A deal has been struck between the Icelandic government and the owners of the Nordic bank Glitnir hf. In cooperation with the Financial Supervisory Authority (FSA) and the Central Bank of Iceland, the state treasury will provide new capital for the bank and become 75 percent owner.
Mbl.is explains that the move is intended to strengthen Glitnir’s position and boost customer confidence during such a difficult period on the international financial markets.
The state treasury, in conjunction with the Central Bank, intends to invest EUR 600 million (ISK 84 billion) in Glitnir, and will therefore own roughly 75 percent of the bank.
A Glitnir shareholder meeting will take place “as soon as possible”, where the deal will be put to shareholders for approval.
This massive investment should serve to increase trust in Glitnir’s activities. The Bank’s capital adequacy ratio will be 14.5 percent, significantly above the accepted minimum of 8 percent.
The state treasury has expressed a desire not to remain a Glitnir shareholder in the long term; but is making the move purely to insure stability on the financial markets.
IceNews will be reporting on any further important details as they happen.
