State Contributes ISK 14 Billion to Savings Bank Skip to content

State Contributes ISK 14 Billion to Savings Bank

The Icelandic state must contribute ISK 14 billion (USD 120 million, EUR 91 million) to the savings bank SP-Kef, previously Sparisjódur Keflavíkur, to guarantee the bank’s continued operations.


Photo by Páll Stefánsson.

Claimants to Sparisjódur Keflavíkur will receive very little in compensation, including approximately 600 shareholders who contributed initial capitalization, reports.

The state took Sparisjódur Keflavíkur over in April 2010. The savings bank had been operated on an exemption from the Financial Supervisory Authority (FME) since May 2009 due to a poor equity ratio.

Deposits and all of the savings bank’s assets were moved to the new bank, SP-Kef, but debts and claims were left in the old savings bank.

The FME is now working on a final foundation balance sheet for the bank and is planning to introduce it next week.

Auditing firm PricewaterhouseCoopers is investigating on behalf of the FME whether laws and regulations were followed while Sparisjódur Keflavíkur was in operation.

Its winding-up committee will decide based on the outcome of the investigation whether there is reason to demand termination of dubious financial agreements made by the savings bank’s board.

According to RÚV’s sources, these include the former bank director’s termination agreement worth ISK tens of millions and the payment of his special pension savings worth ISK 70 million (USD 600,000, EUR 457,000) in January 2009, four months before the bank collapsed.

MP for the Independence Party Gudlaugur Thór Thórdarson has requested a meeting in the Althingi parliament’s Trade Committee because of news that the state must contribute ISK 14 billion to SP-Kef.

Thórdarson told RÚV that he would like an explanation on why such a high amount is being contributed to the savings bank, mentioning that ISK 14 billion is about half the operational cost for the Landspítali national hospital.

Click here to read more about the savings bank’s takeover.

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