MSE News: Mortgage blow as building society hikes SVR

Thrugelmir

sarahbennett wrote: »

What difficulties? Record profits? Rampant acquisition trail? Multi million pound margins? If my company had difficulties like this, I'd be in clover.... :-)

Do you have inside knowledge of the financial circumstances of the Skipton?

Thrugelmir

sarahbennett wrote: »

I agree, but as you are aware of the details of this particular fraud/deception on behalf of the Skipton Building Society, perhaps you should be at another forum discussing flippant people who never read contracts or seek advice, as opposed to (as in this case) people who have law degrees, read every term, and even check the case law.

Skipton have taken money by demanding it of their customers but they have no legal basis to do so, the contract does not provide it. An organisation that is in difficulties is not in a position to buy bad debts and bail out other financial institutions.

I do agree that people should try to read their own contracts, but fail to see how any amount of reading of this contract would have led the buyer to magic up an interest rate floor on their floorless base rate tracker mortgage.

And how could the Skipton foreseen the set of financial conditions which exist today. The measure they have imposed is most likely temporary.

As a customer you have the option of remortgaging elsewhere.

JPS29

Thrugelmir wrote: »

Do you have inside knowledge of the financial circumstances of the Skipton?

Freely available on Skipton's website, a message from David Cutter.....

I wanted to respond to some of the themes emerging by clarifying a few points:
Skipton is a financially strong business
The Skipton Building Society Group is profitable and well capitalised. At this time of year, Stock Exchange rules prevent us from publishing details, but when our annual results are published at the end of February, they will show that our capital and profits increased in 2009 compared to 2008.

This would back up Sarah's statement Thrugle, would it not....

Thrugelmir

JPS29 wrote: »

Freely available on Skipton's website, a message from David Cutter.....

I wanted to respond to some of the themes emerging by clarifying a few points:
Skipton is a financially strong business
The Skipton Building Society Group is profitable and well capitalised. At this time of year, Stock Exchange rules prevent us from publishing details, but when our annual results are published at the end of February, they will show that our capital and profits increased in 2009 compared to 2008.

This would back up Sarah's statement Thrugle, would it not....

The board and management of any organisation have to take a far wider and longer term view than just a focus on historic profitability and current capitalisation. Words such as record profits are emotive rather than factual. If a business has grown in size then one would expect total profits to increase etc.

Considering the fate that has befallen many of the mutual building societies. The Skipton appears to be well run and survived the financial crisis unscathed.

If Skipton was unable to secure sufficent deposits, with a run similar to NR but obviously for different reasons, then it too would close its doors.

So the issues are more complex than merely the interest of the borrowers who are sharing the pain equally, rather than a selected group suffering it all. As I said previously this pain maybe only on a temporary basis anyway.

The_Dentist

I have my final response letter from the Skipton Building Society, which is signed by David Cutter (actual signature - not computer generated). It is 4 pages in length and is almost as detailed and robust as the letters I have sent the Society. Some of the points I would think are unique to my own personal circumstances. I would describe the Society's attitude to my individual relationship with them as expressed in the letter to be highly confrontational and direct. This is not unexpected.

Of note is a rebutal of Barca v. Mears. But nothing particularly exciting that is worth reiterating here.

Of exceptional note however is the response to my allegations regarding the retrospective defining of "exceptional circumstances" and also the Society's actual right to make such a determination.

"It was not our intention to retrospectively define, 'exceptional cirumstances' for the purposes of the contract. Nor have we at any point claimed that we have the sole right to define 'exceptional circumstances'. We have defined them because of the onus to show objectively that exceptional circumstances exist. For the benefit of our borrowers we chose not to use an extensive list of circumstances - as you are aware there are many other circumstances which could have been included, but are not so easily measurable. It is not simply our own belief that the circumstances we used in our definition are exceptional."

Intriguing.

I find it difficult to believe that any person reading the initial letter from the Society and the accompaning Q&A leaflet would have come to this conclusion. If this truly was the Society's basis - I don't think they expressed it in the initial communication. The initial leaflet is missleading.

Thrugelmir

The_Dentist wrote: »

Of exceptional note however is the response to my allegations regarding the retrospective defining of "exceptional circumstances" and also the Society's actual right to make such a determination.

"It was not our intention to retrospectively define, 'exceptional cirumstances' for the purposes of the contract. Nor have we at any point claimed that we have the sole right to define 'exceptional circumstances'. We have defined them because of the onus to show objectively that exceptional circumstances exist. For the benefit of our borrowers we chose not to use an extensive list of circumstances - as you are aware there are many other circumstances which could have been included, but are not so easily measurable. It is not simply our own belief that the circumstances we used in our definition are exceptional."

Intriguing.

Seems a logiical and considered view.

I'm unsure as to why you consider the defining to be retrospective. Surely the basis of the Skiptons boards decision was taken in light of the financial information available to them, and the concensus view for the future. Based on the likely impact to the finances of the BS if matters were to stay the same or in some respects deteroriate further.

howardtheduck

Thrugelmir,

I find your latest posts to be packed with even more inane drivel than your previous ones. How can you be so obtuse?

Let me, once again correct you like a loving parent lawfully chastising a petulant (and in your case likely !!!!!!) child.

You earlier asked SarahBennett if she had inside knowledge of Skipton's finances? However, your sympathies for the "parlous" (I'm being sarcastic by the way) state of poor li'l Skipton's finances are deeply misplaced given their financial results. For your benefit, I will kindly elucidate Skipton's financial position for the year ending 31st December 2009.

(1) In 2009, Skipton's pre-tax profit increased from £41.0m to £63.5m (In 2008 pre-tax profit for Skipton was £22.5m).

(2) In 2009, Skipton's retail balances increased by £2.3bn in 2008 to £10.5bn (that's an increase of 29%!). The number of Skipton savers increased by 145,000 to 700,000 (mainly as a result of the merger with Scarborough Building Society).

(3) In 2009, Skipton's mortgage assets increased by £1.3bn to £10.7bn, mainly as a result of the Scarborough Building Society merger.

(4) In 2009, Skipton's Tier One capital ratio up 20% to 10.8% (In 2008 Skipton's Tier One capital ratio stood at 9.0%)

(5) In 2009, Skipton's estate agency business, Connells, produced an exceptional trading performance, recording a profit of £54.1m (In 2008 the trading performance was £10.4m).

(6) In 2009, the sale of Skipton's credit and marketing services subsidiary, Callcredit Information Group boosted profitability by approximately £40m and increased Skipton's available capital.

Hands up everyone who feels Skipton Building Society is the victim here? Just 1? Why am I not suprised it's you Thrugelmir?

Hands up everyone who feels Skipton's mortgage borrowers are the victims here? 64,000 (that's the approximate number of Skipton borrowers who are suffering as a result of Skipton's actions).

God I love democracy!!!

(IANYL)

howardtheduck

My spider sense is tingling. Why do I have the sneaking suspicion that Thrugelmir's real name is David Cutter? If it's not David Cutter, he's no doubt one of Cutter's obsequious fawning sycophants.

(IANYL)

The_Dentist

The circumstances were not defined in the original contracts but have been defined now. I would therefore suggest that the circumstances have been retrospectively defined.



"The circumstances currently prevailing are exceptional under each of two separate tests, which have recently been defined by the Society's Board as follows:


1. Base Rate is less than or equal to 2.7%; or


2. Base Rate minus the UK average Branch Instant Access savings rate (as published monthly by the Bank of England) is less than or equal to 2.5% for each of the three preceding months.


The circumstances will remain exceptional for as long as either one of these tests continues to be satisfied."

MarkyMarkD

If you pick the relevant bits out of howard's post, you might draw the right conclusion about Skipton Building Society's (not Skipton Group's) results:

howardtheduck wrote: »

For your benefit, I will kindly elucidate Skipton's financial position for the year ending 31st December 2009.

(1) In 2009, Skipton's pre-tax profit increased from £41.0m to £63.5m (In 2008 pre-tax profit for Skipton was £22.5m).

(5) In 2009, Skipton's estate agency business, Connells, produced an exceptional trading performance, recording a profit of £54.1m (In 2008 the trading performance was £10.4m).

(6) In 2009, the sale of Skipton's credit and marketing services subsidiary, Callcredit Information Group boosted profitability by approximately £40m and increased Skipton's available capital.

Right, so Skipton Group made £63.5m profit, of which £54.1m came from Connells and £40m came from the sale of CallCredit.

So Skipton BS made a profit of ... er ... minus £30.6m. How is that not a disastrous loss? And how is that sustainable?