Íslandsbanki hf to proceed with IPO on Nasdaq Iceland

Íslandsbanki hf to proceed with IPO on Nasdaq Iceland 1
Íslandsbanki hf. is wholly owned by the Treasury of Iceland, whose holdings are managed by ISFI

REYKJAVÍK, ICELAND: Bankasýsla ríkisins (Icelandic State Financial Investments, “ISFI”), on behalf of the Treasury of Iceland, and Íslandsbanki hf., confirmed their intention to proceed with the next step towards an Initial Public Offering (IPO) and listing of shares in Íslandsbanki on Nasdaq Iceland.

The intended IPO will consist of a secondary offering of shares in Íslandsbanki. The Offering and timing thereof are subject to, among others, market conditions. Barring unforeseen circumstances, the Offering could be launched as of Q2 2021.

Íslandsbanki hf. is wholly owned by the Treasury of Iceland, whose holdings are managed by ISFI in accordance with Act No. 88/2009. In December 2020, ISFI submitted a proposal to the Minister of Finance and Economic Affairs to initiate a sale process of Íslandsbanki.

As required by provisions in Act No. 155/2012, the Minister prepared a memorandum for the Budget Committee and the Economic Affairs and Trade Committee of Althing (Parliament).

Following the receipt ofcomments on the memorandum by the parliamentary committees, the Minister decided on 29 January 2021 to initiate a sale process, that reflected certain guidelines by the committees, to be managed by ISFI, according to provisions in Act No. 155/2012.

The Offering consists of a public offering of theOffer Shares to institutional and retail investors in Iceland and a private placement to certain institutional investors in various other jurisdictions.

The Offering will comprise Shares representing a minimum of 25% of the total issued and outstanding share capital of the Bank.

Bjarni Benediktsson, Minister of Finance and Economic Affairs: “The listing of Íslandsbanki on Nasdaq Iceland is an important first step to reduce the Icelandic state‘s significant ownership in the banking sector and will provide a clear path for the state to sell its remaining shares in the bank in the near future. Thereby we move one step closer to a healthier environment in our banking sector, such as those of our neighbouring countries in the Nordics. I am very pleased to see how well the process for the IPO, run by ISFI and its advisors, is going and look forward to see it successfully completed.“

Lárus L. Blöndal, Chairman of the Board of Directors of ISFI: “In line with the decision made by the Minister last January and comments from the Budget Committee and the Economic Affairs and Trade Committee of Althing, I am pleased to see that the IPO plans for Íslandsbanki are moving forward. The Minister assigned the responsibility to manage the sale process to ISFI and to ensure certain terms of the offering and allocation principles. The government ́s ownership policy states that the objective is to sell holdings in Íslandsbanki when market conditions are favourable, and we feel that this is the right time to move forward.”

Hallgrímur Snorrason, Chairman of the Board of Directorsof Íslandsbanki: “This is a turning point in the Bank’s history when we return to private ownership, as we have primarily been throughout our history. The Bank is well-positioned to become a listed company and has since its incorporation in 2008 been acting and operating as a listed entity. The Bank’s infrastructure is well developed and suitable to meet the requirements set by the regulated market. We are pleased to invite investors to participate in the continued development of the Bank and believe that the listing is a testament of the quality, not only of the Bank, but also the Icelandic banking sector and the Icelandic economy as a whole.”

Íslandsbanki is headquartered in Iceland, its primary market. In December 2020, the Bank had approximately 31% market share in Personal Banking, 35% market share in Business Banking and 35% market share in Corporate & Investment Banking. Íslandsbanki has a BBB/A-2 rating (stable outlook) from S&P Global Ratings.

Birna Einarsdóttir, CEO of Íslandsbanki: “Since Íslandsbanki was reformed in 2008, we have followed a successful path which has led to the solid and sustainable banking platform we have today. We have a clear strategy for developing our business into the future and are focused on executing that strategy.

With a strong digital offering, long-term customer relationships and a deeply ingrained service culture, we are proud of where we are and remain in an excellent position to capture the momentum ahead in Iceland. We have a clear path towards increased profitability and well-defined milestones towards double-digit RoE in the medium term, paving the way for capital return by regular dividend and return of excess capital. The Bank’s management has a long history of delivering our strategic goals, and I am confident we will continue to do so in the future.”

The Bank’s aims to deliver a return on equity between 8-10% by 2023 and in excess of 10% in the long term. www.islandsbanki.is

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