The Central Bank of Iceland has urged the Financial Supervisory Authority (FME) to postpone MP Bank’s acquisition of the branch network of SPRON savings bank and its online banking unit Netbankinn due to concerns that the new state-run Kaupthing would suffer because of it.
The Central Bank of Iceland. Copyright: Icelandic Photo Agency.
According to Morgunbladid’s sources, the Central Bank believes that SPRON’s former customers might take their business back to SPRON once its branches reopen and that Kaupthing might be unable to pay out their entire deposits.
When SPRON was nationalized last month, its deposits were relocated to Kaupthing with a bond that was backed by the entirety of SPRON’s assets. When SPRON’s resolution committee sold part of its assets to MP Bank, Kaupthing argued that assets were being sold that were held as collateral by Kaupthing.
According to plan, the branches of SPRON were to be reopened today, but due to last weekend’s disputes, those plans have been postponed. It is hoped that an agreement will be reached later today.
Chairman of the board of MP Bank, Margeir Pétursson, told Fréttabladid that he is considering filing a claim with the Competition Authority because of Kaupthing’s involvement in the acquisition.
“It is of course completely unacceptable that a rival on the market, even if it is a state-run bank, can apply pressure to prevent competition,” Pétursson said. Director of Kaupthing Finnur Sveinbjörnsson denied Pétursson’s claims that Kaupthing is trying to prevent competition.
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