BOE MPC - Interest Rates remain at 0.5%

cells

Thrugelmir wrote: »

Depends in what context you consider a margin to be reasonable. Would you be happy operating on a 2% gross margin. Before all operating costs, banking levies, tax, bad debts etc are deducted.

2% margin on prime borrowers is fine especially if a bank can front load the profit by mixing a lot of them together and selling them onto other investors as a tripple A MBS

also 2% margin is fine if a banks got a book of £100B it gives them £2 billion a year to pay for their operations and remember lots of loans now have £1k-£2k fees on them which should pay for the operating costs so maybe a 2% gross margin is closer to a 2% net margin and the fees paying the gross to net

the benefits of banks to society is almost fully in the ability of them to minimise the spread between loans and deposits ideally it would go towards zero (more and more automation of the process should allow the margin to fall)

chucknorris

Thrugelmir wrote: »

Depends in what context you consider a margin to be reasonable. Would you be happy operating on a 2% gross margin. Before all operating costs, banking levies, tax, bad debts etc are deducted.

They seemed to be happy enough with even less margins than that, even in the good old days.

Thrugelmir

CLAPTON wrote: »

they don't seem to be doing too badly : honesty would have saved them a lot of money too.

That's perception. Large figures need to be put into a context.

Little point in continued banker bashing. The "Management" has changed.

cells

Thrugelmir wrote: »

Don't forget that interest rates aren't just set by central banks. There's also the market to consider. Shrinking bank balance sheets may ultimately require higher margins.

it shouldn't be the case as banking is almost purely a data service and it should get more and more efficient with time.

Less branches less staff per billion in loans less overheads and ideally less regulated costs too

Thrugelmir

cells wrote: »

it shouldn't be the case as banking is almost purely a data service and it should get more and more efficient with time.

Less branches less staff per billion in loans less overheads and ideally less regulated costs too

A highly regulated data service.

There's the cost of splitting retail and investment banking to be absorbed.

I wouldn't write off branches totally. There'll come a point when everything will go full cycle. Branches in the future may be very different to what we experience today. Business banking requires relationships not online access.

wymondham

I still think George Osborne has his hand on interest rates...... absolutely no evidence, but its the sort of thing I can imagine him doing .... sinister phone call to a few of the board before the meeting!

Sapphire

Wow – extraordinary news. I never would have expected it.

Mistermeaner

wotsthat wrote: »

Talking head on Bloomberg yesterday said we should be sympathetic to central bankers because they're only human and can't predict the future. Then, in the very next breath, he said if the US raise rates in December further QE by June is a certainty.

talking heads are not human

Mistermeaner

Thrugelmir wrote: »

Depends in what context you consider a margin to be reasonable. Would you be happy operating on a 2% gross margin. Before all operating costs, banking levies, tax, bad debts etc are deducted.

Its alright lads I'm selflessly taking one for the team on my 4.98% ten year fixed. Seemed like a great idea in 2007. Oh well only a year and a bit to go

michaels

lisyloo wrote: »

I am stoozing my mortgage which ends November 2018, so it's not happening until then :-)

Barstewards have just cut the rate on half my mortgage stooze from 3% to 2.25% = minus 900pa - not pleased.

Fixing for 5 years at 2.5% 2 years ago seemed like a no-brainer at the time as we were having another of those rate rises are just round the corner moments and it was before the narrowing in margins from 200 basis points down to 100 that happened a year ago.