ING Direct, the online banking arm of ING Group, said on Wednesday it is acquiring more than £3 billion worth of British deposits from Icelandic online savings providers icesave and Kaupthing Edge.
Kaupthing Bank’s Kaupthing Edge has been determined to be in default, and icesave, part of Landsbanki’s Heritable Bank in Britain, is expected to soon be in default, the UK Treasury said a statement. As a result, ING Direct, the world’s biggest online bank, is acquiring £2.5 billion worth of Kaupthing Edge deposits and £538 million worth of deposits of Heritable Bank/icesave, ING and the UK Treasury said.
Iceland’s financial crisis deepened on Wednesday as Kaupthing was forced to take an emergency loan from Sweden and the island’s authorities took control of Landsbanki. Icesave on Tuesday stopped customers in the Netherlands and Britain from withdrawing or depositing money. “ING Direct is in a position of strength. We are very pleased to have been able to take such rapid and decisive action that has provided Heritable Bank’s customers, and those of Kaupthing Edge, with the reassurances they need,” ING Direct UK chief executive Johan de Wit said in a statement. “This is the right course of action to protect savers, ensure financial stability, and safeguard the interests of the taxpayer,” the UK Treasury said.
Britain’s finance minister, Alistair Darling said earlier on Wednesday that the UK government would pursue Iceland’s obligations to depositors. “It really is quite extraordinary when you get a country like Iceland which is defaulting on its obligations,” Darling said. “We’re going to pursue them with vigor ... you really can’t have a situation like this where countries simply default.” (Reuters)