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Icelandic Banks Profit ISK 370 Billion since Collapse

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Icelandic Banks Profit ISK 370 Billion since Collapse

Glitnir

Glitnir Bank, now Íslandsbanki. Photo: Páll Kjartansson.

The combined profits of the three large commercial banks in Iceland, Landsbanki, Arion Banki (earlier Kaupþing) and Íslandsbanki (earlier Glitnir), was ISK 80 billion (USD 600 million, EUR 530 million) last year. Since the banking collapse in 2008, they’ve earned ISK 370 billion (USD 2.8 billion, EUR 2.5 billion).

With Icelandic residents numbering almost 330,000, each resident would receive ISK 1.1 million if the profits were shared equally, kjarninn.is reports.

The bank earning the most is Landsbanki, which is mostly owned by the Icelandic state. The bank profited ISK 28.8 billion last year and ISK 142 billion since January 2009. For 2013, the bank paid the Icelandic state ISK 20 billion in proceeds and will pay ISK 24 billion for 2014.

Prime Minister Sigmundur Davíð Gunnlaugsson criticized the banks on RÚV on Thursday for making such high profits. “It is in fact unacceptable. Not only have the banks taken over the loans of the public and Icelandic companies at a significant discount and continued collecting them as if they were 100 percent, but have also established a gigantic difference in interests and added these increased rates.”

While explaining that the state cannot interfere with the banks’ decisions on interests and rates, Sigmundur added, “One must appeal to the responsibilities of these companies and not least to companies that are owned by the public.”

RÚV reports that MPs Árni Páll Árnason and Birgitta Jónsdóttir have stated that regulations surrounding the banks’ operations must be stricter and that the public should benefit more from their profits, while Minister of Finance Bjarni Benediktsson has expressed concern that the banks are growing too big.

Since the three banks collapsed in October 2008, the Icelandic state has contributed ISK 72.8 billion to their restoration, ISK 153 to restore the economy.

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