Iceland

edwinac_2

opinions4u wrote: »

lol won't mention the additional risk of the Icelandic provider's currency hedge then.

I was thinking that too.

The Krona has slumped nearly 40% over recent months.

How much further can it drop and what would it mean for Icesave and Kaupthing Edge?

Many of their loans - both commercial and retail - were made in GBP and EUR, but these too are turning sour.

When the XL group collapsed earlier this month, Icesave's parent, Landsbanki, admitted it is owed €200m from a loan taken out by XL.

Worrying times.

noh

XL did owe 207M Euro to Landsbanki but that loan is guaranteed by Eimskip the previous owners of XL.

http://www.lloydslist.com/ll/news/eimskip-investors-may-acquire-e207m-loan/20017569463.htm

Plasticman

I have a savings account and an ISA with Icesave. I'm not in any rush to withdraw the cash. While they are at risk from commercial loans 'turning sour' they do not have the exposure to US / UK domestic mortgage market that brought Norther Rock, B&B, HBOS etc to their knees.

SouthCoast

they do not have the exposure to US / UK domestic mortgage market

Do you have an independent source for this information?

I guess that nobody knew about the XL connection until they went 'pop'.

Nick_C

The problem is, the guarantee schemes themselves are pretty meaningless, only Governments can afford to bail out the banks. HMG will continue to bail out every British bank unless (until?) the country itself goes bust. Would the Icelandic government care so much about protecting the savings of foreign depositors?

I wouldn't risk any foreign bank right now.

luvpump

I have to say this whole thing is worrying me !!.. I Have 20k in a 6 month bond & another 10k instant access, It is a LOT of money to me !! my understanding is that even tho its in a bond i can still withdraw it if i want, with obvious loss of interest..
I also understand that they can should they want too transfer the funds from there u.k subsidiary to the Icelandic one ?? In effect that would make the FSCS redundant & go to the Icelandic scheme ?? & what impact the sliding krona has on all of this makes it even more confusing for me
Although apparently some middle east Bank has ploughed a lot into them very recently, I really dont know what to do for the best..

edwinac_2

noh wrote: »

XL did owe 207M Euro to Landsbanki but that loan is guaranteed by Eimskip the previous owners of XL.

Hmm.. that article of 10 Sept does say that "Eimskip investors may acquire E207m loan", but maybe that's not important..

On 12 Sept, the FT reported that:

"Bjorgolfur Gudmunsson, the West Ham owner and chairman of Icelandic bank Landsbanki, and his son Thor, have agreed to underwrite the claim and delay its payment.
[..]
The Gudmunssons sit on the board of both Landsbanki and Eimskip, and seem willing to take a personal hit to their finances rather than see either of these two companies suffer from XL’s fall."

There are too many 'ifs', 'buts' and 'maybes' to be comfortably reassured.

noh

The loan is guaranteed by Eimskip.
Eimskip investors have agreed to underwrite the claim so as to minimise the effect on the company.
Landisbanki get their money back either directly from Eimskip or from Eimskip investors.

sheslookinhot

Swipe wrote: »

It's in a 2 year fixed rate bond. I would withdraw it if I could.

You can withdraw it. You would just lose the interest.

Swipe

sheslookinhot wrote: »

You can withdraw it. You would just lose the interest.

I asked and was told it's not possible until it matures