Joint administrators Lee Manning (left) and Rick Garrard
LANDSBANKI Guernsey depositors will get more of their savings back in the new year, the bank’s administrators have confirmed.
Joint administrators Rick Garrard and Lee Manning released a statement yesterday announcing that they intended to pay a third distribution to creditors of between 11 and 12.5p in the pound in January.
This means depositors will have received between 66% and 67.5% of their savings back.
The administrators now also believe that savers might get more than 90% of their money back – after having previously said it would require ‘external intervention’ to recover that much.
‘The ultimate recovery for creditors is now estimated by the joint administrators to be between 85 and 91p in the pound,’ they said.
‘The increase in the recovery range reflects the largely successful realisation of assets in 2009 driven, in part, by better than feared market conditions and the intense efforts of the administration team.
‘However, it should be noted that these estimated returns are still subject to a wide range of factors primarily connected to the UK residential property market, many of which are outside of the joint administrators’ control, which may result in the actual return being lower or higher than this range.’
The administrators said they were currently waiting for the completion of a further significant asset sale and the receipt of the second distribution from Heritable Bank Plc, which is also in administration.
They will write to all Landsbanki creditors in early January with details of the third payment sum.
The administration of the bank has also been extended until 6 January 2011.
‘The key reason for the extension of the administration is to ensure the optimal realisation of the bank’s remaining assets,’ they said.
‘The joint administrators anticipate being able to make further distributions in 2010 but note that the pace of further realisations is now largely dependent on the successful development and sale of UK residential property sites and the run off of the Heritable Bank Plc UK residential mortgage book while conditions for the sale of whole loans or developments remain very weak.
‘The joint administrators continue to pursue prudently the bank’s claims in Iceland with the assistance of the States of Guernsey.’
Article posted on 18th December, 2009 - 11.30am
34 Article Comments
Landsbanki. Full marks to joint administrators and others to aim for max repayments in these difficult times. Guernsey’s image will surely benefit.
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They could equally get less than 90%, dear Joel, despite your misleading headline. Actually, as low as 85%, and possibly less, depending on market conditions if you fully read the press release. You failed to report this, altogether.
Independent “journalism” in Guernsey is probably a wishful thinking , anyway.
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At this moment 1600 depositors are 45% down on their deposits, some 15 months after Landsbanki Guernsey went into administration. 600 of those are Guernsey Taxpayers. In January 2010 it looks as though they will receive a further 11-12.5% which means they are still 32.5-35% down on their original deposits. To receive up to 85-90% could take a number of years depending on market conditions and a number of factors. No I’m sorry to say it will be years before Guernsey’s reputation recovers from this, being the only Government in the Western world to totally fail to assist their depositors. Perhaps if they decided to make up any final shortfall, they may recover some of that tarnished reputation.
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Guernsey recover its reputation, NEVER, NEVER, NEVER, not in your lifetime or mine. No one with any sense will ever invest their hard earned and tax paid money to such an unregulated country ever again. Go and grow tomatoes.
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SOME LANDBANKI DEPOSITORS COULD GET AS LITTLE AS 72% BACK. And possibly much less depending on market conditions and future inflation…
The above headline would have been more appropriate as yours appears to be overly optimistic, unfortunately, and does not reflect facts:
First, the administrators’ press release clearly states that the final outcome could still be less than 85% depending on market conditions.
Secondly, affected depositors may have a significant proportion of their savings salvaged by inflation by the time they receive their last dividend in a few years’time if, as widely predicted, the ultra-loose economic policies followed by the UK lead to a significant surge in inflation. Indeed, deposit amounts were frozen at the time of collapse and stopped earning any interest which might have provided some protection against future inflation.
Thirdly, there is a class of depositors which has been largely ignored so far: those with deposits in foreign currencies, ie in Euros or US$. Their deposits were (very) controversially converted into £ by the administrator right after the Bank’s collapse and, as it turned out, before the £’s own collapse against the € and the US$. Looking at € deposits, the exchange rate plummeted from 1.30 to a current 1.12. This means a depreciation of 14%. And, given the state of the UK economy, there is little sign of sustainable improvement for the foreseeable future. A quick calculation shows us that such a depreciation rate means that the 85%-91% recovery rates correspond in fact to 72%-78% recovery rates in €!!! And possibly much less depending on market conditions and future inflation…
Finally, you could have referred to the Bank’s collapse putting on hold or shattering the life of 1,700 depositors. Some were unable to send their children to college as a direct result of this tragedy; others are still relying on help from family and friends to overcome their difficulties. And some died in the anguish of not knowing whether they would be able to leave their hard earned savings to their children. All this due to the rather unique misfortune of banking in Guernsey (an “honour” only shared with the Isle of Man, which at least made some effort to help and launched a public enquiry to investigate their shortcomings)…
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Reading the press release from the administrators, it is interesting to note that they managed to congratulate themselves “for their intense efforts” and also praise the States of Guernsey. Ah, what a cozy little world Guernsey is!!
Let’s not forget to put this in perpective. Super Trott has not released any feedback to deputies on his trip to Iceland. Those have, in truth, remained largely uninterested and have utterly failed to defend the interest of 600 of their constituents. Ah, what a cozy little world…
Let’s not forget the grim reality of this scandal either: Guernsey is the only country IN THE WORLD not to have helped its depositors in this financial crisis.
Depositors, beware!!!
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Gary Blanchford is right. This sad business will drag on for years. I recognise the administrator’s efforts but let us not forget that a penny less than 100% still means that some of our savings have been stolen from a BANK, based in GUERNSEY and under the watchful eyes (albeit closed ) of the GSFC.
The States of Guernsey have stood aside, hands in pockets. Your deputies should be ashamed to a man. Don’t kid yourselves; as far as retail depositors are concerned Guerney’s reputation has been permanently damaged. I wouldn’t trust my loose change on your patch!
Guerney should make up the shortfall and soon.
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Hey Lukey B darling!
What a load of incoherent ranting……………
To your points:-
First: Great! Everyone that initially thought they had lost all their money is actually only 15% down, big deal. Since I assume one would only ever put a tiny proportion of their wealth with any one institution I see no problem here.
Second: If, as you say “depositors may have a significant proportion of their savings salvaged by inflation” then I’m very pleased for them. With inflation (or should I say deflation what with it being negative right now…..) I’m always happy if tricky business situations can be salvaged but bearing in mind the very difficult financial situation many working people are in over here at the moment should rich savers like you really be gloating????
Third: Ah, a controversy. Controversy was my Great Grandfathers middle name and the ‘P’ family has shown a great interest in them ever since.
So now it looks like Landsbanki speculators are actually going to get most of their money back you have come up with a new class of pseudo-martyr, namely the foreign currency investor.
Tell me what was the administrator supposed to do? Even though I personally think that Sterling is on it’s last legs it could well have strengthened after the collapse thus devaluing the € & $ investments. No doubt then the cry would have been ‘but why did they wait so long???’
Finally: My heart strings are indeed being pulled hard by your emotive plea but please everyone learn from this. How many times have you heard the expression ‘don’t put all your eggs in one basket?’
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When you consider that there was no effective protection for depositors of Landsbanki Guernsey either from Iceland nor Guernsey, the projected outcome even if at lower end of the Administrators forecast, must be a reasonable result for the depositors.
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Luke B
What a classic post!
So you now not only want to be bailed out for chasing high deposit rates, but also for losses due to f/x speculation!!
Have you lost any money on the stock markets at all? Just let me know how much it is and I’ll send you a cheque should I?
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Completely agree with Phil’s comments on Luke B.
Ever heard the expression “High risk, High return”?
From memory, there are 12% Argentinian Bonds cheaply available… shall we all invest in that and just ignore the potentially high risk of default?
Suggest Luke B redefines his liquidity policy and keeps it in a high street bank account to minimise chance of future claims against the Gsy government!!
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Yep, that’s right Mrs P – ‘don’t put all your eggs in one basket’ – There is definitely one basket that will never have any eggs in again – the Basket Case of Guernsey!
I can’t tell enough people what an absolute disgrace that Guernsey is – a so called ‘financial centre’ that cannot help its depositors because it doesn’t have the money to!
A great example of its financial abilities!
Can’t wait until the next Guernsey based bank fails and hear the same old stories of not using ‘tax payers’ money to help out the depositors, because they don’t have the money to help.
If only the truth about Guerney was told to the unsuspecting depositors that this island is not part of the EU, nor part of the UK and will happily take your money but leave you with no protection – except of course the well paid Guernsey administrators who will be paid by you to help recover some of your lost money!
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oooo – I’m sooo upset – I chased the money and risked too much, lost it, and am now grumbling whereever I can.
I don’t care that Guernsey’s on the white list, I don’t care that well informed commentators have praised Guernsey’s regulation as being tighter than that of onshore centres such as London, I don’t care about all of that.
I got my fingers burned and I want to be bailed out. Waaa Waaa Waaa, it’s all the Government’s fault, don’t you know.
Oh, and I’m 35 stone after my diet of chocolate….who can I blame for that illness of mine…oh, I know… Dear Lyndon.. blah,blah, blah
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MrsPinthepot
I think we’re still doing ok, the odd retail depositor who pulls their cash out of the island isn’t going to make much difference.
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MrsPinthepot, are you saying you were told that Guernsey is in the EU and is in the UK?
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A year ago it looked very likely that the Landsbanki depositors had lost everything, now it seems there is a good chance they will get up to 90% back, doesn’t stop them constantly moaning though…….
This is getting REALLY BORING now, our government is not going to help so just be thankful that you will get most of your money back – GET OVER IT and move on!
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Phil, has it ever crossed your mind that those depositors with deposits in € or US$ may have actually deposited money in their home currency?
Of course, it is easier to make a lot of assumptions and post ultra simplistic statements.
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Phil, Aidy: before leaping to put down Luke as a currency speculator, you might have paused to think about where he may be from.
Luke was taking no currency risk; his deposit was in his *home* currency (Euros).
His (along with other non-sterling depositors) frustration is that the LG Administrators converted all Euro (and US$) deposits into £ on the day of entering Administration, thus turning those home-currency savings into involuntary foreign (to them) currency deposits.
By contrast, the Kaupthing IoM Administrator maintained the currency of accounts, so no depositors were subjected to currency risk.
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PauseToThink:-
What a great idea, follow the Kaupthing IoM model……………..
“Press Release 3 October 2009
The misery continues for depositors in KSFIOM
One year on and depositors in Kaupthing Singer & Friedlander Isle of Man have only just received up to 24.8% of their money back.”
Source: http://www.ksfiomdepositors.org/press-release/press-release-3-october-2009-misery-continues-depositors-ksfiom
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Luke & PauseToThink
I suggest you take up your grievance with the administrators then, or do you expect the taxpayer to foot the bill for them as well as the bank itself?
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Calpe
Your laughable …
landsebanki has had such minimal impact on us and reputation. If it had, why would some of UK’s most wealthiest be looking to invest over here. When the UK bring in the 50% tax rate, the bonus cap – how many more of the wealthiest individuals will be over here contributing to our economy with their monies and companies based here? The icelanic crisis was a puddle in the banking crisis and frankly bigger countries have much more egg on their faces
Looking forward to 2010
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PC
Where are you getting this projection from?
0-10 was supposed to bring us in these geniuses of the business world…er…did it?
The CHF business is shrinking because of our ‘moves’ towards international acceptibility, proving me right again that people only want to use us as a pawn in a wider secrecy game, and the myth of a mass exodus of the already mobile super-rich won’t be attracted to Guernsey because we have nothing to offer other than ‘favourable’ tax rates.
The ones that do leave the City do so not because they are business minded, but because they can either get favours from our legislation, or because they are not entrepreneurs at all, merely sharks who want a bigger dinner for less swimming about.
Landsbanki may well be just a blip, but these guys do not want any focus on any blips being reported. They will go to sunnier climes, not even the Swiss are able to bring them in droves.
Keep dreaming your dream but the handfuls of Guy Hands’ (keep doing the good work and all that) will not make anything easier for the local population. In fact it will make the fall back to reality that little bit more painful.
We need progressives in power that understand the meaning of life, not wealth, for the Guernsey person to feel content.
Let’s hope that the SFO cannot break our secrecy walls to tarnish us further. Or do you think we were not involved.
Funny how it was the IoM and Guernsey that got the worst possible result in all this. Or does that not mean anything to you?
And where will all these rich expats go? In whose homes and under which auspices? Who will lose out, I wonder?
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Arnald
Firstly, Google Landsbanki Guernsey and news articles you will see in total 64 articles..hardly world news.
As for projection (strange word you use as what projection had I made but all Financial centres will benefit from the 50% joke and the tax on bonus’s. You obviously are not aware of our 2 tier housing market but 1 high earner giving is 20% of their earning 1m a year (200K tax)is contributing the same as 40 or so average paid workers..
As for impact. I work in Finance industry and we have never been busier
Financial climates and regs change so if we bend over for big brother and have to go to 10% tax, will it have any impact given UK/Europe is how much. Do not think so
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Arnald – once again you are displaying your inability to grasp what we actually do here in Guernsey. Zero-10 was never designed to attract people to “move” here – in fact the very reason that zero-10 is under the microscope again is because it is less favourable to those that actually live here.
The attraction of business, and the relocation of a few rich citizens from the UK are two separate issues. The former is far more important and provides the vast majority of the income for the industry and therefore the island.
You will think I am lying (of course) but the vast majority of the business attracted here is not secret/private at all. It does not need to be because it is properly located here and therefore outside the UK tax net – it is declared to the HMRC so as to tell them that it has nothing to do with them.
Maybe we are doing less business with Switzerland (I don’t actually know) – and frankly that would probably be a good thing. But Swiss business is also a very small part of what we do anyway. But how does that shrikage that you mention square with your statements that we are “designed” for secrecy (which I obviously dispute)? Seems like you are arguing against yourself and are actually pointing out that do not rely on secrecy (even if there was an element of that in the past).
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TL
I agree that the zero part of the zero ten was not the issue for the EU, but rather how it moved the burden on to the public, slyly dressing it up. Still the fact remains that it was mis-sold to the general, apathetic voters.
As for the rest, well, why the massive upturn in ‘company’ registrations? Of course it’s for tax purposes, as is all the much vaunted deposit values, used by the marketing people to advertise our ’strength’.
The Fund/Fid admin is different again, but its true worth is meaningless as we, as the public, gain less in proportion to the few that run the stuff, so inequality is heightened and so society is weakened.
I know very well what we do here. I may mix the issues up in my posts, deliberately – because it is essentially all connected, but oour main industry is very much based on tax avoidance. We wouldn’t get the business otherwise. That’s what you and everyone has said, if we were transparent we’d be living in the stone age, twiddling our thumbs.
It’s not much of a basis for general contentment and quality of life, to be on that edge.
oh and
pc
if you work in the finance industry, 0ur Gods help us all.
Short term effects do not help my children as much as you think. We need vision, not greed.
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Arnold,
I have worked in Private Banking, Trusts and Funds for 25 years in London and 4 offshore centres and the offshore centre here started from small seeds and grew to the what it is today – well regulated, highly respected and offering choice to global investors. Your frustrations are what? Envy or the fact you invested in an Icelandic bank offering higher rates?
Over the last 5 years I have noticed more wealthy people take up positions here, noticed some also open “Gsy offices” which will employ mixture of locals and specialists given we are in a world where to communicate, trade or whatever you do not need to be located in London or other financial centres.
How do top Banking earners avoid paying 50% UK tax and bonus penalty – they move themselves and their “department”/family outside UK and work from somewhere else. It maybe here or anywhere outside UK. Lets grab some of these into open market housing, adding to our funds
I do not believe in gods and the seeds/vision we develop today will benefit Guernsey Children tomorrow. The world is a greedy place – fact and in 25 years I have seen Guernsey prosper and lets hope it continues for another 25 years.
If we can do something cheaper, better service and as well as other financial centres then we will always attract investment and tbh its a wonderful place to live, grow up and contribute to.
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Arnald, you said: “our main industry is very much based on tax avoidance. We wouldn’t get the business otherwise. That’s what you and everyone has said, if we were transparent we’d be living in the stone age, twiddling our thumbs.”
Yes, we assist legal tax planning – no shame in that. You may not like it, but that is your view, nothing else. Lobby the UK government to increase the reach of their tax laws if you like.
As for transparency, well it comes down to what you mean by “transparency” (and yes, despite your protestations, it is open to interpretation, as shown by the fact that your definition differs from other peoples’). I say that we are transparent to the same degree as is expected in other business centres. The authorities have as much visibility here as they have anywhere else. You seem to regard transparency as meaning that any interested member of the public can trawl through the private affairs and business dealings of private people and the businesses they own. No other jurisdiction permits that and so, yes, if we did adopt that approach as you suggest then we would lose business. But I would suggest that the majority of people would not consider it a reasonable thing to demand in the first place.
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PC
Material prosperity is meaningless without integrity. Eye of the needle and all that. An influx of personal wealth, at the rate you seem to be wanting to and predicting will happen, into the island (where will they live?) will make life harder for the local population. Prices will go up, tax receipts will not be proportionate to the rise in cost of living, there will be more tension and less people will be saying how wonderful it is here.
They already do. Expats say they think we’re going down the tubes as an ‘idyll’, and that’s within one generation.
Attracting people and business that wish not to fulfil social responsibility ‘at home’ is not something to be very proud of. Yeah, sure it’s good business for us in the short term, but where is the quality?
Quality of life is not the same as the quantity you aspire to.
Happy Christmas, I hope it has some meaning for you.
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PC
I wonder if some of those bankers you would like to see locate here are part of the financial crisis the world has been plunged into?. If so i would rather that kind of scum stayed where they are or better still put behind bars where they belong.
But hey who cares when the only thing that matters is money.
How sad it is when wealthy people(top bankers)wish to relocate to avoid paying taxes for the benifit of the people of the country that they so blatantly robbed.
Just one more thing, If those bankers move to avoid paying their taxes who will pick up the tab for that?
I was watching a tv documentry recently where a reporter was interviewing some guy (from the usa) that invests on behalf of his clients in asia. The reporter pointed out to him the terrible conditions some of the workforce have to endure in the workplace by the companies he invests in. He told the reporter that his investers and himself have no moral obligation towards those people and is a matter only for the employers. So basically he was saying, I don`t give a toss how those people are treated as long as were making money.
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Arnald
‘Expats say they think we’re going down the tubes as an ‘idyll’, and that’s within one generation.’
Expats have been saying that for decades and always will say that in order to justify their decision to become expats in the first place.
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TL
I accept that.
I accept also that I’m an idealist.
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Martino
I accept that
I accept also that some expats are also idealists in their own way.
bcb
That’s what worries me about attracting wealth as a means for us to attempt to maintain our exuberent lifestyles. People just stop caring.
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A couple of points aimed at both sides of the debate
will people stop perpetuating the myth that Landsbanki depositors were greedily chasing high returns – not all of them were in Landsbanki by choice, and the returns weren’t that good really anyway.
As for avoiding the unregulated Guernsey banks ….. Hmmmm … Let’s see, 1 Guernsey bank has collapsed, due SOLELY to the collapse of it’s parents. Far better to put your money in the excelently regulated UK where the list of banks that would have failed ( without huge government bailouts) ALL ON THEIR OWN is as long as my arm and seems to grow longer month by month …
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I will be putting all of my money into a portfolio of the Finest Wines Known to Humanity! I will be doing it Here! And I will be doing it Now!
And cakes!
Happy Festival of Rebirth to you all!
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