Iceland completes largest IPO in history with Islandsbanki offering

Iceland has completed its largest ever initial public offering as the state has sold off more than a third of its stake in the bank Islandsbanki in an oversubscribed offering that will value the lender at $1.3 billion.

“This is the first step in reducing the state’s risk in the banking sector,” Finance Minister Bjarni Benediktsson said in a statement published early on Wednesday.

“With that we move closer to a healthier environment, similar to the Nordic countries and other neighbouring countries of ours,” Benediktsson said.

Islandsbanki, formerly Glitnir, was one of the three lenders that failed within days of each other in 2008, prompting a state takeover that resulted in the restructuring of existing banks and the creation of new ones.

At one point, the country’s banks held assets worth 10 times the Iceland’s economy, most of that in foreign currencies, making them overly exposed when the financial crisis hit.

Shares on offer were sold at 79 Icelandic crowns ($0.6533) and the offering, amounting to a value of $457 million, was the largest IPO in Iceland’s history, Islandsbanki said.

Subscription for shares had ended on Tuesday at 1200 GMT and had been oversubscribed several times due to “substantial interest” from both retail and institutional investors, it said.

The state has sold of 35% of its ownership in Islandsbanki, which has a domestic market share of around one-third and around 740 employees.

Shares in Islandsbanki are expected to trade on Nasdaq Iceland at 0930 GMT on June 22.