Directive 2014/59/EU on Bank Recovery and Resolution (BRRD I) was i.a. transposed into Icelandic law with Act No. 70/2020 on the resolution of credit institutions and investment firms (the Act). On 8th of December 2021, the Icelandic Resolution Authority of the Central Bank of Iceland published its policy on minimum requirements for own funds and eligible liabilities (MREL-Requirement) according to Art. 17 of the Act (hereinafter the MREL-Policy).
The Resolution Authority announced today that a resolution plan had been approved for Íslandsbanki and thereby an MREL-Requirement for the Bank. The decision is based on the aforementioned MREL-Policy.
The MREL requirement is 21% of the Bank‘s Total Risk Exposure Amount (TREA) as per year-end of 2020 and applies from the date of the announcement. The Bank is considered to fulfil the MREL-Requirement from the outset.
It is anticipated that the MREL-Requirement will be updated in the third quarter of 2022.
The subordination requirement of Directive 2019/879/EU on Bank Recovery and Resolution (BRRD II) has not been defined, but the MREL-Policy states that the requirement will be published once BRRD II has been transposed into Icelandic law. In any event, in common with most European jurisdictions, it is likely that Icelandic banks will have to comply with MREL-requirements of BRRD II in January 2024.
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Public Relations – Edda Hermannsdóttir, email@example.com Sími: 844 4005.
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With a history that dates from 1875, Íslandsbanki is an Icelandic universal bank with a strong customer focus. The Bank believes in moving Iceland forward by empowering its customers to succeed - reflecting a commitment to run a solid business that is a force for good in society. Driven by the ambition to be #1 for service, Íslandsbanki’s banking model is led by three business divisions that build and manage relationships with its customers. Íslandsbanki maintains a strong market share with the most efficient branch network in the country, supporting at the same time its customers’ move to more digital services. The Bank operates in a highly attractive market and, with its technically strong foundations and robust balance sheet, is well positioned for the opportunities that lie ahead. Íslandsbanki has a BBB/A-2 rating from S&P Global Ratings. The Bank’s shares are listed on Nasdaq Iceland Main Market.
This press release may contain “forward-looking statements,” involving uncertainty and risks that could cause actual results to differ materially from results expressed or implied by the statements. Íslandsbanki hf. undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. It is the investor's responsibility to not place undue reliance on these forward-looking statements which only reflect the date of this press release. Forward-looking statements should not be considered as guarantees or predictions of future events and all forward-looking statements are qualified in their entirety by this cautionary statement.