It’s also worth noting that ING is one of the largest banks in the world and is therefore a very different type of institution from Kaupthing and Landsbanki, the Icelandic banks that collapsed earlier this month. It has 85million customers and around €330billion in deposit and current accounts.
Why did ING seek a cash injection?
ING strenuously denied that the decision to seek financial assistance from the Dutch Government was because the bank is in trouble and that it was purely the result of the bank wanting to strengthen its capital reserves.
The bank’s chief executive, Michael Tilmant, said: "Market conditions have changed dramatically in recent weeks and have led to an internationally recognised belief that going forward, in this market environment, capital requirements for financial institutions should be higher. We feel that at this time it is prudent to raise our core capital to reinforce our strong competitive position in this challenging position."
I’ve got a Kaupthing Edge/Heritable savings account and am really worried that my savings are still at risk?
It’s completely understandable that savers with Kaupthing Edge and Heritable accounts will be unnerved by the news about ING, given the fact they were caught up in the Icelandic banking scandal. But as mentioned above, the circumstances are completely different and there is no need to panic.
ING rescued most Kaupthing and Heritable Bank customers following the collapse of their parent banks, and their savings accounts are now run by ING Direct, the Dutch provider’s UK savings arm.
The transfer of these accounts over to ING Direct has been completed and as such savers should be able to access their money as normal.
What protection do I have with ING?
Under the terms of the Financial Services Compensation Scheme (FSCS), the first £50,000 UK savers have with a single institution is totally protected. However, ING Direct is signed up to the passport system which means that rather than claiming from the FSCS in the event of it going bust, savers claim through the Dutch compensation scheme first.
Under this system, if the compensation scheme offered by the bank’s country of origin covers less than the £50,000 British savers get with the FSCS, they reclaim the additional amount through the UK scheme. However, in the case of ING, the Netherlands actually offers a greater level of protection. So savers with ING Direct (which includes former Kaupthing Edge and Heritable Bank customers) have €100,000 (about £77,000) totally protected.
I’m an Icesave customer, is there any news about when I’ll get my compensation yet?
While ING bought the savings accounts of Kaupthing Edge and Heritable Bank customers, it didn’t rescue Icesave’s 300,000 UK savers, following the collapse of Icesave’s parent company Landsbanki. Consequently, they are waiting to get their money back through the FSCS.
As with ING Direct, Icesave is signed up to the passport system, but the Icelandic compensation scheme only protects the first €20,887 (about £16,200). Victims of Icesave’s demise therefore need to claim anything above that from the UK scheme. And even though the FSCS only gives protection up to £50,000, the Government has said that it will refund anything above that amount, so no Icesave customer will lose any money.
Although savers could potentially be due compensation from three sources, the FSCS is expected to manage the entire claim so Icesave customers only have to deal with one point of contact. That said, the final details of exactly how the process will work and how long it will take for savers to be reunited with their money have yet to be clarified. The FSCS has said it hopes to make an announcement this week.