On 7 October 2008, following the continued deterioration in the financial markets, the Financial Supervisory Authority of Iceland ("FME") used powers granted by the Icelandic Parliament with reference to Article 100 of Act. No. 161/2002, as amended, to take control of Landsbanki Islands hf. Subsequently, New Landsbanki Bank hf. was created (now “NBI hf.”) and Landsbanki Islands hf. domestic Icelandic deposits, as well as significant Landsbanki Islands hf. assets relating to its Icelandic operations, were transferred to it. NBI hf. is wholly-owned by the Icelandic Government.
NBI hf. has taken over all of Landsbanki Islands hf. domestic Icelandic deposits, together with significant Landsbanki Islands hf. assets that were related to its Icelandic operations, such as loans and other claims.
Landsbanki Islands hf. retains all liabilities and assets not transferred to NBI hf..
NBI hf. will issue a bond to Landsbanki Islands hf., the face value of which will be the net difference between the assets and liabilities transferred into NBI hf. from Landsbanki Islands hf., to reflect a fair value asset adjustment verified by an independent third party.
A Resolution Committee has been appointed by the FME to supersede the board of directors of Landsbanki Islands hf. The role of the Resolution Committee is to oversee the realisation of assets, maximize the value as much as possible, and retain within Landsbanki Islands hf. until a formal process of payment distribution commences.
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