Iceland Thaws on the Return of Foreign Investors to its Banks

Iceland’s former three big banks — Glitnir, Kaupthing and Landsbanki — became poster boys for the excesses among lenders around the world before the 2008 financial crisis, the Financial Times reported. Their assets swelled to more than 10 times the size of Iceland’s economy while they lent to Viking raiders who bought up whole swaths of UK companies from West Ham United football club to Hamleys toy shop. Their spectacular implosion and the currency controls that existed until recently in Iceland led many to doubt there would be much foreign interest in the three successor banks formed, Arion Bank, Islandsbanki, and Landsbankinn. Periodical reports that Chinese and other lenders were sniffing around petered out each time. But now sentiment has finally shifted. Goldman Sachs and three hedge funds bought a third of Arion last month and have an option to increase their stakes to around half of the bank, which is also expected to seek a stock market listing this year. Read more. (Subscription required.)