Iceland’s financial whistleblowing agency has said that state-backed Icelandic banks are operating under uncertainty and a number of risks.
The latest Financial Supervisory Authority’s annual report comes four years after the country’s banking collapse. The Reykjavik-backed state banking institutions were set up following the failure of Landsbanki Islands hf, Kaupthing Bank hf and Glitnir Bank.
The FSA said via its website on Thursday (25 October), “There are certain factors [that] may create uncertainty and have a negative impact on their operating results,” Bloomberg reports.
Officials said in the report that the uncertainty was the result of each institution’s “loan portfolios, legal uncertainty regarding loans in foreign currencies, long-term financing, instability in foreign markets and uncertainty related to the anticipated removal of capital controls.”
The agency added, “Another matter which is cause for concern is the banks’ high cost ratios by an international comparison,” which the body said “indicates that the banks have considerable room for streamlining their operations.”