October 3, 2008

Glitnir, an Icelandic specialist seafood bank, has been partially nationalised by the Icelandic government, as it became one of the victims of the credit crunch.

The government has acquired a 75 percent stake in Glitnir for EUR 600 million (US$830 million), a surprising turn as the bank's funding has been successful this year despite the challenging global market conditions.

However, Glitnir said events unfolding in international financial markets in the past two weeks have impacted Glitnir's short-term funding and as a result, the bank's Board of Directors had meetings with the Central Bank of Iceland to discuss possible solutions to the challenge the bank was facing.

Glitnir's seafood specialist role is thought unlikely to be affected by the nationalisation deal.