First Icesave payouts made to British, Dutch savers: bank

7th December 2011, Comments 0 comments

The winding-up board of failed Icelandic bank Landsbanki has begun reimbursing savers who lost money in the collapse of its online branch Icesave, primarily British and Dutch savers, it said Wednesday.

"The winding-up board of Landsbanki Islands hf has made the first partial payments to priority creditors in the winding-up of Landsbanki Islands hf," it said in a statement.

"The total amount disbursed was equivalent to 432 billion Icelandic kronur (2.71 billion euros, $3.64 billion), which is close to one-third of the recognised priority claims," it said.

Landsbanki, the parent company of Icesave, failed in 2008 when Iceland's oversized financial sector collapsed.

The British and Dutch governments spent 3.9 billion euros ($5.5 billion) compensating 340,000 of their citizens who lost their savings in the collapse.

Landsbanki announced in September it had recovered sufficient assets to repay all of its "priority claims" and still have 13 billion Icelandic kronur (80 million euros, $114 million) left over.

Deals to use tax-payer money to refund the Icesave debt have been twice rejected in referenda so the Landsbanki assets are the only way Iceland can settle the row.

The bitter dispute, which has seen Britain use anti-terrorism legislation against the tiny nation, has also clouded negotiations on Iceland's ambitions to become a member of the European Union.

© 2011 AFP

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