The merger of Íslandsbanki and Byr approved
- The merged bank will be one of the country's largest financial institutions
- The purchase price is ISK 6.6.bn
- No immediate changes to operations or service offering scheduled
- Assets of the merged bank amount to approximately ISK 800bn - total capital ratio in excess of 20%
The sale of the government's 11.8% stake in Byr to Íslandsbanki hf. has been approved by the Parliament. This now clears the way for the merger between Íslandsbanki and Byr, as the acquisition has already been approved by the Financial Supervisory Authority - Iceland, the Icelandic Competition Authority and the EFTA Surveillance Authority. Íslandsbanki buys the government's 11.8% share and Byr Savings Bank's resolution committee's 88.2% share for a price of ISK 6.6bn.
A long history and similar corporate culture
The two banks will now be joined under the brand Íslandsbanki and together form a strong financial institution with a corporate culture of excellence in customer service.
The merged bank will build on a long heritage of banking dating back to 1875 when the Álftaneshreppur Savings Bank, a regional savings bank in the south-western part of Iceland was founded, later merged with Hafnarfjördur Savings Bank in 1902. In the north of Iceland the regional Arnarneshreppur Savings Bank was founded in 1884, later merged with the Northern Savings Bank. Byr was then formed in the years 2007 and 2008 when these two merged with Kópavogur Savings Bank (1954) and the Machinists' Savings Bank (1961).
Old Íslandsbanki was founded by international merchants in 1904 with the aim of supplying financing to the Icelandic industrial and fisheries sectors. Íslandsbanki, itself the product of a four-way merger, has for decades been instrumental in the consolidation of the Icelandic banking sector and, in so doing, improving its efficiency.
A powerful financial institution
The merged bank therefore builds on a 135 year heritage of the savings banks and over a 100 year heritage of Íslandsbanki. The merger will bring about improved efficiency in the Icelandic financial sector and forms an important part of its resurrection.
The combined asset base of the two banks will amount to around ISK 800bn and its total capital ratio will be in excess of 20%.
All branches will continue to operate in their current form until further notice and Byr customers will experience no interruptions to their banking services. Íslandsbanki stresses that the process of merging the two banks will be carried out as quickly and as thoroughly as possible to ensure the process is completed in early 2012. The Bank hopes that this complex process will be executed with the full co-operation and consultation of all major external stakeholders, including customers, employees, municipalities and various grass-root organisations.
The merger of Íslandsbanki and Byr is a part of an important process of increasing efficiency in the financial sector, a process whose importance has been highlighted by the Icelandic authorities, including the regulator as well as the banks' owners. Emphasis will be placed on all actions taken to that effect to be performed responsibly in order to minimise uncertainties for all parties involved.
Birna Einarsdóttir, CEO of Íslandsbanki:
„I am excited to announce this milestone and want to extend my warm welcome to all customers and employees of the merged bank. The merger signifies that we have become one of the country's leading financial institutions. I hope that the synergies this merger will bring about will enable us to offer our customers even better terms of service. The merger further acts to increase the efficiency of the sector as a whole which is an important part of its resurrection. The two companies have a long-standing heritage of banking, strong values and comparable corporate culture. We will place great emphasis on taking the best of both to form a new and even stronger bank."
Jón Finnbogason, CEO of Byr:
„The uncertainties of Byr's future have now been resolved bringing with it new opportunities to look to the future and build a strong and resilient financial institution. The banks are a good match both in terms of a service culture and locations. The past three years have been a time of uncertainties for Byr's employees and customers. I want to extend my sincere gratitude for the loyalty that both groups have shown the bank during the process."