Landsbankinn, an Icelandic bank headquartered in Reykjavík, and the Nordic Investment Bank (NIB) have signed a five-year loan agreement in the amount of EUR 30 million (USD 33 million), Landsbankinn said in a disclosure.
The loan agreement provides that Landsbankinn allocate the funds to projects which improve the competitiveness of small and medium-sized enterprises (SMEs), as well as environmentally-friendly ventures.
Landsbankinn has in the past funded such ventures and companies in various sectors and the NIB loan facility helps the Bank increase its lending to such projects even further.
This is the first unsecured loan NIB grants to an Icelandic bank following the introduction of capital controls in 2008.
“NIB considers this facility to be an important step to encourage SME investments in Iceland. We believe that lifting capital controls will further boost the recovery of Iceland’s economy. We think that the country’s financial authorities have taken the necessary steps to ensure the banking system will be able to withstand pressures when the controls are removed,” says Henrik Normann, NIB President & CEO.
“The conclusion of this agreement is a positive step towards building trust in international financial markets. NIB’s loan facility, along with Landsbankinn’s recent issuance of EUR, SEK and NOK-denominated senior unsecured bonds, are clear examples of the increased trust international investors are extending to Landsbankinn in particular and the Icelandic economy in general,” says Steinthór Pálsson, CEO of Landsbankinn.
NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with leading rating agencies Standard & Poor’s and Moody’s. – BusinessNewsAsia.com