The state has handed a new international mandate to City PR firm FD to explain how it is reviving the entire banking system.
On Monday the Icelandic government, with the support of FD, announced a £1.29bn injection of capital into the banks, to fund the creation of three new institutions – Islandsbanki, New Kaupthing and New Landsbanki.
‘It is a hugely interesting and exciting brief,’ said FD’s UK CEO Geoffrey Pelham-Lane. ‘We will be supporting the re-establishment of an entire banking system in the country, involving a vast range of stakeholders.’
These key stakeholders include international creditors, such as the UK and Dutch governments, as well as potential customers and investors in the new banks.
The move follows a disastrous 2008, which saw the country’s top three lenders, Landsbanki, Glitnir and Kaupthing, collapse last October. Creditors of these failed banks will be offered equity stakes in two of the new institutions as compensation.
FD will work with the Icelandic government on an ongoing project basis. Pelham-Lane said: ‘This is a major step in the re-establishment of a strong Icelandic banking system, but it is important to recognise this is the first step.’
With some executives based in Reykjavik, FD will also give strategic advice on the longer-term goal of restoring international credibility to the Icelandic economy.
Pelham-Lane and Andrew Walton, MD of its financial communications practice, will lead the account from London, with support from its international office network.
The project was handed to FD without a competitive pitch, based on its reputation.
The Icelandic crisis
June 2009 Iceland agrees to pay back the £2.3bn that the UK Government gave UK investors who lost money
April 2009 Centre-left coalition wins general election
November 2008 IMF approves £1.4bn loan
October 2008 Government takes control of all three of the country’s major banks
April 2008 Icelandic government says hedge funds are attacking its financial system