Nýi Glitnir Banki Hf
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Nýi Glitnir banki hf. Summary of proposed acquisition of assets and liabilities for a new company 14. október 2008 The report contains 14 pages Summary of Preliminary Balance Sheet for Nýi Glitnir hf. Nýi Glitnir banki hf. Summary of Preliminary Balance Sheet 14. október 2008 Check and approval: Changes: Version Author Date Change The report has been checked by: Name Date 1 2 3 4 5 The report has been approved by: Name Signature Date 1 2 3 4 5 Summary of Preliminary Balance Sheet for Nýi Glitnir hf-uppfært 171108.doc i Nýi Glitnir banki hf. Summary of Preliminary Balance Sheet 14. október 2008 Contents 1 Introduction 1 2 Preliminary balance sheet 2 3 Assets 3 3.1 Cash and deposits with the Central Bank 3 3.2 Bonds and other debt instruments 3 3.3 Shares and other securities with variable income 3 3.4 Securities used for hedging 3 3.5 Loans to banks 4 3.6 Loans 4 3.7 Derivatives 5 3.8 Investments in associated companies 5 3.9 Investments in subsidiaries 5 3.10 Property and equipment 6 3.11 Intangible Assets 7 3.12 Non-current assets available for sale (Foreclosures) 7 3.13 Other Assets 8 4 Liabilities 9 4.1 Repurchase agreements 9 4.2 Deposit from finance companies 9 4.3 Deposits 9 4.4 Debt issued and other borrowed funds 9 4.5 Balance due to old bank / Owner's equity 9 4.6 Equity 9 4.7 Other off Balance Sheet Items 10 5 Attachments 11 Summary of Preliminary Balance Sheet for Nýi Glitnir hf-uppfært 171108.doc ii Nýi Glitnir banki hf. Summary of Preliminary Balance Sheet 14. október 2008 1 Introduction Attached is an initial proposal for a preliminary balance sheet for a new bank which will take over assets and liabilities of Glitnir bank hf. The proposal is first and foremost based on the methodology described in attachment 1. The main principle of this proposal is that all assets will be taken over by the new bank, except for the assets of foreign subsidiaries and the assets of foreign branch offices. Thus it is proposed that the new bank will take over all assets which have been part of the domestic banking operation of Glitnir bank, for the past years. There are however, some exceptions in this regard, which are detailed in the discussion on the appropriate balance sheet item, in the following report. In the summary there is emphasis on providing detailed and appropriate information, to the fullest extent possible, to facilitate decision making on what assets and liabilities should be taken over by the new bank. Furthermore, the summary also includes an analysis of revaluation/impairment of assets including particulars where it was deemed appropriate. In this summary, evaluation of assets is based on a review by the bank's key employees and the employees responsible for each asset portfolio. This is only a rough approximation, but final evaluation of the assets will be determined by the subsequent revaluation work. Itemization of most of the assets is found in appendix. All figures come from the parent company and are based on the balance of assets and liabilities as of September 30, 2008. Work relating to financial statements and reconciling of accounts is still ongoing at the bank, and it is therefore possible that some figures will change. Furthermore, various changes have taken place since September 30, 2008, which needs to be taken into account in the bank's final settlement. Summary of Preliminary Balance Sheet for Nýi Glitnir hf-uppfært 171108.doc 1 Nýi Glitnir banki hf. Summary of Preliminary Balance Sheet 14. október 2008 2 Preliminary balance sheet Following is an initial proposal of the preliminary balance sheet of a new bank. Detailed discussion on particular items of the balance sheet follows. It is proposed that equity of ISK 110 billion will be paid into the new bank, by additions to cash on hand. Attachment 2 shows the preliminary balance sheet derived from the financial position of the old bank. Draft of Preliminary Balance Sheet for Nýi Glitnir hf. 15.10.2008 (preliminary figures based on balances as of 30.09.08) Amounts in thousands of IKR Assets Book value Cash and balances with central banks .............................................................................................................. 146.461.244 Bonds and debt instruments ............................................................................................................................. 2.118.951 Shares and equity instruments .......................................................................................................................... 9.574.313 Securities used for hedging .............................................................................................................................. 39.606.033 Loans to banks .................................................................................................................................................. 18.999.476 Loans to customers ........................................................................................................................................... 631.368.962 Investments in associated companies ............................................................................................................... 276.551 Investments in subsidiaries ............................................................................................................................... 15.854.313 Property and equipment ................................................................................................................................... 1.446.187 Intangible assets ............................................................................................................................................... 0 Non-current assets held for sale (Foreclosures) ................................................................................................ 455.918 Other assets ...................................................................................................................................................... 19.347.069 Total Assets 885.509.017 Liabilities Deposits from Central Bank of Iceland ............................................................................................................ 0 Deposits from banks ......................................................................................................................................... 14.922.735 Deposits from customers .................................................................................................................................. 338.556.005 Short positions ................................................................................................................................................. 0 Debt issued and other borrowed funds ............................................................................................................. 0 Other liabilities ................................................................................................................................................. 0 Note due the old bank ...................................................................................................................................... 422.030.277 Total Liabilities 775.509.017 Equity ................................................................................................................................................. 110.000.000 Total Liabilities and Equity 885.509.017 Summary of Preliminary Balance Sheet for Nýi Glitnir hf-uppfært 171108.doc 2 Nýi Glitnir banki hf. Summary of Preliminary Balance Sheet 14. október 2008 3 Assets 3.1 Cash and deposits with the Central Bank Cash and deposits with the Central Bank amounted to ISK 36 bn. on 30. September 2008. Thereof, deposits with the Central bank amount to ISK 35 bn. It is proposed that the above mentioned assets will be taken over by New Glitnir bank hf. On the preliminary balance sheet there is an addition of ISK 110 bn. as estimated paid in capital. 3.2 Bonds and other debt instruments Bonds and other debt instruments amounted to ISK 114 bn. at the end of September 2008. It is proposed that bonds existing due to SPV and REPO-agreements amounting to IKR 73 remain with the old bank, but other bonds will be transferred to the new bank. It is also proposed that bonds issued by foreign companies remain in the old bank. After discussing the matter with bank employees, impairment of these bonds is estimated at ISK 15 bn. Bonds available for sale in the new bank amount to ISK 2 bn. after impairment. Itemization of bonds and other debt securities and proposed impairment is found in attachment number 3. 3.3 Shares and other securities with variable income Shares and equity instruments amounted to ISK 102 bn. at the end of September 2008. It is proposed that the shares will be transferred to the new bank with the exception of shares in foreign companies and companies where the Financial Supervisory Authority took action in accordance with article 5. of law number 125/2008. After discussing the matter with bank employees, an impairment of the shares is estimated at ISK 24 bn. Included in the portfolio are shares in Landic Property hf., FL Group hf. and other companies. The total portfolio of the new bank amounts to ISK 10 bn. after the impairment. Itemization of shares and proposed impairment is found in attached attachment number 3 3.4 Securities used for hedging It is proposed that all derivative agreements remain with the old bank, but a decision has already been made to transfer the associated assets linked to derivative to the new bank, with the exception