NI Presbyterian mutual society, Short of funds for withdrawal?

purt

joylikes2shop wrote: »

AS USUAL THE LONG POST I'D BEEN WORKING ON 'DISSAPEARED' SO -LUCKY FOR YOU- HERE'S THE SHORTENED VERSION....

You ought to type your posts into Notepad or Word before you go to post them.

expat68

sharkey8 wrote: »

I think that you are being too complacent in your approach to this issue. We are currently immersed in an unparalleled financial crisis. The UK economy is especially vulnerable due to its over-dependence on the property and financial service sectors. Assuming they accepted liability, at the very least the Government would have to establish a contingency fund to meet the anticipated risk. This would involve mapping the potential extent of any liability. I suspect from reading your previous posts that you have a very good knowledge of the banking sector, so why are you downplaying this??

"Since the Treasury unveiled its bank rescue in October, it has injected £37 billion into the sector and guaranteed about £100 billion out of a proposed £250 billion of lending under the credit-guarantee scheme." That'll be the contingency fund then - the remaining £150 billion should just about cover it. I expect the directors statement of affairs should give a view of any maximum liability in the short term.

How can you be so certain? If the experience with the PMS is anything to go by the level of risk attached to loanbooks and exposure to the property sector could be high. With the current nervousness amongst investors another run on cash like that experienced by the PMS would probably have a domino effect.
So what is the difference in risk terms in lending to Irish property developers??:huh: Compared to RBS's loan book to a single Russian oligarch about £2.4 billion, that £2.5m default is being paid by you assuming you are a taxpayer - the government owns >70% of RBS currently. My point is the assets in PMS while current lowerthan book price are identifiable , not recycled and repackaged financial instruments from other banks

I do not want to appear to be a "troublemaker" but you really do need a reality check on here.

Hopefully you have a reality check

Nomad25

I think at times like this, when people are shell-shocked, they will 'grasp at straws', it's not so much they need a reality check [like some of them have lost all their savings], it's a kinda unreal situation to take on board. They are hoping that someone, anyone can give them some support and perhaps a few glimmers of a possible solution.

If they just 'suck it up' then it's tantamount to accepting the situation and giving up the fight.

I agree that the PCI should be held morally responsible and be made to account for their part in all of this. However, it would appear this will not happen yet and not unless people are seen/heard to be 'kicking off'.

Hence the need for us to keep up the morale of the savers, until the proverbial very publicly hits the fan and the administrator's report is published.

Perhaps PCI could offer some of its' assets as security against rescue funding to the PMS?

I'll leave the financial analysis to those of you more in the know.....who could also perhaps outline what the inexperienced [in these matters] should be doing now to keep themselves right.

Put yourselves in the shoes of a pensioner, who has no financial adviser [other than their minister :rolleyes: ] and savings with PMS - what is their best course of action for the time being?

OldJohn

A few issues still puzzle me - it has been stated that PMS only advanced 70%-75% against any property type loan, why should the loan book be so far out? and if the Commercial property owned by PMS was purchased ~ 5years ago why is it so far off the book value and lastly did the PMS not have funds set aside to allow for loan defaults?

Nomad25

You got me! These appear sensible questions to me - any answers out there.

leftieM

I understood that the PMS didn't keep a sensible capital level for back up so it was 'asset rish, cash poor' to coin a phrase. Obviously, then , when the call on the existing capital exceeded what they had to hand they couldn't meet the demand because their assets are illiquid i.e. mainly property which takes months to turn into cash.

OldJohn

In reply to Nomad25, would it be possible for the PCI to purchase Shareholders share certificates and when the situation improves, have them repaid by PMS. For example this could be limited to £1000 per shareholder per month on an 'if you desperately need some funds basis', I believe most urgent needs would be obvious - money paid out would have cheque made payable to nursing home etc. - A lot of work for someone, but would help the ones in dire need at present. Just an idea.

Nomad25

:T Thanks Leftie, that's such an easy explanation and much easier to understand than all the financial jargon. OldJohn - do you think that idea would be 'do-able'?

sharkey8

Indeed I do have a reality check Expat!

As you well know you are not comparing like with like:
- Mutual Societies and Credit Unions are not Banks.
- The PMS was not regulated by the FSA and is not a member of the FSCS.
- All the UK registered banks and the majority of Building Societies are regulated.

I would not remotely try to defend the lending behaviour of our banks over the past decade or so, (RBS in particular), actively condoned by the current Government. I think it was/is greed fuelled madness and was always going to end in disaster.

However, the scale of the problem with the banks is completely different as you pointedly illustrate! They are also 'joined at the hip' in terms of Government support & credit guarantees. In effect allowing any of the major banks to fail would have a catastrophic effect on the other banks, never mind the economy at large. Brown & Co. can never allow that to happen. Hence, trying to draw an objective comparison with your situation is daft.

OK, I may appear to be stirring it up but this is typically the kind of view you will get from across the water in particular.
I have said my piece and will now put my parachute on and depart the aircraft down the rear ramp. You will hear from me no more!

OldJohn

In the midst of this most are worried about the relative long term, if we heard we would get all of our money back say over 3 years most would be happy, but for those who are in desperate need for small sums, there must be something that can be done. Certainly the PCI would be able to assist with this. Maybe the Administrator will have something in mind when the result of the vote comes out, but that would probably need another postal vote to pass - time marches on. I believe it's do-able. I'm begining to think a share certificate is as valuable piece of paper as paper money!