Iceland's financial watchdog said today it had taken over investment bank Straumur Burdaras, the last major Icelandic bank left standing after the country's financial collapse in October.
The Icelandic Financial Supervisory Authority said in a statement it had been informed by Straumur that the bank's liquidity position was no longer strong enough to sustain its operations.
"The Icelandic Financial Supervisory Authority (IFSA) has therefore decided to assume the powers of a meeting of the shareholders of Straumur and immediately suspend the board in its entirety," the authority said.
"Further, the IFSA hereby appoints a Resolution Committee, which will take over all authority of the Board of Directors."
Straumur chief eExecutive William Fall resigned, effective immediately.
As recently as last month, Fall had expressed optimism that the bank would fare well as a more focused, slimmed-down operation. Straumur lost €616 million before tax in the fourth quarter after hefty loan losses and asset writedowns.
The authority said that all deposits at Straumur were fully secured in line with an Icelandic government statement from October last year. The North Atlantic island nation's financial system and currency were shattered five months ago as Iceland's main commercial banks collapsed under the weight of billions of dollars of debt in a matter of days.
The Nordic stock exchange said, separately, that trade in Straumur shares had been suspended.
The shares fell sharply after the October turmoil and never regained their footing. They were last at 1.71 Icelandic crowns, down from a high of 23.45 in mid-2007.
Straumur had a balance sheet of €3.4 billion euros at the end of 2008, with €1.4 billion euros of loans listed as assets. It had planned to continue to trim its balance sheet and focus on advisory and broking operations.
Reuters