Announcement from LBI on Amsterdam Branch
Landsbanki Íslands hf. takes over administration of the bank's assets in the Netherlands
An agreement has been reached with the administrators of the Amsterdam branch of Landsbanki Íslands hf. (LBI) giving the bank full control of the branch and its assets as of 13 April 2010. LBI's Resolution Committee and Winding-up Board have placed great emphasis on obtaining unrestricted control of the branch.
The assets of the Amsterdam branch consist of a loan portfolio and cash collected on loans. As of 31 December 2009, the loan portfolio, which is primarily leveraged financing, totalled ISK 95 billion and the estimated recovery is around ISK 79 billion or 83%. Cash held at year-end 2009 totalled ISK 22 billion, making total assets at year-end around ISK 101 billion. In its published recovery estimates, LBI hf. has included these amounts. The branch's activities have been moved to smaller, less expensive premises and its employees are now three. Operating costs will be kept to a minimum, for instance, by having the bank's support units in Reykjavík handle back-office loan processing and accounting.
Halldór H. Backman, of LBI's Winding-up Board: "Right from the start it was our opinion that Landsbanki Íslands hf. was clearly in the right on this issue and we welcome the recognition thereof by the Amsterdam District Court. It reinforces our position and the winding-up process as a whole in the future."
Lárentsínus Kristjánsson, Chairman of LBI's Resolution Committee: "A great deal of effort has gone into this project and I am convinced that with this takeover we will be able to handle the assets in the Netherlands better to the benefit of creditors."
Immediately following the decision by the Financial Supervisory Authority of 7 October 2008 to appoint a Resolution Committee for LBI, which took over all the powers of the bank's Board of Directors, the Dutch authorities repeatedly demanded that a court in that country appoint special administrators for the bank's activities in Amsterdam and its subsidiary Sorbus, which held of part of the Amsterdam branch's loan portfolio in custody. Despite the objections of Landsbanki Íslands hf., the Dutch court acquiesced to the above demands and appointed two administrators provisionally for an 18-month period, who immediately took over the operations and handling of all the assets of the branch and Sorbus. The above-mentioned arrangements, which the bank has from the beginning reserved the right to object to, have resulted in high costs. Recently the Dutch administrators requested that a Dutch court extend the term of their appointment, which expires on 13 April. LBI's Resolution Committee objected to the extension, as it has been maintained from the start that the appointment of the administrators was contrary to the law, which is based on the applicable EU Directives. In its ruling of 8 March this year, the court agreed to the claims of Landsbanki Íslands hf. and refused to extend the term of the administrators' appointment. Immediately afterwards, discussions began between the bank and the administrators on arrangements for LBI's takeover of the activities and assets of the Amsterdam branch and Sorbus. These discussions concluded with an agreement between the parties which provides, in part, for the bank's full control of the operating units in question and their assets from 13 April onwards.
Further information is available from: Landsbanki Íslands hf. Páll Benediktsson.
Tel. +354 410 3922 / +354 895 6066 email@example.com