Skagi hf

Quarterly Report • Nov 27, 2024

Condensed Consolidated Interim Financial Statements

1 January – 30 September 2024

Condensed Consolidated Interim Financial statements

____________________________________

1 January to 30 September 2024

Table of Contents

Report and Endorsement by the Board of Directors and the CEOs	3
Condensed Consolidated Interim Income statement	6
Condensed Consolidated Interim Statement of Comprehensive Income	7
Condensed Consolidated Interim Statement of Financial Position	8
Condensed Consolidated Interim Statement of Changes in Equity	9
Condensed Consolidated Interim Statement of Cash Flows	10
Notes to the Condensed Consolidated Interim Financial Statements	11

Report and Endorsement

by the Board of Directors and the CEOs

The condensed consolidated interim financial statements of Vátryggingafélag Íslands hf. ("the Company" or "Skagi") for the period 1 January to 30 September 2024 consist of the financial statements of the Company and its subsidiaries. Subsidiaries include Fossar fjárfestingarbanki hf. ("Fossar" or "the bank"), SIV eignastýring hf. (SIV), and Líftryggingafélag Íslands hf. (Lífís), collectively with the Company referred to as "the Group". The Group's operations consist of insurance activities, investment banking activities and asset and fund management. The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and the additional requirements for companies listed on a regulated securities market. The condensed consolidated interim financial statements have not been reviewed or audited by Independent Auditors of the Company.

Operating and Financial position

According to the Income Statement the Group's profit for first nine months 2024 amounted to ISK 700 million. The Group's assets at the end of the period amounted to ISK 72,835 million and equity amounted to ISK 20,403 million according to the balance sheet.

Insurance

A significant operational improvement has taken place in the insurance business. This can be attributed to more new customers as well as increased insurance sales to existing customers. Insurance business generated growth in insurance revenue with a combined ratio of 95.2% (9M 2023: 100.5%). In Q3 2024 the combined ratio was 92.3% compared to 94.7% in the same period in the prior year. Income growth in life and health insurance is about 15.0% year-on-year. The insurance service result was positive by ISK 1,042 million, versus a negative figure of ISK 102 million last year. This 1,144 million positive turnaround between years is the result of a changed focus, as the Company's sales structure was transformed, and investment was made in new digital sales channels.

The insurance contracts expense ratio is decreasing, coming in at 18.9% for the first nine months of this year versus 21.8% at the same time last year. The claims ratio was 73.3% (9M 2023: 75.7%), net reinsurance ratio was 3,0% (9M 2023: 3,0%).

Financial Services

Financial services activities, which consist of the operations of Fossar and SIV, generated net income of 1,452 million and loss before tax of -150 million in the first nine months of 2024. Important milestones have been achieved during this period as the bank's share of the bond market continued to increase, the bank's interest rate margin became more stable, and the loan book continued to grow in line with expectations. Since the beginning of the year, the balance sheet has grown by 52% and the bank's lending has increased by ISK 2.7 billion at the same time. The bank has now issued its first listed bond for ISK 1.5 billion with term of 18 months on floating rates and recently issued a bond for 1.5 billion for 18 months at fixed rates. The bank is taking important steps towards becoming a reliable issuer on the bond market.

Financial services activities also generated significant growth in net income in the first nine months of the year compared to the prior year with pro forma growth of 86% between years. The net income of financial activities totalled around ISK 1.452 million, compared to ISK 779 million pro forma last year. It should be noted that SIV's activities did not begin until the second half of last year. The financial activities are therefore on a strong growth path.

Assets under management (AuM) at the Skagi Group stand at 123 billion at the end of Q3 2024. AUM of Skagi will increase significantly after the acquisition with Íslensk verðbréf hf. has been completed, at which time AUM will be around ISK 224 billion, representing a 92% growth since the end of last year.

Report and Endorsement

by the Board of Directors and the CEOs

Investments

The return on the insurance investment assets in the first nine months of 2024 was 4.6% (9M 2023: 7.6%). Investments generated financial income of 2,011 million (9M 2023: 3,255) and net financial income of 560 million (9M 2023: 1.975 million). Controlant share price drop in the quarter negatively aƯects the return by an amount of 417 million representing a 0.9% drawdown on the total investment portfolio (share price reduced from 80 USD per share down to 30 USD per share).

Financial Targets

Guidance on target operating performance for the fiscal year 2024 is as follows:

• Target combined ratio below 95% (range 94-97%)
• Net Financial services income is expected to be above 2,200 million (range 1,900 2,600 million)
• Expected return of insurance investments assets is 11%.

An update will be provided to investors if performance is expected to be outside of the target range for Insurance business and financial services, however no update will be provided on expected return for the insurance investment assets.

Shares and allocation of profits

The Company's nominal shares amounted to ISK 1,906.7 million at period end (own shares amounting to ISK 28,9 million), with each share having a nominal value of ISK 1. There were 913 shareholders at the beginning of the period and 882 shareholders at the end of it. The board of directors' proposal for the payment of a dividend in the amount of ISK 1,000 million or ISK 0.524 per share was approved at the Company's Annual General Meeting on 21st March and the company paid the dividend to shareholders on 2nd April 2024.

The acquisition of Íslensk verðbréf hf.

Skagi has signed purchase agreements to acquire Íslensk verðbréf hf. (ÍV). The company, that was founded in 1987, oƯers services in the fields of capital markets, asset management and fund management and currently has about 101 billion ISK of AUM at the end of Q3 2024. Around 4,000 clients have funds under asset management and in custody at ÍV.

Skagi's acquisition of ÍV was agreed subject to the approval of the Financial Supervisory Authority of the Central Bank of Iceland ("FSA") and the Icelandic Competition Authority ("ICA"). The approval of both the FSA and ICA has has now been obtained, and the acquisition was concluded on 11th November 2024. Hence, ÍV will become part of the consolidated financial statements of Skagi as of Q4 2024.

Report and Endorsement

by the Board of Directors and the CEOs

To the best knowledge of the board the consolidated interim financial statements of Vátryggingafélag Íslands hf. give a true and fair view of the consolidated financial performance of the Group for the period 1 January to 30 September 2024, and its assets, liabilities, and financial position as of 30 September 2024. Further, in our opinion the consolidated interim financial statements give a fair view of the development and performance of the Group's operations and its position at the end of the period and describe the principal risks faced by the Group.

The Board of Directors and the CEOs have today discussed the Company's Condensed Consolidated Interim Financial Statements of Vátryggingafélag Íslands hf. for the period ended 30 September 2024 and confirm by means of their signatures.

Reykjavik, 27 November 2024

On the Board of Directors

Stefán Héðinn Stefánsson	Vilhjálmur Egilsson
Chairman of the Board	Vice-Chairman of the Board
Marta Guðrún Blöndal	Ásgeir Helgi Reykfjörð Gylfason
Hrund Rudolfsdóttir
CEOs

Haraldur Þórðarson Guðný Helga Herbertsdóttir

Condensed Consolidated Interim Income Statement

Condensed Consolidated Interim Income Statement
For the period 1 January to 30 September 2024
	Notes	Q3 2024	Q3 2023	YTD 2024	YTD 2023
Insurance revenue		7.634.285	6.952.232	21.636.007	19.630.537
Insurance expenses		(5.613.013)	(5.047.992)	(15.869.322)	(14.864.283)
Insurance contract operating expenses		(1.244.001)	(1.296.829)	(4.083.774)	(4.278.436)
Net expenses from reinsurance contracts		(187.636)	(238.933)	(640.491)	(589.756)
Insurance service result	6	589.635	368.479	1.042.420	(101.938)
Interest income		412.221	0	1.118.864	0
Interest expenses		(349.524)	0	(959.051)	0
Net interest income	7	62.697		159.813	0
Fee and commission income		312.832	0	1.190.234	0
Fee and commission expenses		(7.727)	0	(54.029)	0
Net fee and commission income	8	305.105	0	1.136.205	0
Net financial income	9	119.137	387.677	587.292	1.975.201
Other operating income		16.617	35.627	78.589	77.761
Other net operating income		135.753	423.305	665.881	2.052.961
Net operating income		1.093.190	791.783	3.004.318	1.951.023
Operating expenses Net impairments	10	(651.993) (650)	(79.423) 0	(2.065.510) (9.450)	(203.521) 0
Profit before tax		440.547	712.360	929.358	1.747.502
Income tax expenses	11	(13.330)	(104.888)	(229.283)	(67.838)
Profit and net profit for the period		427.217	607.471	700.074	1.679.664
Profit attributable to shareholders		425.807	613.957	701.422	1.693.417
Profit attributable to minority interest		1.410	(6.486)	(1.348)	(13.753)
Total profit for the period		427.217	607.471	700.074	1.679.664
Earnings per share
Basic and diluted earnings per share		0,23	0,35	0,37	0,98

Condensed Consolidated Interim Statement of Comprehensive Income

For the period 1 January to 30 September 2024
	YTD 2024	YTD 2023
Profit for the period	700.074	1.679.664
Other Comprehensive income Items that are or may be reclassified subsequently to profit and loss and relocated to equity
Reclassification of fair value changes to income statement Unrealised fair value changes	(5.121) (1.983)	0 0

The notes on pages 11-30 are an integral part of these financial statements.

Condensed Consolidated Interim Statement of Financial Position

As at 30 September 2024

Condensed Consolidated Interim Statement of Financial Position
As at 30 September 2024
	Notes	30.9.2024	31.12.2023
Assets
Cash and cash equivalents		1.836.096	2.270.693
Financial assets of insurance activites Securities for hedging purposes	12 13	45.050.792 5.631.144	42.758.589 4.521.114
Forward contracts	14	188.883	143.235
Equities and other securities	26	403.288	337.320
Bonds	26	5.574.278	4.562.123
Loans to customers	26,28,29	4.406.929	1.672.720
Investments where investment risk is
borne by life-insurance policyholders		1.055.384	1.047.382
Share in associates	16	174.883	190.283
Goodwill and other intangible assets	17	3.408.574	3.483.211
Right-of-use asset Operating assets		397.635 343.699	584.453 329.531
Deferred income tax asset		280.997	191.211
Reinsurance contract assets		1.322.546	1.229.156
Other receivables	18	2.759.861	2.146.748
Total assets		72.834.988	65.467.768
Liabilities
Liabilities due to insurance contracts Provisions for investment contracts	19	28.440.693 1.055.384	26.162.186 1.047.382
Subordinated bond	20	3.705.666	3.589.584
Money market loans	26	9.274.046	6.227.385
Issued bonds and bills	26	3.563.529	2.285.315
Liabilities to credit institutions	26	1.399.242	700.000
Forward contracts	14	244.681	215.615
Lease liability		440.059	636.966
Deferred income tax liability		274.537	271.629
Accounts payable and other liabilities Total liabilities	21	4.034.015 52.431.850	3.159.773 44.295.835
Equity
Share capital	22	1.877.737	1.905.550
Share premium account		3.087.000	3.087.000
Statutory reserve		625.620	625.620
Restricted reserves Retained earnings		1.225.346 13.543.780	3.852.262 11.660.499
Total equity attributible to shareholders		20.359.483	21.130.931
Minority interest		43.655	41.002
Total equity		20.403.138	21.171.933
Total liabilities and equity		72.834.988
			65.467.768

The notes on pages 11-30 are an integral part of these financial statements.

Condensed Consolidated Interim Statement of Changes in Equity

Condensed Consolidated Interim Statement of Changes in Equity
For the period 1 January to 30 September 2024
	Share capital	Share premium	Statutory reserve	Restricted reserve	Retained earnings	Minority interest	Total
2023 Equity 1.1.2023 Total comprehensive income for the period	1.715.600		625.620	6.671.783	8.265.816 1.693.417	45.960 (13.753)	17.324.779 1.679.664
Change of holding in subsidiary Treasury shares purchased Dividends paid, ISK 0,554 per share	(20.050)				0 (332.335) (939.335)	6.000	6.000 (352.385) (939.335)
Restricted reserve for securites Equity 30.9.2023	1.695.550	0	625.620	(3.492.869) 3.178.914	3.492.869 12.180.431	38.207	0 17.718.723
2024 Equity 1.1.2024	1.905.550	3.087.000	625.620	3.852.262	11.660.499 701.422	41.002 (1.348)	21.171.933 700.074
Total comprehensive income for the period
Change of holding in subsidiary Treasury shares purchased Dividends paid, ISK 0,524 per share Restricted reserve for securites Stock options	(27.813)			(2.626.916)	(472.187) (984.809) 2.618.322 20.533	4.000	4.000 (500.000) (984.809) (8.594) 20.533

The notes on pages 11-30 are an integral part of these financial statements.

Condensed Consolidated Interim Statement of Cash Flows

Condensed Consolidated Interim Statement of Cash Flows For the period 1 January to 30 September 2024
	Notes	YTD 2024	YTD 2023
Operating activities
Profit for the period		700.074	1.679.664
Operating items not affecting cash flows:
Net interest income		(159.813)	0
Financial income		(2.038.682)	(3.254.684)
Net finance expense from insurance contracts		920.226	668.611
Deferred tax, change		(86.878)	(13.582)
Forward contracts, change		(16.583)	0
Stock options		20.533	0
Profit on sale of operating assets		(3.420)	(6.014)
Depreciation and amortisation		405.185	453.694
Changes in operating assets and liabilities:
Financial assets, change		(552.116)	1.139.633
Reinsurance assets, change		(93.391)	(45.611)
Securities, change		(2.196.746)	0
Loans to customers, change		(2.734.209)	0
Other receivables, change		(597.713)	(2.489.924)
Insurance contract liabilities, change		1.447.861	3.417.946
Accounts payable and other liabilities, change		919.804	(88.306)
Cash flows from operating activities before interest and tax		(4.065.865)	1.461.426
Interest income received		1.177.761	605.453
Dividend received		239.036	0
Financial expenses paid		(932.549)	(517.449)
Income taxes paid		(45.563)	(194.537)
Cash flows from operating activities		(3.627.180)	1.354.895
Investing activities
Purchase of operating assets		(137.353)	(55.670)
Sale of operating assets		3.712	25.200
Purchase of intangible assets	17	(32.786)	(125.749)
Sale of shares in subsidiary		4.000	6.000
		(162.429)	(150.220)
Financing activities
Purchase of treasury shares		(500.000)	(352.385)
Dividends paid		(984.809)	(939.335)
Principal payments of lease liability Short-term loans, change		(184.958) 5.024.117	(118.770) 0
		3.354.350	(1.410.490)
Change in cash and cash equivalents		(435.258)	(205.815)
Cash and cash equivalents at the beginning of the year		2.270.693	2.380.526
Effect of movements in exchange rates on cash held		659	7.325
Cash and cash equivalents at year end		1.836.096	2.182.036

The notes on pages 11-30 are an integral part of these financial statements.

Notes to the Condensed Consolidated Interim Financial Statements

General information

1.	Reporting entity 12
2.	Basis of preparation 12
3.	Functional and presentation currency 12
4.	Accounting estimates 13

Segment information

Operating segment reporting 13

Income Statement

6.	Insurance service result 14
7.	Net interest income 15
8.	Net fee and commission income 15
9.	Net financial income 15
10.	Operating expenses 16
11.	Income tax 16

Statement of Financial position

12.	Financial assets of insurance activities 17
13.	Securities for hedging purposes 17
14.	Forward contracts 17
15.	Share in subsidiaries 17
16.	Share in associates 18

Statement of financial position (cont.)

17.	Intangible assets 18
18.	Other receivables 18
19.	Insurance contract liabilities 19
20.	Subordinated bond 19
21.	Accounts payable and other liabilities 19
22.	Share capital and equity reserves 20
23.	Fossar Capital adequacy ratio 20
24.	Solvency of a financial conglomerate 21
25.	Solvency of insurance activities 21
26.	Financial instruments 22
27.	Credit quality of financial assets 24
28.	Loan-to-value 26
29.	Maximum exposure to credit risk 27
30.	Collateral against exposures to derivatives 28
31.	Large exposure 29

Other information

32.	Key ratios 29
33.	Related parties 29
34.	Events after the reporting date 30
35.	Quarterly statement 30

1. Reporting entity

Vátryggingafélag Íslands hf., the Parent Company, hereinafter referred to as "the Company" or "Skagi", is a limited liability company and operates on the basis of Act No. 100/2016 on Insurance Activities, Act No. 2/1995 on Limited Liability Companies and Act No. 161/2002 on Financial Undertakings. The Company's headquarters are at Ármúli 3, Reykjavík.

On 17th January 2024 a shareholders meeting of the Company was held whereas a change of the Company name from "Vátryggingafélag Íslands hf." to a new name "Skagi hf." was approved. The change of name to Skagi hf. in company registry in Iceland will not be concluded until transfer of the insurance operations into a subsidiary has been finalized.

A purchase agreement for the Company's insurance operations has been concluded between Skagi and VÍS tryggingar hf.; the agreement is subject to the approval of a shareholders' meeting for the transfer of the insurance operations (which was approved at a shareholders meeting on 17th January 2024) and the approval of the Financial Supervisory Authority of the Central Bank of Iceland for the transfer of the insurance portfolio and the insurance operations to a subsidiary, which remains outstanding. The Company expects that the transfer of the Company's insurance operations to VÍS tryggingar hf. will take place in 2024.

The condensed consolidated interim financial statements of Vátryggingafélag Ísland ("consolidated financial statements") comprise the interim financial statements of Vátryggingafélag Íslands ("Skagi" or the "Parent Company") which includes the insurance business of VÍS ("VÍS") and its subsidiaries, Líftryggingafélag Íslands ("Lífís"), SIV Asset Management ("SIV") and Fossar Investment Bank ("Fossar"). The Company and its subsidiaries are collectively referred to as the "Group". The Group operates in the fields of non-life insurance, life insurance, investments, asset management and investment banking. The Icelandic Financial Supervisory Authority supervises the Group's operations based on Act No. 87/1998 on OƯicial Supervision of Financial Activities.

2. Basis of preparation

The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard IAS 34 Interim Financial Reporting, as adopted by the European Union and additional requirements according to the Icelandic Financial Statements Act. The interim financial statements were approved and authorized for publication at a meeting of the Board of Directors on 27 November 2024. The condensed consolidated interim financial statements do not contain all the information required in consolidated financial statements and should be read in conjunction with its annual consolidated financial statements for the year 2023, which are available at www.skagi.is.

3. Functional and presentation currency

The condensed consolidated interim financial statements are prepared and presented in Icelandic krónur (ISK), which is the Company's functional currency. All amounts are presented in thousands of ISK unless otherwise stated.

Notes to the Condensed Consolidated Interim Financial Statements

4. Accounting estimates

Preparing condensed consolidated interim financial statements in accordance with IFRS requires management to make assumptions, estimates and apply judgement that aƯect the assets and liabilities at the reporting date, disclosures in notes and income and expenses. Estimates and judgements are based on experience and various other factors that are considered appropriate and form the basis of decisions made regarding the reported amounts of assets and liabilities not evident by other means.

Estimates and assumptions are reviewed regularly. Changes in accounting estimates are recognized in the period when they are revised.

5. Operating segment reporting

The operating segments' results for the period 1 January to 30 September 2024 are specified as follows:

Management has made assumptions and accounting estimates regarding the following items that materially impact the Group's financial statements:
'- Financial assets, see notes no. 12 and 26
'- Intangible assets, see note no. 17
'- Liability due to insurance contracts, see note no. 19
5. Operating segment reporting
The Group is divided into three operating segments: Insurance operations, Insurance investments and Financial services, in accordance with the Group's organization and internal structure. Insurance operations include the VÍS insurance and Lífís life insurance business units. Insurance investments include the investment operations of the insurance business (VÍS and Lífís). Financial services include the operations of Fossar and SIV. The operating segments' results for the period 1 January to 30 September 2024 are specified as follows:
	Insurance operations	Insurance investments	Financial services	Skagi Supporting units and eliminations	Total
Insurance revenue Claims incurred Insurance contract operating expenses Net expenses from reinsurance contracts	21.636.007 (15.869.322) (4.083.774) (640.491)				21.636.007 (15.869.322) (4.083.774) (640.491)
Insurance service result	1.042.420	0	0	0	1.042.420
Net interest income			159.813	(108.076)	159.813 1.136.205
Net fee and commission income			1.244.280
Financial income Operating cost of the insurance investment portfolio Net finance expenses from insurance contracts		2.011.091 (206.409) (920.226)	27.591		2.038.682 (206.409) (920.226)
Other financial items Net financial income	0	(324.755) 559.701	27.591	0	(324.755) 587.292
Other operating income	62.547		20.010	(3.968)	78.589
Net operating income	1.104.967	559.701	1.451.694	(112.044)	3.004.318
Operating expenses Net impairments	(22.585)		(1.592.611) (9.450)	(450.315)	(2.065.510) (9.450)
Profit (loss) before tax	1.082.382	559.701	(150.367)	(562.359)	929.358
Income tax expenses					(229.283)

Notes to the Condensed Consolidated Interim Financial Statements

5. Operating segment reporting (cont.)

The operating segments' results for the period 1 January to 30 September 2023 are specified as follows:

Notes to the Condensed Consolidated Interim Financial Statements
5. Operating segment reporting (cont.)
The operating segments' results for the period 1 January to 30 September 2023 are specified as follows:
	Insurance	Insurance	Financial	Skagi Supporting units
	operations	Investments	services	and eliminations	Total
Insurance revenue	19.630.537				19.630.537
Claims incurred Insurance contract operating expenses	(14.864.283) (4.278.436)				(14.864.283) (4.278.436)
Net expenses from reinsurance contracts	(589.756)				(589.756)
Insurance service result	(101.938)	0	0		(101.938)
Net interest income					0
Net fee and commission income					0
Financial income Operating cost of the insurance investment portfolio		3.254.684 (239.198)			3.254.684 (239.198)
Net finance expenses from insurance contracts		(668.611)			(668.611)
Other financial items		(371.674)			(371.674)
Net financial income	0	1.975.201	0		1.975.201
Other operating income	55.251		22.510		77.761
Net operating income	(46.687)	1.975.201	22.510	0	1.951.023
Operating expenses Net impairments	(114.478)		(89.044)		(203.521) 0
Profit (loss) before tax	(161.165)	1.975.201	(66.534)	0	1.747.502
Income tax expenses					(67.838)
Profit for the period					1.679.664
6. Insurance service result
Insurance revenue				YTD 2024	YTD 2023
Premiums earned				21.306.737	19.327.586
Other insurance revenue				329.270	302.951
Insurance revenue				21.636.007	19.630.537
Insurance service expenses
Claims incurred				(15.869.322)	(14.864.283)
Insurance contract operating expenses				(4.083.774)	(4.278.436)

6. Insurance service result

Other operating income	55.251	22.510		77.761
Net impairments				0
Income tax expenses				(67.838)
Profit for the period				1.679.664
6. Insurance service result
Premiums earned			21.306.737	19.327.586
Other insurance revenue			329.270	302.951
Insurance revenue			21.636.007	19.630.537
Insurance service expenses
Claims incurred			(15.869.322)	(14.864.283)
Insurance contract operating expenses			(4.083.774)	(4.278.436)
Insurance service expenses			(19.953.096)	(19.142.719)
Net expenses from reinsurance contracts
Premiums earned, reinsurers' share			(774.269)	(658.371)
Claims incurred, reinsurers' share			128.572	63.722
Fee and commission income from reinsurers			5.207	4.893
			(640.491)	(589.756)

7. Net interest income

Interest income is specified as follows:	YTD 2024
Bank deposits, cash, loans and other interest income	359.945
Derivatives	439.315
Interest on financial assets at fair value	140.873
Interest on financial assets recognized at fair value through other comprehensive income	178.731
Interest income, total	1.118.864
Money market loans and other borrowings	(754.389)
Issued bonds and bills	(195.996)
Interest expenses of leases	1.258
Other interest expenses	(9.924)
Interest expenses, total	(959.051)
Net interest income, total	159.813

8. Net fee and commission income

	YTD 2024
Capital markets and corporate finance	767.718
Asset management fees	260.136
Other net fee and commission income	108.351
Net fee and commission income, total	1.136.205

9. Net financial income

Net fee and commission income 8.
	YTD 2024
Capital markets and corporate finance Asset management fees	767.718 260.136
Other net fee and commission income		108.351
Net fee and commission income, total	1.136.205
advisory, asset management, securities custody and credit. Net financial income 9.	Fee and commission income includes fees for services provided to clients in the field of market trading, corporate
	YTD 2024	YTD 2023
Interest income and other investment income	298.594	448.297
Fair value change of equities*	(418.832)	1.404.883
Fair value change of other financial assets* Fair value change of financial assets	2.158.920 1.740.087	1.401.504 2.806.387
Financial income, total	2.038.682	3.254.684
Net finance expenses from insurance contracts	(920.226)	(668.611)
Other financial items	(324.755)	(371.674)
Operating cost of the insurance investment portfolio	(206.409)	(239.198)

Interest income, finance expenses and other financial income above are from insurance investment operations.

Notes to the Condensed Consolidated Interim Financial Statements

10. Operating expenses

Notes to the Condensed Consolidated Interim Financial Statements
10. Operating expenses
Salaries and related expenses			YTD 2024 3.944.103	YTD 2023 2.767.232
Other operating expenses			2.006.405	1.500.230
Depreciation and amortisation			405.185	453.694
Total			6.355.693	4.721.156
Operating expenses of parent company			450.315	0
Operating expenses of financial services			1.592.611	89.044
Expenses of insurance operations			4.106.359	4.392.914
Operating cost of the insurance investment portfolio Operating expenses, total			206.409 6.355.693	239.198 4.721.156
Salaries and related expenses are specified as follows:			YTD 2024	YTD 2023
Salaries			3.048.515	2.171.811
Pension fund contributions Share option expenses*			430.111 20.533	284.097 0
Special financial activities tax on salaries			191.352	128.778
Other salary-related expenses			253.591	182.546
Salaries and salary-related expenses			3.944.103	2.767.232
Number of fulltime employees			242	198
*The 2023 general meeting of the company authorized the Board of directors to approve a share option plan in
accordance with Article 10 of the Income Tax Act No. 90/2003 for all employees of Skagi (Vátryggingafélag Íslands)
and its subsidiaries as for management as part of bonus scheme.
11. Income tax
Income taxes are calculated and recognized in the financial statements.
Effective tax rate:	YTD 2024		YTD 2023
	Amount	%	Amount	%
Profit before income taxes	929.358		1.747.502
Income tax according to prevailing tax rate Fair value changes of financial assets	195.165 79.864	21,0% 8,6%	349.500 (252.047)	20,0% -14,4%
Non-deductible expenses	10	0,0%	9	0,0%
Dividends received	(50.198)	-5,4%	(28.929)	-1,7%
Effect of temporary change in tax rate	3.825	0,4%	0	0,0%
Other changes	618	0,1%	(694)	0,0%

11. Income tax

accordance with Article 10 of the Income Tax Act No. 90/2003 for all employees of Skagi (Vátryggingafélag Íslands) and its subsidiaries as for management as part of bonus scheme.
11. Income tax
Income taxes are calculated and recognized in the financial statements.
Effective tax rate:	YTD 2024		YTD 2023
	Amount	%	Amount	%
Profit before income taxes	929.358		1.747.502
Income tax according to prevailing tax rate	195.165	21,0%	349.500	20,0%
Fair value changes of financial assets	79.864	8,6%	(252.047)	-14,4%
Non-deductible expenses	10	0,0%	9	0,0%
Dividends received	(50.198)	-5,4%	(28.929)	-1,7%
Effect of temporary change in tax rate Other changes	3.825 618	0,4% 0,1%	0 (694)	0,0% 0,0%

Notes to the Condensed Consolidated Interim Financial Statements

12. Financial assets of insurance activities

Notes to the Condensed Consolidated Interim Financial Statements
12. Financial assets of insurance activities
Financial assets are specified as follows:
Shares in other companies	30.9.2024	31.12.2023
Listed on domestic stock exchanges	3.175.148	3.852.460
Listed on foreign stock exchanges	3.073.373	1.896.105
Other companies	7.004.888	6.408.261
	13.253.409	12.156.827
Other securities
Government-backed securities, indexed	3.824.279	4.338.264
Government-backed securities, non-indexed	6.647.062	5.066.129
Other bonds	10.534.457	12.044.764
Bond funds	8.358.969	6.628.339
Institutional investor funds	2.432.616	2.524.266
	31.797.383	30.601.762
Total financial assets	45.050.792	42.758.589
13. Securities for hedging purposes
The carrying amounts of equities and securities held for hedging purposes are specified as follows:
	30.9.2024	31.12.2023
Government bonds and treasury bills	1.298.168	991.441
Shares	3.629.684	2.877.705
Other securities	703.292	651.968
	5.631.144	4.521.114
14. Forward contracts
Assets	30.9.2024	31.12.2023
Derivatives shares	187.366	126.986
Derivatives bonds	1.518	16.249
	188.883	143.235
Liabilities

13. Securities for hedging purposes

	30.9.2024	31.12.2023
Government bonds and treasury bills	1.298.168	991.441
Shares	3.629.684	2.877.705
Other securities .	703.292	651.968
	5 631 144	4 521 114

14. Forward contracts

13. Securities for hedging purposes
The carrying amounts of equities and securities held for hedging purposes are specified as follows:
14. Forward contracts
Assets				30.9.2024	31.12.2023
Derivatives shares				187.366	126.986
Derivatives bonds				1.518	16.249
				188.883	143.235
Liabilities
Derivatives shares Derivatives bonds				226.124 18.557	194.563 21.052
				244.681	215.615
15. Share in subsidiaries
	30.9.2024	31.12.2023		Principal activity
VÍS tryggingar hf.	100,0%	100,0%		Seeking licence for insurance operations
Fossar fjárfestingarbanki hf.	100,0% 100,0%	100,0%	Investment banking
		100,0%	Investing activites
VF Nord ehf.
Líftryggingafélag Íslands hf. SIV eignastýring hf.	100,0% 70,0%	100,0% 70,0%	Life insurance	Asset and fund management

15. Share in subsidiaries

	Principal activity
	Seeking licence for insurance operations
	Investment banking
	Investing activites
	Life insurance
	Asset and fund management

16. Share in associates

Notes to the Condensed Consolidated Interim Financial Statements
16. Share in associates
				Book value	Book value
Tplús hf.			Share 35,0%	30.9.2024 135.994	31.12.2023 151.393
Vex ehf.			35,0%	38.889	38.889
				174.883	190.283
17. Intangible assets
		Customer
Cost	Goodwill	relationships	Brands	Software	Total

17. Intangible assets

Notes to the Condensed Consolidated Interim Financial Statements
16. Share in associates
Tplús hf.
Vex ehf.
				174.883	190.283
17. Intangible assets
		Customer
Cost	Goodwill	relationships	Brands	Software	Total
Cost at 1.1.2023	474.599	0	0	3.780.775	4.255.374
Additions during the year Taken over due to acquisition of Fossar	1.767.984 0	925.000 12.887	305.000 5.923	178.524 28.820	3.176.508 47.630
Cost at 31.12.2023	2.242.583	937.887	310.923	3.988.119	7.479.512
Additions during the period	0	25.000	0	9.661	34.661
Total cost 30.9.2024	2.242.583	962.887	310.923	3.997.780	7.514.173
Amortisation
Accumulated amortisation as at 1.1.2023	0	0	0	2.840.550	2.840.550
Taken over due to acquisition of Fossar	0	1.692	778	3.784	6.253
Amortisation for the year Impairment	0 0	23.125 0	7.625 0	313.121 805.628	343.871 805.628
Accumulated amortisation as at 31.12.2023	0	24.817	8.403	3.963.083	3.996.302
Amortisation for the period	0	75.616	24.094	9.587	109.297
Accumulated amortisation as at 30.9.2024	0	100.433	32.496	3.972.670	4.105.599
Carrying amount
Carrying amount at the beginning of the year 2023	474.599	0	0	940.225	1.414.824
Carrying amount at year-end 2023	2.242.583	913.070	302.521	25.036	3.483.211
Carrying amount as at 30.9.2024	2.242.583	862.454	278.427	25.110	3.408.574
Amortisation rates	0%	10%	10%	10-33%
The Group's goodwill stems from VIS's acquisition of Lífís in 2012 as well as the merger of Fossar Investment Bank in
2023. At year-end 2023, an annual impairment test was carried out on the goodwill in respect of Lífís, based on
discounted future cash flow. The result of the test was that it was not necessary to write down the carrying amount
of the goodwill. It is management opinion that there are no indicators of impairment of goodwill at the 30.9.2024
reporting date.
18. Other receivables
Other receivables are specified as follows:				30.9.2024	31.12.2023
Prepaid taxes				715.699	460.581
Accrued interest income and prepaid expenses				614.169	794.027
Receivables related to domestic operations and other receivables Other receivables, total				1.429.993 2.759.861	892.139 2.146.748

18. Other receivables

Prepaid taxes
Accrued interest income and prepaid expenses
Receivables related to domestic operations and other receivables
Other receivables, total

19. Insurance contract liabilities

Notes to the Condensed Consolidated Interim Financial Statements
19. Insurance contract liabilities
Insurance contract liabilities are determined according to the accounting standard IFRS 17.
Insurance contract liabilities	30.9.2024	31.12.2023
Liability for remaining coverage Liability for incurred claims	2.731.255 25.709.439	2.185.132 23.977.054
Total insurance contract liabilities	28.440.693	26.162.186
Reinsurance contract assets
Reinsurance contracts assets	1.322.546	1.229.156
Insurance contract liabilities, net of reinsurance
Insurance contract liabilities, net of reinsurance	27.118.147	24.933.030
Changes in liabilities for incurred claims are specified as follows:
Liability for incurred claims, start of year	23.977.054	22.880.803
Net finance expenses from insurance contracts	830.646	1.070.275
Paid claims in the period due to older years	(7.664.614)	(9.787.018)
Liability for incurred claims, current year	8.826.031	11.080.777
Total calculated liability for incurred claims	25.969.116	25.244.837
Ruff off Change in risk adjustment	(302.869) 43.191	(783.016) (484.767)

Changes in liabilities for incurred claims are specified as follows:

20. Subordinated bond At the end of February 2016, the Company issued a subordinated bond in the nominal amount of ISK 2,500 million.
The bond is classified as Tier II capital and is included in the Company's solvency. The bond bears a fixed inflation indexed interest rate of 5.25%. Its maturity is 30 years but with a prepayment option and a step-up in interest rate to 6.25% ten years after the issue date.
21.Accounts payable and other liabilities
Accounts payable are specified as follows:	30.9.2024	31.12.2023
Accounts payable	1.446.714	785.401
Income tax payable	421.225	150.590
Liabilities due to reinsurance activities Other liabilities	184.735 1.981.340	67.623 2.156.160

20. Subordinated bond

21.Accounts payable and other liabilities

20. Subordinated bond At the end of February 2016, the Company issued a subordinated bond in the nominal amount of ISK 2,500 million.
The bond is classified as Tier II capital and is included in the Company's solvency. The bond bears a fixed inflation indexed interest rate of 5.25%. Its maturity is 30 years but with a prepayment option and a step-up in interest rate to 6.25% ten years after the issue date.
21.Accounts payable and other liabilities Accounts payable are specified as follows:	30.9.2024	31.12.2023
Accounts payable Income tax payable	1.446.714 421.225	785.401 150.590
Liabilities due to reinsurance activities	184.735	67.623
Other liabilities Accounts payable and other liabilities, total	1.981.340 4.034.015	2.156.160 3.159.773

22. Share capital and equity reserves

Notes to the Condensed Consolidated Interim Financial Statements
22. Share capital and equity reserves
The share capital is specified as follows:	30.9.2024	31.12.2023
Share capital according to the Company's Articles of Association Treasury shares	1.906.700 (28.963)	1.906.700 (1.150)
Share capital according to annual financial statements	1.877.737	1.905.550
One vote is attached to each share of the nominal value of one Icelandic Krona in the Company.
According to the Limited Liability Companies Act, the Company is required to retain amounts corresponding to 25%

23. Fossar Capital adequacy ratio

According to the Limited Liability Companies Act, the Company is required to retain amounts corresponding to 25%
of the nominal value of shares in a statutory reserve that is prohibited from being distributed as dividends to shareholders. Amounts in excess of 25% of the nominal value of shares are at the Company's disposal.
According to the Annual Accounts Act, the Company is to recognize unrealized fair value income of financial assets designated at fair value through profit or loss in a restricted reserve among equity which is not distributable as dividends. According to the Annual Accounts Act, the Company is to restrict the share in profit from a subsidiary and
associate in excess of dividends received.
Retained earnings consist of profit and loss of the Company not distributed as dividends or contributed to statutory reserve or other reserves. Retained earnings can be distributed to shareholders as dividends. However, solvency requirements limit the amounts the Company can pay as dividends.
23. Fossar Capital adequacy ratio
The capital adequacy ratio of Fossar is calculated in accordance with Act No. 161/2002 on Financial Undertakings. The capital requirement due to credit, market, and operational risk is calculated using a standard method and the bank's capital adequacy ratio is 19,1%.
	30.9.2024	31.12.2023
Fossar total equity at period end	1.859.182	1.925.908
Deduction items	(302.950)	(218.894)
Own funds	1.556.232	1.707.014
Risk weighted exposures: Credit risk	4.155.693	1.764.845
Market risk	1.635.395	1.417.711
Total risk weighted exposure for part a, 3rd paragraph. Article 84	5.791.088	3.182.556
Capital requirements for operational risk	2.372.280	2.372.280
Total risk weighted exposure for part b, 3rd paragraph. Article 84	2.372.280	2.372.280
Total risk weighted assets for Article 84	8.163.368	5.554.836

Notes to the Condensed Consolidated Interim Financial Statements

24. Solvency of a financial conglomerate

Notes to the Condensed Consolidated Interim Financial Statements
24. Solvency of a financial conglomerate
It is assumed the approval of the Financial Supervisory Authority for defining the Group as a financial conglomerate as defined in Article 3 of Regulation No. 61/2017 on Supplementary Supervision of Financial Conglomerates will be obtained and the capital requirement of the Group is now calculated as the solvency ratio of a financial conglomerate.
The Group calculates the minimum capital requirements for companies that do not fall under the insurance operations using applicable regulations while using the Solvency II framework to calculate own funds and minimum own funds requirements for insurance activities.
Solvency is a measure of the Group's ability to absorb shocks, or in other words, an indication of its financial strength. The Group's available capital and capital requirements are calculated on the assumption that the Group meets the definition of a financial conglomerate according to Articles 16, 17 and 18 of Regulation No. 61/2017 on Supplementary Supervision of Financial Conglomerates. The Group's solvency ratio is 1,48 compared to the minimum requirement in the Regulation, which is 1.0.
	30.9.2024	31.12.2023
Solvency capital requirements for insurance activities	12.825.142	11.866.623
Solvency capital requirements for other activities	1.138.568	742.873
Total solvency capital requirements	13.963.710	12.609.495
Own funds for insurance activities	19.025.936	19.317.148
Own funds for other activities	1.702.313	1.867.927
Total own funds	20.728.249	21.185.076
Solvency ratio	1,48	1,68
25. Solvency of insurance activities The minimum solvency is a minimum amount of capital needed to meet the risks faced by the Company. The standardized approach, according to Act No. 100/2016, is applied, whereby calculation is based on all measurable risks. The following tables specify how the solvency requirements are divided into subcomponents of risk. Diversification eƯects are deducted since it is not assumed that all risks will be realized simultaneously. An adjustment for the loss-absorbing capacity of deferred taxes is deducted upon realization of risks.
Solvency capital requirements
	30.9.2024	31.12.2023
Market risk	7.765.004	6.683.185
Counterparty risk	1.988.050	1.820.181
Insurance risk	10.185.362	9.736.238
Diversification effects and other factors	(7.113.275)	(6.372.981)
Total solvency capital requirements	12.825.142	11.866.623
Own funds	19.025.936	19.317.148

25. Solvency of insurance activities

Solvency capital requirements

Solvency ratio	1,48	1,68
25. Solvency of insurance activities
The minimum solvency is a minimum amount of capital needed to meet the risks faced by the Company. The standardized
approach, according to Act No. 100/2016, is applied, whereby calculation is based on all measurable risks. The following tables specify how the solvency requirements are divided into subcomponents of risk. Diversification eƯects are deducted since it is not assumed that all risks will be realized simultaneously. An adjustment for the loss-absorbing capacity of deferred taxes is deducted upon realization of risks.
Solvency capital requirements
	30.9.2024	31.12.2023
Market risk	7.765.004	6.683.185
Counterparty risk	1.988.050	1.820.181
Insurance risk	10.185.362	9.736.238
Diversification effects and other factors Total solvency capital requirements	(7.113.275) 12.825.142	(6.372.981) 11.866.623
Own funds	19.025.936	19.317.148
Solvency ratio	1,48	1,63

26. Financial instruments

26.1 Classification of financial instruments of insurance operations

Financial instruments
Notes to the Condensed Consolidated Interim Financial Statements 26. 26.1 Classification of financial instruments of insurance operations
The Group's financial assets of insurance operations pertain to the following categories of financial instruments:
30.9.2024	Financial	Financial
	assets at fair	assets at
Financial assets	value	amortised cost	Total	Fair value
Equity and equity funds	13.253.409		13.253.409	13.253.409
Debt instruments and other securities	29.145.177		29.145.177	29.145.177
Secured debt instruments		2.652.206	2.652.206
Other receivables		1.567.027	1.567.027
Cash in escrow accounts and term deposits		76.205	76.205
Cash and cash equivalents		1.313.147	1.313.147
Financial assets, total	42.398.586	5.608.586	48.007.172
31.12.2023
Financial assets
Equity and equity funds	13.661.697		13.661.697	13.661.697
Debt instruments and other securities	26.387.746		26.387.746	26.387.746
Secured debt instruments		2.709.349	2.709.349
		1.781.063	1.781.063
Other receivables		154.607	154.607
Cash in escrow accounts and term deposits			2.158.620
Cash and cash equivalents		2.158.620

31.12.2023

Financial assets

Equity and equity funds		13.661.697	13.661.697
Debt instruments and other securities		26.387.746	26.387.746
Secured debt instruments	2.709.349	2.709.349
Other receivables	1.781.063	1.781.063
Cash in escrow accounts and term deposits	154.607	154 607
Cash and cash equivalents	2.158.620	2.158.620
Financial assets, total

Fair value hierarchy of insurance operations

The carrying amounts of financial assets at amortised cost approximates their fair values.
Fair value hierarchy of insurance operations
The following table discloses financial assets at fair value or held-to-maturity according to valuation techniques. The valuation techniques are separated into three levels based on the significance of the assumptions made in determining fair value. The levels are as follows:
Level 1: Quoted price in an active market for identical assets.
Level 2: Fair value is not based on quoted prices in an active market (level 1) but on inputs that are observable for the asset, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Financial assets for which there is not an active market are classified into level 2. The fair value assessment is based on recent transactions between unrelated parties or bid prices of unrelated parties. Comparison to similar financial assets is also applied.
Level 3: Fair value measurement is based on significant inputs other than market value. Fair value measurement of financial assets classified as level 3 is based on inputs such as valuation from fund managers of investment or institutional investment funds, put options or the Company's valuation based on financial results or comparison to other similar financial assets.
30.9.2024	Level 1	Level 2	Level 3	Total
Financial assets at fair value	28.778.599	2.223.214	11.396.773	42.398.586
31 December 2023	Level 1	Level 2	Level 3	Total
Financial assets at fair value	27.394.439	1.054.670	11.600.335	40.049.444
Changes that fall under level 3 during the period are specified as follows:			30.9.2024	31.12.2023
Balance 1.1.			11.600.335	11.540.198
Purchased			1.574.118	2.371.195
			(1.624.166)	(3.781.357)

Fair value hierarchy of insurance operations
The following table discloses financial assets at fair value or held-to-maturity according to valuation techniques. The valuation techniques are separated into three levels based on the significance of the assumptions made in determining fair value. The levels are as follows:
Level 1: Quoted price in an active market for identical assets.
Level 2: Fair value is not based on quoted prices in an active market (level 1) but on inputs that are observable for the asset, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Financial assets for which there is not an active market are classified into level 2. The fair value assessment is based on recent transactions between unrelated parties or bid prices of unrelated parties. Comparison to similar financial assets is also applied.
Level 3: Fair value measurement is based on significant inputs other than market value. Fair value measurement of financial assets classified as level 3 is based on inputs such as valuation from fund managers of investment or institutional investment funds, put options or the Company's valuation based on financial results or comparison to other similar financial assets.
Financial assets at fair value
31 December 2023	Level 1	Level 2	Level 3	Total
Financial assets at fair value	27.394.439	1.054.670	11.600.335	40.049.444
Changes that fall under level 3 during the period are specified as follows:			30.9.2024	31.12.2023
Balance 1.1.			11.600.335	11.540.198
Purchased			1.574.118	2.371.195
Sold / Repayments			(1.624.166)	(3.781.357)
Moved between levels			0	(305.964)
Interest and fair value changes*				1.776.264
Balance at 30.9			11.396.773	11.600.335
*Of which ISK 47 million is realised and ISK -201 million is unrealised. Interest and fair value changes are recorded among net financial income in the income statement. Condensed Consolidated Interim

Notes to the Condensed Consolidated Interim Financial Statements

26.2 Classification of financial instruments of financial services operations

Notes to the Condensed Consolidated Interim Financial Statements
26.2 Classification of financial instruments of financial services operations
The Group's financial assets of financial services activities pertain to the following categories of financial instruments:
30.9.2024	Fair value	Fair value
	through	through	Amortised
Financial assets	profit or loss	OCI	cost	Total
Cash and cash equivalents			522.949	522.949
Other receivables (without prepayments)			1.116.628	1.116.628
Bonds	2.547.324	3.026.954		5.574.278
Equities and other securities	403.288			403.288
Securities for hedging purposes	5.631.144			5.631.144
Loans to customers			4.406.929	4.406.929
Total	8.581.756	3.026.954	6.046.506	17.655.217
Financial liabilities
Money market loans Issued bonds and bills			9.274.046 3.563.529	9.274.046 3.563.529
Liabilities to credit institutions			1.399.242	1.399.242
Accounts payable and other liabilities (without unpaid taxes)			1.732.549	1.732.549
Long-term loans			24.256	24.256
Total	0	0	15.993.621	15.993.621
31 December 2023	Fair value	Fair value
	through	through	Amortised
Financial assets	profit or loss	OCI	cost	Total
Cash and cash equivalents			112.073	112.073
Other receivables (without prepayments)			211.078	211.078
Bonds	1.904.654	2.657.469		4.562.123
Equities and other securities	337.320			337.320
Securities for hedging purposes	4.521.114			4.521.114
Loans to customers			1.672.720	1.672.720
Total	6.763.087	2.657.469	1.995.872	11.416.428
Financial liabilities Money market loans			6.227.385	6.227.385
Issued bonds and bills Liabilities to credit institutions			2.285.315 700.000	2.285.315 700.000

Other receivables (without prepayments)
Bonds
Equities and other securities
Securities for hedging purposes
Loans to customers
Total
Financial liabilities
Money market loans
Issued bonds and bills
Liabilities to credit institutions
Accounts payable and other liabilities (without unpaid taxes)
Long-term loans
Total
Cash and cash equivalents			112.073	112.073
Other receivables (without prepayments)			211.078	211.078
Bonds	1.904.654	2.657.469		4.562.123
Equities and other securities	337.320			337.320
Securities for hedging purposes	4.521.114			4.521.114
Loans to customers			1.672.720	1.672.720
Total	6.763.087	2.657.469	1.995.872	11.416.428
Financial liabilities
Money market loans			6.227.385	6.227.385
Issued bonds and bills			2.285.315	2.285.315
Liabilities to credit institutions			700.000	700.000
Accounts payable and other liabilities (without unpaid taxes)			292.507	292.507
Long-term loans			22.176	22.176
Total	0	0	9.527.383	9.527.383
Fair value hierarchy of financial services operations The following table shows a breakdown of the carrying amounts of financial assets at fair value by valuation method:
30. september 2024	Level 1	Level 2	Level 3	Total
Investment in listed companies	4.032.973			4.032.973
Investment in bonds	7.472.809			7.472.809
Holdings in other companies, total	11.505.781	0	0	11.505.781
	Level 1	Level 2	Level 3	Total
31 December 2023	3.215.025			3.215.025
				6.102.592
Investment in listed companies
Investment in bonds Holdings in other companies, total	6.102.592 9.317.617	0	0	9.317.617

Fair value hierarchy of financial services operations

Investment in listed companies
Investment in bonds
Holdings in other companies, total
Investment in listed companies
Investment in bonds
Holdings in other companies, total

27.Credit quality of financial assets

Notes to the Condensed Consolidated Interim Financial Statements 27.Credit quality of financial assets
27.1 Breakdown of loans to customers by industry and information on collateral and other credit enhancements
						Allocated collateral
30.9.2024	Claim value	Impairment to expected credit loss	Carrying amount	Total collateral	Deposits	Listed liquid funds	Unlisted securities and securities and other funds	Residental and Commercial real estate	Other
Public entities Financial institutions Corporate
Real estate activities Construction	292.686 302.282	(1.651) (519)	291.035 301.763	459.900 3.205.250				459.900 3.138.000	0 67.250
Service activities Accommodat. and Food Service Activit. Activities of Holding Companies	0 224.445 3.421.283	0 (1.218) (5.495)	0 223.227 3.415.788	0 2.376.335 9.060.406	37.647	3.862.656	2.091.335 1.561.489	0 285.000 1.412.900	0 0 2.185.714
Wholesale and Retail Trade Other Individual	0 175.683	0 (567)	0 175.116	0 540.000					0 540.000
Total	4.416.379	(9.450)	4.406.929	15.641.891	37.647	3.862.656	1.561.489	5.295.800	2.792.964
						Allocated collateral
		Impairment				Listed	Unlisted
31.12.2023	Claim value	to expected credit loss	Carrying amount	Total collateral	Deposits	liquid funds	securities and securities and other funds	Commercial real estate	Other
Public entities Financial institutions Corporate
Real estate activities Construction	14.994		14.994	67.500					67.500

Claim	to expected	Carrying	Total				Commercial
value	credit loss	amount	collateral	Deposits	liquid funds	other funds	real estate	Other
14.994		14.994	67.500					67.500
150.967 1.506.759		150.967 1.506.759	4.080.000 3.728.145	3.208	2.680.526	1.044.411		4.080.000
							Allocated collateral	securities and securities and

Condensed Consolidated Interim

27.2 Credit quality of loans to customers by credit quality band

30.9.2024

Notes to the Condensed Consolidated Interim Financial Statements
27.2 Credit quality of loans to customers by credit quality band
The following tables show financial assets subject to the impairment requirements of IFRS 9 broken down by credit quality bands where band I denotes the lowest and band IV the highest credit risk. The Bank has primarily used adjusted external credit ratings to assess the default probability of its customers.
Credit quality of financial assets by credit quality band 30.9.2024
Loans to customers:	Stage 1	Stage 2	Stage 3	Total
Credit quality band I Credit quality band II Credit quality band III Credit quality band IV In default	4.289.980 126.399			4.289.980 126.399
Non-Rated Gross carrying amount	4.416.379	0	0	4.416.379
Expected credit loss	(9.450)			(9.450)
Book value	4.406.929	0	0	4.406.929
31.12.2023
Loans to customers:	Stage 1	Stage 2	Stage 3	Total
Credit quality band I Credit quality band II Credit quality band III	1.505.956 166.764			1.505.956 166.764
Credit quality band IV In default
Non-Rated Gross carrying amount Expected credit loss	1.672.720	0	0	1.672.720 0

31.12.2023

Credit quality band IV
In default
Non-Rated
Gross carrying amount
Expected credit loss
Book value
31.12.2023
Credit quality band I
Credit quality band II
Credit quality band III
Credit quality band IV
In default
Non-Rated Gross carrying amount
Expected credit loss				0
Book value	1.672.720	0	0	1.672.720
27.3 Breakdown of loans to customers into not past due and past due
30.9.2024		Claim	Expected
		value	credit loss	Book value
Not past due		4.416.379	(9.450)	4.406.929
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due 91-180 days

27.3 Breakdown of loans to customers into not past due and past due

Credit quality band I
Credit quality band II
Credit quality band III
Credit quality band IV In default
Non-Rated
Gross carrying amount
Expected credit loss			0
Book value
27.3 Breakdown of loans to customers into not past due and past due
Not past due
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due 91-180 days
Past due 181-360 days
Past due more than 360 days
Total	4.416.379	(9.450)	4.406.929
31.12.2023	Claim	Expected
	value	credit loss	Book value
Not past due	1.672.720	0	1.672.720
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due 91-180 days

Not past due
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due 91-180 days
Past due 181-360 days
Past due more than 360 days
Total
Not past due
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due 91-180 days
Past due 181-360 days
Past due more than 360 days
Total	1.672.720	0	1.672.720
Condensed Consolidated Interim
Financial Statements 30 September 2024 25		All amounts are in thousands of ISK

27.4 Allowance for expected credit loss on loans to customers and on loan commitments, guarantees and unused credit facilities during the period

30.9.2024

Notes to the Condensed Consolidated Interim Financial Statements
27.4 Allowance for expected credit loss on loans to customers and on loan commitments, guarantees and unused credit facilities during the period
The following tables show changes in the expected credit loss allowance of loans to customers and for loan commitments, guarantees and unused credit facilities during the period.
30.9.2024 Expected credit loss allowance total
Transfer of financial assets:	Stage 1	Stage 2	Stage 3	Total
Balance as at 1 January 2024 Transfer to Stage 1 Transfer to Stage 2 Transfer to Stage 3	2.049			2.049
Net remeasurement of loss allowance New financial assets, originated or purchased Derecognitions and maturities Write-offs	538 6.863			538 6.863
Balance as at 30 September 2024	9.450	0	0	9.450
31.12.2023
Transfer of financial assets:	Stage 1	Stage 2	Stage 3	Total
Balance as at 1 January 2023 Transfer to Stage 1 Transfer to Stage 2 Transfer to Stage 3	838			838
Net remeasurement of loss allowance New financial assets, originated or purchased Derecognitions and maturities	2.099			2.099
Write-offs Balance as at 31 December 2023	(888) 2.049	0	0	(888) 2.049
28. Loan-to-value The loan-to-value ratio (LTV) is the ratio of the gross amount of the loan to the value of the collateral, if any. The general creditworthiness of a customer is viewed as the most reliable indicator of credit quality of a loan. Besides collateral included in the LTV ratios the Group uses other risk mitigation measures, such as guarantees, negative pledge, cross-collateral and collateralization of non-quantifiable assets. The breakdown of loans to customers by LTV is specified as follows: Less than 50% 51-70%	30.9.2024 1.698.874 2.467.681	% 39% 56%	31.12.2023 662.273 809.305	% 40% 48%
71-90% 91-100% 101-125% 126-200%	240.374 Greater than 200%	5%	201.142	12%

28. Loan-to-value

Transfer to Stage 1 Transfer to Stage 2
Transfer to Stage 3 Net remeasurement of loss allowance New financial assets, originated or purchased
Derecognitions and maturities
Write-offs
28. Loan-to-value
The loan-to-value ratio (LTV) is the ratio of the gross amount of the loan to the value of the collateral, if any. The general creditworthiness of a customer is viewed as the most reliable indicator of credit quality of a loan. Besides collateral included in
the LTV ratios the Group uses other risk mitigation measures, such as guarantees, negative pledge, cross-collateral and collateralization of non-quantifiable assets. The breakdown of loans to customers by LTV is specified as follows:
	30.9.2024	%	31.12.2023	%
Less than 50%	1.698.874	39%	662.273	40%
51-70%	2.467.681	56%	809.305	48%
71-90% 91-100% 101-125%	240.374	5%	201.142	12%
126-200% Greater than 200% No or negligible collateral: Other loans with no collateral

29.Maximum exposure to credit risk

The maximum exposure to credit risk for on-balance sheet and oƯ-balance sheet items, before taking into account any collateral held or other credit enhancements, is specified as follows:

30.9.2024

On and off balance sheet exposure	Public entities	Financial institutions	Corporate customers	Individuals	Total
Cash and balances with Central Bank		517.291			517.291
Fixed income securities	5.631.144				5.631.144
Loans to customers			4.406.929		4.406.929
Derivatives			188.883		188.883
Other assets			258.925		258.925
Total	5.631.144	517.291	4.854.738	0	11.003.173

31.12.2023

On and off balance sheet exposure	Public entities	Financial institutions	Corporate customers	Individuals	Total
Cash and balances with Central Bank		112.073			112.073
Fixed income securities	5.450.624		651.968		6.102.592
Loans to customers			1.672.720		1.672.720
Derivatives			143.234		143.234
Other assets			211.078		211.078
Total	5.450.624	112.073	2.679.000	0	8.241.697

30.Collateral against exposures to derivatives

Notes to the Condensed Consolidated Interim Financial Statements
30.Collateral against exposures to derivatives
The Group applies the same valuation methods to collateral held as other comparable assets held by the Group. Haircuts are applied to the market value of the collateral for liquidity
and other factors which may aƯect the applied collateral value of the asset.
					Market value of collateral
	Notional amount	Notional amount	Total		Fixed	Variable
	fixed income	variable income	notional		income	income	Total
30.9.2024	securities	securities	amount	Deposits	Securities	securities	collateral
Financial institutions	881.814	2.637.097	3.518.911	185.421	239.851	180.744	606.016
Corporate customers	4.704.636	320.402	5.025.038	274.457	2.975.014	866.895	4.116.366
Individuals	5.586.450	2.957.499	8.543.949	459.878	3.214.865	1.047.639	4.722.382
					Market value of collateral
	Notional	Notional
	amount	amount	Total		Fixed	Variable
		variable income	notional		income Securities	income securities	Total collateral
	fixed income
31.12.2023	securities	securities	amount	Deposits
Financial institutions	157.081	1.336.746	1.493.827	42.465	0	0	42.465
Corporate customers Individuals	4.766.714 0	552.748 237.628	5.319.462 237.628	760.846 15.132	209.600 0	2.002.550 0	2.972.996 15.132

		Market value of collateral

31. Large exposure

Notes to the Condensed Consolidated Interim Financial Statements
31. Large exposure
			30.9.2024		31.12.2023
Large exposure before risk adjusted mitigation		Number	Amount	Number	Amount
10-20% of capital base		6	1.478.679	0	0
20-25% of capital base		0		0	0
Exceeding 25% of capital base		0		0	0
Total		6	1.478.679	0	0
Large exposure net of risk adjusted mitigation		6	1.230.442	0	0
32. Key ratios
The combined ratio is the sum of incurred claims, operating expenses and net reinsurance cost as a proportion of insurance
revenue. The claims ratio, operating ratio and net reinsurance ratio are calculated as a proportion of the insurance revenue for the
period.
The following table shows the combined ratio and other key figures of the insurance operations and the Group. For further
information on solvency ratios, reference is made to notes 24-25.
Key ratios for insurance business	30.9.2024	30.9.2023
Claims ratio	73,3%	75,7%
Net reinsurance ratio	3,0%	3,0%
	76,3%	78,7%
Claims and net reinsurance ratio	18,9%	21,8%
Insurance contracts expense ratio
Combined ratio	95,2%	100,5%
Solvency ratio for insurance business	1,48	1,53
Key ratios for the Group
ROE on annual basis	3,9%	13,1%

32. Key ratios

10-20% of capital base 20-25% of capital base Exceeding 25% of capital base Total
Large exposure net of risk adjusted mitigation
Claims ratio 73,3%	75,7%
Net reinsurance ratio 3,0%	3,0%
Claims and net reinsurance ratio 76,3%	78,7%
Insurance contracts expense ratio 18,9% Combined ratio 95,2%	21,8% 100,5%
Solvency ratio for insurance business 1,48	1,53
ROE on annual basis 3,9%	13,1%
	information on solvency ratios, reference is made to notes 24-25.	30.9.2024 30.9.2023	The combined ratio is the sum of incurred claims, operating expenses and net reinsurance cost as a proportion of insurance revenue. The claims ratio, operating ratio and net reinsurance ratio are calculated as a proportion of the insurance revenue for the The following table shows the combined ratio and other key figures of the insurance operations and the Group. For further

33.Related parties

Key ratios for the Group
33.Related parties Related parties are those parties, or their companies, that have a significant influence on the Group, whether directly or indirectly. Related parties are board members of the Group, the CEOs of the Group, key management personnel, associates, close family
members of individuals identified as related parties, as well as other dependent parties directed by or under the influence of the Group. Transactions with related parties have been on the same terms as with unrelated parties. Transactions and balances with related parties are specified as follows:
	1.1-30.9.2024		30.9.2024
Board of directors and key management	Income 2.895	Expenses 36.249	Assets 388.153	Liabilities 12.297
	1.1-30.9.2023		31.12.2023
	Income	Expenses	Assets	Liabilities

Notes to the Condensed Consolidated Interim Financial Statements

34. Events after the reporting date

35. Quarterly statement

Notes to the Condensed Consolidated Interim Financial Statements
34. Events after the reporting date
No events have occurred after the end of the reporting period that require the Group to change these financial statements. It is however noted that capital allocations within the Group have been concluded in November, in terms of (a) on 1st November an equity share capital increase was completed from Skagi to Fossar fjárfestingarbanki hf. in the amount of ISK 200 million, to support growth of the bank; and (b) on 11th November the acquisition of Íslensk verðbréf hf. with initial (1st) payment of ISK 1,579 million to sellers of 98.07% share capital in ÍV was concluded. The 2nd and final payment to sellers of Íslensk verðbréf is expected to be made on 11th January 2025 in the amount of 25 million, subject to certain conditions.
35. Quarterly statement
	Q3 2024	Q2 2024	Q1 2024	Q4 2023	Q3 2023
Insurance revenue	7.634.285	7.212.980	6.788.741	6.843.539	6.952.232
Investment result after financial items	119.137	(31.026)	499.182	845.132	396.871
Net interest and commission income	367.801	336.078	592.138	391.452	37.891
Share in the profit of aff., after income tax	0	0	0	9.191	0
Other income	16.617	37.270	24.702	17.337	14.584
Total income	8.137.840	7.555.303	7.904.763	8.106.650	7.401.578
Insurance service expenses	(6.857.014)	(6.267.195)	(6.828.887)	(6.641.423)	(6.344.821)
Net expenses from reinsurance contracts	(187.636)	(250.375)	(202.480)	42.994	(238.933)
	(651.993)	(749.283)	(664.235)	(658.669)	(105.464)
Operating expenses	(650)	(1.893)	(6.907)	(805.628)	0
Impairment of intangible assets			202.254	43.924	712.360
Profit before income taxes	440.547	286.557
Income tax	(13.330)	(149.213)	(66.740)	108.016	(104.888)
Profit for the period	427.217	137.344	135.514	151.940	607.471
Claims ratio	73,5%	67,2%	79,7%	73,3%	72,6%
Net reinsurance ratio	2,5%	3,5%	3,0%	-0,6%	3,4%
Claims and net reinsurance ratio	76,0%	70,7%	82,6%	72,6%	76,0%
Insurance contracts expense ratio	16,3%	19,7%	20,9%	23,8%	18,7%