Kaupthing Singer & Friedlander

Kaupthing Singer & Friedlander was a United Kingdom financial-services provider that combined the long-established British merchant-banking name Singer & Friedlander with the UK operations of Icelandic bank Kaupthing. The business was created in August 2006, after Kaupthing acquired Singer & Friedlander and combined it with Kaupthing's UK subsidiary, Kaupthing Limited. Its headquarters were moved from the City of London to One Hanover Street in Mayfair, London, where the two operations were brought together. The institution served small and medium-sized companies, corporate clients, and high-net-worth individuals. Its activities included corporate and investment banking, treasury services, capital-markets services, investment management, asset finance, and private banking or wealth-management services. It also operated Kaupthing Edge, a deposit-taking business marketed to retail savers. This combination gave the group a presence across commercial banking, financing, investment products, and wealth services rather than limiting it to a single specialist banking niche. The brand inherited a substantial historical legacy from Singer & Friedlander, a City of London merchant bank founded in 1907 by Julius Singer and Ernst Friedlander. The earlier firm was associated with the City’s merchant-banking community and employed George Soros as a clerk before he moved into its arbitrage department during the 1950s. In August 2005, Singer & Friedlander was acquired by Kaupthing Holdings UK Limited, a subsidiary of Kaupthing Bank, then Iceland’s largest bank. The following year, the acquisition was followed by the operational merger that produced Kaupthing Singer & Friedlander. The company’s existence was short-lived. During the global financial crisis of 2008, the failure of its Icelandic parent undermined the UK subsidiary. On 8 October 2008, the UK Treasury used the Banking (Special Provisions) Act 2008 to transfer the Kaupthing Edge deposit business to ING Direct, an ING Group subsidiary. The rest of Kaupthing Singer & Friedlander was placed into administration. The transfer separated the retail deposit operation from the remaining corporate, investment, and wealth-management activities and effectively ended the brand as an operating bank. A subsequent dispute concerned ING’s treatment of fixed-rate deposits whose advertised terms had appeared on the Kaupthing Edge website before the transfer. The matter reflected the practical and contractual complications created when the deposit business was moved from a failed institution to a new operator. Kaupthing Singer & Friedlander is therefore chiefly remembered for its brief 2006–2008 period as a UK subsidiary of Kaupthing Bank, its broad merchant- and investment-banking offering, the historical Singer & Friedlander franchise, and its administration during the financial crisis.

Kaupthing Singer & Friedlander grew out of the combination of a historic British merchant bank and the UK business of Icelandic Kaupthing Bank. Singer & Friedlander had been established in 1907 by Julius Singer and Ernst Friedlander in the City of London. It developed as a merchant bank serving the City’s financial community. One notable former employee was George Soros, who worked at the firm as a clerk and later moved to its arbitrage department during the 1950s. The firm became part of Kaupthing’s international expansion in August 2005, when Kaupthing Holdings UK Limited acquired Singer & Friedlander. Kaupthing Holdings UK was a subsidiary of Kaupthing Bank, described in the reference material as Iceland’s largest bank. The acquisition placed Singer & Friedlander within a larger Icelandic banking group while retaining its UK financial-services activities and established name. In August 2006, Singer & Friedlander was combined with Kaupthing Bank’s UK subsidiary, Kaupthing Limited. The merged business adopted the name Kaupthing Singer & Friedlander. At the same time, the headquarters moved from the City of London to One Hanover Street in the Mayfair area of the City of Westminster. The relocation placed both constituent operations in the same building and marked the practical consolidation of the UK businesses. The resulting company offered a broad range of services. It provided corporate and investment banking to small and medium-sized companies, alongside treasury, capital-markets, asset-finance, and investment-management activities. It also served affluent and high-net-worth customers through private banking and wealth management. In addition, the company operated Kaupthing Edge, a deposit business aimed at retail savers. The overall model therefore combined institutional and corporate services with private-client and deposit-taking operations. The group’s structure became vulnerable during the global financial crisis of 2008. The failure of Kaupthing Bank, the Icelandic parent, led to intervention in the UK. On 8 October 2008, the UK Treasury relied on the Banking (Special Provisions) Act 2008 to transfer Kaupthing Singer & Friedlander’s Kaupthing Edge deposit business to ING Direct, which was wholly owned by ING Group. The remaining business was placed into administration. This divided the retail deposit operation from the rest of the company and brought the operating life of the Kaupthing Singer & Friedlander bank to an end. The transfer also generated a dispute concerning fixed-rate deposits. ING reportedly declined to accept the terms advertised on the Kaupthing Edge website for some of those accounts after taking over the deposit business. The issue illustrated the contractual and consumer-protection problems that accompanied the emergency resolution of failed banks. Kaupthing Singer & Friedlander is now principally significant as a short-lived UK banking brand formed during the pre-crisis expansion of Kaupthing, as the successor to the Singer & Friedlander operating franchise, and as one of the institutions affected by the 2008 banking crisis.

• 2008

  Retail deposit business transferred and remaining bank placed into administration

  [1]Kaupthing Singer & Friedlanderen.wikipedia.org

  The UK Treasury transferred Kaupthing Edge deposits to ING Direct on 8 October, while the remainder of Kaupthing Singer & Friedlander entered administration.

• 2006

  Kaupthing Singer & Friedlander formed

  [1]Kaupthing Singer & Friedlanderen.wikipedia.org

  Singer & Friedlander and Kaupthing Limited merged, and the combined business moved its headquarters to One Hanover Street in Mayfair, London.

• 2005

  Kaupthing acquires Singer & Friedlander

  [1]Kaupthing Singer & Friedlanderen.wikipedia.org

  Kaupthing Holdings UK Limited acquired Singer & Friedlander, bringing the British firm into the Icelandic Kaupthing group.

• 1907

  Singer & Friedlander founded

  [1]Kaupthing Singer & Friedlanderen.wikipedia.org

  Julius Singer and Ernst Friedlander founded the predecessor merchant bank in the City of London.

A UK merchant and financial-services bank combining corporate and investment banking for small and medium-sized enterprises with wealth-management services for affluent and high-net-worth clients.

• Banking services · 2006

  Corporate and investment banking

  Services for corporate customers, particularly small and medium-sized companies, spanning financing and broader investment-banking support. The business formed part of the bank’s core merchant-banking proposition and sat alongside treasury and capital-markets activities.

• Financial markets · 2006

  Treasury and capital-markets services

  A set of institutional and corporate financial-services activities covering treasury functions and capital-markets services. These operations reflected the bank’s heritage as a merchant and investment bank within the Kaupthing group.

• Commercial finance · 2006

  Asset finance

  Financing services associated with business assets and corporate requirements. Asset finance was one of the principal activity areas identified for Kaupthing Singer & Friedlander before its administration.

• Wealth management · 2006

  Investment management and wealth management

  Investment-management, private-banking, and wealth-management services for affluent and high-net-worth individuals. These offerings complemented the bank’s corporate and institutional businesses.

• Retail deposits

  Kaupthing Edge

  A retail deposit business offering savings products through the Kaupthing brand. On 8 October 2008, its deposits were transferred by the UK Treasury to ING Direct during the resolution of Kaupthing Singer & Friedlander.

• 2008

  Resolve the Kaupthing Edge deposit business separatelyStrategy

  Background

  The failure of Kaupthing Bank during the 2008 financial crisis threatened the UK subsidiary and its retail depositors.

  Action taken

  On 8 October 2008, the UK Treasury used the Banking (Special Provisions) Act 2008 to transfer the Kaupthing Edge deposit business to ING Direct and place the remainder of the bank into administration.

  Aftermath

  The transfer separated the retail deposit operation from the rest of the failed institution. A dispute subsequently arose over ING’s treatment of certain fixed-rate deposit terms advertised by Kaupthing Edge.

  Source

• 2006

  Merge Singer & Friedlander with Kaupthing LimitedM&A

  Background

  After Kaupthing Holdings UK acquired Singer & Friedlander in 2005, Kaupthing consolidated the British merchant bank with its existing UK subsidiary.

  Action taken

  The two UK operations were combined under the Kaupthing Singer & Friedlander name, and their headquarters were brought together at One Hanover Street in Mayfair, London.

  Aftermath

  The merger created a broader UK financial-services provider offering corporate and investment banking, market services, asset finance, and wealth management.

  Source

1. 1Kaupthing Singer & Friedlanderen.wikipedia.org