AN EXTRAORDINARY BANKING battle is being fought in
Reykjavik. Búnadarbanki Íslands, Iceland's third-largest commercial
bank, has made a hostile bid for Spron - the country's largest
savings bank.
New laws have pushed commercial banks into a struggle against each
other to gain control of the savings bank's capital, which can be
acquired on the cheap and transformed into shareholder equity. This
outcome was unforeseen by the savings banks when they lobbied for
changes to laws governing their capital structure. Now they are
determined to stand up and fight. Other banks are being drawn in
and employees are hoping to make a counter-bid.
Gudmundur Hauksson, CEO of Spron and chairman of Iceland's savings
banks' association, sat on the committee that drew up the proposed
legislation for the savings banks. Over a plate of lobster in one
of Reykjavik's top restaurants Hauksson says these banks had not
expected that the change would elicit a...
