Kaupthing Edge, Should I Avoid?

sideysid

I have withdrawn my funds from KE, simply for the fact I've been away from the UK travelling for the last year and will be here in Australia until next year and need instant access to my savings.

I have every faith that the money would be covered, but relying on family etc to convey correspondance with time differences/distance etc is just not viable for me.

nicholbb

donaldtramp wrote: »

Come on, someone out there must know whether or not interest is covered by the bank protection scheme.

Actually as this is has never happened it is an unknown situation. There are a number of factors, the most importnant is the terms and conditions and how they are interpreted.

Any interest you've earned before a bank goes into administration would be covered it wouldn't go back to your initial investment. You would also probably get the interest from the time the bank goes into administration up to the point of liquidation.

For Term deposits it would get really interesting - because it depends when the interest is actually earned (is it daily, monthly, yearly etc) and does this differ to when your account is actaully credited. Also the T&C normally state that the money needs to there for a set time, so if the bank goes into liquidation before the term the contract is not fulfilled (yes I understand it wouldn't be your fault) so may not be covered. There would need to be a precident first (which is unlikely).

donaldtramp wrote: »

If it isn't guaranteed what's the point of me lending MY money to them?? I don't expect to have to take risks when depositing money in banks.

Any investment is a risk. Putting your money in a bank is just a low risk investment in comparison to stocks, shares or buying Zimbarbway Gilts (don't know if they exist).

campins

Saving accounts that pay interest monthly are going to offer savers a better bailout situation than those which pay out annually. Makes you wonder if someone in the bankng world knew that this sort of thing was going to happen. :undecided

martinman3

campins wrote: »

Saving accounts that pay interest monthly are going to offer savers a better bailout situation than those which pay out annually. Makes you wonder if someone in the bankng world knew that this sort of thing was going to happen. :undecided

KE Fixed term deposits pay their interest on maturity which is worse still if the term is greater than 1 year. I doubt if interest would be paid by FSCS up to the point of insolvency if it didn't have to.
Paying interest on maturity is good for KE if they are short of foreign exchange in the short term.

Vectra

Here read this message from Bank:----

The past few weeks have been unusual and uncertain in the world of banking so we want to tell you about our financial stability and the security of your savings.


Message from Sigurdur Einarsson, Chairman, Kaupthing

"Over the years we have built a strong and well-diversified bank - Kaupthing has a great franchise. We have some of the strongest capital ratios in European bank sector (capital adequacy ratio of 11.2% and Tier 1 ratio of 9.3%) and a good liquidity position and a loan to deposit ratio of around 50%. We've got good asset quality and a highly diversified loan portfolio. In fact, 70% of our business is outside Iceland. Kaupthing has and continues to manage its business prudently and, with our strong fundamentals, we are naturally concerned when we hear malicious rumours and sensationalism about Kaupthing being reflected irresponsibly. We ask people to look at the facts, not rumour and innuendo."


Your Financial Protection

Your funds are deposited with Kaupthing Edge, which is a UK bank and regulated by the Financial Services Authority here in the UK. With effect from Tuesday 7 October, your first £50,000 of deposits are protected by the UK Financial Services Compensation Scheme (FSCS) as with any other UK Bank. Your deposits are permanently held here in the UK.
This means funds deposited with Kaupthing Edge UK are deposited with Kaupthing Singer and Friedlander Ltd (KSF), a separately incorporated UK company. KSF shares are owned by a single shareholder, its parent Kaupthing Bank hf. This is a similar structure as Abbey, who are wholly owned by their parent company, Santander.


Kaupthing Edge: a UK Bank

KSF is a registered UK bank, with a UK banking license, and as such we are required by the FSA to hold adequate capital resources, and sufficient liquidity. The same FSA framework applies to KSF as to any other UK incorporated bank. KSF has a strong balance sheet with significant financial resources, a good liquidity position and a good loan to deposit ratio.


Icelandic Stock Exchange

The suspension of dealing in Icelandic Bank stocks does not affect the protection of your deposits as described above.
The Icelandic Stock Exchange has decided to suspend shares in a number of Icelandic financial institutions, including our parent company, Kaupthing Hf. As you would expect, we cannot comment on this decision but in their statement they have said that there are "..... uncertainties regarding the issuers (which) are likely to disrupt normal price formation, and as such, any trading could be detrimental for investors. Furthermore, this decision has been made to ensure equal treatment of investors, as the Issuers cannot ensure confidentiality of price-sensitive information which has not been made public."


On UK Financial Services Compensation Scheme (FSCS) going up to £50,000:

Effective from Tuesday 7 October 2008 the UK FSCS limit will increase for bank deposits from £35,000 up to a total of £50,000 for each customer's claim. As a UK bank, we welcome this increase of the Financial Services Compensation Scheme, as it helps to give customers further peace of mind about their savings.


On Lehman and US Mortgage Market:

Due to our conservative business model, Kaupthing has minimal exposure to either Lehman or the US sub prime mortgage market.


On Glitnir:

The recent events of the Icelandic Government purchasing a 75% stake in Glitnir, a small Icelandic bank, has little impact on Kaupthing - other than the fact that we were encouraged to see the Government act quickly and decisively to strengthen and support the Icelandic financial system.


Credit Rating Agencies:

In recent months, many banks have been downgraded due to market conditions. In line with this, we have recently been downgraded by Fitch. We anticipated this downgrade and remain comfortable with the quality of our loan portfolio which is well diversified geographically and by industry sector. Kaupthing remains a profitable and very liquid bank.

edwinac_2

Vectra wrote: »

Message from Sigurdur Einarsson, Chairman, Kaupthing...

Your Financial Protection

Your funds are deposited with Kaupthing Edge, which is a UK bank and regulated by the Financial Services Authority here in the UK. With effect from Tuesday 7 October, your first £50,000 of deposits are protected by the UK Financial Services Compensation Scheme (FSCS) as with any other UK Bank.

Your deposits are permanently held here in the UK.

This means funds deposited with Kaupthing Edge UK are deposited with Kaupthing Singer and Friedlander Ltd (KSF), a separately incorporated UK company. KSF shares are owned by a single shareholder, its parent Kaupthing Bank hf. This is a similar structure as Abbey, who are wholly owned by their parent company, Santander.

Noteworthy is that Einarsson avoids mentioning the possibility of novation...

noh

edwinac wrote: »

Noteworthy is that Einarsson avoids mentioning the possibility of novation...

Also noteworthy is that the novation clause no longer appears to be in the T+Cs (unless I missed it). This is a new set of T+Cs dated 6th October 2008
http://www.kaupthingedge.co.uk/Includes/PDF/tandcs.pdf

Nigel

alared

It really amazes me that people on this thread and others are arguing how safe KE and Iceland banks are.

They are clearly unsafe,the whole country`s economy is UNSAFE.
The government are going to nationalise the banks.
Big deal

---

the whole country hasn`t got enough money to cover any default if even one bank goes under.
Do you think Brown and Darling are going to be concerned about Iceland (who are not even in the EU) when they`ve got their own banks to worry about?
I dont think so.
And please don`t keep telling me that the first £50k is covered by the FCSA because that`s another theory that`s never been tested.
It`s about time this country started to be concerned about their own citizens and put them first,just like the Germans,Irish,Spanish,Danes,etc.

papolo

alared wrote: »

It really amazes me that people on this thread and others are arguing how safe KE and Iceland banks are.

They are clearly unsafe,the whole country`s economy is UNSAFE.
The government are going to nationalise the banks.
Big deal

---

the whole country hasn`t got enough money to cover any default if even one bank goes under.
Do you think Brown and Darling are going to be concerned about Iceland (who are not even in the EU) when they`ve got their own banks to worry about?
I dont think so.
And please don`t keep telling me that the first £50k is covered by the FCSA because that`s another theory that`s never been tested.
It`s about time this country started to be concerned about their own citizens and put them first,just like the Germans,Irish,Spanish,Danes,etc.

You are talking rubbish!

Do not believe everything you read in newspapers, deeper investigation is needed to make a conclusion.

If you have no deep understand about how banks operate and how they do business then it will be better if you shut up and stop making stupid comments about the safety of KE and icelandic banks.

poppy10_2

alared wrote: »

the whole country hasn`t got enough money to cover any default if even one bank goes under.

The Icelandic government has only €4.5billion in reserves - estimates are that it needs to raise at least double that by the end of the year just to maintain cashflow, let alone bailing out any banks. They are screwed, don't expect them to pay up anything.