The purchase price is confidential, and the transaction will have a negligible impact on the Bank’s operations. After adjusting for the sale of Borgun, Íslandsbanki’s consolidated fee and commission income for 2019 would have been 13% lower, its expenses would have been 13% lower and its cost to income ratio would have been four percentage points lower. The sale has a positive impact on the Bank’s capital ratios and liquidity ratios will reduce slightly on a consolidated basis, although the liquidity ratios are still well above the Bank’s targets and regulatory requirements.
The transaction is subject to Financial Supervisory Authority approval of the purchaser’s acquisition of a qualifying holding. From today until the delivery date, Íslandsbanki will recognise Borgun as “assets held for sale” in its financial statements.
The formal sale process began early in 2019, as was announced by Íslandsbanki on 11 January 2019. The sale was an open and transparent process led by Swiss based investment banking firm Corestar Partners and Íslandsbanki’s Corporate Finance department.
Established in 1980, Borgun hf. issued the first credit cards in Iceland. The company currently employs a staff of just over 130 encompassing three functions: credit card issuance for Íslandsbanki and Aur; acquiring, which takes place in six countries (Iceland, the United Kingdom, Hungary, the Czech Republic, Slovakia, and Croatia); and lending, including loans for goods and services purchases through a number of merchants.
Salt is a global payments company which currently serves merchants and consumers across fourteen countries. Amongst its products and services are market leading loyalty and CRM solutions which complement Borgun's existing offering.
Salt was founded by a group of entrepreneurs responsible for building several leading payments platform around the world.
The underlying philosophy is to use technology to improve lives, overserve, and delight our customers.