FSCS gears up to assist Icesave's UK branch customers
7th October 2008
In the light of the current uncertainties, the Financial Services Compensation Scheme (FSCS) is today gearing up in case it needs to assist approximately 300,000 savers at Icesave.
Icesave is the UK branch of Landsbanki Islands hf (trading here under the registered name Icesave). It is an EEA bank that is authorised by the Fjármálaeftirlitið (FME), the financial services regulator in Iceland. The Financial Services Authority in the UK has reported that Icesave is now expected to go into insolvency proceedings in Iceland and this would trigger an FSCS default.
Eligible savers with Icesave are protected by the Icelandic Depositors' and Investors' Guarantee Fund (IDIGF), up to a limit of the first 20,887 euros of their deposits. As an Icelandic bank Icesave is not automatically a member of the FSCS, but it opted to become a 'top-up' member. This means that eligible retail savers with Icesave's UK branch whose savings exceed the Icelandic limit would benefit from top-up compensation from the FSCS covering the amount over the Icelandic limit up to the new FSCS compensation limit for deposits of £50,000.
If the default is triggered as expected, FSCS will contact all UK savers directly with details of how to apply for compensation. Further announcements will follow and we will keep this page updated.