Nationwide swoops on battered rivals

Liloly

I have been a long time member of the Derbyshire (10 years plus) and Cheshire (9 years) and have substantial savings in both.

I can fully appreciate in the current climate why no windfalls are being paid.
Like others though I find it difficult after having "the benefits of mutuality" spun to us each year in the annual report and voting papers that both societies are now being gifted away.

I am not sure if this has been raised, but does anyone know if when Derbyshire/Cheshire customers become members of the Nationwide, will they be given voting rights and the possibility of a windfall should the Nationwide ever become a bank. (It is in theory possible once better times are here.) If not and/or for whatever reason any potential windfall they would otherwise have had only goes to pre-existing Nationwide members then that would, I think be a case of double robbery.

mikbruin

Liloly wrote: »

I have been a long time member of the Derbyshire (10 years plus) and Cheshire (9 years) and have substantial savings in both.

I can fully appreciate in the current climate why no windfalls are being paid.
Like others though I find it difficult after having "the benefits of mutuality" spun to us each year in the annual report and voting papers that both societies are now being gifted away.

I am not sure if this has been raised, but does anyone know if when Derbyshire/Cheshire customers become members of the Nationwide, will they be given voting rights and the possibility of a windfall should the Nationwide ever become a bank. (It is in theory possible once better times are here.) If not and/or for whatever reason any potential windfall they would otherwise have had only goes to pre-existing Nationwide members then that would, I think be a case of double robbery.

You will get Nationwide membership rights but if you also have a nationwide account that you "signed away to charity", this will overide your derbyshire/cheshire memberships. This is what happened with the portman
merger. Crazy but true!

MarkyMarkD

martinman3 We won't ever see 2008 accounts for the acquired societies. That's the whole point of getting the "merger" done by the end of the year.

Good point, mikbruin. We should be advising all "full" members of Cheshire and Derbyshire to ditch their signaway Nationwide accounts pre-merger, in order to gain full Nationwide membership.

edwinac_2

In light of the rapacious asset raid on the Derbyshire and the Cheshire, aided and abetted by the FSA, I figured the following story should be saved from the memory hole.

It serves to underline the M.O. of the vulture financiers who circle menacingly above our mutuals.

Here we see the gangsters set on stealing the members' interests at the Irish Nationwide building society.

Reuters has now pulled the article, offering no explanation for why. We can presume it was deleted because it was unmitigated propaganda, without any basis in fact.

Chalk it up as another Reutersgate moment.

Yet again, the financial "news" agency is caught with its pants down, peeing over its hapless readership as a service to the fascist financier-oligarchy of the City and Wall Street.

Irish Nationwide denies talks to avoid insolvency

By Elena Moya
Reuters - Friday, September 5 08:35 pm

LONDON (Reuters) - Building society Irish Nationwide denied on Friday that it was talking to its lenders to avoid insolvency.

"This is totally and absolutely incorrect," an Irish Nationwide spokesman said.

"There is no truth whatsoever in the Reuters report. It is a false and malicious report."

Reuters reported earlier that the company had entered the talks after being hit by a falling real estate market.

Some vulture funds are already circling the company, a source close to the situation said.

Distressed investors can profit from an insolvency as a sale of assets would repay their debt -- usually purchased at heavy discounts.

Dublin-based Irish Nationwide Building Society had total assets of 16.1 billion euros (13 billion pounds) at the end of last year, according to Moody's Investors Service.

"They are looking very shaky," the source said. "They are in a very bad position."

Moody's earlier this week downgraded the company's debt, citing an increasing exposure to commercial property and development and the rapid deterioration in land and property values in Ireland and the UK.

Irish Nationwide put itself up for sale earlier this year.

However, a sale is unlikely given the industry's prospects, Moody's said in its note.

cheggers

Lets hope the fat cats at Cheshire/Derbyshire get the boot and leave empty handed. I for one have never voted for the directors bonus on any of the annual voting forms.

edwinac_2

The Irish Independent and the Irish Times are now both reporting that the Irish Nationwide building society is to sue the Reuters agency which published this "totally malicious" insolvency story.

Unlike the Derbyshire and the Cheshire, who both fell victim to the coordinated smear campaign that precipitated their takeover, the Irish Nationwide has the full backing of the Financial Regulator in Dublin.

In a press statement published on the Society's home page, the Irish Nationwide reports:

IRISH NATIONWIDE WISHES TO CONFIRM THAT A MEDIA REPORT REGARDING THE SOCIETY CARRIED ON THE REUTERS WIRES ON FRIDAY 5TH SEPTEMBER 2008 IS COMPLETELY FALSE AND WITHOUT SUBSTANCE.

REUTERS SUBSEQUENTLY STATED THAT THE REPORT WAS INCORRECT AND HAVE WITHDRAWN IT.

THE FINANCIAL REGULATOR HAS ALSO STATED “THERE IS NO BASIS FOR THE REUTERS REPORT”.

DR. MICHAEL WALSH, CHAIRMAN OF THE IRISH NATIONWIDE SAID:

“I WISH TO REASSURE ALL OUR MEMBERS THAT THE SOCIETY IS AND CONTINUES TO BE A STRONG PROFITABLE FINANCIAL INSTITUTION WITH VERY STRONG LEVELS OF CAPITAL AND LIQUIDITY.

WE CAN CONFIRM THAT THERE IS NO BASIS TO THE REUTERS CLAIM. I WOULD LIKE TO RE-ITERATE THAT THERE IS ABSOLUTELY NO SUBSTANCE TO THE REPORT AND WE ARE PURSUING THE MATTER WITH REUTERS.”

Nevertheless, the Reuters agency, through its London correspondent, Luke Baker, continues to deny that its report was false.

Baker, formerly an "embedded" Reuters reporter with the US military (and certainly no stranger to dressing lies as fact) stated this afternoon that further information should be sought from his colleague, Jodie Ginsberg. The Dublin-based Ginsberg was not available for comment at the time of writing.

A number of institutions have made no secret of their desire to take control of the Irish building society. The institutions that are on the public record include HSBC plc, the Quinlan private equity house, the Icelandic Landsbanki, and General Electric Money.

We can reasonably assume that Reuters published this false and malicious story on behalf of one of the above, or on behalf of an as yet unidentified finance house.

The objective of the story was to weaken the building society by triggering a flight of capital from its reserves. Had the Irish Regulator not intervened, this could have served as the catalyst for the hostile takeover of the society.

Exercise extreme scepticism if you should read the Reuters "news" wire!

Froggitt

Its a scandal that the members of Derbyshire and Cheshire are being robbed of their inheritance. Instead, over £200million of reserves are being subsumed into the Nationwide, and no recompense at all is being given to those members......be they 30 year members or carpetbaggers.

The very same directors who trumpet every year how strong their building society is, are the directors now going cap in hand to the FSA and NW with a begging bowl. Two hundred years of history trashed in the space of sx months due to their poor decision making. Two hundred years of reserves poured down the toilet in the dash for profit.....and why.....for heavens sake they are a mutual society.....why get into Liars Loans?

If they had sold themselves to a bank or another building society 8 or 9 years ago, the members would have received payouts in the region of one or two thousand pounds......at its peak Northern Rock was worth about £6,000 plus annual dividends of a few hundred pounds.

The directors have pocketed hundreds of thousands of pounds every year, and will probably trouser another windfall when the Nationwide consign them to the skips they deserve. And the members......not even bus fare home.

edwinac_2

PremierFella wrote: »

the timing and nature of the recent announcement appears to indicate that neither society has freely chosen this Nationwide merger option.)

Good point. And the financial press was otherwise engaged in its frenzied reporting on the Fannie Mae and Freddie Mac scandal, forcing this British takeover story off the front pages.

The timing of this announcement was just too coincidental for chance!

In the words of Jo Moore, that notorious "New" Labour spinmeistress, this was an obvious opportunity for news management, a "good time to bury bad news".

And it is VERY BAD NEWS for members of the Derbyshire and Cheshire, who have been robbed of a vote that could have triggered large windfalls.

Who would have rejected that in the current economic climate?

edwinac_2

Instructive is the universal fawning praise of the FSA published in the corrupt corporate media. Ne'er a whisper of contempt. That silence speaks volumes.

How obvious it is that the same power elite who control the City of London and Whitehall, also control the newspaper industry.

And the last thing those dastardly crooks ever want to do is put the public in the know if that would raise their hackles.

Andrew Hill, one of the slime-mould scribblers at the FT (motto: without fear or favour!!), even gloats in the Sept 9th paper:

"[T]he Financial Services Authority was strictly hands-off..and..in answer to greedy carpetbaggers with rose-tinted eyewear: no, you will not get a merger bonus, and, since you ask, no, you won't get a windfall from Nationwide either."

Meanwhile, over at the Daily Mail, Viscount Rothermere's rag, the paper's "finance columnist of the year", Tony Hazell, claims absurdly:

"[T]he Nationwide's takeover of the Derbyshire and Cheshire..has been conducted with minimal fuss and without worries for savers... This is a lesson to the banking industry and Government."

Whereas, over at Murdoch's Times, the paper's business editor, David Wighton, sniggers that:

"it's hard luck on the members, who will get no windfall from the takeovers and aren't even allowed to vote on them!.. [They]..have seized upon a little-used clause in the Building Societies Act to bypass the tedious democratic business of consulting the owners before seizing their property (members can make representations to the FSA and much good may it do them).

The agenda to this outrageously biased reporting which exhibits total subservience to the City, is to completely drown out the howls of protests from the hundreds of thousands of little people, robbed of their nest-eggs in the run up to what may be the most austere Christmas since World War II.

Moroever, all this dubious reporting pre-supposes that a genuine crisis actually exists at these two societies.

The facts simply don't bear out that claim.

Many suspect that this crisis was engineered in order to remove two players from the marketplace. Doubtless the banksters are plotting further ways right now to sink and drown other societies.

martinman3

edwinac wrote: »

Instructive is the universal fawning praise of the FSA published in the corrupt corporate media. Ne'er a whisper of contempt. That silence speaks volumes.

How obvious it is that the same power elite who control the City of London and Whitehall, also control the newspaper industry.

And the last thing those dastardly crooks ever want to do is put the public in the know if that would raise their hackles.

Andrew Hill, one of the slime-mould scribblers at the FT (motto: without fear or favour!!), even gloats in the Sept 9th paper:

Meanwhile, over at the Daily Mail, Viscount Rothermere's rag, the paper's "finance columnist of the year", Tony Hazell, claims absurdly: Whereas, over at Murdoch's Times, the paper's business editor, David Wighton, sniggers that: The agenda to this outrageously biased reporting which exhibits total subservience to the City, is to completely drown out the howls of protests from the hundreds of thousands of little people, robbed of their nest-eggs in the run up to what may be the most austere Christmas since World War II.

Moroever, all this dubious reporting pre-supposes that a genuine crisis actually exists at these two societies.

The facts simply don't bear out that claim.

Many suspect that this crisis was engineered in order to remove two players from the marketplace. Doubtless the banksters are plotting further ways right now to sink and drown other societies.

From the Nationwide press release

The Derbyshire has assets of £7.1 billion at 30 June 2008 including £1.4 billion of near-prime and sub-prime residential mortgage loan assets and £0.5 billion of commercial loan assets. The sub-prime and commercial loan books were closed to new business in March and May 2008 respectively. The Derbyshire's core residential mortgage business is sound and The Derbyshire has no commitments to buy further mortgage portfolios. All of the assets and liabilities of The Derbyshire will be adjusted to their fair value at the date of the merger. Nationwide is satisfied that The Derbyshire's general reserves are sufficient to cover conservative fair value adjustments including current and expected future losses on The Derbyshire's assets.
As at 30 June The Cheshire had assets of £4.9 billion, including a prime residential book, with excellent asset quality of £2.4 billion. The Society has limited exposure, of less than £0.15 billion to near-prime and sub-prime residential mortgage assets. Of its £0.6 billion commercial loan book, £0.3 billion comprises loans to registered social landlords. The balance is a diversified loan portfolio secured on commercial property assets. In accordance with accounting regulations, the assets and liabilities of The Cheshire will be adjusted to their fair value at the date of the merger. The Cheshire is strongly capitalised and Nationwide considers that The Cheshire's general reserves are sufficient to cover Nationwide's conservative fair value adjustments including current and expected future losses on The Cheshire's assets.

Derbyshire BS has already taken a hit of £17m for the half-year with more to come, has reserves of only around £250m and has £1.4bn of near-prime and sub-prime assets on residential property and £500m for commercial property which are losing value.

Cheshire BS has been operating with a £1m profit, has reserves of only around £180m and has £150m of near-prime and sub-prime assets on residential property and £600m on commercial property which are losing value.

The facts are there, they know the level of arrears and the negative equity situation and they know that it is going to wipe out all their reserves in the years to come. Nationwide have taken on a lot more risk than people realise, especially with the Derbyshire BS.