Leeds Building Society has unveiled a new range of euro-denominated savings accounts aimed at Gibraltarians and UK expatriates living in Spain. In the process, it has revealed a way some expats may obtain coverage for their savings by the UK’s depositors’ compensation scheme.
Being a branch of Leeds rather than an offshore subsidiary of it, the Gibraltar outpost targets Gibraltarians and Spain-resident UK expatriates rather than British expats from around the globe.
The issue of UK depositors’ compensation coverage for expats arose after last year’s collapse of Icelandic banks on the Isle of Man and Guernsey. Depositors in Kaupthing Singer & Friedlander (Isle of Man) and Landsbanki Guernsey were not covered by the UK’s Financial Services Compensation Scheme (FSCS), and some British expatriates claimed that they had been forced to bank offshore because onshore UK banks would not have them as customers as long as they did not live in Britain.
Earlier this year the British Bankers’ Association said it was in talks with Treasury officials about making it easier for UK expats to open onshore accounts, and it added a new page to its website with links to banks that say they offer them.
‘branch’ not ‘subsidiary’
Leeds Building Society, which has had a branch in Gibraltar since 2002 and which is the UK’s sixth largest society, is able to offer UK depositors’ compensation to its Gibraltar clients because it is a branch of the onshore parent rather than an offshore subsidiary, and because of Gibraltar’s status as a British overseas territory.
However, Gibraltar is considered an EU member, and it recently boosted its own depositors’ compensation scheme to €50,000 or sterling equivalent, putting it on a par with the UK and other EU members in this area, a spokesman for the Gibraltar Finance Centre noted.
In addition to the Leeds Building Society branch, Gibraltar has two others – Newcastle Building Society and N&P Building Society.
One of the territory’s two Barclays operations and one of its two Lloyds entities are also branches rather than subsidiaries of their UK parents, the Gibraltar Finance spokesman added.
Customer feedback
Leeds Building Society said it decided to offer the new euro accounts in Gibraltar in response to feedback from its customers there. The society has offered euro-denominated mortgages on the Costa del Sol since September 2005, and last year introduced euro-denominated savings accounts through its Dublin branch.
Although UK expatriates living in countries other than Spain or Gibraltar are not eligible for the Gibraltar savings accounts, those living in northern Spain would be, providing they were willing to open the account in person or by post, and had the necessary documentation.
Leeds chief executive Ian Ward said the new euro savings accounts were the first of their kind to be offered by a UK building society in Gibraltar and Spain.
To encourage customers to visit the Gibraltar branch and open one of the new accounts, Leeds is offering a £20 Morrisons voucher to new account holders that it says is designed to “cover the costs of their trip to Gibraltar” from Spain, as well as a chance to win various prizes.
More information on the new accounts may be found at www.leedsbuildingsociety.com/gibraltar .
