Looks like West Brom Building Society is going UNDER

Balls_Of_Steel

Building society in rescue talks

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6301642.ece

hotkee

Bit dramatic to say going under - the times article says

"Although none of the societies involved is considered to be in imminent danger, the regulator is concerned about the impact of falling house prices."

It will probably get gobbled by another building society as part of the Gordon "save the world" plan - merger with Coventry or Yorkshire touted.

Its a shame the regulator wasn't so concerned about the house prices when they were rising.

sagalout1954

Good job my dosh is covered by the FSCS then! As long as I either get it back or better yet, someone takes them over & honours my 4.3% fixed interest rate 'til maturity I can't say I'm going to lose sleep over it.

Having had savings with Icesave and Kaupthing Edge when the financial sh*t first hit the fan was a worry, this isn't in the same league.

soolin

Just done my bond with them for a year, but am happy as I kept under the cover limit if it does go wrong.

[Deleted User]

Hi,

oooh, glad I saw this,was going to go for the 4.27% 'til September, tomorrow, maybe I should just go for AA 3.75%, it's only a 1 year bond, and backed by HBOS. I know WB is save for 50K, it's just the hassle I can't be bothered with, the difference in interest would be about £208, though.

Steve_xx

hotkee wrote: »

Bit dramatic to say going under - the times article says

"Although none of the societies involved is considered to be in imminent danger, the regulator is concerned about the impact of falling house prices."

It will probably get gobbled by another building society as part of the Gordon "save the world" plan - merger with Coventry or Yorkshire touted.

Its a shame the regulator wasn't so concerned about the house prices when they were rising.

I couldn't agree more, especially with your last sentence.

baby_boomer

hotkee wrote: »

Bit dramatic to say going under - the times article says

"Although none of the societies involved is considered to be in imminent danger, the regulator is concerned about the impact of falling house prices."

It will probably get gobbled by another building society as part of the Gordon "save the world" plan - merger with Coventry or Yorkshire touted.

"Going under" will be the correct phrase IMHO.

I would bet heavily against Coventry or Yorkshire being strong enough to take over the West Brom's entire business - as opposed to them taking over the savers like Nationwide negotiated at Dunfermline with the Treasury.

The Coventry was strong but unfortunately went on a mortgage splurge to expand its business because it underestimated the extent of the current housing market crash.

Fact is that the Building Societies have opted out of Gordon's "Save the World Plan" (and the old tradition of saving others in the sector) in favour of their own survival - assuming that's still an option.

The Dunfermline rescue by the government was a watershed. Why should any individual BS sacrifice themselves to sustain a reputation for the industry as a whole [which no longer exists any more] for no society going bust? It would additionally be against the directors' fiduciary duty to their own members / savers / mortgage holders.

If any society I'm a member of steps in to save the West Brom they'll be told at their next AGM that they have let their members down for the sake of a future gong.

MSErs should also note that the boss of the West Brom is best buddies with half the Nationwide board from his days i/c Portman BS. So if this story is in the open, then it's 99% certain that Nationwide isn't offering assistance.

theGrinch

hotkee wrote: »

Bit dramatic to say going under - the times article says
as part of the Gordon "save the world" plan

surely you meant the World saving Gordon plan

ChuckCash

From the article:

“It has an alarmingly high BTL [buy-to-let] and commercial-loan portfolio, combining to represent nearly two-thirds of the whole loan book,”

It also had one of the best fixed rate savings deals.

In the absence of detailed financial health statistics for these institutions i'm beginning to suspect that the best rate deals are also the higher risk deals.... how long before a new standard disclaimer appears? Something like:

Warning: your savings can go down as well up (at least for amounts > 50k).

bristolleedsfan

ChuckCash wrote: »

i'm beginning to suspect that the best rate deals are also the higher risk deals.... .

:T That has been the suspicion for many months ( if not longer) :T

opinions4u

Why oh why did our legislators and regulators allow building societies to deviate from being savings and loan companies who earned a bit of extra income from arranging home insurance?

While I can understand banks getting involved in buy-to-let and buying dodgy securitised assets from over the pond I cannot understand why lenders like the West Brom are exposed to these things.

A key part of rebuilding the UK financial services system should be to identify how the country can ensure small and local providers can operate competitively in the savings and mortgage markets against the giants such as HSBC and LBG, without taking on risk profiles way beyond sense.

Finding a solution that gives us genuine competition will be good for all.