Bradford and Bingley - Treasury to intervene

Andrew64

[FONT=&quot]Here's a statement from the FSCS:

[/FONT]http://investing.thisismoney.co.uk/security.cgi?csi=14340&action=news&story_id=2359832&rns=1
[FONT=&quot]
RNS - FINANCIAL SERVICES COMPENSATION SCHEME [/FONT]
[FONT=&quot]The FSCS has been triggered following the failure of Bradford & Bingley to meet its regulatory requirements and its declaration of default by the FSA, prior to the making of the Transfer Order. [/FONT]

[FONT=&quot]Under the Transfer Order, the FSCS has paid out approximately £14bn to enable retail deposits held in Bradford & Bingley and covered by the FSCS to be transferred to Abbey Santander. The Treasury has made a payment to Abbey Santander for retail deposit amounts not covered by the FSCS, amounting to approximately £4bn, to be transferred to Abbey Santander. In return, the FSCS and the Treasury have acquired rights in respects of the proceeds of the wind-down and realisation of the assets of the remaining business of Bradford & Bingley in public ownership. [/FONT]

[FONT=&quot]The FSCS has financed its payout through a short-term loan from the Bank of England, which it is intended will be replaced with a loan from the Government after a short period of time. The repayment terms of the loan for the first three years provide for repayment of interest at a rate of one-year LIBOR plus 30 basis points, plus the repayment of any recoverables accruing to the FSCS from the wind-down of the business against the principal outstanding. The first payment, for interest from the period from now until end-March 2009, will take place at end-September 2009 and subsequent payments will be made annually thereafter. It is currently estimated that the first payment required in September 2009 by the FSCS under the loan will be approximately £450 million. After the first three years, it is intended that the loan will be refinanced by the Treasury, repayments of the principal to be made over a period of years in the light of prevailing market conditions. [/FONT]

[FONT=&quot]The Chancellor of the Exchequer today confirms that the Government stands behind the FSCS, so it can be relied on to be able to play its role in meeting future claims that arise. [/FONT]

pauldav76

hi everyone - being a share holder within b&b (250no.) & with the recent events ie the government taken over etc i wasnt expecting to recieve a penny for my shares, however i read in a report somewhere online that the shareholders would receive compensation

does anyone know if this is accurate & secondly does anyone know what sort of compensation us small investors might receive

is it fair to assume we'd get the value of the shares when they were withdrawn from the market ie 20p x 250 = £50??

thanks in advance

dunstonh

pauldav76 wrote: »

hi everyone - being a share holder within b&b (250no.) & with the recent events ie the government taken over etc i wasnt expecting to recieve a penny for my shares, however i read in a report somewhere online that the shareholders would receive compensation

does anyone know if this is accurate & secondly does anyone know what sort of compensation us small investors might receive

is it fair to assume we'd get the value of the shares when they were withdrawn from the market ie 20p x 250 = £50??

thanks in advance

When any company is nationalised, a valuation takes place. However, you need to remember that the fact it was nationalised because it was failing. So, in very simple terms, if debts exceed liabilities then dont expect anything. Its possible you may get a penny or two but don't hold your breath.

bristolleedsfan

Andrew64 wrote: »

[FONT=&quot]Here's a statement from the FSCS:[/FONT]

http://investing.thisismoney.co.uk/security.cgi?csi=14340&action=news&story_id=2359832&rns=1

[FONT=&quot]RNS - FINANCIAL SERVICES COMPENSATION SCHEME [/FONT]
[FONT=&quot]The FSCS has been triggered following the failure of Bradford & Bingley to meet its regulatory requirements and its declaration of default by the FSA, prior to the making of the Transfer Order. [/FONT]

[FONT=&quot]Under the Transfer Order, the FSCS has paid out approximately £14bn to enable retail deposits held in Bradford & Bingley and covered by the FSCS to be transferred to Abbey Santander. The Treasury has made a payment to Abbey Santander for retail deposit amounts not covered by the FSCS, amounting to approximately £4bn, to be transferred to Abbey Santander. In return, the FSCS and the Treasury have acquired rights in respects of the proceeds of the wind-down and realisation of the assets of the remaining business of Bradford & Bingley in public ownership. [/FONT]

[FONT=&quot]The FSCS has financed its payout through a short-term loan from the Bank of England, which it is intended will be replaced with a loan from the Government after a short period of time. The repayment terms of the loan for the first three years provide for repayment of interest at a rate of one-year LIBOR plus 30 basis points, plus the repayment of any recoverables accruing to the FSCS from the wind-down of the business against the principal outstanding. The first payment, for interest from the period from now until end-March 2009, will take place at end-September 2009 and subsequent payments will be made annually thereafter. It is currently estimated that the first payment required in September 2009 by the FSCS under the loan will be approximately £450 million. After the first three years, it is intended that the loan will be refinanced by the Treasury, repayments of the principal to be made over a period of years in the light of prevailing market conditions. [/FONT]

[FONT=&quot]The Chancellor of the Exchequer today confirms that the Government stands behind the FSCS, so it can be relied on to be able to play its role in meeting future claims that arise. [/FONT]

Didnt you read the link that I posted in Post No 120.


http://forums.moneysavingexpert.com/showthread.html?t=305655


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daveinliverpool

I too took up the offer to buy further shares at the recent rights issue, and thought I was going to lose the money I had paid.
However, I have just rung my bank and they informed that B&B had not cashed the cheque yet, and that was from 1st August, so I got my bank to stop it.
Might be useful to anyone who paid by cheque to ring their bank and check theirs.
I did have shares with B&B too, which i don't expect anything back from, but at least I got my extra right issue money back.

Stavros_3

Not wanting to **** on your chips by any means, but have you not entered into a contract with the B & B in August and the shares were purchased for you? Or were the shares not purchased? I'd make some quick enquiries if I were you

martinman3

The most interesting thing to come out of this failure is the inability of the other still solvent financial organisations and members of the FSCS to cough up their portion of the compensation. The total required was £14bn which would have been apportioned according to asset size I believe. The FSA obviously had a quite discussion with the banks and building societies and knew that at least one organisation didn't have enough money to pay so the Government loaned the £14bn.

Interesting also that the extra £4bn provided by the Treasury itself covered the portions of savings and deposits greater than £35k and this would have been lost by savers if the Government/Treasury had not done this to guarantee 100% but instead left the compensation at £35k.

Finally, several previous posts have said that it is not necessary to remove savings from B&B. However, since the savings/deposits have been moved to Abbey National plc they are now both covered by the same FSCS licence protecting £35k.

If you believe that the Government will not protect 100% of savings next time move any excess above £35k out of Abbey/B&B.
If you believe that they will do the same next time leave it where it is.

GeorgeHowell

martinman3 wrote: »

The most interesting thing to come out of this failure is the inability of the other still solvent financial organisations and members of the FSCS to cough up their portion of the compensation. The total required was £14bn which would have been apportioned according to asset size I believe. The FSA obviously had a quite discussion with the banks and building societies and knew that at least one organisation didn't have enough money to pay so the Government loaned the £14bn.

Let's hope that HMG remembers this when things turn around and the big banks start declaring profits in the mega-billions again. As taxpayers we want our money back please.

runciblespoon

runciblespoon wrote: »

Uh, no it hasn't. B&B International is based in the Isle of Man and isn't under the UK jurisdiction.

B&B International now have a notice on their website. B&BI has been transferred to Abbey and it's business as usual. So no different from the rest of the group.

Stavros_3

http://www.bradford-bingley.co.uk/announcement.asp