2017 has marked a turnaround for Iceland’s economy. Nine years after the its three biggest banks collapsed, sending the island of 300,000 residents into financial crisis, capital controls have been lifted and economic growth is forecast at 5%.
Its lenders are in good shape too, having ended 2016 with some of the highest Bank for International Settlements (BIS) capital ratios in Europe. Landsbankinn, the country’s biggest bank by assets and capital, held $2.2bn in Tier 1 and a BIS ratio of 30.2%.
It is trailed by Arion, which emerged from the ashes of failed lender Kaupthing and has $1.77bn in Tier 1 capital and a capital adequacy ratio of 27%. Earlier this year a Goldman Sachs-led consortium snapped-up a 30% stake in Arion just days after the government scrapped its cross-border capital restrictions.
Third is Islandsbanki, the successor of Glitnir bank, with $1.55n of Tier 1 capital and a 25.2% BIS ratio. Rounding out the top four is asset management and capital markets-focused Kvika Bank which has just $62m in Tier 1 but maintains a robust BIS ratio of 20.6%.
All data sourced from www.thebanker.com
