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BS ratings downgrades
baby_boomer
Posts: 3,883 Forumite
Telegraph
"...Fitch had earlier downgraded the Britannia, Principality and West Bromwich to a B/C from B..."
Are Principality and West Brom the next to be "rescued"?
Britannia may be too big for the sector to rescue and will have to sort itself out.
It would appear from the Nationwide's statement about the Derbyshire & Cheshire rescues that society directors have been branching out into unsuitable commercial mortgage areas as a way of boosting growth, profits and bonuses.
Unfortunately mutuals are only accountable to their financially ignorant members, so there is too much scope for poor management decisions to go undetected.
However the sectors is healthy according to the BSA.
"...Building Society director general Adrian Coles has also sought to reassure investors. He said: "The building society sector is coping well in the current difficult conditions in the housing market. Societies have strong balance sheets, are well capitalised, have high levels of liquidity and have experienced record saving inflows over the last year."The mergers announced today do not involve any need for government guarantees, or tax-payer funded liabilities. They illustrate the strength of the building society sector and its ability to act swiftly to pre-empt potential difficulties......"
"...Fitch had earlier downgraded the Britannia, Principality and West Bromwich to a B/C from B..."
Are Principality and West Brom the next to be "rescued"?
Britannia may be too big for the sector to rescue and will have to sort itself out.
It would appear from the Nationwide's statement about the Derbyshire & Cheshire rescues that society directors have been branching out into unsuitable commercial mortgage areas as a way of boosting growth, profits and bonuses.
Unfortunately mutuals are only accountable to their financially ignorant members, so there is too much scope for poor management decisions to go undetected.
However the sectors is healthy according to the BSA.
"...Building Society director general Adrian Coles has also sought to reassure investors. He said: "The building society sector is coping well in the current difficult conditions in the housing market. Societies have strong balance sheets, are well capitalised, have high levels of liquidity and have experienced record saving inflows over the last year."The mergers announced today do not involve any need for government guarantees, or tax-payer funded liabilities. They illustrate the strength of the building society sector and its ability to act swiftly to pre-empt potential difficulties......"
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