The fate of Chelsea Building Society is decided this week...

bjorn_again

scott_lithgows wrote: »

I find it hard to believe that the British people put their cash into Spanish and Australian banks but dont support their local Building Society.

Bit of a no brainer really. Savers generally save to support themselves. If a Bank looks safe and is offering a better rate than the local BS thats where their money will go. Altruism is not a sentiment I would call upon when deciding where my cash goes.

dzug1

scott_lithgows wrote: »

I find it hard to believe that the British people put their cash into Spanish and Australian banks but dont support their local Building Society.

Spanish... yes

But Australian? Which ones's that?

But hard to believe? No - they do, the majority of them, what's in their perceived short term interest.

Chadsman

dzug1 wrote: »

But Australian? Which ones's that?

Clydesdale and Yorkshire Banks are both owned by National Australia Bank. In the Daily Mail article it was rumoured that NAB was interested in Chelsea but IMHO it will be a cold day in Hades before any BSoc sells itself to a PLC no matter what the state of their finances.

Here is a nice piece of spin from the Chelsea website...
http://www.thechelsea.co.uk/media/media_press_release_20090820.html

Exited Kaupthing Singer & Friedlander (Icelandic bank) position with a £9 million gain compared to year end provision

Old_Slaphead

scott_lithgows wrote: »

I find it hard to believe that the British people put their cash into Spanish and Australian banks but dont support their local Building Society.

Spanish and Australian banks employ British people therefore support the local economy.

BSs don't have shareholders to keep happy therefore if they can't offer competitive rates then there's something seriously wrong (Directors & staff paid too much, too many glossy brochures, new computer systems, flashy offices, unaffordable pensions, no critical mass ?).

dzug1

Chadsman wrote: »

Clydesdale and Yorkshire Banks are both owned by National Australia Bank.

Ah - news to me. You live and learn.

Primrose

I'll be very disappointed if they have to merge for two reasons. Firstly I have found them an efficient building society to do business with and merging will well mean result in less efficient administration during the transition period. Also it will undoubtedly mean a reduction in the number of financial institututions with separate licences available to enable savers to spread their money around and remain protected by the compensation limit.

Mithos

RayWolfe wrote: »

As above, because they are borrowing from "the market" and cannot get those borrowings replaced by "the market" and it is too much to get from savers quickly.
They are paying their directors too much.
They have "invested" in lavish head offices.
They have foolishly "invested" in some very strange instruments.
They have lent too much money to people who cannot repay.
Apart from that, your point is well made!

Thanks for your answer, (and everyone else's too!). I suppose to me its just too much money to grasp in my head, looking back on my question, forcing a redemption of a few mortgages is not going to cover them if they have seriously over stretched, and looking back at the yearly voting reports they sent, its clear they were wasting excessive money on the supposedly best "top" people :eek:. Still those comments are clearly in hindsight and its not like we didn't all ride the gravy train at the time, who could guess what was on the other side of the tunnel.


They were still around after the Icelandic blunders and the disastrous half yearly reports, survived a lot longer than others, maybe they still have life left in them. *shrugs* (Prove the Daily Mail wrong Chelsea!)

ed123_2

....I have found them to be the most efficent bank/building society I have dealt with (& that is alot)...the staff are polite & well informed. They opened an account for me within two days & I had the passbook by post before the cheque had cleared! It will be a real shame if the Chelsea "brand" disappears.

Hungerdunger

Mithos wrote: »

I'm obviously a bit naive, but I've never understood how a BS can go "bust" or become insolvent.

It's my understanding that the crisis was at least partially caused by this mortgage fraud.

baby_boomer

Mithos wrote: »

I've been with them for many years and have always thought it very powerful,

It just goes to show how image can be misleading .

I went to a Skipton BS AGM and asked the directors in private afterwards what they thought of their balance sheet compared to Chelsea BS.

They eventually stopped laughing.

And that was before the Iceland fiasco and the incompetent buy-to-let disasters the Chelsea management brought on itself as they sought to maximise their bonuses by taking risks at our expense

The Chelsea directors have long milked our company for £millions and they have got off scot free.

The new emergency CEO is a Nationwide man who may well take Chelsea into the arms of Big Daddy.

Good riddance to the whole self-serving board. It's about time they lost their overblown sinecures .

Mithos wrote: »

I know its a daily mail link,

No it's not. It's a Financial Mail on Sunday link and the author knows more about the subject than any journalist in the country. Respect where it's due.

scott_lithgows wrote: »

I find it hard to believe that the British people put their cash into Spanish and Australian banks but dont support their local Building Society.

Could it be disconnect between the name - "Chelsea" and the HQ in "Cheltenham" which puts them off? Chelsea has long been just a national business.

melbury wrote: »

If there is a merger do you think there will be any payout for existing Chelsea customers?

No. The problem is getting someone to take them on for £0 given the current losses and future uncertainty !

Jeff_Prestridge wrote:

That probably leaves just two shows in town - Yorkshire, the country's second-biggest society and Coventry, number three

The real issue is not whether there should be a windfall, but whether a merger with Chelsea, without the FSA taking on board some of the weaker loans, would weaken or strengthen Yorkshire or Coventry BSs in the long term. Obviously it would strengthen the salaries of the directors of those societies in the short term.