Landsbanki Guernsey savers offered 30p in the pound

Landsbanki Guernsey savers have been offered 30p in the pound by administrator Deloitte & Touche for the £117 million they had on deposit. 

The administrator said the chance of securing more cash for the 2,000 consumers with offshore accounts at the Icelandic-owned bank was good but it depended on selling commercial loans and recovering assets from parent banking group, Landsbanki. 

‘While depositors may be disappointed, they can be assured the administrators are working very hard to secure repayments as soon as possible,’ said Rick Garrard, joint administrator from Deloitte & Touche. ‘The prospects for further repayment to depositors are good but the repayment of substantial extra sums is dependent on a recovery of certain illiquid assets.’ 

Garrard said talks had begun with a number of parties interested in buying commercial loans from Landsbanki, adding due diligence would begin on 10 October. The chances of recovering deposits from the bank’s Icelandic parent were unclear and depended on talks between the governments of Iceland and the UK, he said. 

Selling the Landsbanki Guernsey bank whole was the best option for savers but was less likely to happen, Garrard said. The offer to savers was rushed through the courts without sufficient time to fully asses what was owed to the bank's creditors. 

The States of Guernsey has no compensation scheme in the event of a bank or financial institution collapsing. Landsbanki Guernsey was put into administration after the Icelandic government took over its parent bank, Landsbanki. 

Deloitte & Touche said depositors would be sent a letter later today with details of how to withdraw cash from the bank. Details will also be posted on the Landsbanki Guernsey website later today.