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Landsbankinn CEO Steps Down

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Landsbankinn CEO Steps Down

Landsbankinn

Photo: Páll Stefánsson.

The board of directors of Landsbankinn bank and CEO Steinþór Pálsson have reached an agreement that he leave his post at the bank, RÚV reports. Steinþór has been the CEO of Landsbankinn since June 1, 2010. On the bank’s website, it is announced that Hreiðar Bjarnason, CFO and deputy CEO, now acts as interim CEO of the bank. The position will be advertised as soon as possible.

Steinþór has been harshly criticized lately for the sale of the bank’s share in Borgun, a financial institution. The sale took place behind closed doors and the National Audit Office has concluded that the work methods used did not conform to healthy business practices and accepted customs in the financial markets.

Shortly after the sale, Visa Europe and Visa Incorporated merged, bringing those who purchased Landsbankinn’s part in Borgun profits of more than ISK 6 billion (USD 53 million, EUR 50 million). It appears Landsbankinn officials forgot to ask directors of Borgun about their share in Visa Europe prior to the sale, according to RÚV. They also failed to request any additional information from Borgun prior to the sale.

A report released last week from the Icelandic National Audit Office not only criticized the Borgun sale, but also the bank’s sale of several other assets between 2010 and 2016.

After the report was published, Steinþór said he welcomed the criticism, but had no intention to resign.

The bank’s board of directors announced in August that the bank intended to file a lawsuit because of the sale of its share in Borgun, and alleged it had not been provided with adequate information. Landsbankinn maintained it was unaware of the pending payments due to the merger, but that those who purchased Landsbankinn’s share in Borgun were well aware of the payments. In one year, the value of the buyers’ investment tripled, RÚV reports.

Less than a year ago, the Wage Council decided to give Steinþór a 20 percent pay raise.

Helga Björk Eiríksdóttir, chair of the board of directors, stated in an announcement that new challenges at the bank call for a new CEO. She added, “Many urgent and demanding projects have been completed under his leadership, and the bank’s position has strengthened a great deal in recent years.”

Steinþór stated in the announcement that he leaves the position satisfied; the bank’s financial position is very secure, he wrote, and its market share has increased.

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