Kaupthing Bank


Kaupthing Bank

Infobox_Company
company_name = Kaupþing banki hf.
company_
company_type = Public (OMX|ICE10905|KAUP)
company_slogan = Thinking Beyond
foundation = Reykjavík, Iceland, 1930 (foundation of "Búnaðarbanki")
location = Reykjavík, Iceland
key_people = Hreiðar Már Sigurðsson (CEO), Sigurður Einarsson (Chairman of the board), Ingólfur Helgason (CEO in Iceland), Ármann Þorvaldsson (CEO in United Kingdom)
industry = Banking
net_income = profit €812 million (2007)cite web |url=http://www.kaupthing.com/library/13859 |title=Annual Report 2007 |publisher=Kaupthing Bank|accessdate=2008-05-08]
assets = €58.34 billion (2007)
num_employees = 3,330 (2007)
homepage = [http://www.kaupthing.com/ www.kaupthing.com]
intl = yes

Kaupthing Bank ( _is. Kaupþing banki) (OMX|ICE10905|KAUP, OMX Stockholm: KAUP SEK) is an Icelandic bank, headquartered in Reykjavík, Iceland. It was formed by the merger of "Kaupthing" and "Búnaðarbanki Íslands" in 2003 and is the largest bank in Iceland.

Kaupthing Bank currently operates in thirteen countries; including all the Nordic countries, the Netherlands, Belgium, Luxembourg, Switzerland, the United Kingdom and the United States. 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. [ [http://www.kaupthing.com/pages/164?path=http://cws.huginonline.com/K/133944/PR/200801/1186876.xml Kaupthing] ] 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. [ [http://www.forbes.com/lists/2006/18/Country_5.html The World's Biggest Public Companies (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". [ [http://icelandreview.com/icelandreview/daily_news/?cat_id=16539&ew_0_a_id=218882 Three Icelandic Banks among top 300 in World (Iceland Review Online)] ]

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). [ [http://www.kaupthing.com/pages/164?path=http://cws.huginonline.com/K/133944/PR/200801/1186876.xml Kaupthing] ]

On October 9, 2008, following a major banking and financial crisis in Iceland, the Icelandic Financial Supervisory Authority took control of the bank. [http://www.fme.is/?PageID=581&NewsID=340 The Financial Supervisory Authority - Iceland, "News: Based on New Legislation, the Icelandic Financial Supervisory Authority (FME) Proceeds to take Control of Kaupþing to ensure Continued Commercial Bank Operations in Iceland" (09.10.2008)] ] So far, it has not been declared bankrupt, but is effectively closed for trading in the Iceland Stock Exchange.

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. [ [http://visir.is/apps/pbcs.dll/article?AID=/20061229/FRETTIR01/61229029&err=10002 KB banki verður Kaupþing (visir.is)] ]

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 October 9, Kaupthing Bank HF was forced into government receivership - only days after a crisis at Landsbanki placed it into government control. [http://bankrun.us/forums/index.php?topic=3.0 Bank Run at Kaupthing forces seizure] Due to crisis throughout the Icelandic financial system, all trading in the country's equity markets was suspended October 13 2008.

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) [ [http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2263399.ece Kaupthing buys NIBC for €3 billion (Times Online)] ]
* 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 [http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article1951069.ece]
* 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. [ [http://www.kaupthing.com/pages/164? 2007 Kaupthing opens Middle East offices in Dubai and Qatar] ] [ [http://cws.huginonline.com/K/133944/PR/200710/1159344.xml Kaupthing Bank Luxembourg acquires Robeco Bank Belgium (Press Release)] ]
* 2007 - 2008 Kaupthing launches internet based Kaupthing Edge [ [http://www.kaupthingedge.com 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 during the market turmoils of the financial crisis of 2007-2008. Kaupthing Singer & Friedlander is placed into administration. The Icelandic Financial Supervisory Authority puts the bank in administration.

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 Belgium 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:

*Finland - available since October 2007
*Sweden - available since November 2007
*Norway - available since January 2008
*Belgium - available since January 2008
*United Kingdom - available since February 2008
*Germany - available since March 2008
*Luxembourg - available since April 2008
*Isle of Man - available since April 2008
*Switzerland - available since June 2008
*Austria - available since September 2008

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

Government takes control

On Wednesday, October 9, 2008, the Icelandic Financial Supervisory Authority took control of Kaupthing after the resignation of the entire board of directors. [cite web|url=http://www.kaupthing.com/pages/164?path=K/133944/PR/200810/1258139.xml|title=Kaupthing Bank, "Press release: Kaupthing Bank turns to the Icelandic FSA"|date=2008-10-09|accessdate=2008-10-09|publisher=Kaupthing press release] 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. [cite web|url=http://www.reuters.com/article/innovationNews/idUSTRE4981SV20081009?sp=true|title=Shellshocked Iceland takes control of biggest bank|publisher=Reuters|date=2008-10-09|accessdate=2008-10-08] 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 [ [http://www.einlagensicherung.ch/en/home.htm Einlagensicherung] . "Deposit Protection of Swiss Banks and Securities Dealers". Retrieved 2008-10-09 en icon] 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. [ [http://www.einlagensicherung.ch/ Einlagensicherung] . Retrieved 2008-10-09 de icon]

ee also

* Glitnir
* Landsbanki
* Seðlabanki Íslands

References

External links

* [http://www.kaupthing.com/lisalib/getfile.aspx?itemid=17423 Company Profile September 2008]
* [http://www.kaupthing.com/lisalib/getfile.aspx?itemid=13859 2007 Annual Report]
* [http://www.kaupthing.is Official site] is icon
* [http://www.kaupthing.com Official site] en icon
* [http://www.kaupthingedge.co.im Isle of Man site for Kaupthing Edge] en icon
* [http://www.kaupthingedge.co.uk UK site for Kaupthing Edge] en icon


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