Iceland investment could cost Coventry Building Society £24million
Apr 1 2009
By Priya Mistry
COVENTRY Building Society could lose nearly £24million invested in an Icelandic bank.
The news was delivered in the society’s annual financial summary, which is posted to each customer.
In the statement it declares: “The society has raised a ‘one-off’ impairment charge of £23.9million to reflect the potential non-recovery of debt securities issued by the Icelandic owned bank, Singer and Friedlander/Kaupthing.”
The society, which is the fourth largest in the country, has
stressed that it is not customers’ money but the “reserve of the
society” and there were no further investments in any other Icelandic
bank.
A spokesman said: “At
the moment we are waiting on the administrators to collect the bank’s
assets, which could take several years. The building society is still very profitable and as a result no member will lose any money.”
In
2005 the building society had invested two separate sums of money in
Singer and Friedlander, a UK bank, and another sum in Icelandic bank
Kaupthing.
Eventually Kaupthing took over from Singer and Friedlander and collectively Coventry Building Society had invested £23.9million. Kaupthing had also deposited £5million in Coventry Building Society which could be set-off against the amount.
The
spokesman added: “Our members can be confident that the Coventry
Building Society is a strongly profitable, traditional building society
which has just reported among the best set of results in the building
society sector.”
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