Depositors

MONEY which councils invested in Icelandic banks which then collapsed during the credit crunch is pouring back into authority coffers.

And individual savers who saw millions of pounds frozen by Iceland's financial collapse are also seeing far higher returns than had been feared.

Yesterday, a ruling in the country's supreme court led to East Staffordshire Borough Council announcing that it expected to get back "almost all" of the money it invested in Landsbanki.

Amber Valley Borough Council revealed it had already received 73% of the £1 million it had invested in Kaupthing.

And investors whose accounts were passed from a Derbyshire Building Society subsidiary to an offshore Icelandic bank before its collapse reported they would get much more cash back than expected.

Savers with Derbyshire Offshore were left out of pocket after the building society passed on their accounts to Icelandic bank Kaupthing, Singer and Friedlander (KSF) Isle Of Man.

Among those left panicking by the crash were Leonard and Kathleen Orton, now aged 79 and 84, of Alresford, Hampshire, who feared they would lose £190,000 of their £290,000 investment.

But Mr Orton said the future was now looking brighter. He said: "We are expecting to have had 80% back by the end of this month and 90% by 2014.

"Obviously we would prefer to get 100% with interest but you can't help but feel pleased."

Yesterday's Icelandic Supreme Court ruling means that Landsbanki, another of the collapsed banks, will give priority to UK investors when it hands back people their cash.

One of those was East Staffordshire Borough Council, which was due to see its investments mature in 2009.

Chief executive Andy O'Brien said: "This judgement means that UK authorities' claims have been recognised as deposits with priority status over other creditors' claims.

"We anticipate that our investments will be paid back first and we should recover almost all of the money we deposited with Landsbanki."

The authority also had £2million invested in Kaupthing, Singer and Fried- lander and says more than half of this has been recovered.

A spokesman for Amber Valley Borough Council said 73% of the £1 million it had invested in KSF had already been returned and that it was due to get 84%.

Spokesmen for depositors who lost money in the collapse of Guernsey’s Landsbanki branch and the Isle of Man’s Kaupthing Singer & Friedlander subsidiary expressed disappointment at a decision on Friday by an Icelandic court, which will ensure some other losers in the collapse of Iceland’s major banks will get back most of their money – but they, once again, will not. ...

Iceland will start paying out as much as $11.4 billion in foreign depositor claims after the country’s top court upheld an emergency law that leaves bank bondholders in the lurch and protects ordinary account holders. ...

Comment posted by anrigaut:

"leaves bank bondholders in the lurch and protects ordinary account holders." It also leaves in the lurch the ordinary account holders with Kaupthing's Isle of Man subsidiary Kaupthing Singer & Friedlander (IoM) who, 3 years after the collapse of their bank, have so far recovered 73.6% of their deposits and were counting on the parental guarantee given by Kaupthing (Iceland), and recently upheld by the Icelandic Supreme Court, to cover the eventual shortfall in their bank's ongoing liquidation. But as the claim under this guarantee does not, it seems, benefit from the priority status accorded by the emergency law to depositors, the present ruling will push them to the back of the queue along with other unsecured creditors and reduce the value of their claim. These depositors have been helped nowhere - not in the Isle of Man, not in the UK (supposed to represent the IoM in negotiations with Iceland), and not, now, in Iceland.They remain the only retail depositors in Kaupthing not to have been fully compensated by government intervention, despite acknowledged regulatory and governmental failures in dealing with the bank’s insolvency

UK fights bondholders to retain 'priority' status over £5bn Iceland cash
British councils and the UK bank bail-out fund will defend their right to get back the entire £5bn they lost in the Icelandic banking crash against a group of hedge funds and other creditors who claim they should get a share of the money. Bondholders owed $4bn (£2.5bn), including hedge funds Arrowgrass, GLG and Varde, are challenging the "priority" status awarded to the local councils and the bail-out scheme by one of the banks, Landsbanki, in a test case due to start on Thursday in the Supreme Court of Iceland. (Continues)

Bradford & Bingley IOM is transferring accounts to Alliance & Leicester IOM. However not to worry, there is a Parental Guarantee from Santander and Aspden has already publicy commented:-

"Ha ha ha ha ha ha ha ha ha ha. Oh dear me sorry. I meant Ha ha ha ha ha ha ha. Oh no don't you'll just me going again. I mean the Isle of Man Government has ensured that there is a Parental Guarantee and we are committed to Ha ha ha ha ha ha ha......"

The UK FSA has confirmed with effect from 31/12/2010, the new deposit compensation limit for the UK will increase from 50,000 pounds to 85,000.00 pr person, per authorised firm.

The revisd sum is the sterling equivalent of the 100,000 euro compensation limit which comes into force in all European Economic Area (EEA) Member states at the end of the year.

The Dutch Finance Ministry said on Thursday that Iceland, Britain and the Netherlands had reached a deal on repayment of about $5 billion owed by Iceland to the other two countries for deposits from failed bank Icesave.

Iceland will pay a fixed interest rate of 3.0 percent on the money it owes to the Netherlands, and will pay a rate of 3.3 percent on the money owed to Britain, the Dutch Finance Ministry said in a statement.

The 2nd half Alan Bell's testimony to the Tynwald Select Committee.

Foreign creditors of Old Kaupthing Bank will take the lion’s share of Arion Bank (formerly New Kaupthing). RUV reports this will be officially announced by the bank some time today.
The Old Kaupthing resolution committee has been working hard to negotiate a consensus among creditors before yesterday’s deadline expired. The two main options on the table were for the Icelandic government to hold on to Arion Bank for the time being with Old Kaupthing creditors having options on 90 percent of the bank later; or for creditors, the vast majority of whom are not Icelandic, to take 87 percent of the bank straight away and leave the government with 13 percent.

According to RUV sources, Old Kaupthing creditors have decided to take the second option and take control of Arion Bank. Arion will therefore be a foreign-owned bank as of today – provided that the country’s financial regulator and competition authority approve the move.

It looks likely that from today, both Arion and Islandsbanki will be foreign-owned banks in Iceland and of the three big players, only New Landsbanki will remain a nationalised institution.