Finance Minister supports Landsbankinn’s insurance acquisition in Iceland

The Icelandic Minister of Finance has stated that there is nothing unusual about Landsbankinn owning an insurance company, especially if it is a common practice for banks in the market. He emphasized that the bank’s board will decide whether the insurance company will be sold or not, asserting that this acquisition does not affect the sale of Landsbankinn, which is not currently planned.

The Financial Supervisory Authority has approved Landsbankinn’s purchase of TM and its subsidiaries, with only the Competition Authority’s approval remaining. However, the deal has been controversial and led to the resignation of the entire board of Landsbankinn.

Finance Minister Sigurður Ingi Jóhannsson noted that if it is typical for banks in the market to hold ownership of insurance companies, he sees no issue with Landsbankinn participating. He believes this is a natural progression but acknowledges that the Competition Authority must review the matter.

Former Finance Minister Þórdís Kolbrún Reykfjörð Gylfadóttir had expressed her intention to prevent such acquisitions, arguing that the government should not increase its stake in the financial market but rather reduce it. With the sale of Íslandsbanki, she asserted that the state’s ownership is decreasing.

When asked whether TM should remain part of Landsbankinn, the current finance minister stated that it is up to the bank’s board to decide, and he trusts them to make the appropriate choices. He reiterated that these dealings do not alter the potential sale of Landsbankinn. “It is certainly enough to sell one bank at a time; that is the objective for this term, and we are focused on that,” he said.