Iceland’s State Acquires 75 Percent in Glitnir Bank Skip to content

Iceland’s State Acquires 75 Percent in Glitnir Bank

An agreement has been reached between the Icelandic government and the owners of Glitnir Bank. Following consultations with the Central Bank and the Financial Supervisory Authority (FME) the state has acquired a 75 percent stake in Glitnir.

The state treasury will provide Glitnir Bank with a stock infusion because of the bank’s tight liquid capital position and exceptionally difficult situation in international financial markets, as revealed by the Central Bank this morning, reports.

According to a statement from the Central Bank, the state treasury will contribute with EUR 600 million (USD 876 million) to Glitnir’s capital stock through the Central Bank and thus the Icelandic state will become a majority owner in Glitnir, holding 75 percent of its shares.

Glitnir Bank will hold a meeting with shareholders as soon as possible to have the proposal accepted. The state is not planning to be a majority owner in Glitnir long-term; the purpose with these actions is to secure economic stability.

At this valuation the shares in Glitnir have lost about 85 percent of the share value when the stock market closed on Friday.

The FME evaluates the capital position of Glitnir Bank as solid. Its capital ratio will be 14.5 percent after these actions and the bank will continue to operate as usual. The government has requested that Lárus Welding remains CEO of Glitnir.

Last night the Central Bank of Iceland’s board of directors held a meeting with some of the highest executives of Iceland’s three main commercial banks, Kaupthing, Landsbanki and Glitnir, also in attendance were leaders of the largest opposition parties.

According to Morgunbladid, earlier in the evening Prime Minister Geir H. Haarde and Minister of Finance Árni M. Mathiesen met with both directors of the Central Bank and high-ranking executives of the commercial banks to discuss the economic situation.

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