Keflavík Savings Bank Heavy Load for Icelandic State Skip to content

Keflavík Savings Bank Heavy Load for Icelandic State

The Icelandic state must pay more than ISK 6 billion (USD 46 million, EUR 37 million) in interests for SpKef, the Keflavík Savings Bank. The total cost of the agreement between the Icelandic state and Landsbanki on the repayment to Landsbanki due to the takeover of SpKef therefore amounts to approximately ISK 25 billion (USD 193 million, EUR 154 million).


Copyright: Icelandic Photo Agency.

A ruling committee established to determine the amount announced its decision on June 7 that the repayment to Landsbanki because of the takeover of deposits and assets of SpKef should be ISK 19.2 billion, as stated in a press release from the Ministry of Finance.

The verdict resolves the dispute between parties on payments to Landsbanki for the takeover of SpKef. The settlement of accounts will be made in the form of treasury bonds (RIKH 18), which have the maturity date of October 9, 2018.

Former Minister of Finance Steingrímur J. Sigfússon told that the cost is much higher than anticipated when SpKef was founded on the basis of the bankruptcy estate of the savings bank Sparisjóður Keflavíkur.

“It is of course a much higher amount than one hoped would ever have to be contributed. But it is the cost of sacrifice to guarantee all the deposits in this large financial institution which proved to be in such horrendous state,” Steingrímur explained.

Chairman of the opposition’s Progressive Party Sigmundur Davíð Gunnlaugsson stated that Steingrímur had used an obsolete legislation without authorization when SpKef was founded.

Steingrímur denies such accusations, claiming that the issue was reviewed carefully with lawyers before the decision was made.

MP of the Independence Party Guðlaugur Þór Þórðarson is calling for an investigation into the minister’s work methods.

Representatives of the Progressive and Independence Parties in the Alþingi parliament’s administration and surveillance committee have requested a meeting to discuss the affairs of SpKef.

Click here to read more about SpKef.


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