Barnsley B. Soc. to be part of Yorks

Milarky

Something else from the statement struck me: Technically this is a 'merger of equals'. The usual ballot requirement has be waivered by the FSA for both societies.

Why do only one set of members recieve a 'Merger Notification Statement'? (The same query applies to the Nationwide-Derbyshire-Cheshire faux-merger - and also the Nationwide-Portman [one ballot but no 'Notification' of NW members] and Chelsea-Catholic [one ballot but no 'Notification of Chelsea members] mergers.)

(Just on the technicalities...)

baby_boomer

Because the rules say that if the society is more than 5X the size of the other, then this can happen, subject too FSA approval.

Etccarmageddon

you could look at it like this... YBS (ie. its members to be precise) are taking a risk of losing £10million (or perhaps more if Barnsley have other skeletons in the closet) BUT the YBS have said if they get the £10million back they (might) hand it back to the (soon to be) former barnsley members.

So in some respects the YBS members are being short changed... they are guaranteeing the £10million short fall if it isn't returned from Iceland but if it is (probably) giving it to the Barnsley folk only - a lose lose scenario. Surely if the £10million is recovered it should be distributed amoungst equally to all members of the newly merged society.

baby_boomer

And in the meantime there are 4 major Yorkshire branches within 200 yards of half of the 8 strong Barnsley branch network - so the long term cost savings, once you've also ditched the Barnsley HQ, are considerable.

Barnsley jobs are "safe" for now, because there's no need for YBS to talk about job cuts until the merger is in "the bag".

These significant merger benefits will go to the whole society in due course. It's not rocket science to see how they will be achieved.

But YBS should pay Barnsley members for these long term benefits in the meantime.

Milarky

The statement from the Barnsley here

The Yorkshire intends to pursue the two Icelandic banks (Kaupthing Singer & Friedlander and Heritable) for recovery of the monies that had been deposited with them by the Barnsley. Should this be successful, the Yorkshire will consider an ex-gratia payment from the proceeds, net of recovery costs and tax. Any such payment will be made to those members who were saving or borrowing members of the Barnsley on 21 October 2008 and who meet certain conditions, including continuing as members of the Yorkshire to the date of any payment. The terms of any payment will be determined by the Yorkshire at the time of recovery and may take into consideration the size of balances (in the case of savers) maintained at the Barnsley over the intervening period. The Yorkshire cannot guarantee, however, that a payment will be made.

So if you have a Barnsley passbook and are already a member of YBS it appears you could not close the Barsnsley account any time post merger. Might make sense to actually close your Yorkshire accounts instead, at that stage!!

alanq

Oblivion wrote: »

Apart from Nationwide who seem to keep their hands clean, who the heck knows. I've still got Coventry high on my list of reliables ... unless someone knows better? Dave.

"Though Chelsea's exposure to Iceland is understood to be the biggest among building societies, other mutuals-known to have money tied up in the country's crippled banks are Coventry, Leeds, Nationwide and Skipton."

http://www.dailymail.co.uk/money/article-1076688/Iceland-effect-stalks-mutuals-panic-withdrawals-savers-forcer-mergers.html

Oblivion

alanq wrote: »

"Though Chelsea's exposure to Iceland is understood to be the biggest among building societies, other mutuals-known to have money tied up in the country's crippled banks are Coventry, Leeds, Nationwide and Skipton."

http://www.dailymail.co.uk/money/article-1076688/Iceland-effect-stalks-mutuals-panic-withdrawals-savers-forcer-mergers.html

Ah well, at least that article says "Coventry said its exposure was half that of Chelsea's and would have little impact on the society's profitability."

So I take some comfort from that. Just hope they're not telling porkies like some banking institutions have been recently :rolleyes:

Dave.

baby_boomer

That'll help wipe the smile off CEO David Stewart's face. He was so smug at the last AGM when he said that Coventry had no exposure to CDOs and SIVs.

What's a paltry £25m between 1 million mutual friends?

Well actually it's 0.25% worse interest rates for a year for every saver and mortgage holder. And at Chelsea that's going to be about 0.7% worse, so they'll have to spread it out over the next few years . Worth considering if you have variable rate accounts with these institutions.

This loss wouldn't have been part of Cov's plan as they went about their aggressive 2008 mortgage expansion programme.

And Leeds BS has also been up front advertising its financial strength. Not quite so strong now.

pem2

It would appear one way or another, directly or indirectly everybody in the UK has deposited money in Iceland's banks.

baby_boomer

Yes. You might have been sensible enough to steer clear, but your building society bosses were clever enought to invest your money in Iceland for you!