Glitnir Transfers Clients To Oslo Bank, Freeing Access To Assets

Rachel Walsh

6 November 2008

Glitnir, the Icelandic bank that went into administration in October, is transferring private clients at its Luxembourg subsidiary to Oslo-based bank Nordea, a move which will enable clients to get access to securities.

The Luxembourg financial markets regulator suspended payments from Glitnir Bank Luxembourg last month.

The transaction was approved by the Luxembourg financial regulator on 23 October, according to a statement from Nordea. The Nordic bank said clients have now been informed of the development and the process of moving assets into its custody is underway.

The transfer means account holders can once again get access to their securities, which have been frozen since Glitner Luxembourg went into receivership. Nordea said cash balances are, for the moment, however, not part of this transaction.

“At Nordea we have a strong funding position, and are viewed by the market as one of the most solid banks in Europe right now,” said Jhon Mortensen, managing director of Nordea Bank in Luxembourg. “We are pleased the Luxembourg regulators concur and have given the go-ahead for this agreement. Certainly the clients involved are relieved that this unfortunate situation has been resolved.”

A spokesman for Nordea told WealthBriefing the number of clients affected could not be disclosed. Prior to the announcement, Nordea reported 11,000 private banking clients in 125 countries.

“At Glitnir our primary focus has always been the customer. This situation is no different. Nordea has been reporting strong financial results in these extreme circumstances and we feel our clients will be well served by the move,” said Ari Danielsson, managing director of Glitnir Bank Luxembourg.

In October, as the Icelandic Financial Services Authority forced massive foreign asset sales to aid the failing economy, Glitnir sold its Norwegian, Finnish and Swedish operations. Glitnir Norway went to SpareBank 1 Alliance, Norway’s third largest bank, for NKr300 million ($45.4 million). Glitnir Sweden went to HQ Bank for SKr60 million kronor ($8.1 million). HQ Bank also bought Glitnir Finland and its asset management operations for an undisclosed sum.

Nordea Luxembourg is a subsidiary of the Nordea group, the largest financial institution in the Nordic and Baltic regions. Its capital markets and savings division, with the Luxembourg-based operation as a substantial contributor, has €139 billion assets under management, as at September 2008.