£612m For B+B savings arm

swiss69

For all the doubters Santander are masters of cost cutting. I know from experience! They are an extremely well run and efficient bank and will keep the staff and branches they want and let the rest go over time. This is a fantastic deal for them hence the 2% drop in share price today against 10-20% drops for the Uk banks. Santander share price is no lower today than it was 12 months or so ago - Compare this to Lloyds - 60% lower over the last year and taking on all of HBOS debt! Surely this increases their risk against Santander reducing their risk - Which one seems more sensible to you??

MarkyMarkD

Yes, as others have said, I was serious. The FSCS has really been done for £14bn. But, and it's a big "but", the £14bn isn't a real deficit, because it's protected by some sort of charge (notional or real) over B&B's assets.

Basically, the £14.5bn the government has lent to B&B via the FSCS, and the £4.6bn the government has lent to B&B directly, will be repaid first out of whatever they get from realising B&B's assets. This will happen either naturally - as and when mortgage borrowers repay, and their loans aren't replaced by new ones - or less than naturally, if B&B sells blocks of mortgages on to other lenders.

There is no reason for the FSCS to make a levy to recover the £14.5bn from its members, because the ultimate loss will no way be £14.5bn. The FSCS levy is limited to c.£4bn per annum in any case, but I don't even see why a £4bn levy in the current year is necessary, and nor is it advisable given the fragile state of the banking industry.

More likely, IMHO, that the levy will be restricted to (say) the interest on the £14bn - around £0.9bn-£1bn per annum - with the remainder left until the final outcome is clearer.

Even a £1bn levy is unpalatable - don't get me wrong. But I don't think people should scaremonger and suggest that the FSCS will be stealing £14bn from its members' pockets.

baby_boomer

In the USA this'd be the sort of thing that would be scrutinized by Congressional committees.

In the UK, Gordon does what he likes and the details seep out via the press and internet in due course.

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baby_boomer wrote: »

In the USA this'd be the sort of thing that would be scrutinized by Congressional committees.

In the UK, Gordon does what he likes and the details seep out via the press and internet in due course.

Absolutely agree. Good or bad deal, should be scrutinized by the Parliament first, not Gordon's decision alone.