Bank payouts to come in September

Some depositors had opposed the scheme of arrangement

Savers who lost up to £50,000 through the collapse of Kaupthing, Singer and Friedlander Isle of Man (KSFIOM) will get their money back by September.

The Manx government has approved £193m of funding to speed up payments under the Depositor Compensation Scheme.

Depositors will receive up to the first £50,000 of the money they lost, plus any money recovered by liquidators.

KSFIOM, a subsidiary of Icelandic bank Kaupthing, collapsed during the crisis that engulfed the Iceland bank system.

The Manx bank was put into liquidation in May after creditors rejected an alternative scheme of arrangement put forward by the government.

Bank loan

About £85m has already been paid out to depositors under the government's early payments scheme, under which people could apply for advance payments of up to £10,000.

The additional funding announced on Thursday will enable the more than three quarters of savers - those who had up to £50,000 invested - to get their money back in full by early September.

The funding is made up of £73m in direct support from the government and a £120m interest-free loan.

The loan will be repaid through a £21m levy on the island's banks and from money recovered by the KSFIOM liquidator.

Some savers in the failed bank, under the KSFIOM Depositors' Action Group, are lobbying the Manx and UK government to get all depositors in the bank repaid in full.