Nationwide swoops on battered rivals

cheggers

Don't expect a massive windfall if any.

Most savers ended up with £165 after tax when the Nationwide took over the Portman last year, and that was when they took over the 3rd largest Building Society not the 10th & 11th largest!!!

Looks like there will be some busy days at derbyshire and Cheshire branches this week with people jumping on the band wagon.

Speculator

cheggers wrote: »

Don't expect a massive windfall if any.

Most savers ended up with £165 after tax when the Nationwide took over the Portman last year, and that was when they took over the 3rd largest Building Society not the 10th & 11th largest!!!

Looks like there will be some busy days at derbyshire and Cheshire branches this week with people jumping on the band wagon.

It's already been established that there will be ZERO windfall with these two mergers. Therefore, no one will be "jumping on the band wagon."

ad44downey

cheggers wrote: »

Don't expect a massive windfall if any.

.

If you read the thread further up you'll see that it's already been announced that there is zero windfall. And no vote.

baby_boomer

Nice work by Nationwide to pick up £billions of our assets for £0

When they eventually start closing the branches, sacking the staff and merging the brands the Nationwide directors will rake it in.

Is it time to close accounts at the mutuals and just chase the highest rate? Could I learn to love Kaupthing Edge et al?

:idea:

If other mutuals are financially strong they won't merge.

And if they are financially weak there won't be any windfall.

And if the FSA thinks the 9th and 11th largest societies are suddenly in the gravest financial crisis, there isn't much of an argument for selecting mutuals for our savings on the grounds that they are financially more secure .

Because clearly they aren't. Unless the FSA isn't telling us the truth.

edwinac wrote: »

What on earth is a British building society doing purchasing dodgy sub-prime loans from overseas?

I'd have thought that was obvious? To fuel director bonuses . And they can get away with it because there is zero accountability at mutuals.

Gorgeous_George

Hmmm...

I opened an account with DBS as recently as last month. I only put £1,000 in but I was considering adding another £34K. At the moment this is with Nationwide e-savings (I like to have immediate access).

I could offset it in my Britannia mortgage account but if they are struggling, maybe it would be better under the bed.

Or maybe Premium Bonds - after all, the country cannot go bankrupt - can it?

Not enough to worry about thankfully.

GG

steady__eddie

One thing puzzles me which hopefully someone in the know on here will enlighten me about.
I am assuming that both Derby and Cheshire approached Nationwide for a fix and it was not a case of the other way round ? I am aware, that by asset size Nationwide is probably bigger than the other remaining 58 societies put together but are there no other societies capable or probably more importantly, willing to enter into a forced marriage ? I am obviously thinking here of Britannia and Yorkshire. Perhaps it is perceived that they would not be capable of sustaining the possible losses which the disgraced societies are facing ?
At least it would have stifled the Tesco style growth rate of Nationwide within the mutual sector and the possible pitfalls ?

noh

Deleted_User wrote: »

How do they get round NOT giving members of CBS and DBS a vote. Surely it is down to the members to decide?

Isn't this what mutuality is all about?

http://www.fsa.gov.uk/pages/Library/Communication/Statements/2008/bs_mergers.shtml

Nigel

Milarky

Under the 1986 Building Societies Act (the 1986 Act), the FSA has powers that it can apply in certain circumstances in relation to building society mergers. Section 42B of the 1986 Act provides that if the FSA considers it expedient to do so in order to protect the investments of shareholders or depositors of a building society, it may direct that a transfer may proceed by board resolution only rather than by seeking the approval of the members of the society.

That rather presupposes that the beefed up depositor protection scheme - the FSCS - advised on and under the auspices of the same FSA only 12 months ago - wouldn't "protect the investments of shareholders or depositors" of either Derbyshire, Cheshire (or any other 'small') building society. Yet I thought they'd fixed that scheme after Northern Rock, so that it will now protect the deposits of 98%+ of people? Is there another group of depositors (non-members? PIBS?) that are completely unguaranteed or something?

Surely the conditions allowing the FSA to disregard normal consultation aren't met? The depositors ARE protected - not by the societies themselves but by the industry-backed compensation scheme.

Effectively the FSA must be saying: "Things are so bad with these firms they are about to 'pop' [dubious]. We could ask the members - but that would not be 'quick' enough. So we'll act to 'protect' the assets of those people by taking away their title rights. Even though they're already 'insured' we don't want to risk anyone actually claiming under the FSCS as that would collapse the whole house of cards."

[Hmm, nice, an insurance policy that works only so long as no one ever tries to claim...]

Yes, I know what people will say to that: "There is no pot of money to bail out these societies if they fail - merely as system of 'promises'"

Again, my point would be that if the FSCS is not to trusted why have it? Individuals who 'under-insure' don't get paid out. Drivers get into trouble - it is the responsiblity of everyone (but the insurers it seems) to make sure they are adequately covered.

Why can't the FSCS be used here - unless it isn't needed because there really is very little chance of a preciptuous failure of these societies.

mikbruin

I am totally outraged by these "mergers". I 've going round like someone with tourets all day! Some points I would like to raise are:

1) Why is big better. If they need rescuing a little building society won't be a problem, but if Nationwide goes belly up, its a real problem. An earlier poster is exactly right, they are bigger than the rest put together, and by the looks of it getting bigger still.
2) Derbyshire BS is 150 years old. It is having a bad year but it has assets of £7000,000,000. To give it away is madness. Cheshire is really quite a good business, it just had a bad deal go bad.
3)irrespective of the special regulations they have outlined, surely it is possible for an emergency extraordinary resolution to be put forward, with enough support, that we have no confidence in the board. In the summer they sent a re-election document wanting to be re-elected, stating everything was hunky dorey! Now is transpires they knew they were a basket case of sub prime loans.
4) Maybe a company in the private sector would like to buy one of these building societies, and even if they paid a few million for it, the proceeds could be distributed for a windfall.

what do you think?

Gorgeous_George

I think some people are more concerned about 'their' windfall than the future of the banking system.

GG