The authority has successfully scratched back all but £1m of the money it invested in the bank, called Glitnir.
The money was transferred on 16th of March 2012.
Brent Council is still expecting to recover 100 per cent of the original amount.
So far £6.8 million of a £10 million of council deposit have been saved with a second bank called Heritable.
The council expects will recover £8.8 million of the original deposit it made within the next two years.
Councillor Muhammad Butt, Brent Council's deputy leader and lead member for finance and corporate resources, said: "We are absolutely delighted that we have recovered £4 million of taxpayers' money from Glitnir.
"Despite our success we are very conscious that the job isn't finished. Brent Council, the Local Government Association and LGA member councils will continue to work with the various winding-up boards to expedite remaining payments."