West Iceland Savings Bank in Serious Trouble Skip to content

West Iceland Savings Bank in Serious Trouble

The savings bank of Mýrarsýsla county in west Iceland, Sparisjódur Mýrarsýslu (SPM), has lost almost ISK 5 billion (USD 609 million, EUR 407 million) this year, mainly because of a plummet in stock value. The bank held a public meeting to discuss the situation in Borgarnes yesterday.

The owners’ equity is currently 1.5 billion (USD 18 million, EUR 12 million), Fréttabladid reports.

Director of SPM Gísli Kjartansson announced at the meeting that he had looked towards Landsbanki Bank, the Savings Bank of Keflavík, Saga Capital and Byr investment funds for help, and finally to Kaupthing Bank.

According to Morgunbladid, Kaupthing Bank agreed to participate in the repossession and operation of SPM and acquire, along with other investors, 80 percent of SPM’s initial capitalization, leaving Borgarbyggd municipality with a share of 20 percent.

Attendees of the meeting expressed concern that SPM’s culture fund would suffer as a result and that funding to sports in the municipality would be reduced. Mayor of Borgarnes Páll S. Brynjarsson said such concerns were unfounded, Fréttabladid reports.

The poor financial situation of SPM had already become clear on June 19 when key persons of authority in SPM and Borgarbyggd were called to a meeting.

The town council of Borgarnes was however not notified of the situation until in early July and Sveinbjörn Eyjólfsson, representative of the Progressive Party and the opposition leader within the council, said he was dissatisfied with the municipality’s working practices of not revealing the situation sooner to the town council.

Representatives of SPM will hold a meeting with Minister of Commerce Björgvin G. Sigurdsson today.

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