MSE News: Blow for Bradford & Bingley shareholders

The_MoneySavingKid

Thrugelmir wrote: »

To be fair. B&B was not operating as people thought. Just like NR.
The friendly building societies that the small shareholders knew was no more.

But surely the point of investing in shares, is taking the risk that come along within the business world . Whatever that risk may be. Otherwise you should not bother to invest whatsoever.

ESKIMO

Thrugelmir wrote: »

To be fair. B&B was not operating as people thought. Just like NR.
The friendly building societies that the small shareholders knew was no more.

In actual fact it was a reasonably competitive lender looking to develop it's portfolio for the sub-prime, buy-to-let mortgage market which was very lucrative 2005-7.

Based on previous market analytics and statistics B&B developed and adjusted their business plan to take advantage ('exploit' - if you prefer) and increase or 'reassert' it's market foothold.

Only because it was directly taken out of their hands. Shareholders had no say in the matter.

I doubt that even with a 51% maj vote of 'no confidence' in the BODs HMT would have still exerted it's 'authority'. - How can you really argue with a government? (It's not that simple).

The_MoneySavingKid wrote: »

But surely the point of investing in shares, is taking the risk that come along within the business world . Whatever that risk may be. Otherwise you should not bother to invest whatsoever.

Not necessarily, shareholders don't just invest to 'make a quick buck or two' - in doing that you may as well roll a rice and join in a game of Russian Roulette.

Think about it logically, many shareholders invest because they may believe in the business, plan, forecasts, where it's going.

Alternatively they may be, in actual fact, a stakeholder with an 'already vested interest' (say as a customer - saver or mortgage borrower). Mutual interests are generally a good reason for investing.

If you buy and/or use a business/company/corporation/group/organisation's products and/or services, it's a good indication that you are interested in it (or you 'buy' into it - think of other similar people to yourself [client, customer and consumer demographics and profiles]. You can quickly build up a picture of the 'type' of market(s) that it appeals to.



SPAM. Please kindly remove.

Thank you in advance for your cooperation and understanding.

Regards.

le_loup

ESKIMO wrote: »

Think about it logically, many shareholders invest because they may believe in the business, plan, forecasts, where it's going.

Quite so.
... and you got it wrong. Now give it a rest!

jamesd

The business plan was to borrow short term money on the money markets and make long term mortgage loans with the money. As the short term money terms expired replacement short term borrowing was required. This worked fine so long as the short term money markets were still in business. As soon as they weren't, the vulnerability of the business model was exposed and the company started to enter a deep financial pit because it could neither repay the borrowing (that would have required forcing people to repay their mortgages) nor borrow replacement money on the closed money markets. Liquidity crisis and insolvency were the following steps.

What they were doing was the equivalent of buying a house on credit card 0% balance transfer deals when they wouldn't be able to keep up the monthly payments if the 0% deals stopped. They did stop and the company imploded as a result. It's cheap while it works, shame about what happens if you can't repay after it stops.

ESKIMO

le_loup wrote: »

Quite so.
... and you got it wrong. Now give it a rest!

I 'did not get it wrong' as you state.

I was/am a shareholder in a 'non entity' that is still operating.

After having had a lengthy discussion with one of the Bradford & Bingley Mortgage Customer Advisors, i was assured that they were taking on no new business and that they were; 'not trading - only administering and honouring the existing mortgages of Mortgage Express underwritten by the taxpayer' and the savings book having been 'purchased' by Abbey, Banko Santander.

I still remain optimistic and i hope others have the same sentiment.

Thrugelmir

jamesd wrote: »

The business plan was to borrow short term money on the money markets and make long term mortgage loans with the money. As the short term money terms expired replacement short term borrowing was required. This worked fine so long as the short term money markets were still in business. As soon as they weren't, the vulnerability of the business model was exposed and the company started to enter a deep financial pit because it could neither repay the borrowing (that would have required forcing people to repay their mortgages) nor borrow replacement money on the closed money markets. Liquidity crisis and insolvency were the following steps.

What they were doing was the equivalent of buying a house on credit card 0% balance transfer deals when they wouldn't be able to keep up the monthly payments if the 0% deals stopped. They did stop and the company imploded as a result. It's cheap while it works, shame about what happens if you can't repay after it stops.

In addition as has been shown by recent financial results the quality of the loan book was extremely poor.

A_nice_fellow

Eskimo, you ain't getting anything. You'll be a lot happier in the long run if you accept it now.

ESKIMO

For now maybe.

It's NOT ABOUT THE MONEY. I could't give a rats about it tbh.

I'm a man of principal and morals.

This certainly wasn't 'good' business practice.

If you don't ask you don't get.

I'm adamant that shareholders will get a 'real' explanation. Mark my words.

cardsharps

ESKIMO wrote: »

I'm adamant that shareholders will get a 'real' explanation. .

Look there's no nice way of saying this but you got taken for a right mug and you fell for it hook, line and sinker. There's your explanation. So put is down to experience and move on.

herewegoagainguys

Does anyone know if it's worthwhile joining one of these 'Action Groups' that have seem to have sprung up? Or would I just be wasting more of my money?