57 employees of Arion Bank made redundant

Fifty-seven employees of Arion Bank were made redundant today, 38 of whom worked at the Bank’s headquarters and 19 were employed elsewhere. The Directorate of Labour has already been informed.

These redundancies are the latest phase in the on-going process of streamlining the Bank’s operations. Making redundancies was a difficult step but it was a necessary response to circumstances. No further such measures are planned.

Arion Bank has reached an important juncture in its operations. Debt recovery activities are coming to a conclusion, while work relating to corporate restructuring and the aftermath of the financial crisis in Iceland is slowing down.

It is clear that the Icelandic financial system is too costly to run. Financial companies in Iceland are simply overstaffed given the size of the sector. This also applies to Arion Bank.

Furthermore, demand for new loans and investments is currently at a low. Although the Bank’s financial results have been satisfactory, a large proportion of these profits originates from the revaluation of the corporate banking division's loan portfolio. Profitability on regular operations is not satisfactory in the long term. Arion Bank has consolidated its position on the market since it was founded but these latest measures are necessary to strengthen the Bank and to improve its ability to compete in the future.

It is with regret that the management of Arion Bank has had to resort to these unavoidable measures.