Iceland Warms Up Its Welcome

Things being what they are, I was a little surprised to be given the opportunity to have a telephone interview with Bjarni Armannsson. He's the 38-year-old CEO of Iceland's Glitnir Bank, the second-largest by assets in Iceland, formerly Islandsbanki. (I just turned 40 and manage people's money in my pajamas on the couch. I will finish that conversation with my therapist.)

I was more excited about the conversation after it was over, because what we talked about validated my long-term theses on this country, despite its recent economic troubles. The situation is much the same as with Vietnam: Awareness and broad exposure are the way to go for the time being.

But the major takeaway from the call was the encouraging news that the CEO of one of the big three banks in a tough-to-access country is willing to do what it takes to make investing there easier. That he even gave me an interview speaks to the idea that business leaders in Iceland want the country to be more visible and have a larger footprint in the global economy. I believe over time that this will play out, and it's the major reason I believe Iceland, long term, is a viable investment destination. (Right now, the easiest access to Iceland is the Stockholm listing of Iceland's largest bank, Kaupthing (KPBIF). It has sold off significantly in the last couple of months but seems to have settled down for now.)

Right now, though, there is fear that the banks have problems. Handily enough, Glitnir just reported solid first-quarter earnings. After-tax profit tripled from a year ago to ISK 9.1 billion, with 60% of the bank's profit generated outside of Iceland and 11% of that profit coming from operations in Norway. This type of global diversification is very common with Icelandic banks. These growth numbers and the foreign diversification of revenue refute the notion that this bank is in trouble, and these positives are in play at Iceland's other two big banks.

Because Armannsson is a highly visible figure -- he appears regularly on CNBC Europe and other European financial news networks -- I tried to focus on questions that I don't think he's asked very often. (If you're interested, videos of his frequent interviews are available on Glitnir's Web site.)

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Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, Ariz., and the author of Random Roger's Big Picture Blog. At the time of publication, Nusbaum had no positions in any of the securities mentioned in this column, although positions may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback; click here to send him an email.