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Kaupþing Headquarters


Kaupthing Bank ( ) ( , OMX Stockholm: KAUP SEK) is an Icelandic bank, headquartered in Reykjavíkmarker, Icelandmarker. It was formed by the merger of Kaupthing and Búnaðarbanki Íslands in 2003 and is the largest bank in Iceland.

Kaupthing Bank previously operated in thirteen countries; including all the Nordic countries, the Netherlandsmarker, Belgiummarker, Luxembourgmarker, Switzerlandmarker, the United Kingdommarker and the United Statesmarker. It is the seventh largest bank in the Nordic countries in terms of market capitalization.

The bank employs over 3,300 people and maintains 36 retail branches in Iceland.

As of 31 December 2007, the bank had a total assets of €58.3 billion. In 2006, it ranked number 1,006 on Forbes Global 2000, which is an annual ranking of top 2000 corporations in the world by Forbes magazine. The same year, it ranked number 177 (up by 34 places from 2005) on the list of the world's largest banks composed annually by the international finance magazine The Banker.

In 2007, Kaupthing Bank had net earnings of €812 million, compared with €986 million in 2006. About 70% of the operating profit originated outside Iceland (33% in Iceland, 31% in the UK, 26% in Scandinavia, 8% in Luxembourg and 2% in other countries).

On 9 October 2008, following a major banking and financial crisis in Iceland, the Icelandic Financial Supervisory Authority took control of the bank. So far, it has not been declared bankrupt, although it has obtained a moratorium on payments from the District Court of Reykjavík and has been suspended from trading in the Iceland Stock Exchange.

On November 20th 2009, Kaupthing changed its name to Arion Banki.

The name

The bank is known as Kaupthing Bank outside of Iceland.

In Iceland, its official name is Kaupþing Banki hf.

Formerly, its official name was Kaupþing Búnaðarbanki hf., but the name was changed as the former name was considered too unwieldy for most people. From 2003 to 2006 the company used the name KB banki for its retail operations in Iceland. In December 2006, however, the bank started using the old name of Kaupþing for its network of high-street banks. It was announced that the change was part of the bank's plan to operate under the same name.

In November 2009 the bank changed his name into Arion bank.

History

Established in 1982 as a small agency for financial advisory and securities brokerage, Kaupthing has since then been at the forefront of changes in the Icelandic financial market, continually setting trends and being one of the five founding partners of the Icelandic Stock Exchange. In the mid 1990s Kaupthing widened its focus to include opportunities abroad, and becoming the first Icelandic financial institution to operate outside Iceland.

Kaupthing was listed on the Iceland Stock Exchange in October 2000, at which point the original owners of the Bank, the savings banks in Iceland, reduced their holdings, and individuals and institutional investors replaced them as shareholders. Kaupthing Bank shares were listed on the Stockholm Stock Exchange (now OMX Nordic Exchange in Stockholm) in 2002.

By 9 October 2008, Kaupthing Bank HF was forced into government receivership - only days after a crisis at Landsbanki placed it into government control. Due to the crisis throughout the Icelandic financial system, all trading in the country's equity markets was suspended on 13 October 2008.On 29 July 2009 Wikileaks exposed a confidential 210 page document listing Kaupthing's exposure to loans ranging from 45 million to 1.25 billion Euros. The leaked presentation revealed the bank had loaned billions of euros to its major shareholders, including a total of €1.43 billion to Exista and subsidiaries which owns 23% of the bank.

Acquisitions, mergers, subsidiaries

  • 1930 Búnaðarbanki Íslands (English: Agricultural Bank of Iceland) founded in Iceland
  • 1982 Kaupthing hf. founded in Iceland
  • 1998 Kaupthing Luxembourg, S.A. opened
  • 2000 Kaupthing Faroe Islands opened, Kaupthing New York opened, Kaupthing Stockholm opened
  • 2001 Kaupthing Bank Copenhagen opened, Kaupthing Lausanne opened, Sofi acquired in Finland
  • 2002 Aragon acquired in Sweden, JP Nordiska acquired in Sweden, Auðlind acquired in Iceland
  • 2003 Kaupthing merges with Búnaðarbanki Íslands to form Kaupthing Bank, Tyren acquired in Norway, Norvestia acquired in Finland, Kaupthing Limited opened in the UK
  • 2004 A. Sundvall acquired in Norway, FIH acquired in Denmark
  • 2005 Singer & Friedlander acquired in the UK
  • 2006 Kaupthing Limited merges with Singer & Friedlander to form Kaupthing Singer & Friedlander in the UK
  • 2007 Kaupthing buys Dutch merchant bank NIBC for €3 billion (as of late January 2008, Kaupthing decided to cancel the acquisition of NIBC )
  • 2007 Kaupthing acquired a 20% stake in New Delhi-based Indian investment services company Finoble Advisors with in option to buy the remaining 80% in 5 year's time
  • 2007 Kaupthing buys Belgian private banking and asset management operations of Robeco Bank, for an unspecified amount, further strengthening its position in the Benelux market.
  • 2007 Kaupthing hf acquired Derbyshire Offshore, the Isle of Man subsidiary of Derbyshire Building Society, continuing Derbyshire Offshore's irrevocable and binding guarantee for all depositors funds in the new subsidiary, Kaupthing, Singer and Friedlander (Isle of Man) Ltd.
  • 2007 - 2008 Kaupthing launches internet based Kaupthing Edge in the UK, Belgium, Norway, Germany, Finland, Sweden, Luxembourg, the Isle of Man, Austria and Switzerland.
  • 2008 The UK business of Kaupthing Edge, covering £2.5 billion in deposits and 160,000 customers, is taken over by ING Direct after the Financial Services Authority closed its London centre of operations.


Kaupthing Edge

Kaupthing Edge was a pan-European retail deposit taking brand. The purpose of the brand was to diversify liabilities on the Kaupthing balance sheet by currency, customer type (personal/retail) and country. Kaupthing Edge offered two deposit products: a savings account and a fixed term deposit account. Both were straightforward high-interest products. In Belgiummarker customers could choose a third product which was a current account. Kaupthing Edge savings and fixed term deposit accounts were managed over the Internet with the support of telephony call centres.

Kaupthing Edge was available in eleven countries in Europe:

  • Finlandmarker - available since October 2007; liabilities taken over by the Finnish Financial Supervision Authority on 9 October 2008
  • Swedenmarker - available since November 2007; accounts closed and all deposits repaid by 20 October 2008.
  • Norwaymarker - available since January 2008; liabilities taken over by the Norwegian government on 12 October 2008
  • Belgiummarker - available since January 2008, all accounts were frozen on the 9th of October 2008. over 20,000 depositors funds still remains blocked as the bank is awaiting its takeover
  • United Kingdommarker - available since February 2008; accounts transferred to Dutch bank ING Direct on 8 October 2008
  • Germanymarker - available since March 2008; 30,000 depositors in Germany are still awaiting repayment of their deposits by the bank. Kaupthing Bank Liquidation Committee has announced that it has secured funds to repay German depositors. German depositors started to get their money back on the 22. of June and are to be paid in full.
  • Luxembourgmarker - available since April 2008
  • Isle of Manmarker - available since April 2008
  • Switzerlandmarker - available since June 2008; in liquidation from 17 November 2008. Depositors partially repaid.
  • Austriamarker - available since September 2008; accounts frozen on 9 October, accounts transferred to other banks on 29 October


Kaupthing Edge accounts were protected within the EU by compulsory depositors protection schemes. These schemes are financed by a levy on the respective countries financial industry. In the case of the UK, the government would forward a loan to the scheme against future increased payments in case of a shortfall.

Kaupthing Edge is a word play on 'cutting edge'.

Government takes control

On 8 October 2008, The UK's FSA transferred the UK deposit accounts to ING. In its statement, "The FSA has determined that Kaupthing Singer & Friedlander no longer meets its threshold conditions, and is likely to be unable to continue to meet its obligations to depositors...The FSA concluded that KSF is in default for the purposes of the Financial Services Compensation Scheme". .

On 9 October 2008, the Icelandic Financial Supervisory Authority took control of Kaupthing after the resignation of the entire board of directors. This came about when "Britain transferred control of the business of Kaupthing Edge, its Internet bank, to ING Direct and put Kaupthing's UK operations into administration" placing Kaupthing in technical default according to loan agreements. The prime minister of Iceland, Geir Haarde, has stated that the British government brought down Kaupthing unnecessarily by abusing their power.

The same day the EKB (Swiss Federal Banking Commission) started proceedings under the Swiss Deposit Insurance scheme with respect to the Geneva branch of Kaupthing Bank Luxembourg. EKB requested customers of that branch to contact them so that compensation of up to 30000 Swiss Francs could be paid.

In Finland, the Financial Supervision Authority (Rahoitustarkastus) took control over the Finnish branch to prevent funds being transferred to Iceland. It has said that it believes that no one will lose their money. Finnish branch paid all its liabilities to its customers with debt it got from three major Finnish banks. Finnish branch then liquidated all of its assets and paid back debt to the Finnish banks. According to Finnish authorities Kaupthing Edge ended its operations in Finland on 30 January 2009.

See also



References

External links




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