Restructuring of Savings Banks Completed

Five savings banks have now completed negotiations with the Central Bank of Iceland as regards restructuring in accordance with the Emergency Act, which was enacted in the wake of the banking collapse in 2008. Saga Investment Bank’s Corporate Finance acted as consultant for two of the savings banks during the negotiations: Sparisjodur Nordfjardar and Sparisjodur Thorshafnar.

Five savings banks did not meet the requirements for minimum capital adequacy requirements in the wake of the banking collapse, and the Central Bank of Iceland was their principal creditor. They were, in addition to Sparisjodur Nordfjardar and Sparisjodur Thorshafnar, Sparisjodur Bolungarvikur, Sparisjodur Svarfdaela and Sparisjodur Vestmannaeyja. These savings banks have all reached agreement with the Central Bank as regards the settlement of their debts.

According to a press release from the Central Bank, the written off claims against all these savings banks amount to a total of ISK 4,564m. However, a total of ISK 3,982m was received in satisfaction of the claims: ISK 1,735m in guarantee capital shares, ISK 450m in subordinated loans, ISK 1,184m in contractual loans and ISK 613m in cash.

See announcement from the Central Bank of Iceland: http://sedlabanki.is/?PageID=287&NewsID=2694