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BANK

Iceland’s Glitnir bank sells Swedish subsidiary

The Swedish subsidiary of Iceland's third biggest bank, Glitnir, has been sold to HQ bank of Sweden, the company announced on Friday

Swedish bank HQ “has entered an agreement … to acquire all the shares in Glitnir AB (the Swedish subsidiary) for a purchase price of approximately 60 million kronor ($8.12 million) to be paid in cash upon completion,” according to a joint statement.

“The acquisition is a complement to HQ’s existing investment banking operations and … will enhance HQ’s value through a wider product offering,” it added.

According to the deal, HQ will not take over any of Glitnir AB’s Icelandic parent company’s obligations “such as client claims or payments due, since the transaction only involves the Swedish-based” branch.

Glitnir was taken over by the Icelandic state last week, along with the country’s other two leading banks.

“We see this as a unique opportunity to acquire a company with a good value proposition and strong market share despite the harsh market conditions,” HQ’s deputy chief executive Fredrik Crafoord said in the statement.

The deal, which still must be approved by the Swedish Financial Supervisory Authority, is expected to have a “marginal positive effect on HQ’s earnings per share for the current year.”

The announcement comes two days after Glitnir’s Finnish branch announced its local management had bought it from the crisis-ridden parent company.

Iceland’s government announced on September 29 that it had taken over 75 percent of Glitnir, which was teetering on the brink of bankruptcy due to a lack of liquidity.

The country’s Financial Supervisory Authority has since then officially taken control of the bank’s domestic business, creating a new fully state-run bank called New Glitnir Bank.

It also acquired Iceland’s two other cash-strapped leading banks, Kaupthing and Landsbanki.

BREXIT

Brits in EU risk losing UK bank accounts ‘within weeks’

Some of Britain's biggest banks have begun contacting customers in European Union countries, warning them that their accounts will be closed down within weeks because the cost and complexity of operating without a continuation of pan-European banking rules is too much.

Brits in EU risk losing UK bank accounts 'within weeks'
Lloyds Bank expects to close at least 13,000 accounts. Photo: Lloyds Bank
According to a report in The Times, thousands of Britons who live in Europe face being stripped of their UK bank accounts and credit cards, because of the UK government's failure to agree rules for operating after Brexit. 
 
Each of the EU's 27 member states has different rules for cross-border bank accounts which will start to apply immediately the UK's transition period ends on 31st December 2020. 
 
“In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense,” a source at one British bank told the newspaper. “This is passporting — this is the reality of Brexit.”
 
 
If a way is not found to continue pan-European banking rules, or passporting, UK banks will br breaking the law if they don't apply for new banking licenses in each European Union Country. 
 
 
Lloyds, Britain’s biggest banking group, began writing to customers in August, warning them that their bank accounts would  close down on December 31.
 
The bank estimates that 13,000 customers, including those based in Holland, Slovakia, Germany, Ireland, Italy and Portugal, would lose their accounts. 
 
“If customers have regular deposits into, or payments out of, their account, they will need to make other arrangements before their account is closed,” the bank said. 
 
Barclays and Coutts have also started contacting customers. 
 
“In light of the UK leaving the EU at the end of 2020, we continue to review the services we offer to customers within the European Economic Area (EEA), and any impacted customers will be contacted directly,” Barclays said in a statement. “The timings for account closure will depend on the type of product that a customer holds, but we will always give notice to customers.”
 
“In the event that no alternative to the European Economic Area passporting regime for financial services is agreed between the UK and EU, we have taken the difficult decision to withdraw from offering our services to clients who reside in the EEA,” Coutts said. 
 
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