MSE News: Mortgage blow as building society hikes SVR

VIGILANT22

[QUOTE=howardtheduck;

God I love democracy!!![/QUOTE]


It even means you're free to move mortgage lenders if you're unhappy with the current one........

Thrugelmir

howardtheduck wrote: »

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.

Such utter drivel. To be appointed to the role he has. I'm sure David Cutter's an extremely competent individual that has no need to read the posts on here. As he's more pressing problems to contend with.

howardtheduck

Spoken like a true fawning lackey Thrugelmir.

Now for the benefit of MarkyMarkD, Thrugelmir, and Vigilant22 (who if they had a braincell between them would be considered dangerous) the following is taken directly from Skipton Building Society's website (Financial Results for year ended 31st December 2009).

"On Wednesday 24 February Skipton Building Society announced increased group profits to £63.5m - despite some of the most difficult trading conditions the Society has seen in its 157 year history. The results show our financial strength has increased significantly. The Group's ongoing success is down to our uniquely diversified business model – as well as a pragmatic approach to decision making and a clear plan for steering the business through the further challenges which undoubtedly lie ahead in the marketplace."

Skipton Building society itself confirms it has made huge group profits of £63.5 million!!!

Now how do you like them apples?

(IANYL)

Thrugelmir

howardtheduck wrote: »

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!!!

Seems other posters are able to read and obtain an understanding Skiptons financial information in a proper manner.

As MarkyMarkD has pointed out the SBS lost money, some £30m .

So each borrower of the Skipton has cost the society around £500.

MarkyMarkD

Howard, if you cannot understand the difference between SBS and Skipton Group, you'll obviously keep drawing the wrong conclusions.

And of the £63.5m "record profit", £40m was a one-off profit from selling a profitable business, which will leave the Group more than £40m worse off next year.

Regarding other comments, I don't think anyone here seems to understand that the size of the balances compared to the margins in building society accounts mean that it is a mere twinkling of the eye to get from say a £25m group profit (after stripping out the £40m exceptional) to a significant loss which can erode most of the free capital.

Just making up some numbers, if Skipton BS has £10bn of mortgages (it's something like that) then 0.1% on those balances costs/earns them £10m.

And during the course of the last financial year, Skipton's profitability has probably been falling month on month, as their average savings rates have risen (new money coming in at high fixed rates; old money going out at lower variable rates) and their average mortgage earnings have fallen (as LIBOR has fallen a lot). 'Cos that's how it is for other building societies too.

http://www.thisismoney.co.uk/libor has a graph which shows what I'm talking about. It took until September 2009 for LIBOR to hit the bottom, so for each month before that in 2009 most lenders were earning more money than they were from September 2009 onwards and are now.

howardtheduck

MarkyMarkD,

On what accounting basis do you separate Skipton Building Society from Skipton Group? Skipton Building Society is part of Skipton Group and Skipton Group (of which Skipton Building Society is but one of the many companies operating under its umbrella) are in profit yet you're separating Skipton Building Society from Skipton Group?

I shall use a recent (and poignant) example to illustrate my point. If Cadbury's make a loss next year (not likely I might add), whose bottom line is it going to hurt? Cadbury's or Kraft's?

Talk about missing the wood for the trees!!!

(IANYL)

Thrugelmir

howardtheduck wrote: »

MarkyMarkD,

On what accounting basis do you separate Skipton Building Society from Skipton Group? Skipton Building Society is part of Skipton Group and Skipton Group (of which Skipton Building Society is but one of the many companies operating under its umbrella) are in profit yet you're separating Skipton Building Society from Skipton Group?

I shall use a recent (and poignant) example to illustrate my point. If Cadbury's make a loss next year (not likely I might add), whose bottom line is it going to hurt? Cadbury's or Kraft's?

Talk about missing the wood for the trees!!!

There's a fundamental difference between Krafts and the Skipton. Skipton is a mutual organisation and therefore is unable to recapitalise in the same manner that Krafts is able to as a public company. Furthermore the SBS deposit base can literally walk out the door, whereas shareholders are unable too.

Interesting view that borrowers should receive subsidised mortgages. If this is the case.

howardtheduck

I fear we're losing sight of the purpose behind this thread. I'm going to keep it simple. I've referred my claim against Skipton to the Unfair Contract Terms Team at the Financial Services Authority and I'm aware that the law firm that previously successfully represented Equitable Life policyholders has submitted a class action claim against Skipton to the Office of Fair Trading following receipt of counsel's opinion. Beyond these avenues of redress, there is the Financial Ombudsman Service and ultimately, the courts. Personally, I'm very confident that Skipton borrowers like myself have an excellent case and whilst the systemic aspects of Skipton's improvidence are all very interesting, they are not material to the legal challenge. We're going to win, Skipton is going to lose, and Skipton's balance sheet will remain a mere academic point to be debated until stars burn out by those so inclined.

For those who still doubt the strength of the case against Skipton, feel free to look at how the Halifax reacted to Jon Pain of the FSA's speech to the CML on 2nd December 2008. It decided not to try and enforce the collar in its tracker mortgages because it had not been included in the KFI. A spokesperson for Halifax said "This has been our decision. In making the decision, we have consulted with the FSA". Does that sound familiar to anyone? Skipton are claiming that they arrived at their decision to scrap the SVR pledge after "consulting" with the FSA. Methinks they're being somewhat economical with the truth!

The KFI issue is just one of the many points to challenge the rate rise with. It is not the only issue. Let the courts be the final arbiter of what is just and right.

To those who bleat about the systemic risk of holding Skipton to their pledge I say only "Fiat justitia ruat caelum".

(IANYL)

JPS29

The_Dentist wrote: »

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.

.

Hi Dentist.

Thanks for the update. I'm still waiting for mine but in the meantime can you elaborate on the above, re confrontational. Is it basically if you dont like what we are doing, move provider?

The_Dentist

To be fair on the Society - No.

However I used to live in the Property mortgaged to the Society as my main home. I have subsequently left the city in which the property is located and am renting it out. I may eventually return to the property and live in it as my personal circumstances dictate.

The Society is fully aware of this matter and has previously consented to the letting. It is also aware (from re-reading my various loan application and BTL consent application) that I own the home I currently live in and rent out two properties in total one of which in the property mortgaged to the Society.

The Society has asked me to seriously consider (their phrase not mine) if I fall within the definition of "consumer" within UTCCR 1999! on basis that I am engaged in the business of property letting, (specifically on basis I rent out two or more properties)!

I think that is particularly confrontational (regardless of taking into account the merits of the argument) as clearly of the 60,000 people impacted by the decsion I would think it unlikely many let their properties having previosuly lived in them as their main home. I also doubt in many cases the Society has information in its possession regarding how many properties a borrower owns. I think it is reasonable to assume that this argument might almost be bespoke to me. It is also a highly technical and peripheral issue, which someone must have been employed to provide serious brain power to arrive at. I don't object to the Society writing to me in robust terms as such (I write to them in such a manner after all) but I think that the gloves have very much come off for them to come up with that and profer it as an argument to me.

The reason I think it is particularly confrontational is that in order to arrive at this proposition the Society has had to recover and pore over various copy loan applications and consider in detail my personal circumstances - almost in the manner of a witch hunt.