MSE News: Barclays to buy ING Direct UK: How it affects you

jammynuts

opinions4u wrote: »

You won't get a bean.

can someone with some knowledge answer...thanks so much :money:

webmasterpolo

jammynuts wrote: »

can someone with some knowledge answer...thanks so much :money:

What you remember was a Building Society demutualising and turning into a bank. As customers of a BS are actually members or owners of the BS they are entitled to shares.

In INGs case, they are a bank being bought by a bank. So no you don't get any free shares as you don't own a piece of ING while you would have if it was a BS.

-Web

opinions4u

jammynuts wrote: »

can someone with some knowledge answer...thanks so much

I've given you a wholly accurate answer, based on knowledge.

If it helps, I was employed by Halifax Building Society in 1994 when it announced the biggest ever building society merger the world had ever seen - Leeds Permanent Building Society being the other half of that equation.

I was seconded to a temporary job based in an old Halifax carpet mill, living out of a really mediocre hotel, where my role was to answer written correspondence about the merger.

When a large building society merges with a strong but smaller society, it is usual for the saving members of that smaller society to be paid a bonus from the reserves of that smaller society. Usually a sum in the region of 4% of their balance.

This didn't happen in the case of the Leeds PBS because the new enlarged society also announced an intention to float on the stock exchange. The biggest floatation of a mutual company ever.

The voting members of the new, larger, Halifax Building Society (now including Leeds PBS) had to agree to this. For clarity, the voting members were savers with a balance of £100 or more at certain dates and mortgage borrowers with a balance outstanding in excess of £100.

In return for their vote, they would receive shares in a new company, Halifax plc. Halifax Building Society would then cease to exist as a mutual (member owned) business.

Naturally the members voted for the shares and received a value in the region of £1,500 each or more.

Many then sold their shares. They remained customers of the bank but no longer owned it. Within a couple of years more than 50% of the shares that were issued to members were owned by pension funds and other investment companies. By the time they merged with Bank of Scotland in 2001, forming HBOS, over 75% of the shares were no longer owned by former members.

In the case of ING they are not a mutual owned by their members. They have no members. By selling their UK retail business to Barclays they are simply raising cash to run their business with. Their customers have no say in the matter. They don't get to vote in the matter. They have to either like it or lump it. My guess is that there will be no benefit for those customers at all. Rates will fall and Barclays will squeeze more profit out of it.

The shareholders of ING may benefit from any share price impact. Although in the great scheme of things the UK business is tiny.

Now, I've not gone into any significant detail there. If you need me to draw further on my knowledge I will.

But, as a rule:

Strong small mutual merging with strong mutual = modest payment to members of the small mutual, usually cash.

Mutual becoming a plc = a bigger payment to members of the mutual. Usually shares.

A non-mutual being taken over by another non-mutual (as is the case with ING and Barclays) means the customer get nothing more than a new logo on correspondence they routinely receive as part of their business relationship.

So, to repeat, you won't get a bean.

Happy that I've got some vague professional experience to tell you that?

(Regardless, anybody who was a customer of a larger building society in the 1990s and kept their eyes open could have answered your question - with much the same answer I gave).

webmasterpolo

LOL, I like your style opinions4u.

-Web

jammynuts

I like your style too opinions4u. Very informative indeed. I'm so sad...won't even get a free keyring...tightwads!

Thanks. :money:

xylophone

free keyring

Ing used to give away a rather nice keyring.......:D

pinkpurplevicki

We are worried that when Barclays take over our mortgage we will have a hike in interest rates as we are all going to be switched to "equivalent" Barclays products within two years. Barclays don't have an "EQUIVALENT" product, their nearest means we will have to pay an extra £80 a month! Is this fair? If we didn't pay our mortgage payment every month there are consequences so why is this company going to be allowed to effectively break their contract. We have sent a letter of objection to the court but received a reply virtually stating that this take over is going to happen. We will consider taking Barclays to court if they try and break our contract, can't wait to see what happens!!

CRAIGEMMA

I am about to complete on a 5 year fixed with ING direct 3.14% at 75% LTV, just completed, so im wanting to make sure this rate will remain for the full 5 years, it IS a fixed rate after all...

On their website under Q&A it says

**will my mortgage rate change?

your mortgage rate will continue to be payable on the basis set out in the terms and conditions, any change to rate will be set out within such terms and conditions.

however.. it then says

**will my mortgage terms and conditions change?

no, your mortgage terms and conditions will not change on the transfer In time Barclays will move all accounts to equivalent barclays products. We expect this to happen within 2 years of the transfer

So my question is....

They are basically saying, no your rate wont move as it will transfer over on the same terms and conditions but within 2 years we will change these terms and conditions and move you onto a barclays equivalent product????? So will my fixed rate change or not!!!

Answers on a postcard!!!!!!!!!

CBA_Caption

Craig,

Those are my fears exactly! Empty promises. I have a lifetime base rate tracker that I'm almost positive they won't honour when it gets transferred.

However, I have no idea how I'll be able to force them to keep my existing conditions without hiring an expensive Contracts Lawyer!

CBA

CRAIGEMMA

I am going to speak to my legal team , I work for a major lender and we put up our SVR a few years back using "exceptional cîrcumstances" a clause the likes of Nationwide didnt have.. I will ask if on transfer it can happen to a product NOT on svr tomorrow. I do know barclays stopped overpayments on standard life products when transferred over... Which is a feature i want on fixed rate unless they allow me to change the term (currently ing are allowing me on 2y longer than I want but I'm going to overpay) i will report back what legal say