ISFI and Íslandsbanki hf. announce intention to proceed with an initial public offering of Íslandsbanki on Nasdaq Iceland
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Bankasýsla ríkisins (Icelandic State Financial Investments, “ISFI”), on behalf of the Treasury of Iceland, and Íslandsbanki hf. (“Íslandsbanki” or the “Bank”), confirm their intention to proceed with the next step towards an Initial Public Offering (the “IPO” or the “Offering”) and listing of shares in Íslandsbanki on Nasdaq Iceland. The intended IPO will consist of a secondary offering of shares in Íslandsbanki. The Offering and timing thereof are subject to, among others, market conditions. Barring unforeseen circumstances, the Offering could be launched as of Q2 2021.
Offer Highlights
- The Offering will comprise existing Shares of Íslandsbanki hf. offered by Icelandic State Financial Investments (“Offer Shares”) on behalf of the Treasury of Iceland (the "Selling Shareholder").
- The Offering consists of a public offering of the Offer Shares to institutional and retail investors in Iceland and a private placement to certain institutional investors in various other jurisdictions.
- The Board of Directors of the Bank will submit an application for all Offer Shares in the Bank to be admitted to trading on the regulated market of Nasdaq Iceland.
- The Offering will comprise Shares representing a minimum of 25% of the total issued and outstanding share capital of the Bank.
- The Selling Shareholder will not divest its remaining Shares for a period of 180 days after the first day of trading in the Shares on Nasdaq Iceland, subject to certain exceptions – in line with standard market practise.
- Citigroup Global Markets Europe AG, Íslandsbanki hf. and J.P. Morgan AG are acting as Joint Global Coordinators and Joint Bookrunners on the Offering, alongside Barclays Bank Ireland PLC, HSBC Continental Europe, Fossar Markaðir hf., and Landsbankinn hf., as Joint Bookrunners, Arion Bank hf., and Kvika banki hf. as Joint Lead Managers, and Arctica Finance hf., Íslenskir fjárfestar hf. (Icelandic Investors) and Íslensk verðbréf hf. (Icelandic Securities) as Co-Lead Managers.
- The IPO is subject to the receipt of all applicable registrations and regulatory and governmental approvals.
Financial targets
- The Bank's aims to deliver a return on equity between 8-10% by 2023 and in excess of 10% in the long term.
- The Bank aims to reduce its cost-to-income ratio to less than 45% by 2023.
- The Bank targets a long-term CET1 capital ratio of >16%.
- Íslandsbanki targets approximately 50% of earnings as a base dividend and may utilise its excess capital to support further dividend payments, share buybacks or ROE enhancing growth.
Since Íslandsbanki was reformed in 2008, we have followed a successful path which has led to the solid and sustainable banking platform we have today. We have a clear strategy for developing our business into the future and are focused on executing that strategy. With a strong digital offering, long-term customer relationships and a deeply ingrained service culture, we are proud of where we are and remain in an excellent position to capture the momentum ahead in Iceland. We have a clear path towards increased profitability and well-defined milestones towards double-digit RoE in the medium term, paving the way for capital return by regular dividend and return of excess capital. The Bank’s management has a long history of delivering our strategic goals, and I am confident we will continue to do so in the future.
Birna Einarsdóttir,
CEO of Íslandsbanki
The listing of Íslandsbanki on Nasdaq Iceland is an important first step to reduce the Icelandic state‘s significant ownership in the banking sector and will provide a clear path for the state to sell its remaining shares in the bank in the near future. Thereby we move one step closer to a healthier environment in our banking sector, such as those of our neighbouring countries in the Nordics. I am very pleased to see how well the process for the IPO, run by ISFI and its advisors, is going and look forward to see it successfully completed.
Bjarni Benediktsson,
Minister of Finance and Economic
In line with the decision made by the Minister last January and comments from the Budget Committee and the Economic Affairs and Trade Committee of Althing, I am pleased to see that the IPO plans for Íslandsbanki are moving forward. The Minister assigned the responsibility to manage the sale process to ISFI and to ensure certain terms of the offering and allocation principles. The government´s ownership policy states that the objective is to sell holdings in Íslandsbanki when market conditions are favourable, and we feel that this is the right time to move forward.
Lárus L. Blöndal,
Chairman of the Board of Directors of ISFI
This is a turning point in the Bank’s history when we return to private ownership, as we have primarily been throughout our history. The Bank is well-positioned to become a listed company and has since its incorporation in 2008 been acting and operating as a listed entity. The Bank’s infrastructure is well developed and suitable to meet the requirements set by the regulated market. We are pleased to invite investors to participate in the continued development of the Bank and believe that the listing is a testament of the quality, not only of the Bank, but also the Icelandic banking sector and the Icelandic economy as a whole.
Hallgrímur Snorrason,
Chairman of the Board of Directors of Íslandsbanki
