MSE News: Santander safety Q&A: your questions answered

dtaylor84

The bank says "more than circa 90% of our total assets are held in the UK".

"more than circa 90%"? Did they just stick "circa" in there to sound smart? Either it's more than 90% or not. More than approximately 90% is just meaningless.

elsiekay

Not very encouraging for those of us locked into Fixed Rate accounts with Santander, SimonEarly!

Can anyone confirm that the UK protection scheme cover Fixed Rate Savings Bonds as well as ordinary savings accounts please?

brit1234

CoolHotCold wrote: »

It's a whole lot easier to think of them as two separate banks owned by different entities.

Spanish banks are in dire straights and looks like a Bank Run is under way in some banks, the UK financial intuition is pretty healthy and the chance of Santander UK going bust is about the same as RBS or Halifax in the short term.

Unlike RBS and Halifax Santander UK itself has been downgraded A2 ratting.

http://www.guardian.co.uk/world/2012/may/17/spain-denies-bankia-customers-rushing-to-withdraw

That will mean it costs them more than other banks to borrow on the whole sale market. With LIBOR going up mortgage rates for Santander could rise faster/higher than their UK rivals. Possibly leading to more payment difficulties and repossessions. When Greece goes pop the cost or borrowing will go up for everyone its just Santander Customers it might be even harder.

I haven't any savings with them but I'd might be looking to split my cash between some of the healthy banks if there is such a thing irrespective of missing the best saving rates.

Anyone know the safest UK banks?

opinions4u

elsiekay wrote: »

Not very encouraging for those of us locked into Fixed Rate accounts with Santander, SimonEarly!

Can anyone confirm that the UK protection scheme cover Fixed Rate Savings Bonds as well as ordinary savings accounts please?

If it is a typical term deposit, yes.

Some of their structured products linking returns to stock market performance may not.

innovate

brit1234 wrote: »

Unlike RBS and Halifax Santander UK itself has been downgraded A2 ratting.

RBS and Halifax have both been on Moody's A2 since October 2011 at least, according to this reference.

Nobody panicked about RBS and Halifax last October.

May be it's just time now to calm down a little.

Florian86

:mad:

what the ****?

Ok, i'm a huge fan of Spain, but I wouldn't worry about it, Spain is the EU, Santander has a worlwide presence...

non the EU, or the spanish government will allow it

jamesd

elsiekay wrote: »

Can anyone confirm that the UK protection scheme cover Fixed Rate Savings Bonds as well as ordinary savings accounts please?

Yes, it does. You'd get the choice of taking the money within days or weeks or letting the term run to completion, based on what happened in past cases where the FSCS was involved. That simply worked as expected, no great hassles.

And don't be too worried. First Santander UK could borrow what it needed from the BoE, then EU. Then if it went bust any way and the FSCS became involved the FSCS can borrow from the Treasury (and has in the past). Big UK banks like Santander also have been required to have "living will" provisions set up to deal with things if they do fail and the FSCS ends up getting invoked.

I don't know where Santander is in the process of getting it possible to transfer all accounts to another owner in a week but by now it should be well along the track tot hat or completed. perhaps something for MSE to check.

Unlike the Northern Rock time the FSCS now covers 100% up to the limit, not just 90%, so smaller depositors won't lose anything at all, not even 10%. And the BoE is sure to guarantee 100% of larger deposits including small business deposits (but check the definition of how big a small business can be if this matters to you, it's not tiny but it's also not huge).

The protections now are pretty comprehensive, so consumers are not likely to to have any significant adverse effects other than uncertainty for a short time, measured in hours to days, not weeks or months.

franklee

What about people who have cash ISAs in a bank that goes under? Is the FSCS compensation done in a way that allows the cash to keep it's tax free status?

oldvicar

CoolHotCold wrote: »

... the chance of Santander UK going bust is about the same as RBS or Halifax in the short term.

This made me :rotfl:

RBS and Halifax have already gone bust once (twice in Halifax's case).

However RBS and Halifax have been rescued by the UK government, and by LLoyds (which caused it to then be rescued by the UK government).

There's no good reason I can think of why the UK government should rescue a subsidiary of a spanish bank.

Don't panic - in the event of Santander UK going bust, I would expect UK government to stand behind the independent FSCS so that depositors are protected. Lets face it, UK even protected depositors in Icelandic banks. But it didn't stop the Icelandic banks going under.

oldvicar

Martin Lewis, MoneySavingExpert.com creator, says: "Santander UK is a British bank, fully UK-regulated and thus in the unlikely event it were to get in serious trouble, the UK Government via the FSCS guarantees the first £85,000 per person in it.

The article says in a couple of places that the chances of a bank (in this case Santander UK) getting in to trouble is "unlikely".

I wonder how Martin etc. have reached this conclusion. Why use the word "unlikely" at all? The sentence reads correctly and more accurately without it.

Banks do keep getting in to trouble, and in recent years there have been quite a few, big ones at that. The chances of at least one well known bank getting into trouble in the next year or two are surely extraordinarily high at the moment? Only this week Sir Mervyn King once again referred to the European banks facing a "solvency crisis" - strong words indeed from a man holding the position of governor of the BoE.

[BTW I'm not suggesting that ordinary depositors protected by the FSCS need to panic just yet.]