Icelandic State Wants to Acquire Savings Bank Skip to content

Icelandic State Wants to Acquire Savings Bank

By Iceland Review

The Ministry of Finance proposed in December that the Icelandic state acquire Byr savings bank and that claimants be compensated by 40 percent, paid out with bonds issued by the state.

Claimants rejected this proposal and are awaiting a new offer from the ministry, which could include an ultimatum: either the offer is accepted or a resolution committee will take over Byr, Morgunbladid speculates.

Another option is for the state to merge Byr with the new Landsbanki (NBI) after the Icesave dispute has been resolved. Thus Byr could become part of a merger plan for the Icelandic savings bank system.

Last week an informal meeting among Byr claimants was held where possible counteroffers were discussed.

According to Morgunbladid’s sources, Byr’s domestic claimants, that is, the pension funds, aren’t interested in coming into full ownership of the bank and would rather have the state acquire it.

The ministry estimated in December that the cost of Byr’s restoration would be ISK 10.6 billion (USD 82 million, EUR 60 million) and assumed that it would acquire 70 to 90 percent of the initial capitalization. The rest would remain in the ownership of the current owners.

Less than half of the cost of the financial reorganization would be covered by claimants, around 14 percent by the state and the rest by the owners of initial capitalization.

The total claims to Byr are ISK 58 billion (USD 450 million, EYR 329 million), 75 percent of which are made by Icelandic companies and individuals. The savings bank’s equity is negative by 23.5 billion (USD 182 million, EUR 133 million).

Click here to read more about Byr.

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