Voting online in proposed Yorkshire-Chelsea makover

Mithos

Old_Slaphead wrote: »

Chelsea BS up to mid 2009 had accumulated reserves of £400+million.

Given that these are significantly more than the losses over the last couple of years then where's the problem ?

Surely that's what reserves are for - to cushion the company in the bad years.....or am I missing something?


I was talking to a ex-Derbys BS manager recently - he said it was simply a confidence thing - if they'd been shown as making losses there'd quickly be a run on the BS. Given some of the BS figures being produced now, he said DBS were no where near as bad and could have probably survived but for the 'confidence' issue.

My understanding is that because everyone is having problems getting money in and being able to make money on what they do get, there is a much smaller profit to be made these days. I could be wrong but Chelsea and Yorkshire will still be paying money out for the FSCS levy that was imposed on them?? Large salary's and pension pots for the directors, coupled with the "one off" mistakes that keep cropping up. All money out and little in.

They can't borrow money at the lovely .5% from the Bank of England so they are up the creek as they cant operate properly.

Either way I agree with your point. Cut the costs that are doing Chelsea the most damage, and carry on. (Naive and out of the inner circle comments obviously )



After thinking about it, I voted NO with a smile on my face. The FSA can force the merger if its as dire as some predict. If not I hope Chelsea remain as they have for another 100 years or so.

baby_boomer

Mithos wrote: »

After thinking about it, I voted NO with a smile on my face. The FSA can force the merger if its as dire as some predict.

A very good point. I entirely agree.

Chelsea members needn't worry about the consequences of a NO vote. It can be used to send a shot across the board's bows - and any other mutual board which thinks it can take members for granted in the future.

As you say, the FSA would sort out any real problems arising out of a NO vote PDQ. That's their job & they've already done it at Dunfermline, Cheshire, Derbyshire, Scarborough inter alia - with no losses to members.

Mr_Crunch

I'm a YBS saver, and a strong supporter of mutuals. It's got to be a "no" for me on the basis that YBS' capital ratios will be diluted if it merges with Chelsea, and it will need all it's good capital ratios to thrive under a stricter FSA (or whatever) regime in the next few years. I don't buy the arguments in the merger docs - merger cost savings are rarely fully delivered, and as a glass-half-empty merchant, I fear that more impairments will materialise. Potentially another Lloyds/HBOS but on a smaller scale, and for different reasons.

scott_lithgows

I,ve got 2 YBS votes and either gonna vote yes or not bother voting.
For me its up to the Chelsea members,When the evil Abbey put in an unwelcome bid for National + Provincial BS,N+P tried to merge with Leeds Permanent to save themselves.Leeds permanent said no,evil abbey got their way.
I wouldnt wish abbey on my worst enemy.

progressive_uk

I'm a Chelsea borrower about 6 months into a 5 year fixed deal. I've got plenty of equity and I have no other connection with either Chelsea or Yorkshire.
Can somebody summarise the benefits/cons of merger from my position?

bristolleedsfan

baby_boomer wrote: »

Let's all vote for what we believe .

Off topic slightly although their is a relevance due to This Is Money comparison between pay at KRBS with Yorkshire BS, the latter organisation of which is reported to be 10 times larger in size.

Any opinions BB : http://forums.moneysavingexpert.com/showthread.html?p=28022207#post28022207

baby_boomer

I ran into a keen YBS employee supporter of the merger in Leicester today who was able to hold the official line with some confidence.

Either YBS or Chelsea in Leicester will be one of the first branches axed.

YBS and Chelsea are not more than 200 yards apart and both branches are too far south of the city centre now that the real centre has migrated north due to the Highcross shopping centre.

Granby Street (where Chelsea is) & Gallowtree Gate are starting to look like ghost towns with new boards going up every money and all the Leicester BSs, apart from Coventry, not to mention most of the estate agents, are too far south for their own good.

The banks, eg NatWest and Halifax, have begun to migrate north to reflect commercial reality, but the BSs, as usual, are stuck in their own self satisfied time warp.

Mithos

progressive_uk wrote: »

I'm a Chelsea borrower about 6 months into a 5 year fixed deal. I've got plenty of equity and I have no other connection with either Chelsea or Yorkshire.
Can somebody summarise the benefits/cons of merger from my position?

(Below points regarding the merger booklet only directly relate to Chelsea borrowers, but might indirectly effect savers too, they are only my thoughts, I hope others comment on your question also to give a more collective understanding)


1) I don't think generally mortgage holders have too much to fear unless they are on a BTL or a SVR type of mortgage. The amount of wordy jargon in the merger booklet regarding SVR or soon to be CSVR, is quite worrying (in that there is just no need for that level of complexity IMO) and potentially misleading if you are just skimming, which a cynic might say they want (Page 5).

In summary they are basically saying the CSVR will remain completely independent to the Yorkshire SVR which is 4.99%, there will be no caps or limits. But they will write to you if anything changes

Theoretically if Yorkshire say no to BTL or the high LTV borrowers they could force the CSVR up to shift people out. Chelsea are doing that already (At 5.79% it's in comparison quite high), but it will all depend on how strongly Yorkshire feel about taking on these types of loans... I'm sure others will have thoughts on that. There is also links to the Building Societies Act (1986) (page 21) regarding fair treatment to borrowers. But again its not overly helpful, and its wording does not protect against possible SVR/CSVR rate rises before or after the merger (Yorkshire just promises not to change it straight away, unless they really have to). Small positive but Chelsea Directors would have seen this coming for sometime and could have put the SVR up higher to try and save themselves. As far as I can tell its remained at 5.79% for a year now...


2) The second issue (Again page 5) to take note of is that Chelsea and Yorkshire will be separately branded. If Chelsea wind down the brand and you want a Yorkshire mortgage product you will need to start the mortgage application process a fresh. Possible fee's for revaluations etc. (This is true also if Yorkshire want a Chelsea product). So at the end of your 5 years you might have to consider moving from Chelsea rather than just picking an existing borrower product from their range: Discharge fee + Legals + set up's with the new provider + Time = Cost.


3) (The more the merger costs, the more they will have to claw back down the line). Page 18 states there will be additional costs (Which longer term will need to be made up from higher mortgage/lower savings rates etc) if the merger goes ahead, but is quite vague as to the amounts (mailing ALL members etc), you need to skip to the back pages to find some of the real cost's, only three individuals are covered by mentioning "contractual obligations" the highest being a Mr Ford who will be paid £371k plus pension payments :eek:. Its possible he might get a redundancy payout on top, but its not made clear, nor is it made clear how much they expect to pay out for all the other staff they make redundant, with the assumption they don't know who's going at this stage (Page 6).



There is quite a lot of information up there, but those are the key points that stuck out for me whilst reading. Its not a really complex document in reality, but the CSVR parts is something that does need proper time and attention.



As a saver I voted NO (Against).

If I were a mortgage holder I'd be on the fence, better then devil you know in some cases, but then there is the possibility of more competitive rates down the line. But the uncertainty and the fact Yorkshire are not in the best position either would make me vote no, IMO it will get worse before it gets better.

MiserlyMartin

YBS. Vote no. There is nothing in this for members. At least we are being given the option of voting no this time unlike those government forced mergers of Scarborough, Derbyshire BS etc. Absolute scandal that the government has steamrollered all over the banks and BS's allowing normally illegal mergers and rescues (HBOS-Lloyds)

I urge everyone to vote NO to this merger.