Whilst many financial spectators have been advising Icelandic banks to proceed more cautiously this year, the main Icelandic banks have not stopped in their acquisitions on the global market.
Icelandic banks were in financial turmoil in early 2006 but that hasn’t stopped Iceland’s biggest bank, Kaupthing, from buying up Dutch merchant bank NIBC, this summer. The deal cost Kaupthing $4.2 billion dollars but neither that, nor the current credit crisis seems to have slowed the bank down. Kaupthing currently has its eyes on Norwegian insurance company, Storebrand.
Meanwhile another big player in the Icelandic banking world, Landsbanki, has also been growing. The company recently acquired British brokerage firm, Bridgewell. After paying $123 million for the deal, many suspect the bank is considering placing a bid to purchase the Irish Nationwide Building Society which is valued at €1 billion.
Two other banks, Glitnir and Straumur have also been busy on the acquisition market. Glinter spent €341 million this year on FIM, a Finnish company specialising in asset management while Straumur picked up eQ, a Finnish brokerage, and Wood & Co, a Czech brokerage.
Although the banks are optimistic about the new year and believe that the current credit environment is ripe with opportunities, others are not so sure. The global credit market is getting tighter and Iceland’s economic growth has slowed considerably. Only time will tell whether the spending gamble will pay off.