Iceland’s Byr Savings Bank Requests Help from State Skip to content

Iceland’s Byr Savings Bank Requests Help from State

The board of Byr savings bank plans this week to request an almost ISK 11 billion (USD 95 million, EUR 73 million) bailout from the state treasury following its ISK 29 billion (USD 250 million, EUR 192 million) loss posted in 2008 on the basis of the emergency law passed at Althingi parliament last year.

According to the emergency law from October 6, 2008, the minister of finance has the authority to provide savings banks with up to 20 percent based on its annual accounts for 2007, Fréttabladid reports.

In the case of Byr, that amount is approximately ISK 10.6 billion.

In April 2008, the savings bank’s primary capital owners paid themselves proceeds worth ISK 13.5 billion (USD 116 million, EUR 90 million) from a so-called reserve fund. Byr had reported a profit of almost ISK 8 billion (USD 67 million, EUR 53 million) the previous year.

The board of the savings bank Sparisjódur Keflavíkur has also decided to request financial assistance from the state based on the emergency law, which would result in new stockholders’ equity of around ISK 5 billion (USD 43 million, EUR 33 million).

Click here to read more about the emergency law, here to read about another Icelandic bank that is in trouble and here to read about the fall of Straumur-Burdarás.

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