming months, with formal announcements to regulators and shareholder meetings contingent on successful preliminary discussions [3] Benefits of the Merger - The merger is expected to enhance banking services for retail, corporate, and investor customers, providing opportunities for risk distribution and diverse revenue streams [4] - It aims to create a more effective business model and improve efficiency within the Icelandic financial market [4] Market Position - Kvika has been a competitive player in recent years, particularly through its brand Auður, which has significantly impacted the deposits market and successfully entered the home loan market [5] - Post-merger, both companies' brands will continue to play a crucial role for customers [5]

Group 1 - Kvika banki hf. held a closed auction for the bond series KVIKA 28 0703 with total bids amounting to ISK 9,860 million [1] - The spread for the bids ranged from 0.89% to 1.50% over the 3M REIBOR, with accepted bids totaling ISK 5,000 million at a 1.14% spread [1] - The bonds have a maturity of 3 years and will pay interest quarterly, scheduled to be admitted to trading on Nasdaq Iceland in July 2025 [1] - The bonds will be issued under the bank's EMTN programme [1]

Core Viewpoint - Kvika banki is preparing for the implementation of Regulation (EU) No. 2024/1623 (CRR III), which is expected to result in a 14% reduction in the bank's risk-weighted exposure amount by May 31, 2025 [1] Group 1 - The estimated 14% reduction in risk-weighted exposure is primarily attributed to changes in risk weights for property-backed loans [1] - The implementation will also involve adjustments in calculations related to capital requirements for operational risk [1]

Kvika will offer bonds in a new series, KVIKA 28 0703, for sale on Wednesday 25 June 2025. The bonds will be issued under Kvika’s EMTN programme and listed on the Nasdaq Iceland exchange. The bonds pay a quarterly interest of 3-month REIBOR plus a spread. Principal is repaid in one payment at maturity, 3 July 2028. The offering will be a Dutch auction, all bonds will be sold at the highest accepted spread on 3-month REIBOR. Expected settlement date is Thursday 3 July 2025. Capital Markets at Kvika manages ...

Attached is a major shareholder announcement. Attachment Flöggun vegna eigin hluta í tengslum við endurkaupaáætlun ...

Core Viewpoint - Kvika banki hf. has received a request from Íslandsbanki hf. to enter into merger discussions, indicating potential consolidation in the banking sector [1] Group 1 - The Chairman of the Board and the CEO of Kvika banki hf. are involved in the initial stages of considering the merger proposal [1] - The Board of Directors of Kvika banki hf. will review the merger request and decide on the next steps for the bank [1] - This notice is classified as inside information under EU regulation on market abuse, highlighting the regulatory implications of the merger discussions [1]

Group 1 - Kvika banki hf. shareholders approved a buyback program allowing the board to repurchase up to 10% of issued shares [1] - The board decided to initiate a buyback program with a total consideration of ISK 5,000,000,000, targeting a maximum of 400,000,000 shares [2] - The first tranche of the buyback program concluded on 12 May 2025, with Kvika acquiring 163,590,409 shares for ISK 2,500,000,000 [2] Group 2 - Arion banki hf. will oversee the execution of the buyback program, making independent decisions regarding share acquisitions [3] - The buyback program must comply with Icelandic laws and European regulations on market abuse and buyback programs [3] - The program is designed to ensure transparency in transactions involving the bank's own shares [3] Group 3 - Daily purchases in the buyback program are limited to 6,893,138 shares, with the maximum purchase price based on the last independent transaction or highest existing bid on Nasdaq Iceland [4] - The buyback program is set to commence on 26 May 2025 and will remain in effect until the annual general meeting in 2026 or until ISK 2,500,000,000 is fully utilized, or 236,409,591 shares are repurchased, whichever occurs first [4] Group 4 - Trading in own shares under the buyback program will be reported in accordance with applicable laws and regulations [5]