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Cooperative Bank Guernsey kicks out expat customers
| Published: | 2 Dec at 6 PM |
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Tagged: Money
In another hit on expat investors, the Guernsey arm of the Co-Operative Bank is closing the accounts of fixed-rate depositors and returning their money.
Already in the headlines over the last few weeks concerning its former chairman’s antics, the now decidedly uncooperative bank is closing down its Guernsey subsidiary. The reason given is the simplification of its business model, with the closure affecting customers with variable as well as fixed rate accounts.
Account holders have been receiving letters informing them of the closure since late August, offering fixed rate depositors able to move their money by 15 November an inconvenience payment of £100. On 22 November, interest payments were stopped on accounts not yet removed.
The bank is blaming the terms and conditions of offshore fixed-rate deposits for the withdrawal of interest payments, saying that it’s not allowed to pay interest as the rules offer no ‘minimum interest rate’ provision. It states that it can change interest rates when it pleases, although it must inform customers within 30 days.
Current account holders are also being dumped, although they have until the end of December to move their money to another bank. The closure will not at present affect accounts held with the bank’s Britannia International subsidiary in the Isle of Man.
Co-Operative is the latest in a long line of offshore banks to close its doors, leaving a poor choice for expat customers, with more exits not ruled out. Although offshore savers are protected against bank failure to the tune of £50,000, a lower compensation level than on the mainland, in the EEC or Gibraltar, the guarantee gives some small comfort for expat savers, at least whilst there are still banks to serve them.
Already in the headlines over the last few weeks concerning its former chairman’s antics, the now decidedly uncooperative bank is closing down its Guernsey subsidiary. The reason given is the simplification of its business model, with the closure affecting customers with variable as well as fixed rate accounts.
Account holders have been receiving letters informing them of the closure since late August, offering fixed rate depositors able to move their money by 15 November an inconvenience payment of £100. On 22 November, interest payments were stopped on accounts not yet removed.
The bank is blaming the terms and conditions of offshore fixed-rate deposits for the withdrawal of interest payments, saying that it’s not allowed to pay interest as the rules offer no ‘minimum interest rate’ provision. It states that it can change interest rates when it pleases, although it must inform customers within 30 days.
Current account holders are also being dumped, although they have until the end of December to move their money to another bank. The closure will not at present affect accounts held with the bank’s Britannia International subsidiary in the Isle of Man.
Co-Operative is the latest in a long line of offshore banks to close its doors, leaving a poor choice for expat customers, with more exits not ruled out. Although offshore savers are protected against bank failure to the tune of £50,000, a lower compensation level than on the mainland, in the EEC or Gibraltar, the guarantee gives some small comfort for expat savers, at least whilst there are still banks to serve them.
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