Bank Shares & Nationalisation

Cozworth806

opinions4u wrote: »

In the case of both Northern Rock and Bradford & Bingley, the banks would have collapsed without government intervention.

The likelihood of recovering money from Northern Rock is actually higher than for Bradford & Bingley - as B&Bs loan book is more likely to suffer losses.

So Northern Rock shareholders should expect very little and B&B substantially less than very little.

Funny that because NR was technically insolvent but B&B was not and I have seen reports that B&B shareholders may get a reasonable amount (compared to the 20p shareprice at the time when it was nationalised) whereas I doubt that NR shares will be worth anything.

It depends on how the figures stack up and if the loans made to NR are taken out of the equation prior to calculation

full-time-mum

I know this is a bit of a "how long is a piece of string" question but which banks are currently on the verge of needing nationalisation or are all of them?

Steve_xx

There is something of a discrimination issue here, as far as shareholders are concerned. Northern Rock & Bradford & Bingley shareholders may get some compensation for their loss, albeit minimal. However, HBOS shareholders have been married to Lloyds TSB and therefore they have had some of the value of their stock preserved and it is possible that once this debacle settles, that the price of their holdings may rise. I feel sure that HBOS would have collapsed if the government hadn't stepped in. Royal Bank of Scotland shares are currently trading at about half of the price that B&B were trading at before they were swooped on by the government.

Steve_xx

full-time-mum wrote: »

I know this is a bit of a "how long is a piece of string" question but which banks are currently on the verge of needing nationalisation or are all of them?

Royal Bank of Scotland can't be far off.

Andrew64

Steve_xx wrote: »

Royal Bank of Scotland can't be far off.

As RBS is already 70% government-owned, the government may decide that they don't have to bother about the other 30%. A more likely priority is to get their 43% stake in Lloyds up to 50%.

stevetodd

Steve_xx wrote: »

Royal Bank of Scotland can't be far off.

How much were RBS shares worth at their peak?

hopefulfooluk

stevetodd wrote: »

How much were RBS shares worth at their peak?

£7.05 in Feb 2007.

£3.99 if we're talking over the last year.

98% drop in value between Feb 2007 and today...

mrposhman

hopefulfooluk wrote: »

£7.05 in Feb 2007.

£3.99 if we're talking over the last year.

98% drop in value between Feb 2007 and today...

that is what they were however, it is not the best comparison method.

You must take into account the huge increase in shareholding to get a proper comparison.

Still a massive drop but not much as is being bandied around. Market cap is the comparison NOT share price.

mrposhman

Steve_xx wrote: »

Royal Bank of Scotland can't be far off.

how do you come to that conclusion. I'm not saying your wrong, but I'd be interested to read your reasoning behind it.

Blah99

mrposhman wrote: »

Still a massive drop but not much as is being bandied around. Market cap is the comparison NOT share price.

Market cap isn't the comparison when you're comparing peak to trough straight price falls.