Solutions for your company

We accommodate corporate customers who seek our help in unexpected circumstances.

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Companies who bank with Landsbankinn can take advantage of various solutions offered to resolve the impact of Covid-19 on operations. We encourage customers who expect to have difficulties meeting their payment obligations to contact the Bank soonest to review possible solutions and receive appropriate advice.

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Agreement on temporary payment deferral for companies

In accordance with an agreement between domestic financial undertakings and pension funds, which is part of the response to the economic ramifications of Covid-19, companies can now apply to defer payments on loans for up to six months. Companies should apply to their main bank of business. Other solutions for companies have already been introduced or are in the works.

The parties to the agreement are Landsbankinn, Arion Bank, Íslandsbanki, Kvika, Lykill, the savings banks and pension funds.

The agreement is intended to facilitate quick and co-ordinated processing of individual cases and contribute to equal standing, both of lenders and companies. The agreement is valid throughout June 2020 and includes extension provisions if circumstances demand.

More about the agreement (Icelandic)

The agreement provides for the following:

  • Companies can apply to defer payments for up to six months with their main bank of business or savings bank, which assesses whether the company meets the requirements of the agreement.
  • The agreement is designed for operating companies and does not extend to holding companies.
  • To meet the requirements of the agreement, company operations must have been healthy and suffering temporary loss of income leading to operating difficulties. The company may not have been in arrears 60 days or longer at the end of February 2020 and have taken advantage of the government’s solutions in response to the pandemic.

Payment deferment in numbers - example

Company applies for a 4-month deferral of instalments and interest payments:

  • Company is liable for ISK 120 m over 20 years with 6% non-indexed interest.
  • Monthly instalments on the principal amount to ISK 500,000 (ISK 120 m / 240 months).
  • Monthly interest payment is ISK 600,000 (ISK 120 m / * 0.06 / 12 months).
  • Monthly instalment on the principal plus interest is ISK 1.100.000.
  • Deferment of instalments and interest for 4 months adds up to ISK 4.400.000. This amount is added to the principal and the term of the loan extended for 4 months.
  • Once the 4 months have passed, payment resumes and the term of loan is again 20 years.
  • The principal has increased by the amount of interest during the period (ISK 2.4 m) and is ISK 122.4 m.