Icelandic bank makes assault on UK savings

Landsbanki, the Icelandic bank, announced an aggressive push into the UK retail savings market yesterday with the launch of an account paying more interest than any other comparable competitor.

The Icesave account, available on the internet, will pay 5.2 per cent a year on balances of £250 or more. The rate has not been artificially boosted by any short-term introductory offer, allows savers immediate access to their money without penalty, and is guaranteed to stay above the Bank of England's base rate until 1 October 2009.

Landsbanki is Iceland's oldest bank but has only recently begun expanding internationally. It bought Heritable Bank in the UK in 2003 and the stockbroker Teather & Greenwood this year.

Mark Sismey-Durrant, managing director of Icesave, said the bank would be a "long-term player" in the UK but warned Landsbanki was wary about spending too much on promotion of the new brand.

"There will be further product launches along a similar theme - we already have some experience of offering fixed-rate savings bonds, for example," he said.