Iceland’s Kaupthing Bank has called off its takeover of the Dutch investment bank NIBC because of the ‘instability on financial markets’. On Wednesday morning the bank’s CEO Michael Enthoven announced his resignation.

The bank announced last August that it was prepared to pay the €3bn for NIBC, a ‘surprisingly high’ price at the time, reports the Financieele Dagblad website on Wednesday.
In the NIBC statement published today, Enthoven says: ‘Together with Kaupthing we agreed that the current market conditions bring the benefits of the acquisition under pressure and don’t form a solid base on which to build a combined future…
‘Jurgen Stegmann [chief risk officer] and I recognise the need for the bank to adapt its business model in the new circumstances and believe that this is the right time for a change of leadership.’
NIBC said that its shareholders (led by US venture capitalist JC Flowers) support the decision to terminate the takeover and will invest €300m of new capital into the bank to strengthen its position.
The Dutch bank on Wednesday announced provisional net profit of €235m in 2007, up 1% on the preceding year. But the profit for shareholders is €91m, considerably lower than €243m in 2006.