Foreign creditors to take Iceland’s Arion Bank

arion-IIForeign creditors of Old Kaupthing Bank will take the lion’s share of Arion Bank (formerly New Kaupthing). RUV reports this will be officially announced by the bank some time today.

The Old Kaupthing resolution committee has been working hard to negotiate a consensus among creditors before yesterday’s deadline expired. The two main options on the table were for the Icelandic government to hold on to Arion Bank for the time being with Old Kaupthing creditors having options on 90 percent of the bank later; or for creditors, the vast majority of whom are not Icelandic, to take 87 percent of the bank straight away and leave the government with 13 percent.

According to RUV sources, Old Kaupthing creditors have decided to take the second option and take control of Arion Bank. Arion will therefore be a foreign-owned bank as of today – provided that the country’s financial regulator and competition authority approve the move.

It looks likely that from today, both Arion and Islandsbanki will be foreign-owned banks in Iceland and of the three big players, only New Landsbanki will remain a nationalised institution.

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