Iceland intends by next month to launch an initial public offering (IPO) of wholly state-owned Islandsbanki, taking the first step to reduce its significant ownership in the sector.
Islandsbanki was one of the three lenders that collapsed within a few days of each other in 2008, prompting a state takeover which resulted in restructuring existing banks and creating new ones.
“The listing of Islandsbanki on Nasdaq Iceland is an important first step to reduce the Icelandic state’s significant ownership in the banking sector,” Finance Minister Bjarni Benediktsson said in a statement.
“Thereby we move one step closer to a healthier environment in our banking sector, such as those of our neighbouring countries in the Nordics,” he said.
State holding company ISFI said it intends to launch the sale of at least 25% of the bank’s existing shares by next month.
In December, the finance ministry valued Islandsbanki at between 130 billion and 140 billion Icelandic crowns ($1.1-1.16 billion), according to local media outlet Kjarninn.
Islandsbanki has a domestic market share of around one-third, around 740 employees and last year posted pretax profit of 9.32 billion Icelandic crowns ($77 million).
The bank, which has a BBB/A-2 credit rating at S&P Global Ratings, aims to deliver a return on equity between 8% and 10% by 2023 and above 10% in the long term.
The state holding company has hired Citigroup, J.P. Morgan, Barclays and HSBC to help coordinate the IPO.
