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ING acquires Icelandic saving accounts
By Rebecca Atkinson
Savings bank ING Direct is to buy more than £3 billion of British cash deposits held in Icelandic-owned banks Heritable Bank and Kaupthing Edge.
The Dutch-owned savings bank says it will acquire 160,000 saving accounts from Kaupthing Edge and 22,200 from Heritable.
Heritable Bank, the mortgage and savings bank owned by Landsbanki, has now been closed by the Financial Services Authority (FSA). The watchdog says the bank can no longer continue to operate under it rules and has therefore placed it in default. Like savings bank Icesave, Heritable is owned by the now-nationalised Icelandic bank Landsbanki.
The British Government has promised to protect 100% of deposits in both Icesave and Heritable. The chancellor Alistair Darling says it has taken this action to ensure the stability of the UK financial system and to ensure savers' money is "safe and secure".
The UK Government says it expects Landsbanki to soon be declared in default. However, it says arrangements are ready so that "no retail depositor will lose any money" as a result.
In a statement it says: "The Treasury and the Financial Services Compensation Scheme (FSCS) are working with the Icelandic authorities and its deposit insurance scheme to ensure that depositors are paid back as quickly as possible.
"The chancellor has also spoken to the Icelandic finance minister about the importance of the Icelandic authorities ensuring that UK depositors in Icesave are given the same protections as depositors in Iceland and receive their deposits back in full promptly."
All ISA customers of Icesave will also continue to "benefit from the tax-free status of their accounts" it adds.
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