Borrowers with property loans in foreign currencies have the option of paying ISK 5,000 a month for every ISK 1 million borrowed

• Borrowers with property loans in foreign currencies can pay ISK 5,000 a month for every ISK 1 million borrowed
• No forced property sales will take place in 2010
• The bank's solutions to help customers with property loans in foreign currencies will be available until 1 September

Arion Bank has decided that borrowers with property loans in foreign currencies, with a mortgage in property, will be given the option of paying ISK 5,000 a month for every ISK 1 million originally borrowed to help avoid defaulting on their loans. For example, a customer with a loan in foreign currencies of ISK 13 million would pay ISK 65,000 a month. Arion Bank wishes to help its customers in this way until the Supreme Court makes a formal decision on the bank’s loans.

In light of the uncertainty surrounding loans in foreign currencies Arion Bank has also decided to extend the solutions devised to help its customers by two months until 1 September 2010. The bank also wishes to confirm that if, at a later date, the Supreme Court pronounces a judgment which is more advantageous to borrowers, those customers of the bank who have already taken advantage of the bank’s solutions will still be entitled to benefit from the later judgment. The bank furthermore wishes to point out that it will not be holding any forced property sales this year.

Customers can apply to change their monthly payments as described above from 8 July. The changes will come into effect on 1 August.

Arion Bank hopes that this temporary solution will be prove beneficial to borrowers with property loans in foreign currencies until the issue is finally resolved. The bank hopes that a conclusion can be reached as soon as possible and apologises for any inconvenience caused.