- Keflavik Savings Bank, BYR Savings Bank and SPRON enter merger discussions

Keflavik Savings Bank, BYR Savings Bank and SPRON enter merger discussions.

The Board of Directors of Keflavik Savings Bank, Byr Savings Bank and Reykjavik
Savings Bank have signed a letter of intent to prepare for the merger of the
three savings banks.  The Savings Banks have committed to only discussing a
merger between these three savings banks while the merger discussions are
ongoing.   The aim is to reach a conclusion as quickly as possible. 

In the letter of intent it is stipulated that parties will work according to an
action plan with the aim of presenting a proposal to primary capital market
holders and shareholders in February and that the merger take effect from
January 1. 

Geirmundur Kristinsson Director of Keflavik Savings Bank:
“The Savings Bank looks positively to these merger discussions.  These three
savings banks have the most in common and if all parties reach an agreement to
merge a new and stronger savings bank will emerge which will benefit all
savings banks. In these difficult times a strong savings bank with a solid
operational base will build customers trust as well as other stakeholders.  The
merged savings bank will continue to service its customers in its locality and
in good cooperation with the community.” 
 
Ragnar Z. Guðjónsson Director of Byr Savings Bank: 
“The Board of Directors of Byr have decided to take part in these discussion in
spite of Byrs strong position with the interests of its customers and primary
capital holders in mind.  With the discussion we will see whether there is a
basis to merge the savings banks.  If a conclusion is reach which all parties
are in agreement with, a foundation for a strong company is set which is well
equipped to meet future challenges.  Furthermore a merged savings bank will be
well positioned to take advantage of future opportunities when the financial
markets reach an equilibrium.  It is therefore interesting for us to look at
this opportunity seriously and we enter these discussion head on with the aim
of reaching a conclusion as soon as possible. 

Guðmundur Hauksson CEO of SPRON: 
“The purpose of the merger is to strengthen the savings banks in the difficult
economic environment which lies ahead of us and support the further
restructuring of the Icelandic financial market. With the merger a larger and
stronger unit will emerge which is better equipped to meet new and challenging
projects.  The Savings Banks have traditionally placed great importance on
quality customer service and with a merged Savings bank our service to
customers can be improved further.” 

For further information please contact: 
Geirmundur Kristinsson Director of Keflavik Savings Bank, tel: +354 421 6605
Ragnar Z. Guðjónsson Director of Byr Savings Bank, tel: +354 575 4000
Guðmundur Hauksson CEO of SPRON, tel: +354 550 1213