MSE News: Euro crisis - How safe is Santander?

longleggedhair

jeanmd wrote: »

I'm sick of seeing Santander being pulled apart on here. I and many other are happy customers - as someone else said 'why santander' when other banks are in as much if not more trouble. Yes there's a risk, but then wasn't there a risk when our banks had to be bailed out.

I completely agree, Santander pay some of the best rates on the market and in my oppinion they are no better/worse than the other big banks.

jamesd

bubbles0169 wrote: »

does anyone know if it were to go how long would it take to get my savings back through compensation? it an ISA being used to save for my wedding!

No more than a few weeks. The FSCS has substantially improved processes since it took a few weeks for most Icesave customers and more changes are on the way. What the FSCS has to say about its timetable for savings accounts is:

"Claims against deposit takers

The FSCS will aim to pay compensation in the majority of cases within seven days of a bank, building society or credit union failing. Any remaining claims, which are likely to be more complex, will be paid within 20 working days."

There's a bit more technical information if you're curious.

This answer applies to UK registered institutions like Santander only. Institutions using the passport scheme would use the processes of their home country and could take much longer, though even for them the EU Deposit Guarantee Schemes Directive requires payment within 20 days. But this doesn't apply to Santander since it's UK registered.

You also wouldn't lose the ISA tax wrapper. If for some reason it became necessary to close the account you'd also be issued with a certificate that let you redeposit the money into another ISA account without it counting (again) against that year's ISA allowance. This has happened in a number of significant cases where repayments were necessary.

This from personal experience with Icesave and reading what the FSCS has been up to since then. The Icesave one ended up involving a modified version of their web site that people could use to make a claim electronically, which was then paid out quite rapidly.

Longer term the FSCS is looking to setups that would allow accounts to be operated normally after a failure.

sabretoothtigger

Its a good article so long as you dont fall off your chair in a blind panic after reading just the headline.

It confirms what Ive thought true for a while that Santander is the opposite of how RBS was run.
If you read to the end it says each section of the bank is run separate from the others, where as RBS and friends were piled together like a giant wrecking ball used to endlessly take out competitors and in the end their own knees, leaving them and their customers in a mess on the floor

If you own the shares then you own the whole bank, the growing parts in South america , the UK, the USA bank and the Spanish debt and iffy government bonds.

If you have a savings account then you just have an interest in their UK bank, the rest of the company doesnt matter. If anything the flow of money has been into the UK I think the parent company was obliged to increase the capital because they have so many customers.
Alot of these banks have large amounts of capital now, the others have bad debts I dont think Uk Santander does as it did not take on B&B debt and you can speculate about A&L and Abbey but I dont think they were especially bad or exposed to anything bad outside of uk residential mortgages

HBOS BARC and RBS were doing all sorts of strange deals. B&B were buying up USA general motors unsecured car loans, why a tiny BS had to go and do that I will always wonder

Also Nationwide was downgraded

I own San shares for the yield, they seem relatively sensible to me

Consumerist

I thought the article was informative for those who may have been worried about their savings in UK banks, generally, but the headline "How safe is Santander?" beggars belief. I agree the headline is a poor show from the MSE team.

oldvicar

My RBS accounts (which were Williams and Glyns) are to be forcibly sold to Santander next year.

I must remeber to close them before the transfer happens.

Meeper

Shame on you, MSE, for scaremongering with this nonsense. I haven't even read the majority of the thread, but the title is enough for me to wonder about why you would inflame things in such a way. Post some positive news for a change.

BILLIONS wiped of pensions!! When did you ever report the billions ADDED ON to pensions from early 2009 to June 2011?

No wonder people are concerned. The media makes it so. Shameful.

John_Pierpoint

All banks are bust if their depositors try to take out their deposit on the same day.
Google "fractional reserve banking" if you don't understand the way the merry-go-round works. (It is like a bicycle, if it stops going forwards it falls over).
Personally, as a Santander (amongst others), saver - I found the item reassuring.

[On the subject of Chinese walls and multinational operations; what was it that became of Lehman Brothers' cash balances?

[URL="http://www.channel4.com/news/articles/business_money/who+really+pulled+the+trigger+on+lehman/3319992.html]"]http://www.channel4.com/news/articles/business_money/who+really+pulled+the+trigger+on+lehman/3319992.html[/URL]

http://www.guardian.co.uk/business/2008/mar/19/lehmanbrothers.goldmansachs

Don't you just love it? The Grauniad published an article like this on Burmah Oil the weekend before it fell over, because it had over invested in "Floating real estate" (oil tankers).

Meanwhile, here is the latest "bad bank", financing European local authorities.
http://en.wikipedia.org/wiki/Dexia

]

jamesd

The following part of the story is misleading: "Santander UK was one of 12 institutions downgraded by ratings agency Moody's. This doesn't mean banks are about to collapse but is nevertheless a sign of weakening confidence."

When it comes to Moody's ratings of the individual banks, it recently upgraded the standalone rating of Santander: "earlier announcements cover the upgrades of the standalone ratings of Santander UK, Nationwide, Yorkshire, and Principality Building Societies". So we have the joyful position of MSE reporting a decrease in the ratings of the bank when it was actually recently upgraded.

Moody's was explicit: the downgrade was not because of any weakening of confidence in the banks that were downgraded. It was solely because of its view that the UK government is becoming less likely to provide medium to long term support. That expectation of reduced medium to long term support caused it to reduce the boost to the ratings of the individual banks from expected government support.

For others, do try to understand Martin's position. Some criticised him heavily for not providing warnings about the safety of Icesave when listing it at high ranks in highest paying savings account lists. His policy is not to censor those lists but to make people aware of potential risks. We can expect more stories like this one as he tries to do that. Their key message is to be aware of the FSCS limit and arrange money so that it is within that limit at each institution.

jeanmd

I understand what you are saying jamesd, what annoys me is how Santander is singled out so often. As you said Santander is

one of 12 institutions downgraded by ratings agency Moody's.

As others were downgraded too and Santander seems to have a very good structure on top of it's good interest rate, why head line it? It only takes a wisper to start bringing a company down.

jamesd

Santander's interest rates and switching offers mean that it can be or more interest to those seeking the best rates than most of the others that were mentioned.