Canterbury City Ccouncil has received its first dividend from the administrators of a failed Icelandic bank it had invested in.

It was was given £673,871, a dividend of 16p in a pound.

This is on its investment of £4 million, plus more than £178,000 in interest, that was owed on the date Heritable – which is a UK bank but with an Icelandic parent bank – went into administration.

The council is expecting more dividends in the future and reckons to be able to recoup 80 per cent of its investment in Heritable.

Another £2 million was invested in the Icelandic bank Glitnir, but the council is not expecting anything until 2010.

Council leader John Gilbey said: “We have remained confident since the start that we would get back the majority of the money invested in Icelandic banks.
“This dividend is good news and we look forward to further payments in the months to come.”

The money the council receives will be placed in reserves and will not be used for the general running of council business.

That means it will not affect the £3.5 million spending cuts the council is making over the next two years.