Britania merger vote

baby_boomer

Where did our reserves go?

The reserves have shrunk by more than 10%. Usually when a society makes a profit - as Britannia did in 2008 - the reserves grow.

Has anyone got any ideas? The directors aren't telling in the accounts. Except to say that they are really keen on financial stability. Which = looking after the reserves .

At the moment I'm making the assumption that they have taken £120m from the reserves to "invest" in or prop up one of their subsidiaries.

withnell

The reserves have gone down to pay off some of the liabilities, which have also reduced.

If the Co-op wanted more branches, why didn't they buy Bradford&Bingley? Nice load there, cheap in a fire sale!

Britannia currently offers higher savings rates than the Co-op, so even though for members of less than 5 years the co-op bonus is slightly bigger, it doesn't make up for the lower interest rate.

jack_spratt_2

EdwardR wrote: »

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.

At last someone making a common sense statement !! myself I would prefer the merger than having to wait to be bailed out by the financial protection scheme if things go hairy.

withnell

jack_spratt wrote: »

At last someone making a common sense statement !! myself I would prefer the merger than having to wait to be bailed out by the financial protection scheme if things go hairy.

You are assuming that Britannia will go under? They're well capitalised, and 97% of mortgages are covered by deposits - the ones that have gone under had problems borrowing money on the wholesale markets

With the co-op, the rates offered are lower - and surely overall it's safer to have an account with each as separate entities?

EdwardR_2

Co-ops accounts will be published in this week coming, I'm 100% sure that these will be very positive and show that they are bucking the trend in the current climate. Another positive towards a merger?

EdwardR_2

withnell wrote: »

You are assuming that Britannia will go under? They're well capitalised, and 97% of mortgages are covered by deposits - the ones that have gone under had problems borrowing money on the wholesale markets

With the co-op, the rates offered are lower - and surely overall it's safer to have an account with each as separate entities?

The co-op also has 100% deposit ratio to mortgages

Old_Slaphead

I'm with cheggs on this and will be voting NO. I'll also be voting with my feet when Brit R/S matures.

Directors will make a packet - rewards for failure.

Members will get a few vague assurances on future stability.

cvd

They're well capitalised, and 97% of mortgages are covered by deposits - the ones that have gone under had problems borrowing money on the wholesale markets

I thought the Britannia borrowed a greater proportion of its money on the wholesale markets than any other building society. The figure I saw was 34% .

See also here:

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5562981.ece

One credit agency has said it will downgrade the Co-op because " its credit and funding risk profile will weaken as a result of the merger”.

jack_spratt_2

withnell wrote: »

You are assuming that Britannia will go under? They're well capitalised, and 97% of mortgages are covered by deposits - the ones that have gone under had problems borrowing money on the wholesale markets

With the co-op, the rates offered are lower - and surely overall it's safer to have an account with each as separate entities?

Fitch downgraded the building society from A- to A on November 24 over concerns that its credit risk is set to deteriorate. As the economy worsens, the agency believes the society's high 'loan to value' lending on its specialist mortgage book could cause problems. However it recognises the high quality mortgages held by the society's members, which accounts for almost half of the society's loans.
Analysts have long expected its rating to fall due to its exposure to subprime mortgage assets and the tough economic environment for building societies in the UK.

I am not saying that Britannia is going belly up!! but I am pretty sure no mutual would throw away its independence without considering the worldwide economic situation and how it is best to act for the benefit of its members

EdwardR_2

Hmm... interesting point cvd. Could this end up like TSB/HBOS merger? I don't think so, In the short term it may be the case but long term Co-op/Britannia will be a profit making machine