Savings and Investment Bank
| Company type | Private |
|---|---|
| Industry | Banking |
| Defunct | 1982 |
| Fate | Ceased operations; liquidation commenced |
| Headquarters | Isle of Man |
| Products | Banking services |
Savings & Investment Bank (SIB) was a bank operating under a license in the Isle of Man that ceased operations in 1982, carrying liabilities estimated at approximately £37 million.
History
The process of liquidation commenced on 29 July 1982. A creditors' statement disclosed that loans and advances surpassed £40 million. The Chairman of the Finance Board highlighted that SIB had extended exceptionally large loans to a limited number of companies, exceeding standard banking limits, and these loans were deemed largely unrecoverable.
Claims were accepted from 3,000 depositors and creditors amounting to £31.4 million, whereas recoveries from loan repayments totaled only £12.8 million. After 23 years, the final dividend paid out was 29p per pound. The Isle of Man Government provided additional ex gratia compensation payments of 50p per pound on the initial £10,000 of deposits to certain eligible depositors. Furthermore, some depositors engaged in settlements involving SIB's auditors.
In the aftermath of the collapse, officials seconded from the Bank of England conducted a review of banking supervision on the Isle of Man. The criticisms and suggestions in their report led to the establishment of the Financial Supervision Commission in 1983, followed by the creation of the Insurance Authority (which later became the Insurance and Pensions Authority) in 1986.
The failure of SIB also prompted the introduction of a Depositors' Compensation Scheme for banks on the Isle of Man. This scheme, funded through contributions from participating banks, was implemented under the Banking Business (Compensation of Depositors) Regulations 1991.
Further reading
- Chadwick, JM; Jordan, MA; & Beer, TJ. Savings & Investment Bank Limited: Investigation under Section 5 of The Companies Act 1974 (Chadwick Report). Tynwald Library, March 1986
- May, ATK. Savings and Investment Bank Ltd: Commission of Inquiry (May Report). Tynwald Library, December 1990