Landsbanki - Icesave and Heritable
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Released 08 October 2008
Landsbanki, Icesave and Heritable
1. Acting on the advice of the Bank and Financial Services Authority (FSA),
and in light of announcements made by the Icelandic authorities in recent days,
the Chancellor has taken action today to protect the retail depositors in two
Icelandic owned banks: Icesave, a UK-based branch of Landsbanki and Heritable, a
UK-based banking subsidiary of Landsbanki. He has taken this action to ensure
the stability of the UK financial system. Savers’ money is safe and secure.
2. The UK authorities expect that Landsbanki will soon be declared in
default. Should that occur, the Chancellor has put in place arrangements to
ensure that no retail depositor will lose any money as a result of the closure
of Icesave. The Treasury and the Financial Services Compensation Scheme are
working with the Icelandic authorities and their Deposit Insurance Scheme to
ensure that depositors are paid back as quickly as possible. The Chancellor has
also spoken to the Icelandic Finance Minister about the importance of the
Icelandic authorities ensuring that UK depositors in Icesave are given the same
protections as depositors in Iceland and receive their deposits back in full
3. Arrangements are being put in place to ensure that all ISA customers of
Icesave will continue to benefit from the tax-free status of their accounts.
4. The Chancellor has also today taken steps to freeze assets of Landsbanki
in the UK until the position with respect to the future of the firm and UK
creditors becomes clearer.
5. Heritable is regulated by the FSA. The FSA has determined that Heritable
no longer meets its threshold conditions, and is likely to be unable to continue
to meet its obligations to depositors. The FSA concluded that it is in default
for the purposes of the Financial Services Compensation Scheme. The Treasury has
used the Banking (Special Provisions) Act 2008 to ensure a resolution that
preserves financial stability and provides protection and continuity of business
6. Heritable’s retail deposit business has been transferred to ING Direct, a
wholly-owned subsidiary of ING Group. ING Direct is working to rapidly ensure
that it is business as normal for all customers.
7. This action by the Tripartite Authorities protects savers’ money and
provides certainty for retail depositors. The transfer of the retail deposit
book has been backed by cash from HM Treasury and the Financial Services
8. The remainder of Heritable’s business has been put into administration.
Any retail depositors eligible to claim under the Financial Services
Compensation Scheme whose business has not been transferred to ING will be paid
out in full through the Financial Services Compensation Scheme.
9. This is the right course of action to protect savers, ensure financial
stability, and safeguard the interests of the taxpayer.
- These notes set out in further detail the arrangements announced today by
HM Treasury to safeguard deposits with Heritable.
- By orders made under the Banking (Special Provisions) Act 2008, all retail
deposits with Heritable have been transferred to ING Direct.
- Retail deposits with Heritable means the credit balances on the following
deposit accounts and retail bonds: retail Fixed Rate Bonds; 50+ Saver; 60 Day
Notice; 90 Day Notice; 120 Day Notice, Online Saver; Direct Saver and Easy
- ING Direct N.V. is a wholly-owned subsidiary of ING Group N.V., the Dutch
holding company of an international banking and insurance group, with branches
in London and elsewhere. The group has over 85 million customers worldwide,
and is one of the 20 largest financial institutions in the world.
- ING Direct already has over 1 million customers in the UK using its online
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Article Published/Sorted/Amended on Scopulus 2008-10-08 14:10:00 in Business Articles