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Ooooh er missis. What do we do now? Is it time to panic, pull the cash, stuff it in the mattress? Or is this more financial malarkey to get us lemmings on the run?
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We are the state's representative in our constituencies and we should not be frightened of taking decisions on behalf of our constituents, because that is to the general good.
The Rt Hon.Kevin Barron MP getting his job description a$$$ about t!!
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We won't get the truth from the current batch of directors - at least not in this year's accounts.
It will be interesting to compare the West Brom BS's results for the year to end March 2009 with their confident statement half-way through that financial year.
Quote:
The West Brom continues to perform strongly through the current, unprecedented economic times. As the UK’s seventh biggest building society, the West Brom is a successful and profitable business, generating tangible benefits for its 530,000 members.
This statement was made the day before the announcement that the Chief Executive was standing down . If West Brom does have to be bailed out, it is worth considering that it is x3 the size of Dunfermline and that one ratings agency had warned Nationwide that if it bails out any more BSs it would be downgraded.
All BS directors have to watch their backs since their increased salaries and bonuses over the last decade have come on the back of the very same diversification policies [into buy-to-let / self-certification / commercial property / Icelandic banks / buying dodgy loan books to boost the assets ] that are hitting the societies so hard.
Your £50K is safe - guaranteed by the government - but what are the interest rates going to be like as these societies try to repair the damage over the next five years?
Another problem with the £50K protection, necessary as it is, is that it will delay the process of a flight of savers money to the stronger societies and a weeding out of the weak.
The article is a case in point. Martin Lewis is effectively directing savers towards the West Brom with its new top 4.3% rate - and why not since the government will bail it out if it has to?
Last edited by baby_boomer; 17-04-2009 at 6:25 PM..
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"....Scaremongering and inaccurate reports could cause significant damage to the short and medium term outlook for the sector and possibly the long-term stability of the building society movement in the UK."
So should we be having this discussion at all, when we already know the conclusion?
After all, Martin has had the first and the last word. £50K and under in UK building societies and you're safe as houses.
Sorry for the bad analogy
Last edited by baby_boomer; 17-04-2009 at 7:29 PM..
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"....Scaremongering and inaccurate reports could cause significant damage to the short and medium term outlook for the sector and possibly the long-term stability of the building society movement in the UK."
Ohhh.
Mr. Peston (and, subsequently other reporters,) reporting on Northern Rock is ringing bells here for some, clearly, obscure reason.
Quote:
Originally Posted by Media
$ENTITY on the verge of downfall, if inaccurately reported, and if readers assume the worst and withdraw all funds. !!! !!!one!!eleven!!11.
Apropos of nothing, I've not heard much from Mr. Peston recently - has he been sacked/demoted?
Quote:
We are the state's representative in our constituencies and we should not be frightened of taking decisions on behalf of our constituents, because that is to the general good.
The Rt Hon.Kevin Barron MP getting his job description a$$$ about t!!
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Size 12th with £3.3bn in assets Wholesale funding 25% Average loan to value 33%. Our average LTV for new business is around the 75% mark Arrears and repossessions Three to six months arrears are 0.46% of all mortgages, and over six months 0.43%. Properties in possession 0.12% of total Solvency ratio 12.2% as of Dec 2002
Subprime exposure None Message to members "We have an outstanding record for safety. The society is a financially robust, profitable and well-capitalised institution and has absolutely no exposure to subprime lending. Our arrears and provision levels are consistently below the industry averages."
".....The Government had to pay Nationwide to take Dunfermline off the taxpayers' hands. Some of the others may not be so lucky. Virtually all of them were subjected to "stress testing" by the FSA when applying for the Government's credit-guarantee scheme. Dunfermline failed, but the rest of them seem to have passed, suggesting that the situation for the remaining tiddlers may not be quite as bad as the "whistle-blower" thinks.
Whatever. The bottom line is that the entire banking system only continues to exist courtesy of the taxpayer right now. The Government's implicit guarantee of bank deposits makes us all believe our money is safe, but if you want to know who is underwriting your account, just take a look in the mirror. It's you and me."
## - Well put. Except that it's taxpayers AND savers. The strain this puts on interest rates [because of the FSCS levy] will last for years.
Last edited by baby_boomer; 18-04-2009 at 9:21 AM..
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Building societies got up to some pretty stupid things, it seems
:
http://www.guardian.co.uk/money/2009/apr/17/building-societies-risk
Building societies face awful truth about boom-time spending spree Building societies snapped up high-risk mortgage packages in the boom years. Now the extent of their rashness is revealed, threatening the credibility of the whole sector
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i have some savings in the cambridge building society, but i've been googling in vain to find a credit rating and none appears on the society's website. does anybody know where we can obtain these ratings? the blurb from the society says it is risk averse and local, but i would like a rather more independent opinion. any pointers very welcome...
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Cambridge is pretty staid and really is a traditional building society. It doesn't have a rating because it doesn't raise money in the capital markets, and was less tempted to get involved in business it didn't understand. Therefore it has had a better year than many.
"Who says the era of the small building society is over? The Cambridge has managed to turn a neat profit of £2.5m and add to its reserves in the worst financial market in human history. It has only needed to take one property into repossession...."
I'd say its capital & reserves were OK for its risk profile.
Which is not to say that it won't come under increasing pressures in the future as it hardly has economies of scale & its expenses are considerably higher than the larger societies.
Last edited by baby_boomer; 19-04-2009 at 11:41 AM..
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I've just had a word with a friend who works in the finance dept of a County Council who is involved in deciding where to invest/save the Council's money. He tells me that the 3 big rating agencies don't rate building societies with assets of less than 2 Billion Pounds. Anyway, he can only get ratings for the bigger societies. CBS has assets of about 750 Million Pounds. There may be ratings out there, but not by Moody, Fitch or S&P. That could explain why you can't find anything!
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Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps. Take care over copyright. Use excerpts and links rather than copying long text. This site asserts copyright on all comments posted on the board.
Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps.
Building Societies - are they safe?
. If West Brom does have to be bailed out, it is worth considering that it is x3 the size of Dunfermline and that one ratings agency had warned Nationwide that if it bails out any more BSs it would be downgraded.
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