General - Wednesday, October 01, 2008 10:01 AM
Landsbanki divests European Investment banking platform for EUR 380m
On 30 September 2008, Landsbanki signed an agreement with Straumur-Buršarįs Investment bank to divest Landsbanki's corporate finance and securities brokerage platform in Europe. The consideration of EUR 380m (ISK 55.4bn) will result in no material loss or gain for Landsbanki.
The sale includes Landsbanki Securities (UK) Ltd in the UK, Landsbanki Kepler SA in Continental Europe and the bank's 84% holding in Merrion Landsbanki Ltd in Ireland. The agreement is subject to approval by the regulatory authorities in the respective jurisdictions where the companies operate.
The transaction will strengthen Landsbanki's Tier1 capital ratio as EUR 380m (ISK 55.4bn) of equity was allocated to divested operations. Landsbanki will streamline its remaining international platform, strengthening overall operations and achieve considerable cost efficiencies.
The transaction will enable both companies to leverage their core competencies and infrastructure, while continuing to build on existing and new relationships.
Following this transaction, Landsbanki will consolidate its corporate and commercial banking operations in Europe through its overseas banks and branch network. Strategic focus will be directed at the bank's core banking operations such as asset backed lending, niche specialty finance and retail deposit programs, anchored in its domestic universal bank. Landsbanki is thereby pursuing a more focused banking model, generating increasingly diversified and stable recurring revenues.
At the 1H08 results presentation, Landsbanki stated its key objectives in 2008-9 to continue to strengthen core income and operational fundamentals. This transaction is an important milestone in the pursuit of these stated goals.
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