Icelandic savings banks nationalised

spron-kaupthingThe Icelandic Financial Services Authority (FME) today announced it has taken over the savings banks SPRON and Sparisjodabankinn after they requested state help earlier in the week.

Their operations and deposits will be moved over to other establishments. SPRON will be merged into New Kaupthing from midnight tonight and Sparisjodabankinn is to be taken over by the Central Bank of Iceland.

The deposits in both banks are guaranteed and customers will still be able to access their money and their online banking services.

Kaupthing said in a statement that it will announce more information as soon as possible, and that it sees the responsibility of being chosen to take over SPRON as a welcome endorsement from the authorities.

SPRON and Kaupthing got approval for their merger from the Competition Authority in the summer; but the banking crisis stopped it from going ahead. Now it seems Kaupthing got its prize in the end – although admittedly less valuable than it once was.

As their name suggests, the savings banks have a much higher savings to loans ratio than the other banks did – although they are now full service banks, offering loans, mortgages and credit cards just like the commercial banks.

The flurry of news stories saying that all of Iceland’s major banks have been nationalised (which appeared in October and again recently when Straumur was nationalised) have not been true. But they are now.

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