Bradford and Bingley Shares Legal Action

sabretoothtigger

Ok I think thats right on the savings but the retail side with its shops was sold as an asset, savings they can repay. I think the figure paid was 600m not sure how that compared to actual accounts balance transfered

If the b&b average mortgage customer had 20% ltv they would have been ok but until its paid off the mortgage and house count as a positive and negative to them I think

opinions4u

sabretoothtigger wrote: »

Ok I think thats right on the savings but the retail side with its shops was sold as an asset, savings they can repay. I think the figure paid was 600m not sure how that compared to actual accounts balance transfered

£600m bought £14bn in savings accounts and the branch network. As you say, the buildings are supposedly assets (although who wants to buy high street property off them when they decide to get rid of these assets), the savings accounts are liabilities.

If the b&b average mortgage customer had 20% ltv they would have been ok but until its paid off the mortgage and house count as a positive and negative to them I think

Although the mortgage balances are assets of the business, they are poorly performing assets. I read that arrears on their large buy-to-let book were several times the industry average while they had also bought a large amount of GMAC sub-prime rubbish too. LTV on many of the poorly performing assets is, in many cases, negative equity stuff. This is loss making and while the repayments of capital on the good performing mortgages is very nice, the mix makes it near impossible for them to make a dent in the FSCS debt and interest, even with fair winds for the next 30 years.

agsnu

opinions4u wrote: »

£600m bought £14bn in savings accounts and the branch network. As you say, the buildings are supposedly assets (although who wants to buy high street property off them when they decide to get rid of these assets), the savings accounts are liabilities.

And just to spell this out more clearly, in order for Santander to take on the savings liabilities they were paid a certain amount of cash from the Treasury/FSCS. So when people say they "paid £600m" for the savings & branch network, what actually mean is they agreed to take on the liabilities of B&B for slightly less than par (e.g. we'll assume liability for £14bn of savings deposits if you give us £13.4bn in cash).