Føroya Banki, a leading bank on the Faroe Islands, has shown interest in taking over SPRON (Reykjavik Savings bank), the last of the major Icelandic banks to fall, Morgunbladid reports.
Føroya Banki has a network of around 10 branches on the Faroe Islands in addition to a newly established branch in Denmark. The bank services private, institutional and commercial customers on the islands and abroad.
Several groups of investors have shown interest in buying or taking over SPRON, but Føroya Banki is the first to come in from abroad.
Føroya Banki profit was some 860 million Danish Kroner. According to the bank’s annual report their assets where around 218 billion Icelandic Kronur or just over 10 billion Danish Kroner.
The new board of SPRON hopes that a binding offer will be made by the end of next Monday. Information on Føroya Banki can be found here and on SPRON here
Easy, I don’t know what will happen to the ISK but when you have a large difference in official versus unofficial rates then secondary, foreign, or black markets will develop to exploit this “inefficiency”. Actually, they have already developed – in Norway for instance the cardealers pay with ISK they have traded from one or two Icelandic guys in the fishing industry.
And sooner or later the official market will move to unofficial “real rate.
ISK rate still over 200 on foreign markets:
Gengin krónunnar gagnvart evru enn yfir 200 á mörkuðum erlendis
Viðskipti með krónuna á millibankamörkuðum erlendis eru enn að fara fram á genginu 200 – 200 krónur gagnvart evru en gengi krónunnar hér á landi er um 150 krónur.
Þetta hefur Dow Jones fréttaveitan eftir heimildarmanni af gjaldeyrisborði Royal Bank of Scotland.
Í frétt Dow Jones kemur fram að vegna óvissu um erlendar skuldir Íslendinga, fjármögnun ríkissjóðs og enduruppbyggingu fjármálakerfisins hér á landi sé ekki óhætt að setja krónuna á flot ennþá sem síðan veldur því að gengið er eins og það er erlendis.
Dow Jones hefur eftir viðmælanda sínum að þar sem gjaldeyrishöft verði ekki afnumin fyrr en í fyrsta lagi seint á þessu ári sé krónan enn undir þrýstingi erlendra fjárfesta sem hafa töluvert tak á henni.
And obviously it is not just the foreign investors who cause the pressure. Icelanders will try to move their money out to euros knowing that the ISK will go down, and anyone who has loose money will try to exchange.
I don’t have any idea what the solution is. You must have restrictions if the currency is to be held artificially high. One possibility is negotiate with the bondholders to get them to take 50%. Either give them cash now (which Iceland doesn’t have), get Norway to buy them, or make them only redeemable in Iceland to the original purchasers (thus eliminating the secondary market).
@Ilene, sorry for the sarcasm,. the message just says that many Icelanders have looked for an official way to exchange abroad, and there isn’t any way, the foreign banks just don’t have the bills. Unless you have hunderds of thousands of Euros or more to exchange, then you can to a dealer like TD waterhouse in london.
VILJHAM SAID:
“Anyways, you are a SPECULATOR and you do the devil’s work, so fardu til fj*ndans, lol.”
TO THE EDITORS OF THIS ICENEWS, REALLY, I AM TIRED OF SEEING HOW YOU DELIVERATELY AND ARBITRARY BAN PEOPLE HERE, WHILE YOU LET OTHERS DIRECTLY INSULT OR CALL BAD NAMES TO OTHER PEOPLE HERE.
ILENE, WHAT VILJHAM SAID LITERALLY MEANS SOMETHING LIKE : “GO TO HELL”…
IT IS DISGUSTING THAT THE EDITORS OF THIS PLACE LET COMMENTS LIKE THAT TO BE POSTED HERE. THEN THEY SEE A RETHORIC AND IRONIC COMMENT ABOUT ICELAND AND THEY DECIDE NOT TO POST IT BECAUSE IS INSULTING TO THEIR EYES…
KAMON ALEX… BRING SOME CRITERIA TO THIS PLACE…SERIOUSLY
VILJHALM
“This is not good. The ISK is like Monopoly game play-money or East German marks. Soon people will start to stockpile canned goods and tents.
ATTENTION, PASSENGERS, ABANDON SHIP … PROCEED CALMLY TO THE LIFEBOATS ON THE UPPER DECK …”
“This is getting scary really, 6 months ago a country puts very tight currency restriction, the normal tendency for an economy that is stabilazeing is to loos the restrictions little by little, but no, WE even have to put stronger restrictions, what does that mean? this s**t is sinking. CHILDRENM AND WOMEN first!!!!
When they dont let you make bussiness in your own currency no matter if its inland or offshores, it only menas fasism, totalitarism”
YOU SEE GUYS? AT THE END CRAZY GUS WAS RIGHT AND WARNING ALL, MONTHS AGO, ABOUT WHAT REALLY WAS GOING ON IN ICELAND…
NOW YOU ALL SEE WHAT ICELAND IS ABOUT…
THE ICELANDIC KRONA IS DEAD AND ICELAND IS A POOR COUNTRY…
AMEN
@Viljhalm
Are you saying thet the krona will get to 120 per Euro?
>By the way what did you mean buy “a 35% haircut”?
To lose 35% of your ISK worth, in foreign currency terms, when the rate normalises. Actually, it’s not quiet that bad at ~25%. Assuming UBS are right.
@Vilhjalm.
This is getting scary really, 6 months ago a country puts very tight currency restriction, the normal tendency for an economy that is stabilazeing is to loos the restrictions little by little, but no, WE even have to put stronger restrictions, what does that mean? this s**t is sinking. CHILDRENM AND WOMEN first!!!!
When they dont let you make bussiness in your own currency no matter if its inland or offshores, it only menas fasism, totalitarism, it only show how bad things are and how stupidli desperate they are. Just dump the STUPID krona allready!!!
By the way what did you mean buy “a 35% haircut”?
Althingi has passed more emergency currency restrictions in the middle of the night. Apparently too many people are trying to dump the ISK and putting pressure on the currency, mainly by getting around the current laws by using intermediaries to exchange.
Get ready for at least a 35% haircut in the near future.
UBS: 1 EUR = 221.07 ISK
SÍ: 1 EUR = 163.08 ISK
This is not good. The ISK is like Monopoly game play-money or East German marks. Soon people will start to stockpile canned goods and tents.
ATTENTION, PASSENGERS, ABANDON SHIP … PROCEED CALMLY TO THE LIFEBOATS ON THE UPPER DECK …
Vilhjalm Antonsen
Thanks for your reaction about buying ISK off shore
If I can exchange euro’s for the so called right price I can do it through my bank in Iceland, but I wonder whether I can get a better rate than that.
I do understand Dutch, German and english but not icelandic.
Can you translate what you wrote in Icelandic?
By the way I do not agree with you that I am doing
a devilish job.
I lost a huge sum of money from icelandic banks which will not be recovered.
Now I try to make the best of what is left.
So all this moral connotation underlying the word SPECULATOR makes no sense.
Thanks in advance for any advice.
Apparently there are no foreign banks that have ISK. You can advertise on the net or in a forum or newspaper, lots of Icelanders want euros – at the right price. Or come to Norway and ask the used car salemen who buy Icelandic “game-overs.”.
“Búinn að reyna að útskýra þetta fyrir fólki hér að það er ekki hægt að kaupa IKR seðla erlendis. Það eru einfaldlega ekki til IKR seðlar í erlendum bönkum, þeir kláruðust í hruninu en þá var hægt að gera tombólukaup. Núna getur þú skipt gjaldeyri í IKR á mjög hagstæðu gengi ef þú átt helling (nokkrar milljónir EUR) af gjaldeyri. Þá fara kaupin þannig fram að þú hefur samband við krónubréfaeiganda og gerir samkomulag við hann um EXIT gengið. Er þetta ekki allt í lagi ?”
Anyways, you are a SPECULATOR and you do the devil’s work, so fardu til fj*ndans, lol.
Sir Euro
I follow for a long time your view about Iceland
although now I am less pessimistic about iceland’s future as you seem to be
I got stuck with a big sum of Isk in iceland in this crisis, but I would like to increase my ISk sum
So I want to exchange off-shore euro’s into Isk and transfer it to iceland
Most european banks do not deal with that
Can someone give me an advice where I can exchange
euro’s off-shore?
Sounds like the faroese are falling into exactly the same trap as the icelandic in overstretching their commitments.
Take it over! Then in a surprise move fire the entire staff. I mean everybody right to the cleaning contract people. Transfer all real assets to mother company in Faroe Islands. After that, find the 40 biggest guys in the Faroe Islands and send them over to Iceland. They go door-to-door of everybody that owns money on a loan or such. The 40 just take their stuff (cars, TV, DVD, furniture, etc… Icelanders are sheep now, so this will not create a problem. Then bankrupt the company Icelandic style.
Oh, I almost forgot one of the main practices of Icelandic business. Borrow the money to by the bank from another Icelandic bank. When you bankrupt the company you can write that off as well.
= profit in a traditional Icelandic way
Sorry belongs to the germans now, they will have to talk to them.
Thank you, Faroe Islands!