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Former Landsbanki Owner: Assets Will Cover Icesave

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Former Landsbanki Owner: Assets Will Cover Icesave

Björgólfur Gudmundsson, former majority owner and chairman of Iceland’s Landsbanki Bank, which has now been nationalized, stated in an interview on RÚV’s news magazine Kastljós last night that the bank’s assets will suffice to compensate Icesave account holders, Landsbanki’s online banking unit in the UK and the Netherlands.

Gudmundsson said it was a misunderstanding that Landsbanki’s debts in relation to Icesave would end up as the Icelandic nation’s responsibility, Morgunbladid reports.

On September 30, Landsbanki’s assets were worth twice the amounts deposited in Icesave, Gudmundsson explained, so even though the value of the bank’s assets have decreased by 50 percent since then, they would suffice to compensate Icesave account holders.

Gudmundsson claimed that the Icesave dispute between Icelandic, British and Dutch authorities originated in Iceland’s emergency legislation, accepted by the Althingi Parliament on October 6, but not in the Icesave deposits as such.

According to Fréttabladid, a rough estimate of the value of Landsbanki’s assets (as stated in documents that will be submitted to the board of the International Monetary Fund (IMF) in relation to Iceland’s request for a loan) is ISK 900 to 1,200 billion (USD 6.6 to 8.7 billion, EUR 5.2 to 7.0 billion).

Total claims to the bank’s bankruptcy estate amount to ISK 2,500 billion (USD 18.2 billion, EUR 14.5 billion) of which deposits amount to ISK 1,200 billion.

Part of the old Landsbanki’s assets are tied up in debentures, which the new state-run Landsbanki issued to the old one, worth ISK 600 billion (USD 4.4 billion, EUR 3.5 billion).

According to Fréttabladid’s sources, that amount is almost exactly the amount needed to cover the deposit insurance of the Icesave accounts.

Click here to read about a solution on the Icesave dispute being in sight.

Copyright of photo of Björgólfur Gudmundsson: Icelandic Photo Agency.

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