Landsbankinn and Kvika Bank have agreed to enter into exclusive negotiations for the purchase by Landsbankinn of TM tryggingar hf. (“TM”) based on a purchase offer the Bank made for all equity in TM on 15 March. The proposed acquisition is contingent on such factors as due diligence and approval by the Icelandic Competition Authority and the Financial Supervisory Authority of the Central Bank of Iceland.
Lilja Björk Einarsdóttir, CEO of Landsbankinn:
“The addition of insurance activity to the Bank’s operation will allow us to offer customers even better and diverse services. The acquisition of TM is a solid investment that strengthens the Bank’s operating platform and enhances its long-term value. TM is a sound insurance company that employs an experienced team. Together, we have a robust presence around the country and are in a good position to advance. We know how to provide first-rate financial service, as evidenced by the fact that we have topped the Icelandic Performance Satisfaction index among customers in the banking market for five consecutive years.”
Helga Björk Eiríksdóttir, Chairman of the Board of Directors:
“Landsbankinn operates on a competitive market and it is of substantial significance that the Bank continues to be a valuable asset for shareholders. This necessitates that we assess and take advantage of opportunities in the financial market to maintain and grow the Bank’s value. For some time now, the Board of Directors and management have evaluated the option of adding insurance to the Bank’s already diverse service platform, as considerable synergies exist between insurance activity and commercial banking. We believe that the acquisition of TM will strengthen and empower both companies.”
Information on the offer and financial standing
The Bank has offered an ISK 28.6 billion purchase price. The final consideration for the company depends on a closing adjustment on the date the Bank assumes operation of TM.
At the end of 2023, Landsbankinn’s total assets amounted to ISK 1,961 billion and equity was ISK 304 billion. The Bank’s profit in 2023 was ISK 33.6 billion and, in accordance with a proposal made to the 2024 AGM, the Bank will pay a dividend of ISK 16.5 billion this year. The acquisition is not expected to impact the Bank’s dividend policy which is to pay at least 50% of the previous year’s profit in dividends to shareholders.
