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Bank Criticized for Shady Assets Sale

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Bank Criticized for Shady Assets Sale

Landsbankinn

Photo: Páll Stefánsson.

Iceland´s FME financial regulator has released a statement which concludes that Landsbankinn’s conduct in selling its 31.2 percent stake in credit card company Borgun could not be considered in line with normal, healthy trading procedures in the financial market.

FME considers that Landsbankinn’s procedures had been lacking, resulting in the likelihood that the sale did not deliver the best results for the bank, Vísir reports.

The statement continues, saying that especially close attention should be paid to professionalism and transparent working methods when selling the assets of banks which are majority owned by the State, as Landsbankinn has been since the 2008 crash. By not having an open sale and only working with one bidder, the process could see reputations damaged—especially without also calling on neutral third parties and financial experts for advice and auditing.

Landsbankinn has responded positively to FME’s concerns, the statement continues. The bank has presented an action plan to guide its future sale of assets to avoid similar mistakes. All future sales will take place through an open sales process and any decision to engage in a closed sale will be thoroughly justified, explained and documented.

As Landsbankinn has clearly reacted to the outcry over the sale of its stake in Borgun, the FME does not see reason for further action at this time, but will closely monitor all future sales of assets in the largely-publicly-owned bank.

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