New Íslandsbanki CEO Aims to Restore Trust: “Challenging Times”

CEO

The new CEO of Íslandsbanki, Jón Guðni Ómarsson, has stated that his priority is to restore trust in the bank. In an interview with RÚV yesterday, he admitted that the mood among the bank’s employees, following recent events, and in light of the public discourse, has been fraught.

“Challenging times”

On Wednesday morning, Birna Einarsdóttir, CEO of Íslandsbanki, announced her decision to step down. Birna’s resignation came on the heels of Íslandsbanki agreeing to pay a fine of ISK 1.2 billion [$8.8 million, €8.1 million] due to “serious and systematic violations” during the sale of the state’s 22.5% stake in the bank in March of last year.

At the same time, Íslandsbanki announced that Jón Guðni Ómarsson would be replacing Birna as CEO. “Naturally, these are very challenging times,” Jón Guðni told RÚV yesterday. “We need to throw ourselves back into our daily work and focus on taking care of our customers as well as we can.”

As noted by RÚV, Jón Guðni has been with Íslandsbanki for nearly two decades and served as the finance manager since 2011. Jón Guðni told RÚV that he did not participate in the sale of the government’s share in the bank. “I was introducing the bank to investors. Regarding the sale itself and the bank’s involvement in it, I did not take part.”

Jón admitted that the mood among employees, following recent events, and in light of the public discourse, has been fraught. “It has, of course, been a big shock for the employees and some customers, as well. It’s something we take very seriously and will take time to address; that’s the task that lies ahead.”

Rebuilding trust a priority

Jón Guðni admitted that he had not expected Birna Einarsdóttir to step down following the bank’s settlement with the Financial Supervisory Authority of the Central Bank (FME). This having been the case, however, it was now necessary to start repairing the bank’s reputation.

“First of all, we need to throw ourselves into implementing these changes that are requested in the agreement with the Central Bank.” One of the first issues under consideration is whether further personnel changes need to be made, although “no decisions have been made,” according to Jón Guðni. Other changes are yet to be revealed.

According to Jón Guðni, the priority is to restore customers’ trust in the bank. “First of all, it will take some time. We just need to dedicate ourselves to the project and implement these requirements requested by the Central Bank. All in all, we must show humility and roll up our sleeves,” Jón Guðni observed.

As noted by RÚV, FME’s report concluded that many of the things that went wrong at Íslandsbanki during the sale were to be ascribed to the bank’s corporate culture. Jón Guðni believes that a lot can be learned from the report while maintaining that the bank’s corporate culture is strong: “The risk and corporate culture in the bank is very strong in many respects. We simply need to ensure that this culture extends fully to all of the bank’s activities.”

Birna Einarsdóttir, CEO of Íslandsbanki, Resigns

Íslandsbanki bank

In a press release sent to the media last night, Birna Einarsdóttir announced her decision to step down as the CEO of Íslandsbanki. Birna’s resignation comes on the heels of Íslandsbanki agreeing to pay a fine of ISK 1.2 billion [$8.8 million, €8.1 million] due to “serious and systematic violations” during the sale of the state’s 22.5% stake in the bank in March last year, RÚV reports.

Shouldering responsibility

In a press release sent to the media at 4 AM tonight, Birna Einarsdóttir, CEO of Íslandsbanki, announced her decision to step down. The decision was made with “the bank’s interests in mind” and in order “for peace to be attained following Íslandsbanki’s agreement with the Financial Supervisory Authority of the Central Bank (FME).”

The resignation, Birna states, is her way of shouldering responsibility for her role in the affair. “The discussion has been unsparing and various politicians have frequently called for my resignation; I wish them well in their work,” Birna stated.

While reluctant to leave Íslandsbanki, she highlighted her long-standing commitment to the bank throughout her career, emphasising that the settlement with the Financial Supervisory Authority only pertains to a single project and the rest of her tenure has been successful.

“Under my management, the bank’s equity has increased by almost ISK 150 billion [$1.1 billion, €1.1 billion], and more than 110 billion [$810 million, €740 million] have been paid in dividends to shareholders,” Birna stated.

In her concluding remarks, Birna expressed a bittersweet farewell to the bank. She extended well wishes to her colleagues and expressed her hope that her decision to step aside would foster a sense of peace within the company and among the individuals she holds dear.

Jón Guðni Ómarsson will succeed Birna as the CEO of Íslandsbanki.

Birna’s full statement was posted on Vísir this morning.

Íslandsbanki Lays Off 20 Employees

Íslandsbanki laid off 20 employees today, most of whom worked at the bank’s headquarters in Smáralind, Vísir reports. The bank dismissed 20 employees in September and 16 in May.

In an interview with RÚV, Birna Einarsdóttir, CEO of Íslandsbanki, expressed lament. “The days are always sad and tough when we must resort to such measures.” Íslandsbanki’s staff has shrunk by approximately 90 employees, or 10-12% in total, in 2019.

“We cannot guarantee that this will be the last round of lay-offs, but we hope so.” According to Birna, the banking environment is evolving rapidly and Íslandsbanki must evolve as well. “Some of these changes today are organisational in their nature. Job descriptions are changing.”

An earnings report for the third quarter indicated that return on equity was below the bank’s target. “It’s our goal to improve return on equity to the satisfaction of the bank’s owners. To that end, various measures must be taken.”

Terms of notice differ between employees. According to Birna, the term of notice is approximately six months. In most cases, however, the employees will cease work at the end of November.

Íslandsbanki is fully owned by the Icelandic State Treasury. It is not the only bank to have laid off employees this year. In September, Arionbanki laid off approximately 100 employees.