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Local councils that invested millions of pounds in Icelandic banks that subsequently collapsed may be able to get most of their money back, according to a new report.
Several banks in Iceland were taken over by the country's authorities when the nation's financial system seized up in October last year, trapping around £800m of UK local authority funds.
According to the BBC, the administrators for one of the banks that collapsed, Heritable Bank, have indicated its creditors could receive around 80% of their funds back - equating to a total repayment of about £300m.
The leader of Kent County Council - which had around £50m invested with some of the country's banks including £18m with Heritable - said the payout could be even more if market conditions improved.
Paul Carter told the BBC: "They're hoping to make their first payment towards the end of July and August, 70 to 80 pence in the pound they're predicting," he said.
"If markets improve, we may get more than that, closer to 90%. A lot of the lending book within the Heritable Bank is in property investments.
"If the property market begins to start to have an upside, we could make an even better recovery."
Other Icelandic banks that were taken over last October included Landsbanki and Glitnir.
Last month the Audit Commission said a number of local authorities "negligently" deposited almost £33m in Icelandic banks in the final days before their collapse.
The commission found that seven English authorities breached official guidance and their own treasury management protocols in continuing to invest in Iceland after the banks' credit ratings were downgraded below acceptable levels.
Cashback chance over Iceland banks - Yahoo! News UK
Several banks in Iceland were taken over by the country's authorities when the nation's financial system seized up in October last year, trapping around £800m of UK local authority funds.
According to the BBC, the administrators for one of the banks that collapsed, Heritable Bank, have indicated its creditors could receive around 80% of their funds back - equating to a total repayment of about £300m.
The leader of Kent County Council - which had around £50m invested with some of the country's banks including £18m with Heritable - said the payout could be even more if market conditions improved.
Paul Carter told the BBC: "They're hoping to make their first payment towards the end of July and August, 70 to 80 pence in the pound they're predicting," he said.
"If markets improve, we may get more than that, closer to 90%. A lot of the lending book within the Heritable Bank is in property investments.
"If the property market begins to start to have an upside, we could make an even better recovery."
Other Icelandic banks that were taken over last October included Landsbanki and Glitnir.
Last month the Audit Commission said a number of local authorities "negligently" deposited almost £33m in Icelandic banks in the final days before their collapse.
The commission found that seven English authorities breached official guidance and their own treasury management protocols in continuing to invest in Iceland after the banks' credit ratings were downgraded below acceptable levels.
Cashback chance over Iceland banks - Yahoo! News UK
