Britania merger vote

baby_boomer

Chairman_of_Britannia wrote:

My focus has been consistently on maintaining the financial strength of the Society

So that'll be why the merger reduces Britannia's capital ratios & Britannia is being taken over by an organisation which is making less profit than Britannia and is therefore less able to reinforce future capital ratios? [a key aspect of financial strength] :rolleyes:

baby_boomer

Alternative strategies considered by the board

Option 3. Merge with another building society. [page 21]

[Paraphrase] We can't do this because no other BS has a Member Reward Scheme. So under such a merger Britannia members could be expected to be worse off. :rotfl: :rotfl: :rotfl: :rotfl:

This is hilarious.

a) we'd all benefit from the cost savings of scrapping the entire bureaucratic, money-wasting scheme
b) Britannia's savings rates have been dire over the years, more than "compensating" for the "generosity" of the Reward
c) the Reward has been slashed in the last two years
d) I'm also losing out under the Co-op merger because the Co-op dividend is less than the Reward and it is offered to all new members - so any payout has to be diluted.
d) Any FSA hearing over a Britannia/Yorkshire BS merger would laugh in the face of Britannia's arguments if they were put by a member, rather than by our board
e) the logic of Britannia's argument here is that the Co-op is their only possible merger partner - which is hugely restrictive of the board's options, to the possible detriment of the whole membership.

So what is the real reason for merging with the Co-op rather than Yorkshire BS?

1) Yorkshire boss Iain Cornish wouldn't let Britannia man Neville Richardson be the boss!

bristolleedsfan

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5976566.ece :eek:

EdwardR_2

My opinion is it that the merger does make quite good sense. One of the main things that holds the co-op back is the lack of high street presence. Taking over britannia will give them many more branches. The co-op has also experienced record growth in recent times due to being 'different' to the bailed out banks and the future does look very bright. I think on the face of it they are trying to make the most of this current climate as the majority of people are so fed up with most the banks and also the whole 'ethical' thing will become more and more popular in years to come and the co-op are the fore runners in this case. As you delve deaper there are a few cracks that appear as people have pointed out.

The Co-operative will become a HUGE brand very soon with the take over of Britannia, Somerfield last year along with all its other services.

martinman3

EdwardR wrote: »

One of the main things that holds the co-op back is the lack of high street presence. Taking over britannia will give them many more branches.

If branches is all that they want then there will be plenty once the surplus Lloyds TSB and HBOS ones are closed, probably one on every major high street in the country.
Where I live there are still empty Barclays/Woolwich branches from the last set of closures.

premierfella

EdwardR - yes, the merger makes sense - for the Co-op!, not for Britannia (unless Britannia's management believe that they have no viable future as an independent building society because of mismanagement, which some contributors believe is a serious possibility).

The only positive I see as a member of both is that it builds a larger mutual financial institution that can compete better with Nationwide, which in the last few years seems to have lost sight of what its members want (even then this positive is limited given that the Co-op/Britannia merged entity will still be less than half the size of Nationwide in terms of assets).

cheggers

Vote against everything on the voting form for what it's worth.

Gutted to be loosing my Britannia reward, up until last year I use to do allright by it, only got £22 this year still more than I'll get on the Co-Op dividend scheme.

I would have rather Nationwide took over Britannia, if fact anyone other than Co-Op. I'll be moving my mortage elsewhere as soon as I can as Co-Op have never offered competative rates:mad: :mad:

[Deleted User]

bristolleedsfan wrote: »

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5976566.ece :eek:

All I can say to that is wow!

Just had a look at some of the other main UK banks to do a comparison of the number of directors to the size of their assets (from wiki):

HSBC Assets: 1319 Directors: 14
Barclays Assets: 2050 Directors: 17
Lloyds Groups Assets: Not sure! Directors: 16
Coop/Britannia Assets 79 Directors: 20

While I'm guessing the number of directors shouldn't really be proportional to the asset size, how can the Coop justify that many directors?

baby_boomer

Actually they are planning on 22 directors :eek:

The 20 listed and 2 more yet to be appointed!

Does mutuality = I'll scratch your back if you'll scratch mine = jobs for the boys?

apt

Presumably the numbers are needed to make sure the Co-op keeps tight control even after allowing a few ex-Britannia executives/board members a place on the gravy train. Probably the latter will be paid-off within a few years - with the members' money.