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Kaupthing Singer & Friedlander Limited (KSF), a UK subsidiary of Iceland’s largest bank, faced significant challenges during the 2008 financial crisis, which threatened its operations and the confidence of its depositors. As banks globally were failing, KSF was on the brink of collapse, prompting the Financial Authority (FSA) to appoint EY-Parthenon as administrators. The primary objective was to ensure a smooth transfer of KSF’s retail internet-based deposits to ING Bank while managing the administration of the bank’s remaining operations and maximizing returns for creditors, who had claims totaling over £4 billion (approximately US$6 billion). The administration process was complex, requiring EY-Parthenon to migrate 170,000 internet depositors to ING Bank within six months, alongside addressing the needs of an additional 3,000 depositors and managing loan books worth around £3 billion (US$4.5 billion). To stabilize KSF’s operations and maintain depositor confidence, EY-Parthenon implemented a strategy that focused on operational efficiency and effective communication. They quickly addressed immediate IT, legal, and operational challenges, stabilizing the bank’s accounting systems and banking platforms, which were in transition at the time of administration. Collaboration with the Financial Compensation Scheme (FSCS) was crucial in ensuring that depositors were paid promptly. Within four months of EY-Parthenon’s appointment, the transfer of internet depositors to ING Bank was completed, and the remaining deposits were validated and protected, allowing for the reimbursement of an additional 2,000 non-internet-based retail and SME depositors. This effective communication and collaboration not only facilitated timely payments but also helped maintain public confidence in the financial system during a period of crisis. To create long-term value, EY-Parthenon developed a loan run-off strategy for KSF’s loan book and restructured its asset finance businesses, which were sold for a premium three years into the administration. Throughout the process, regular communication with creditors was maintained, ensuring they were informed of progress and reassured the administration's direction. As a result of these efforts, EY-Parthenon was able to return 86.8 pence in the pound to creditors, demonstrating the effectiveness of their strategy in navigating the complexities of the financial crisis and achieving favorable outcomes for all stakeholders involved.

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