Kvika’s purchase of Netgíró completed

Kvika expects that the purchase of the rest of the shares in Netgíró will positively affect this year’s results, which will increase in the years to come.

Kvika Banki will become the sole owner of Netgíró by purchasing an 80% share in the company, which the company announced today as being completed. Still, the profit forecast for the coming year assumes that the purchase will have a positive effect on the year’s results.

Viðskiptablaðið reported on the companies’ declaration of intent regarding the purchase this summer. At that time, the bank owned 20% of the company, which lost 225 million before taxes last year and 523 million in 2018.

At the end of November, the Samkeppniseftirlitið approved the transaction and said there was little overlap between the customer groups and the companies’ activities. The seller is Alva Holding ehf., which is owned mainly by Skorra Rafn Rafnsson, the company’s chairman.

“This is a happy turning point for Netgíró, which is strengthened with this purchase,” says Skorri Rafn, who says he wishes the company well in the coming years. “At the same time, Kvika’s purchase of Netgíró confirms the good work done at the company since its inception by the excellent staff who work there.”

The total share of Kvika and Netgíró in the market for individual loans was said to be small in the merger register of the companies, or about 0 to 5%, respectively, which is small compared to what the merging parties call the dominant position of the three big commercial banks.
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Kvika says the purchase aligns with the bank’s policy of using technology solutions to modernize financial services. Netgíró has focused on the development of credit assessment as well as offering installment payments simply. Previously, the bank successfully set up the Auði financial technology service.

Kvika also says that it has had a successful collaboration with Netgíró in recent years, among other things, regarding the financing of the company’s receivables portfolio. The purchase enables the bank to further strengthen this partnership, which leads to increased efficiency and optimization for both parties. Netgíró has almost 3,000 points of sale in the country, and almost 50,000 people do business with the company.

The bank will publish its earnings forecast 2021 on January 28 next year. In the forecast, it is assumed that the purchase of Netgíró will positively affect the results for the year, but the aim is that this effect will increase considerably in the coming years.

“The country’s financial system is changing, and competition is increasing. Kvika plans to be a financial company that uses the latest technology solutions to serve customers,” says Marinó Örn Tryggvason, CEO of Kvika.

“With the purchase of Netgíró, the bank is well equipped to expand its activities in financing product purchases. At the same time, there are great opportunities in using Netgíró’s infrastructure to expand the company’s services.”

Link to Viðskiptablaðið