Recalculation of foreign currency car loans following Supreme Court ruling

17.09.2010
  • Settlement and recalculation of car loans and hire-purchase agreements to be ready in mid-October
  • Customers can use temporary debt-relief programmes whilst awaiting new legislation
  • Íslandsbanki's capital position remains above the 16% minimum capital requirement of the Financial Supervisory Authority after the ruling

In light of the judgment passed yesterday by the Icelandic Supreme Court, Íslandsbanki has resolved to expedite work on the recalculation and settlement of foreign currency car loans, hire-purchase agreements and leases to individuals. The results of this work should be completed in mid-October in cases where the loan has not been transferred to a new borrower or paid off.

Repayments to settle loans covered by the ruling have little impact on Íslandsbanki's liquidity ratios. Our liquidity position remains strong and our liquidity ratios are well above Central Bank requirements.

Customers can use temporary debt-relief programmes while awaiting new legislation

The Minister of Economic Affairs has announced plans to enact legislation addressing the legality of foreign currency mortgages. Until this legislation is passed, Íslandsbanki encourages customers with foreign currency mortgages to avail themselves of our debt-relief programmes, in particular the option of paying ISK 5,000 a month for every ISK 1 million borrowed.

As stated in Íslandsbanki's six-month interim financial statements, the Bank has assessed the effects of various possible court decisions relating to foreign-currency loans on the Bank's capital ratio. Having reviewed the Supreme Court ruling, it is clear that the Bank will continue to meet the 16% capital ratio requirement of the Financial Supervisory Authority.

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