Showdown at Íslandsbanki? Skip to content

Showdown at Íslandsbanki?

By Iceland Review

Both Iceland State Radio, RÚV, and Fréttablaðið have carried news over the past few days of what they describe as a showdown in a fight between two factions over control of Íslandsbanki.

One of Iceland’s three largest banks, together with Kaupthing Bank and Landsbanki, Íslandsbanki was in 2002 disqualified from the privatization process of then state controlled banks Búnaðarbanki (now part of Kaupthing) and Landsbanki on the grounds that competition would suffer in Iceland if any two of the top three banks merged (see Iceland Review, Daily News, May 31st, “Privatization of banks draws heavy fire”).

Since acquiring the goverment’s controlling stake in Landsbanki, Björgólfur Thor Björgólfsson, his father, Björgólfur Guðmundsson and their partner Magnús Þorsteinsson, have relentlessly pursued takeovers of various Icelandic companies, both friendly and hostile.

Starting in early 2004, they have had their sights on Íslandsbanki with the result that investment company Burðarás and investment bank Straumur now own roughly a third of the bank. Landsbanki controls Burðarás, and Burðarás and Landsbanki are jointly the largest shareholders of Straumur.

The opposing side, led by Íslandsbanki chairman Einar Sveinsson, former president of the insurance company Sjóvá, and CEO Bjarni Ármannsson, also has a stake of a third.

Both parties are now competing for the 4 per cent held by Steinunn Jónsdóttir. An interior designer and a MBA student at Reykjavík University, Steinunn acquired her shares in Íslandsbanki shortly after her separation from her former husband, current chairman of FL Group (Icelandair) and former Chief Business Officer of deCode Genetics, Hannes Smárason.

Earlier this month, Fréttablaðið reported that Steinunn’s father, Jón Helgi Guðmundsson chairman of retail company Norvik, had sold 1.8 out of the 3 per cent he owned in Íslandsbanki to a group of insiders led by the chairman and the CEO in what Fréttablaðið called a “vote of support” for them. But according to Fréttablaðið and RÚV, his daughter has yet to make up her mind.

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