HBOS - what's happening?

GDB2222

HBOS share price down 50% over 2 days, which is way more than other banks. Surely, they are too big to (be allowed to) fail? Surely?

Just I have today withdrawn almost all that I had with them by CHAPS, but some of it will take nearly a week to clear.

ad44downey

It's probably because they're a crap bank and their management couldn't run a bath.

But there was no need to move your money. The government will bail out savers if it failed completely

motch

ad44downey wrote: »

It's probably because they're a crap bank and their management couldn't run a bath.

But there was no need to move your money. The government will bail out savers if it failed completely

As long as you don't need the cash in a hurry, could take an age to have it returned. This system has also never been tested in UK history as far as I'm aware?

WTF?_2

Stock price doesn't dictate whether or not the bank will fold.

NR didn't have to be taken over because its stock was low, its stock was low because people figured it was in bad shape and could fold.


As long as HBOS can meet the capital adequacy requirements and can raise the capital it needs to operate, it's not going to fold. I imagine stringent attempts are being made behind the scenes to make sure that it will continue trading (ie the BoE provides liquidity) as an overt rescue would cost the taxpayer much, much more.


However my advice on savings remains to stash them in NS&I and if you must have a regular savings account, go for Northern Rock.

sarkin

Short selling is the answer

The city think that HBOS are in it upto thier necks

Riq

Oh god, you're not one of those panicers that hang around outside the bank to withdraw your money like Norther Rock :rolleyes:

amcluesent

Short selling needs to be banned as unpatriotic during the current National Crisis. I expect Crash Gordon to broadcast upon his nation very soon - pound in your pocket, only thing to fear is fear itself, right decisions for the long term, crisis? what crisis? etc.

dopester

I'm guessing because they are so exposed to residential property and commercial property, and have a need to use the money markets, where the inter-banking lending rates will now be raised again. And maybe they will be back to funding Grampian out of their own pocket.

I pulled the savings I had with HBOS back in August 2007 after reading this:

(Not because I think they'll go under - they should be able to cover Grampian easily enough, but because I don't like heavy off-balance surprises, although I guess many a bank has got conduits or complex off-balance sheet financial vehicles.)

Shareholders digest £18bn HBOS shock

Published Date: 26 August 2007

By BILL JAMIESON

THOSE who thought the 'great credit crunch' was a phenomenon confined to overexcited New York traders and a few never-heard-of German banks have had a huge surprise close to home.

It came in a brief and tersely worded announcement from the Edinburgh-based bank HBOS to the Stock Exchange last Tuesday that it was extending credit to a vast in-house debt-finance fund called Grampian Funding.

Especially eyebrow-raising was the size of this Jersey-registered fund: a whopping $37bn (£18bn).

Now, gigantic though it is, you will search in vain for any mention of Grampian in the 200-page HBOS annual report

For the army of small HBOS shareholders, news that Grampian existed, never mind that it was the largest banking conduit in Europe and now needed financial assistance from its parent, came as a total shock, akin to discovering a face you thought you were familiar with had suddenly grown an enormous protrusion on the side of the head.

http://ftalphaville.ft.com/blog/2007/08/21/6731/hbos-the-latest-abcp-victim-insists-it-will-weather-this-squall/

Nikkster

S&P cuts HBOS plc to 'A+' from 'AA-'
http://www.iii.co.uk/news/?type=afxnews&articleid=6896075&action=article

amcluesent

I'd be interested in HBOS once it's a penny-share.

moanymoany

I have a 12 month thing that they have today told me I cant touch it until it is 6 months old.

I have another account and tomorrow I'm going to get it out.

Today I put most of our cash into income bonds from NS&I.