Landsbanki depositors to receive chunk of trapped savings

Landsbanki joint administrators, Deloitte, says savers can expect to receive another 25% of their money within weeks.

The cash has been trapped in the Icelandic subsidiary since October last year when Landsbanki collapsed.

In a statement, Deloitte says: "The Joint Administrators anticipate making a further substantial payment in late 2009 / early 2010, however the exact timing and quantum of this payment will depend on further recoveries from the Bank's loan portfolio and distributions from Heritable Bank."

"The ultimate recovery for creditors is still anticipated to be in the region of between 70 to 80 pence in the pound but the Joint Administrators are more confident that the final outcome will be at the higher end of this range."

Local depositors welcomed the news and their spirits are further buoyed by Guernsey chief minister Lyndon Trott's announcement he is making a state visit to Iceland to secure a greater recovery than the 89p which he predicted would be the best case scenario.

In an open letter, Trott says: "The Government has decided to try to constructively influence the process, and the talks in Iceland are just the latest step in that respect.

"The Joint Administrator said in 2009 that the eventual outcome for Landsbanki savers could be repayment of up to 89p in the pound. Our efforts are aimed to increase this further."

The Landsbanki Guernsey Depositors Action Group (LGDAG) vows to fight for the remaining 45% of their savings.

Currently, Landsbanki Guernsey depositors are treated as a non-preferential creditors, whereas the UK Government made sure the UK branch's members were treated as preferential and therefore entitled to more compensation, says spokesperson for the LGDAG Neil Dickens.

He suspects the Guernsey Government's state trip is a knee-jerk reaction to claims by the action group that Guernsey deceived Landsbanki depositors about meetings that had taken place between the Jurisdiction and Iceland. However, he welcomes the move.

"We're encouraged by the letter and it has helps us to focus our campaign and make it even stronger," says Dickens.

"Local depositors have vowed not to stop fighting until Guernsey people are treated the same way as savers on the mainland."