'How safe Is Santander UK? - What I really think' blog discussion

callum9999

2sides2everystory wrote: »

I deleted my last post soon after I made it (but clearly not before The_Economist had seen it ). I deleted it because I soon realised I wasn't using the FSCS latest figures for investment protection. So, I'm sorry to be pedantic again.Did anyone tell us Bankia were particularly vulnerable before this week?
... bla ... bla ...

Is it not a fact that we barely know anything about this company's vulnerability or intentions other than what it chooses to let us know?

I'm pretty sure they did. I've certainly heard Bankia mentioned many times during the financial crisis - a really quick Google search found articles from earlier this year talking about it's toxic loans etc.

Not really no. If they have been lying then they will get into serious trouble. As in MASSIVE fines and probably a variety of fraud-like charges. The claim that Santander Spain can't take money from Santander UK has been verified as well.

Plus there is nothing to suggest that they are lying anyway. Their business is comprised of traditional British banks and they are a major UK retail bank. While you and me have no idea what their exposure is like, I'm sure people in the industry have been monitoring it - they would have disputed any major discrepancies.

Reaper

2sides2everystory wrote: »

... bla ... bla ...

Is it not a fact that we barely know anything about this company's vulnerability or intentions other than what it chooses to let us know?

Not quite. It it hard to know what is going on but there is some data not provided by the bank.

The first is credit ratings. By no means perfect as we know from the last crash but they do at least analyse the banks in a way not possible by the public. Santander UK was downgraded to A2 which was partly the reason for the panic, but this just brings it into line with other UK high street banks and is still a reasonable rating.

Secondly there is reserves to fall back on when things go pear shaped, in particular Tier 1. Europe declared a Tier 1 ratio of 9% was needed and did stress tests to see what the banks had. Santander UK passed easily with 11.7%

I can't say it won't go bust, but believe what facts are available show it is stable. So far those who who think otherwise seem to do so based on unspecified fears rather than facts. Can you come up with any evidence the bank is not safe?

chai1812

The question is not just whether Santander is safe or not.
Obviously, in the event of a bank run,
which is probably underway right now in any case, this would bring the issue of bank solvency into question.
But if Spain were to leave the Euro, then it would among other
things lead to a massive devaluation of the Spanish currency
vis a vis the Euro and other currencies.

then what would happen to any deposits held at Spanish banks.

x% devaluation of currency and assets held by overseas depositors:eek::eek::eek::eek::eek::eek::eek:

Scarratto

Great stuff Martin - very thorough!

What about Individual Savings Accounts with Banks e.g. HBOS ISA - HBOS Investmant Fund Managers Ltd? I have been told these are out side the present £85,000 Compensation scheme, but the limits are unclear. I also have savings along the lines you have described.

Many thanks.

eventer

Question: All the info in the blog is about personal accounts, though there is a passing mention of large businesses such as councils.

Where do those of us stand who have small business accounts with them? I have a small business - in profit, no line of credit. It's a limited company, but it only employs me as a director, and I have no staff and a very straightforward setup. I bank with Santander because they are free.

Where do I stand if they go down? Should I be looking at setting up another business account to transfer deposits into and running my current account at a low level?

Scarratto

Martin : Please note I am not Scarratto. I do have Scarratt in my surname!

Hope I haven't cocked things up!

hmbell

You say that councils and big businesses are not protected. What about small businesses? We employ 2 people, at times have over 85k in RBS which a few days ago has merged/been taken over by Santander. Is this money protected? should I move my businesses account? Please advise.

JasBuc

I have a business ac with Santander with 2 equal directors, does this mean we have a total coverage of £170k or is it different for business accounts
thanks

Reaper

eventer wrote: »

Where do those of us stand who have small business accounts with them?

hmbell wrote: »

What about small businesses?

Yes most small businesses are covered by the FSCS too. See Q12 here:
http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-deposits/#Is_a_business_covered_if_the_bank_or_building_society_it_holds_money_with_fails_

Briefly, your business must meet at least 2 of these 3 conditions:

• Turnover: not more than £6.5 million
• Balance sheet total: not more than £3.26 million
• Total number of employees: not more than 5

Reaper

JasBuc wrote: »

I have a business ac with Santander with 2 equal directors, does this mean we have a total coverage of £170k or is it different for business accounts
thanks

Unless the rules have changed since I last checked it is the business which gets the compensation, so you will only get the standard £85k.

I believe in the case of Sole Traders (as opposed to Partnerships and Limited Cos) you have to be a bit careful as you can only claim for business or personal accounts at a banking group, not both. So it might be better to do your personal banking at a different bank to your business if that is still the case. I expect somebody else on here will be able to confirm whether this rule still applies.