Icelandic bank savers expect to get nearly all their money back

Posted 12/11/2011 - 08:06 by tonycBrisbaneOz

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2011-11-08 14

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%.