Kaupthing Edge, Should I Avoid?

altocumulus

poppy10 wrote: »

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.

But the compensation fund is not held by the government.... It is a private fund....
The Icelandic Deposit Guarantee Scheme
Iceland as a member of the European Economic Area (EEA) has adopted all EU Directives making Iceland an integral part of the European Internal Market for financial services and consumer protection. The Icelandic deposit guarantee scheme is based on the EU directive 94/19/EC of the European Parliament and of the Council. The Directive ensures that the main elements of the deposit guarantee schemes are harmonized across the European Union (EU) and EEA (EEA includes Iceland, Norway and Liechtenstein). Thus, Iceland is legally obliged, in the same way as countries which are members to the EU, to provide the minimum deposit protection of EUR 20,000 as stated in the EU directive on Deposit Guarantee Schemes.

http://www.tryggingarsjodur.is/

stevetodd

poppy10 wrote: »

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.

They should be ok then because Russia has just agreed to lend Iceland 5 Billion Euros

prudryden

Iceland has two industries - banking and fish. Your money might be safer in one of their fishing boats.

papolo

I found this article on their website http://www.kaupthingedge.co.uk/about/importantinformation.aspx

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.

prudryden

A fitting epitaph - engraved on an ice slab - melting as we speak.

poppy10_2

Landsbanki has gone into receivership

http://ftalphaville.ft.com/blog/2008/10/07/16734/landsbanki-in-receivership/

All those who kept their money in Icesave, get ready to apply to the FSCS for your money back; and wait...... :money:

prudryden

poppy10 wrote: »

Landsbanki has gone into receivership

http://ftalphaville.ft.com/blog/2008/10/07/16734/landsbanki-in-receivership/

All those who kept their money in Icesave, get ready to apply to the FSCS for your money back; and wait...... :money:

And wait, and wait, and wait. Interesting to hear if interest will be paid on deposits - let us know if anyone hears.

papolo

poppy10 wrote: »

Landsbanki has gone into receivership

http://ftalphaville.ft.com/blog/2008/10/07/16734/landsbanki-in-receivership/

All those who kept their money in Icesave, get ready to apply to the FSCS for your money back; and wait...... :money:

It is a shame to hear this news about Icesave.

Kaupthing edge is still sound.

Dave_Braddan

The Isle of Man Depositors Compensation Scheme only covers each depositor to a maximum of £15,000. However the Kaupthing Bank web site states that
" Not only are all deposits held with KSFIOM covered by the Depositors Compensation Scheme contained in the Isle of Man Banking (Compensation of Depositors) regulations 1991, all deposits are also fully guaranteed by our parent company Kaupthing Bank hf – with this guarantee customers have peace of mind that their savings are fully secured."

I am not sure if this guarantee is also given in the UK or if it is worth the paper it is written on. I have a considerable amount in the IOM branch and following my discussion with the branch this morning I will be sticking with them but I will be watching the situation closely. Keep your nerve until your finger nails have all gone. It's people like us that are not helping to alleviate the panic ! Note I included myself in that last statement.

occamsrazor

Dave_Braddan wrote: »

I have a considerable amount in the IOM branch and following my discussion with the branch this morning I will be sticking with them.

Hi,

See this thread (which has gotten lost amongst the other 100s of Icelandic threads)

http://forums.moneysavingexpert.com/showthread.html?t=1203227

Can you expand more on whether you learned anything useful from your discussions this morning? I have to say the Kaupthing IOM branch people are a super bunch. The service has been excellent, I feel sorry they are being caught up in all this.

Cheers,

Ben