Iceland's Kvika banki seeks merger with Islandsbanki

Islandsbanki hf

03/02/2023 09:01

COPENHAGEN, Feb 3 (Reuters) - The board of Icelandic
lender Kvika banki  KVIKA.IC  has written to its larger rival
Islandsbanki  ISB.IC  proposing a merger. Islandsbanki said it
will respond in the coming days.
    Islandsbanki is one of Iceland's three largest banks and is
partly state-owned. The state sold of a third of its stake in
the bank in 2021, marking the largest initial public offering in
the country's history.
    "Kvika's board of directors believes that merging the
companies would create a strong financial institution with an
optimal revenue combination," Kvika said in a statement late on
Thursday. 
    A merger between the two lenders could provide customers
with "diversified services", increase competition and present an
"interesting investment opportunity," it said. 
    In a separate statement, Islandsbanki confirmed receipt of
the letter from Kvika and said it would decide how to proceed
next week.
    If formal discussions commence, a comprehensive assessment
of tax, competition and commercial matters would be launched,
Kvika said. 
    It was too early to say which lender would be the acquiring
entity or to what extent their subsidiaries would merge, it
added.
 (Reporting by Nikolaj Skydsgaard; editing by Barbara Lewis)
 ((Nikolaj.Skydsgaard@thomsonreuters.com;))