Nov. 21 (Bloomberg) -- Kaupthing Bank hf, one of three failed Icelandic banks under government control, lent about 310 million pounds ($460 million) to U.K. customers to spend on sailing boats and planes.

Kaupthing Singer & Friedlander, the bank's London-based arm which is in administration, had a ``private'' loan book of 1.29 billion pounds shared between 400 customers, according to accounts filed at Companies House, Britain's corporate registry, by Ernst & Young LLP. Of those loans, 219 million pounds were to buy yachts and 90 million pounds were given to customers for ``aviation'' purposes. Another 425 million pounds were to buy property.

Iceland seized control of Kaupthing Singer & Friedlander's Reykjavic-based parent on Oct. 9, completing the takeover of a banking industry that collapsed under the weight of foreign debt. The bank's London business lent money to a roll-call of the U.K.'s most successful property names, including Robert Tchenguiz and brothers Nick and Christian Candy, none of whom were mentioned in the filing.

``A line by line review of the loan book'' is taking place, Ernst & Young said in the filing. The focus is on ``the performance of the borrower, the quality of the security and the potential realization strategy.'' Ernst & Young declined to comment on the loans when contacted by telephone.

Kaupthing Singer & Friedlander had two other loan books, according to the accounts. The ``property'' loan book totaled 937 million pounds, of which 35 percent was lent to ``large commercial projects'' and 15 percent to residential projects.

The value of U.K. shops, offices and warehouses has slumped 28 percent since their peak in June last year, as the industry grapples with one of its worst economic slowdowns in history.

The ``corporate book'' of Kaupthing's London unit totaled 824 million pounds. It lent about 16 million pounds on ``football'' deals, according to the filing.

Kaupthing Singer & Friedlander's spokespeople in London referred calls seeking comment to Ernst & Young.

To contact the reporter on this story: Chris Bourke in London at cbourke4@bloomberg.net

Last Updated: November 21, 2008 11:28 EST