As Icelandic banks grapple with the fallout of the Covid-19 crisis, it is instructive to compare the current Tier 1 capital of the country’s two largest lenders with how they fared during the global financial crisis.
Landsbankinn and Íslandsbanki, which have roots that date back to the 1880s, were both re-established by the Icelandic government as a result of the Icelandic financial crisis (2008-11). In 2008, Landsbankinn was born out of the domestic operations of its predecessor Landsbanki, while Íslandsbanki was split out from the bankrupt Glitnir banki.
