Saffron Building Society

Androcles

I have just had the most amazing admission from a Building Society Chief Exec!

Jon Hall, the Chief Exec of Saffron has just sent out an email saying that they are reducing their interest rate on their Internet Saver Account from 2% to 1.7% as due to the Funding for Lending Scheme providing mortgage loans at low rates, they apparently no longer need saver's money to fund Mortgages. (He points out that they were not members of the scheme, but the market effects are the same)

So perhaps we can find out how serious he was if we got all savers in Saffron to withdraw their money all at once and see what happened to his society then?

Northern Rock, anybody?

Tongue in cheek!

A.

Hominu

Then they would partially collapse and tax money would be used to bail them out.

Either way, we lose.

opinions4u

Hominu wrote: »

Then they would partially collapse and tax money would be used to bail them out.

Either way, we lose.

Which building societies have needed tax payer cash?

Building societies have, traditionally, been fairly good at mopping up their own problems.

Repeat3Times

At least one customer here who'll be participating in the experiment, Andocles. It'll be the shortest-lived savings account I've ever had.

Bernard_Coleslaw

Androcles wrote: »

I have just had the most amazing admission from a Building Society Chief Exec!

Jon Hall, the Chief Exec of Saffron has just sent out an email saying that they are reducing their interest rate on their Internet Saver Account from 2% to 1.7% as due to the Funding for Lending Scheme providing mortgage loans at low rates, they apparently no longer need saver's money to fund Mortgages. (He points out that they were not members of the scheme, but the market effects are the same)

I'm surprised that you're surprised, to be honest. I thought it was well known that FLS was having exactly this effect.

So perhaps we can find out how serious he was if we got all savers in Saffron to withdraw their money all at once and see what happened to his society then?

Northern Rock, anybody?

Tongue in cheek!

A.

Building societies have been more sinned-against than sinners, to be fair. They've done a relatively good job in difficult circumstances. FLS has had a terrible impact on savings rates. What do you expect him to do - pay well over the odds for funds that others are getting for 0.75%?

Serious question.

bigadaj

Presume the OPs surprise was that a financial services chief exec would admit this, but as has been said, funding for lending has actually screwed the bs sector as well as your average saver.

adonis

I also had an email in December
saving the rate is dropping in January from 2.50% to 2.20% .


Why are we making this change?
Recent down pricing in the savings market has resulted in a need to bring our rates into line. Whilst we appreciate that any rate reduction is likely to be unwelcome, this rate is currently competitively placed in the top 10 Moneyfacts 'Best Internet Saving Accounts' table. This account offers easy access, unlimited withdrawals and a rate that is not complicated by introductory bonuses.

I checked the Moneyfacts site at the time and Saffron BS was not in the top 10.

kidmugsy

The Saffron is clearly run by a man who's better than the average financial CEO. I think I'll leave the kidmugsy millions with him.

mulronie

opinions4u wrote: »

Which building societies have needed tax payer cash?

Building societies have, traditionally, been fairly good at mopping up their own problems.

You're right, the Nationwide and the Yorkshire have been good so far at taking the hit; absorbing a load of deposit liabilities backed by nothing but bad-smelling assets, to avoid their precious mutual sector being brought into disrepute...

Fortunately the losses that would have ruined the likes of Derbyshire/Dunfermline/Barnsley BSs barely make a ripple in the balance sheets of the big two.

grey_gym_sock

in the case of dumfermline, nationwide didn't absorb the whole thing, just most of it. some dodgier bits did require a bailout. i think they may be recovering any losses on that from the deposit protection scheme?

there is some desire among building societies to prevent other BSs going under. but less capacity to absorb losses, since most of the biggest converted into banks.

there has been much less mess to be cleaned up for BSs than for banks, though.

Milarky

Has this:

"After three years of dedicated service as Chief Executive officer, Jon Hall has resigned from Saffron Building Society, Colin Field, Chief Financil Officer, will take on his role as Acting CEO while a search for a replacement is undertaken."

Any connection with this:

http://www.ftadviser.com/2014/05/08/ifa-industry/saffron-building-society-gives-hall-pay-rise-KNadXLoaVWnPzuLtIMzLaL/article.html