Iceland Crisis Report: Banks' Owners Owed the Most Skip to content

Iceland Crisis Report: Banks’ Owners Owed the Most

By Iceland Review

The majority owners of the three largest Icelandic banks, Kaupthing, Landsbanki and Glitnir, and of the investment bank Straumur-Burdarás, were also their largest debtors, as the Special Investigative Commission’s crisis report, which was made public yesterday, has revealed.

SIC members Sigrídur Benediktsdóttir (left) and Páll Hreinsson present their findings at yesterday’s press conference. Photo by Geir Ólafsson.

According to, the following statements can be found in the report.

“At Glitnir Bank the largest loan recipients were Baugur Group and companies related to Baugur. The increase in Glitnir’s granting of loans to this group after mid-2007 is especially noteworthy.”

“A change in executives had then occurred, with parties connected to Baugur and FL Group significantly increasing their shares in the bank.” In April 2007, Lárus Welding took over as CEO of Glitnir from Bjarni Ármannsson.

“When Glitnir collapsed, Baugur and related companies owed the bank almost ISK 250 billion [USD 2 billion, EUR 1.5 billion]. That amount equals approximately 70 percent of the bank’s equity basis.”

“The largest shareholder of Kaupthing, Exista, was also its second-largest debtor. The largest debtor was Robert Tchenguiz, shareholder and chairman of Exista. At the collapse of the bank, Exista owed Kaupthing more than ISK 200 billion [USD 1.6 billion, EUR 1.2 billion].”

“At the collapse of Landsbanki, Björgólfur Thor Björgólfsson and companies related to him were the bank’s largest debtors. Björgólfur Gudmundsson was the bank’s third largest debtor. In total, their commitments to the banks were well over ISK 200 billion. That was more than the entire equity of the Landsbanki conglomerate.”

“Björgóflur Thor was also the largest shareholder of Straumur-Burdarás and he was chairman of that bank. Björgólfur Thor and Björgólfur Gudmundsson were both, along with related parties, among the bank’s largest debtors and together they formed its largest group of loan recipients.”

The report also states that the employees of banks are generally not in a good position to evaluate whether the banks’ owners are suitable loan recipients.

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