More than three years after the Icelandic banking collapse, Kaupthing Singer & Friedlander (KFS) says it has repaid nearly all of the £4.6 billion owed to non-preferential creditors. Although all retail depositors have already been paid in full by the Financial Services Compensation Scheme, UK charities and councils who put savings into the bank have faced the continued possibility of heavy losses.
However, according to the bank’s administrators, £3.36 billion of the £4.6 billion still owed (73p for each pound) has now been given back to unsecured creditors. By the end of the year, it is expected that creditors will receive a final payback of between 79p and 86p for every pound invested.
The groups put their savings in KFS, which was based in the UK but owned by Kaupthing in Iceland, due to tempting interest rates. However, the credit crunch of 2008 brought a swift end to the Icelandic banking model, with Kaupthing, Glitnir and Landsbanki all collapsing and defaulting on a total of $85 billion in debt.
Speaking to the Financial Times, Arlingclose Partners director Mark Horsfield said the recovery of funds is going “better than we expected”. He added that most UK local authorities have also learnt their lessons and would not invest again with non-UK banks.