Two banks to offer interest only mortgages again

chewmylegoff

The Moody's downgrade does mention Clydesdale's rubbish commercial lending as an issue but it doesn't stop there. It basically slates Clydesdale's entire business and brand and says the whole lot is all a bit rubbish, mentions that its costs are too high and points out uncertainty over its medium term future as its parent company wants to sell it.

http://www.rns-pdf.londonstockexchange.com/rns/4427M_-2013-8-23.pdf

CLAPTON

seems some what odd sort of down grade.

although it referred to the poor commercial property debts it also acknowledges that they have been transferred to the Australian owner's balance sheet so Clydesdale is now well capitalised.

Moody's concern seem more that the bank is inefficient and has low profits


Nice to see no reference to bad domestic mortgages.

Moody's believes that the bank's franchise as a retail and selective business lender has been materially
weakened, following a strategic pull-back from commercial real estate (CRE) lending and other areas of business
lending, an action prompted by ongoing losses which required injections of capital by its parent, National Australia
Bank (NAB, rated Aa2 stable; B-/a1 stable) and the ultimate transfer of the GBP 5.6 billon CRE portfolio at book
value to NAB's balance sheet.
As a result of NAB's intervention, the bank is well-capitalised and has substantial liquid assets, and we see no
immediate threat to creditors from its near-term challenges. However, the weakness of its franchise and
uncertainty over its future strategic direction, alongside NAB's stated intention to sell the bank over the medium
term, leaves Clydesdale in an uncertain position. Moreover, the losses incurred on the CRE portfolio highlight
historical failures of risk management and governance, and the strengthening of these areas, while under way, in
Moody's view is challenging and will take several years to be fully effective. The bank's efforts to address these
shortcomings and develop a more coherent long-term strategy are complicated by the short term pressures

Thrugelmir

CLAPTON wrote: »

although it referred to the poor commercial property debts it also acknowledges that they have been transferred to the Australian owner's balance sheet so Clydesdale is now well capitalised.

Moddy's concern seem more that the bank is inefficient and has low profits


Nice to see no reference to bad domestic mortgages.

Being cleaned up to sell. Perhaps the buyers of the RBS branches will be bidders down the line.

Retail banking profits are in decline. So there's only room for so many big players in the market.