Saga Capital Investment Bank Iceland

This means that Saga Capital’s asset portfolio is divided so that assets belonging to banking activities will remain within the portfolio while other assets will be sold, i.e. assets that may reduce operability and equity strength.This, moreover, is done to meet the possible impact of EU Directives that have yet to be adopted in Iceland.

The regulatory and legal frameworks pertaining to the financial sector in many parts of the world have been re-examined as a result of the credit crunch. Iceland is no exception, and considerable work has been spent on amending legislation applicable to financial undertakings since the collapse of the banks in the autumn of 2008. It is assumed that these amendments will, among other things, take account of the recommendations of the Finnish expert Kaarlo Jännäri and EU equity directives which e.g. relate to credited preferential loan terms on the debts of financial undertakings and their tax assets.

The management of Saga Capital, therefore, has worked in close co-operation with the authorities on restructuring the bank with the intention of meeting planned changes in the legal environment for financial undertakings before those changes come into effect. This was done in accordance with the management’s established policies as regards pre-empting legislative amendments in the banking sector and being operationally reliable and transparent at all times.

The operation of Saga Capital has been satisfactory this year, characterised for the most part by increased income from commissions and lower operating costs, as well as a growing number of depreciations that mirror the general economy situation.

As a result, the bank’s balance sheet is much more condensed, risks are considerably reduced and operability is very good. Moreover, the bank’s equity ratio is high and its liquidity position is good.

The restructuring is subject to the final approval of the shareholders of Saga Capital and the Icelandic Financial Supervisory Authority (FME).