New Kaupthing Founded, Staff Concerned Skip to content

New Kaupthing Founded, Staff Concerned

By Iceland Review

Nýja Kaupthing, the New Kaupthing Bank, was established earlier this week with ISK 75 billion (USD 630 million, EUR 500 million) in equity provided by the Icelandic state treasury. The size of the balance sheet of the new state-run bank will be around ISK 700 billion (USD 5.8 billion, EUR 4.7 billion).

According to a statement from the Financial Supervisory Authority (FME), independent parties will estimate the value of the bank’s assets, debts and the bottom line in the following 90 days, visir.is reports.

Nýja Kaupthing will take over the old bank’s assets in Iceland to secure normal domestic banking operations and the safety of deposits in Iceland. Kaupthing’s international operations will be separated from Nýja Kaupthing’s operations.

It remains unclear how many of the 1,500 employees of the old bank will lose their jobs and according to a statement sent by their union representative to the key executives of the new bank, the employees feel “very insecure about their situation because of upcoming layoffs.”

Director of Nýja Kaupthing Finnur Sveinbjörnsson said it is understandable that employees are feeling insecure, but that he is unable to announce any numbers in relation to mass layoffs at the moment.

“But it is absolutely clear that we will make cuts in Kaupthing like at the other two banks, unfortunately,” Sveinbjörnsson added. “Operations are of a completely different nature than before. It has been reduced considerably and under such circumstances it is unavoidable that the number of employees drops.”

Click here to read about the new Glitnir Bank and Landsbanki Bank launching operations.

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