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State Aid

State aid: Landsbankinn's refund of interest to customers does not raise concerns



Landsbankinn adopted in May 2011 certain debt relief measures, including granting its household customers that had honoured their obligations towards the bank between December 2008 and April 2011, a 20% refund of their interest payments during this period.

A competitor of Landsbankinn alleged that State aid was involved in the measure, in essence because the Icelandic State, as majority owner, allowed for a debt relief measure that went beyond what a privately owned bank would have done on the basis of pure commercial considerations.

The Authority has now decided that the measure was not imputable to the Icelandic State. The measure appears to having been adopted by the bank on the basis of commercial considerations, in particular as a measure to maintain customer loyalty, and that there was no interference or instructions given by the Icelandic authorities. The Authority has in that regard assessed the Icelandic State's applicable policy and arrangement on public ownership of financial undertakings as well as the available evidence on the adoption of the decision by Landsbankinn. The Authority therefore concluded that there are insufficient grounds to question the commercial nature of Landsbankinn's measure.

There is no evidence to indicate that the Icelandic State has waived any expected return on its investments in the bank in relation to the measure. Moreover, the measure does not alter the Authority's conclusion in its earlier decision that the aid granted for the restructuring of Landsbankinn in 2008 and 2009 was limited to the minimum necessary. Lastly the Authority has noted that the beneficiaries of the interest refund are individuals and households and not undertakings.

For the above reasons, the measure does not involve state aid.

A public version of the decision will be published on the Authority's website, normally within a month.


For further information, please contact:

Mr. Trygve Mellvang-Berg
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187

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