Landsbanki buys shares in Arion Custody Services

A letter of intent has been signed whereby Landsbanki acquires new shares in Arion Custody Services hf. Arion Bank currently owns the entire share capital. The letter of intent is signed subject to due diligence and the approval of the regulatory authorities. Following Landsbanki’s acquisition of new shares in Arion Custody Services, the name of the company will be changed to Verdis.

Arion Custody Services is a service provider for Icelandic and international financial institutions and companies in the financial market. It offers customised and simple solutions for the custody of securities, back office and mutual fund administration.

According to the statement, Landsbanki and Verdis will make a service agreement whereby Verdis will handle the settlement and custody of securities and services for Landsbanki as well as Landsbanki´s subsidiary which operates mutual, investment and institutional investment funds.

The aim of the acquisition is to achieve rationalization. This will be accomplished by increasing automation as well as sharing employees and various operating factors. In addition, it is more efficient to develop expertise, operations and computer systems in one place.

The change will not result in any redundancies but employees in Landsbanki will be transferred to Verdis. The Landsbanki employees and their knowledge will make an important addition to the strong team currently at Arion Custody Services.

The representatives of Arion Bank and Landsbanki are in agreement to bring in more shareholders to Verdis in future with the aim of reducing their combined shareholding to below 50% within three years.

An agreement pursuant to the content of the letter of intent is expected to be signed by 30 April 2011.