Cats Protection and the Lost Icelandic Bank Deposits

Cats Protection and lost money at Icelandic banks

Cats Protection and lost money at Icelandic banks

In 2008, at the start of the financial crisis, it was revealed that the venerable cat charity Cats Protection had potentially lost £11.4 million deposited in Icelandic banks that had gone bust.

As the total amount of money available to Cats Protection was about £34 million, the potential loss represented about one third of all cash assets, as I understand it. It must have been a very worrying time for management because most donations come from legacies in Wills and there is a loyal following which could have been tested. They could lose the trust of donors. There was talk of having to shelve some planned facilities.

At the time there was no news as to what happened. Did Cats Protection manage to recover the money?

A report online at informs me that between 78 and 86% of the money was recovered.

It was expected that in May 2012, £8.2 million would be recovered. I feel better having read that. However, it is also bad news because Cats Protection appear to have lost £3.2 million. This represents about 10% of cash assets, a very substantial proportion.

I must have had an impact. I wonder if this is the reason for the recent story about apparent cutbacks and closure of some branches, which I reported on.

If the two stories are connected it is shame because the reason why Cats Protection deposited such a large percentage of funds in Icelandic banks was because the returns (the interest) was very attractive.

However, when interest rates are attractive and the banks are foreign some caution is required and it appears that this was not the case.

Donations from people to charities should be invested in highly secure investments and deposit accounts which are absolutely solid.

There is never a justification for taking even the slightest risk with donated funds.

Note: I have nothing but the utmost respect for Cats Protection. I am just reporting cat news. However, within the organisation I am bound to respect the volunteers at the front line more than senior management. It is just my preference.

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Cats Protection and the Lost Icelandic Bank Deposits — 18 Comments

  1. I think my question is why did they deposit funds in an Icelandic bank. Obviously, an executive decision gone wrong. And, funds are being held and invested for what reason? To me, funds should be dispersed as they accumulate.
    I don’t care what region or country, all appropriations should be a matter of public knowledge when it is a charitable organization.

    • To me, funds should be dispersed as they accumulate.

      Excellent point Dee. As I was saying to Rudolph, it was a time of greed in the UK and the Icelandic banks were even more greedy in promising unrealistic returns on deposits which they could not sustain. As I recall local authorities in Britain lost one billion pounds doing the same thing, depositing in Icelandic banks. You can’t trust the Icelandics ;). They now over-fish and kill endangered wales as their main source of income.

  2. “CATS CHARITIES” should have entrusted me to invest their money! I can’t believe that a “CHARITABLE ORGANIZATION” invested “11.4 Million Pounds” in a single bank ? It doesn’t take a chartered accountant’s degree to be a astute investor or a average investor.Any bank or business that offers higher interest than the normal is liable to failure or risk in the future, a gamblers bet.After retiring from the shipping Industry i live on my investments and a reasonable comfortable life.Its not how much money you earn but how you invest your money to make your money work for you that is the secret of successful investments.Feel sad that a “Cat Charity” organization lost such a huge sum of money in a single investment.Hope they didn’t invest in the “Bernie.Madoff Mutual funds” ?

    • I agree. It was foolish to invest in Icelandic banks. It was the time of “greed” in the UK. People chasing too much money. Quick fixes. Easy money. As I recall most Icelandic banks went bust and the whole country went bust with the banks. Nowadays Iceland makes its money through fishing and they are still messing around hunting wales and overfishing, illegally as far as I am concerned.

      • Yes – Iceland is worse than Japan. Actually they kill Minke whales and export them to Japans stockpiles.

        Basically nobody except a few out of touch older generations eat the stuff and these two countries want to keep hunting and just stockpile it.


        Since when has tradition become more important than extinction.

  3. This is why it’s best to help local branches, we know for sure that any donations to ours will be safe in the hands of our co-ordinator Marion and used wisely.

  4. Yes, RuthAKA, I bullied Michael into reinstating the archives section here. I threatened to wave my magic wand and turn him into a mouse for Charlie.

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