Looks like West Brom Building Society is going UNDER

Ifts

I also took out the E Bond 23 (fixed term investment to 30 September 2010) last month, got the investment certificate in the post last week dated 30 May 2009.

Personally I am not worried because it is FSA authorised and the £50,000 FSCS depositor compensation limit covers your savings.

At the moment the FSA are trying to save it so it can carry on trading as West Bromwich building society and remain an independent.

I don't think savers or borrowers have anything to worry about, they will not loose out. Even Mr Peston's report from the BBC starts off with "Savers with the West Bromwich will not lose a penny".

If it does get taken over by another institution then as consumers we will all loose out, there will be less competition in the market and therefore even worst deals for savers and borrowers.

asbokid

I see the hand of GMAC, the finance arm of General Motors, is yet again behind another British banking crisis.

Yet more dodgy yankee car loans have been dumped on the Great British Building Society sector... and no surprise those loan books have turned sour.

You've got to wonder why the societies ever bought these ticking timebombs known as "collateralised debt obligations". I guess the BS directors were never really in it for the members. Most of them are Establishment nerds, parachuted in from the City, and that is where their allegiance always lay - in the City. In fact many of the societies' board members are still working in, and for the City. Cuckoos in the Nest. Foxes in charge of the Chicken House..

This whole charade remind me of the party game "hot potato".. The CDOs that the Societies have been snapping up with our hard-earned savings are like the hot potato in the party game. You never hold them for a second longer than necessary because you WILL get your fingers burned.

So where is GMAC in this, and who is REALLY managing it from behind the curtain? Best guess is the same old hands who've pulled the strings of Western finance for hundreds of years..

The FT reports that there are 60 subordinated debt holders owed £188m. They will be swapping their debt holdings for an equity stake in the West Brom. They become shareholders. And their new holdings will be ranked pari passu with ordinary building society members.

In effect, the West Brom is being partially de-mutualised to benefit the usual City Rogues - a sinister and faceless cabal of London bankers. And as for the members? Their assets are being diluted by 20%, to begin with.

The bankers are now brazenly robbing the building society sector, one of the last bastions of people-power in finance.

This private demutualisation will be the first of many.

It would be nice to hear the Tories stand up for the little man and condemn this swindle. But since those crooked tyrants are simply the other end of the same pantomime horse that houses New Labour, that is a slim prospect.

The contrived collapse of the building society sector through carefully choreographed crisis after crisis, is all about consolidation, removing choice and competition.

The High Finance fascists who run the City and Wall Street are determined to rape the little people for the very last cents in our wallets.

Ifts

asbokid wrote: »

The contrived collapse of the building society sector through carefully choreographed crisis after crisis, is all about consolidation, removing choice and competition.

Could'nt agree with you more, your post made a great read, thanks.

likklegem

How thankful am I that the BBC has just announced this:


"The West Bromwich Building Society has said that it has reached an agreement with debt-holders over a deal to boost its financial strength. The society's difficulties had led to reports that it may be broken up, but by converting its £182.5m debt into capital, this should be avoided.
It now has a financial buffer to absorb losses and avoid insolvency.
Analysts say this will allow it to keep its independence or to merge at some point in the future.
The West Bromwich employs about 850 staff in 46 branches and has about 350,000 customers. It is the UK's eighth largest building society. "

Although £40million in the red is terriable I'm greatful that their not going under. Hubby and I have £67K in there!

edda

The Chief Exec has been on local radio this morning to say that the West Brom is staying independent.

This backs up their latest news release:

http://www.westbrom.co.uk/westbrom/news?id=2157

and the BBC's local summary:

http://news.bbc.co.uk/1/hi/business/8096498.stm

Possible good news - if its stops another merger.

Steve_xx

likklegem wrote: »

How thankful am I that the BBC has just announced this:


"The West Bromwich Building Society has said that it has reached an agreement with debt-holders over a deal to boost its financial strength. The society's difficulties had led to reports that it may be broken up, but by converting its £182.5m debt into capital, this should be avoided.
It now has a financial buffer to absorb losses and avoid insolvency.
Analysts say this will allow it to keep its independence or to merge at some point in the future.
The West Bromwich employs about 850 staff in 46 branches and has about 350,000 customers. It is the UK's eighth largest building society. "

Although £40million in the red is terriable I'm greatful that their not going under. Hubby and I have £67K in there!

Yes one the one hand it looks good, ie it remains independent - for now. On the other hand it is effectively part demutualised and the debt buyers have effectively secured a stake in the business and they'll want their pound of flesh in return. The pound of flesh will come from future profits which might normally benefit the members in the form of decent savings rates.

However, any perceived problems arising for existing recent bond issues have effectively been quelled and the bonds will now continue on to their natural conclusion.

I guess in a nutshell that this means that rates for savers will remain low while rates for borrowers will slowly increase. The gap between the two becoming wider as these institutions battle for survival and try to restore their balance sheets.

CLAPTON

so we seem to have

-mutual building societies (nationwide etc)
-part mutual, part demutulaised (West Brom)
-fully independant banks (HSBC/Barclays)
-part nationalised banks Lloyds/RBS
-wholly nationalised banks Northern Rock

it will be interesting to see which offer the best saving rates and the best mortgage deals

personally I would bet is won't be Nationwide but time will tell.

Trollfever

CLAPTON wrote: »

so we seem to have

-mutual building societies (nationwide etc)
-part mutual, part demutulaised (West Brom)
-fully independant banks (HSBC/Barclays)
-part nationalised banks Lloyds/RBS
-wholly nationalised banks Northern Rock

it will be interesting to see which offer the best saving rates and the best mortgage deals

personally I would bet is won't be Nationwide but time will tell.

Not sure where the Bradford & Bingley mortgage book fits into this.

opinions4u

Trollfever wrote: »

Not sure where the Bradford & Bingley mortgage book fits into this.

Wholly nationalised pile of doggy doo.

steady__eddie

"The West Brom has been a mutual building society for 160 years and is committed to staying that way. That is because, as a building society, we don't pay dividends to outside shareholders. This means that we are able to pass on more to our members." :T