The board of Icelandic lender Kvika banki has written to its larger rival Islandsbanki proposing a merger. Islandsbanki said it will respond in the coming days.
Islandsbanki is one of Iceland’s three largest banks and is partly state-owned. The state sold of a third of its stake in the bank in 2021, marking the largest initial public offering in the country’s history.
“Kvika’s board of directors believes that merging the companies would create a strong financial institution with an optimal revenue combination,” Kvika said in a statement late on Thursday.
A merger between the two lenders could provide customers with “diversified services”, increase competition and present an “interesting investment opportunity,” it said.
In a separate statement, Islandsbanki confirmed receipt of the letter from Kvika and said it would decide how to proceed next week.
If formal discussions commence, a comprehensive assessment of tax, competition and commercial matters would be launched, Kvika said.
It was too early to say which lender would be the acquiring entity or to what extent their subsidiaries would merge, it added.
Source: Reuters.com