ING rescues Kaupthing Edge and Heritable Bank's UK savers

08 October 2008 / by Rachael Stiles
The Treasury has announced that more than £3billion of deposits held by more than 180,000 UK savers in Icelandic banks Kaupthing Edge and Heritable Bank will be protected by an acquisition deal with ING Direct.

British savers who have deposits in the two banks can now rest assured that their money will be protected now that will own the two banks' savings deposits

As a subsidiary of Netherlands-based ING Group, ING Direct savings accounts are protected under the Dutch Investor Compensation Scheme which provides a €100,000 guarantee (approximately £77,700).

"ING Direct is in a position of strength," said Johan de Wit, chief executive of ING Direct UK. "We are very pleased to have been able to take such rapid and decisive action that has provided Heritable Bank's customers, and those of Kaupthing Edge, with the reassurances they need. We are working to rapidly ensure that it is business as usual for all customers."

ING will acquire £2.5billion of deposits held by 160,000 UK customers of Iceland's biggest bank Kaupthing Edge's internet-only savings arm, and a further £538million of savings held by 22,200 British savers of Heritable Bank, which was run by the now nationalised Landsbanki, owner of Icesave.

The deal will see a similar situation to when Spain's biggest bank, Santander, took over Bradford & Bingley's savings accounts when it was broken up and parts of it were nationalised recently.

While Kaupthing was a separate bank, Heritable was owned by Landbanksi, so its savers will be relieved not to find themselves in the same position as customers of it's other saving arm, Icesave, this week as they feared never seeing their money again until the UK Government announced it would guarantee compensation for British depositors.

Customers with Heritable Bank savings accounts, thus far frozen since it went into administration, will be able to access them again through ING shortly. In a statement, the Treasury confirmed that they would have access again soon: "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."

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