The Three Major Banks of

Iceland
Glitnir
Landsbanki
Kaupthing Bank (Arion Banki)
Glitnir
 An international Icelandic bank. It
was created by the state-directed
merger of the country's three
privately held banks and one
failing publicly held bank in 1990
 Publicly listed on the Iceland
Stock Exchange, in 1993
 Glitnir offered universal banking
and was a leading niche player in
three global segments;
seafood/food, sustainable energy,
and offshore supply vessels

 Services included retail, corporate

and investment banking, stock
trade and capital management
 Glitnir operated branches in
London and Copenhagen, and had
representative offices in Halifax,
Canada and Shanghai, China

 Also had a fully owned bank in

Luxembourg and banks and
financial services companies in
Norway.
 Glitnir continued to expand its
operations in the Nordic
countries

 Acquisition of 68.1 per cent of

the shares in the Finnish
investment firm FIM was
announced in early February
2007 and completed later in the
spring of 2007
 On October 7, 2008, the
Government of Iceland nationalized
Glitnir by acquiring a 75% share in
the bank for €600 million through
the Icelandic Financial Supervisory
Authority

 Glitnir Bank ASA, was sold

for NOK 300 million on October 21,
2008, or ISK 5.5 billion, but its
 On 20 February 2009, in light of the
Icelandic financial crisis, the bank’s
name was changed back to the
original Íslandsbanki

 By 15 October 2009, it was decided

that 95% of the
new Íslandsbanki would be taken over
by the creditors of Old Glitnir, while
the government of Iceland would
retain ownership of the remaining 5%.
Landsbanki
 Second largest bank in Iceland

 Began operations since 1885 and had

been instrumental in the economic
development of business and industry
in Iceland

 From 1927 to 1961 the bank had acted

as the central bank
 One of the largest Icelandic banks
with assets of ISK 3,058 billion in
December 2007 and a market
capitalisation of ISK 383 billion

 Landsbanki had positioned itself

as Iceland's primary provider of
general and specialized financial
services to individuals, corporate
entities and institutions.
 Landsbanki provided close to 40% of
corporate lending in Iceland, and for
around 60% of companies listed on
the OMX Iceland Stock Exchange

 Started to expand overseas in 2000

through a number of acquisitions
and organic growth, expansion
leading to Icesave subsidiary in
2006
 ICESAVE
 An easy-access, on-line savings account
deposit programme for the UK market
 Icesave grew rapidly and at 31 March
2007 Icesave deposits totalled £2.8 bn
with over 80,000 accounts opened.
 A key factor in Icesave’s appeal to
savers was its interest rate guarantee
 Icesave quickly became the market
leader in internet deposit savings
accounts in UK in terms of interest rates.
 The relatively limited size of the
Icelandic market prompted
Landsbanki to expand and
diversify outside of Iceland when
it acquired the London-
based Heritable Bank in 2000

 Acquired three European

securities houses in 2005
 On October 7, 2008 the Icelandic
Financial Supervisory
Authority took control of
Landsbanki. A press release by
the IFSA states that all of
Landsbanki's domestic branches,
call centres, ATMs and internet
operations will be open for
business as usual, and that all
domestic deposits are fully
Landsbanki Freezing Order
2008

-passed on 8 October 2008, Her

Majesty's Treasury froze the assets
of Landsbanki in the UK, and assets
belonging to the Central Bank of
Iceland, and the Government of
Iceland relating to Landsbanki
 On 9 October 2008 the domestic,
Icelandic branch was split off into
the "Nýi (= new) Landsbanki"

 On 27 October 2008 the inability

to render payment of deposits
was declared for the remaining
parts of Landsbanki.
Kaupthing Bank
 Now known as Arion Bank

 Established in 1982 as a a small

agency for financial advisory and
securities brokerage, then became the
largest bank in Iceland.

 First Icelandic financial institution to

operate outside the country
 Listed in ICEX on 2000 and on
Stockholm Stock Exchange on
2002

 Operated in thirteen countries,

including all the Nordic countries,
the Netherlands, Belgium, Luxem
bourg, Switzerland, the United
Kingdom and the United States
 Kaupthing Bank had net earnings of
€812 million, compared with
€986 million in 2006. About 70% of
the operating profit originated
outside Iceland.

 By 9 October 2008, Kaupthing Bank

HF was forced into government
receivership
WikiLeaks

 A confidential 210 page

document listing Kaupthing's
exposure to loans ranging from
45 million to 1.25 billion euros
was leaked.

 It revealed the bank had loaned

billions of euros to its major
 On 9 October 2008, the Icelandic
Financial Supervisory
Authority took control of
Kaupthing after the resignation
of the entire board of directors.