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Banks posting huge profits. Will they reduce margins?

2

Comments

  • Linton
    Linton Posts: 18,353 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    spence wrote: »
    BY margins I specifically was thinking mortgage rates compared to BOE base rate.

    Saying that they have increased their margins across the board.


    I would say that other factors are more important than BOE base rate. For example:

    1) They need to cover their overheads
    2) They need to cover the costs of defaults
    3) Banks need long term finance - it was short term borrowing and long term lending that did for NR. Long term finance isnt available at BOE base rates.
  • WhiteHorse
    WhiteHorse Posts: 2,492 Forumite
    Why, given that the banks are now state controlled, does the government not require that they stop all their ripoff practices?

    Could it be that the boot is in fact on the other foot?
    "Never underestimate the mindless force of a government bureaucracy
    seeking to expand its power, dominion and budget"
    Jay Stanley, American Civil Liberties Union.
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    WhiteHorse wrote: »
    Why, given that the banks are now state controlled, does the government not require that they stop all their ripoff practices?
    HSBC isn't Government owned
  • Old_Slaphead
    Old_Slaphead Posts: 2,749 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    WhiteHorse wrote: »
    Why, given that the banks are now state controlled, does the government not require that they stop all their ripoff practices?

    Because they're pseudo tax collection agencies.

    High bank profits = more taxes for the exchequer
  • spence
    spence Posts: 43 Forumite
    ILW wrote: »
    Bearing in mind that banks do not get the money at BoE base then it is not their margin.



    The difference between BOE base and LIBOR is back to pre crash levels, as near as makes no difference.
  • Fiddlestick
    Fiddlestick Posts: 2,339 Forumite
    WhiteHorse wrote: »
    Why, given that the banks are now state controlled, does the government not require that they stop all their ripoff practices?

    I don't think you understand that a company's first and foremost duty is to return a fiduciary benefit to it's shareholders.

    In the case of state-owned banks then I WANT them to make a bumper profit - that means that greater dividends are paid to UKFI, the share prices rise and the taxpayer will ultimately benefit from the profit realised when UKFI sells off it's holdings.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    WhiteHorse wrote: »
    Why, given that the banks are now state controlled, does the government not require that they stop all their ripoff practices?

    That's factually incorrect.

    Only 4 UK banks failed. Two were nationalised. One was saved by a merger and the other was large enough internationally to be turned around.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ILW wrote: »
    Now the wholesale money markets are drying up, they will need to attract some savers money. All depends what is meant by margins.

    HSBC does not use wholesale funds. Retail deposits fund its UK mortgage book.

    HSBC did not join in the rush to lend. Always remained conversative. The name should give an indication as to why this is the case.
  • Malcolm.
    Malcolm. Posts: 1,079 Forumite
    I love HSBC. My mortgage is with them. :)
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Malcolm. wrote: »
    I love HSBC. My mortgage is with them. :)

    Likewise. My main bank share holding is HSBC . :)
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