Unexpected interest rate reduction

ValiantSon

Broadwood wrote: »

Here's a suggestion and I'll do the same.

Ask half a dozen friends or relatives (who are similarly interested in finances like we are to be on here in the first place) the following question :-

"Out of the 1.7 million people on these forums.....How likely is it that at least 100 people have £85k or more deposited with Coventry BS ?"

We'll compare results in a few days time?

Doing so will prove absolutely nothing! Anecdotal evidence is worthless.

Broadwood

ValiantSon wrote: »

Doing so will prove absolutely nothing! Anecdotal evidence is worthless.

No doubt they would refuse to answer, but it's a pity The Coventry wont say how many of their 1.5 million savers have £85k or more invested with them.

I bet it's more than you think. But we'll probably never know.

bowlhead99

Broadwood wrote: »

Here's a suggestion and I'll do the same.

Ask half a dozen friends or relatives (who are similarly interested in finances like we are to be on here in the first place) the following question :-

We'll compare results in a few days time?

Unfortunately I don't think as many as half a dozen of my friends are interested enough in personal finance to be on a forum such as this.

But if I can find some, just to clarify, the series of questions to pose to them is "Out of the 1.7 million user accounts which were registered on the MSE forums in the fifteen years since February 2003, how many of them are separate unique individuals?

And of those number, how many of them are still active users of the forum site in March 2018?

And of those, how many of them regularly read the Savings & Investments Board?

And of those, how many have £85,000 or more deposited with a single financial institution?

And of those, how many would say that financial institution is Coventry BS?

And of those, how many would be motivated to withdraw their funds from Coventry BS on the suggestion of an anonymous fellow user of the MSE Savings & Investments board who believes that despite them offering some leading accounts and providing decent customer service, they should be dumped for not offering an interest rate that equals inflation throughout all market conditions because it's shocking for them to reduce rates below what that user believes they should be.

And would that amount of users leaving Coventry in the same week cause Coventry (with its £40bn of assets) significant distress?

Please show your workings because I have to compare notes with Broadwood by next weekend..."

Broadwood wrote: »

No doubt they would refuse to answer, but it's a pity The Coventry wont say how many of their 1.5 million savers have £85k or more invested with them.

... And have MSE Savings & Investment forum membership... and are motivated to move accounts from time to time by peer pressure.

I bet it's more than you think. But we'll probably never know.

I bet it's exactly as many as I think because I'm really good at guessing. But we'll never know because I refuse to answer.

ValiantSon

Broadwood wrote: »

No doubt they would refuse to answer, but it's a pity The Coventry wont say how many of their 1.5 million savers have £85k or more invested with them.

I bet it's more than you think. But we'll probably never know.

This is still just wild speculation on your part.

jimjames

bowlhead99 wrote: »

I bet it's exactly as many as I think because I'm really good at guessing. But we'll never know because I refuse to answer.

I'll have a guess. I think it's a (very) round number...

Phil27356

Broadwood wrote: »

Mass ditch and switch from The Coventry to somewhere better ?

What date shall we do it ?

These are serious questions by the way.

Not a serious question that I shall beconsidering - having several other accounts with the Cov

Phil27356

OK, so perhaps I should have been a little bit clearer in the objectives of my original post: [And perhaps my own mind]
I have no desire to know how many savers (friends, family or otherwise) have more than 85K invested with The Coventry; that is their business and quite rightly confidential. I also have absolutely no interest in becoming a financial activist and trying to shame, cause fiscal panic or anything like to The Coventry.
There are undoubtedly [good] reasons why The Coventry is one of the biggest Building Societies in the UK with +£40Bn assets. I am wondering why exactly, after posting such positive Year end results* only recently, they deemed it necessary to reduce recent interest rate rises against the BoE trend. That said, The Coventry, and others, may feel that they still offer very competitive and attractive savers' rates, but others may feel they can find something a little bit better out there (with exact same risk). We are only a matter of weeks before the new financial year and ISA allowances commence. I am hoping for some favourable rates to be announced soon, which will hopefully compensate for the drop in the Easy Access rate.

In a nutshell: Is there anything now out there to rival The Coventry on their Easy Access 30 day notice Saver without exposure to any greater risk?
Why this reduction? Were The Coventry perhaps over generous with their interest rate rise in the first place and now trying to readjust?


https://www.coventrybuildingsociety.co.uk/content/dam/cbs/consumer/pdf/get-in-touch/media-centre/2017_Year_End_Financial_Results_News_Release.pdf

nbrewitt

Very disappointed with the latest news from the Coventry, I've been singing their praises for years about them being a bit different and more customer focused and they go and pull a stunt like this when the general trend is for rates to be on the move upwards. Having said that, their rates are still competitive although it has dulled my opinion of them somewhat.

AndyPK

Sorry it was my fault! :rotfl:


After they increased the rate a few months ago, I realised it wasn't a bad account.


That combined with regular savers getting worse, (can't pay as much in etc)
I started to pay money into the Cov. which I hadn't done in some time.




I wonder if others did the same.

bowlhead99

Phil27356 wrote: »

I am wondering why exactly, after posting such positive Year end results* only recently, they deemed it necessary to reduce recent interest rate rises against the BoE trend.

It's not really just the published BoE base rate but other factors too, and the players in the savings and borrowings markets are not guided by just what BoE does but what they each do. There are also things in the background like Funding for Lending scheme and Term Funding Scheme which can mess with the rates that banks and building societies are willing to lend at and borrow at.

When cheap government finance gets withdrawn you might think the banks would all scramble to improve rates to compete for more customer deposits to replace the government funding they lost. But in some cases they will think OK we just lost lots of bank funding at 0.5%, and we are still trying to lend competitively on mortgages but we can't do that if our funding is now coming from savers at 1.6% instead of the central bank 'free money' gravy train at 0.5%...

That said, The Coventry, and others, may feel that they still offer very competitive and attractive savers' rates

They do still have decent rates in the market across various products. 'Challenger bank' Aldermore is only just over 1% for their 30 day access. But you can't expect one business to be at top rates on all products, or one business to retain 'top rate' status all the time on a particular product. They need to take the foot off the gas every so often to batten down the hatches for some periods which are less kind to them.

In a nutshell: Is there anything now out there to rival The Coventry on their Easy Access 30 day notice Saver without exposure to any greater risk?

Will leave for someone else to answer!

Why this reduction? Were The Coventry perhaps over generous with their interest rate rise in the first place and now trying to readjust?

If it was the best rate in town then yes it was over-generous rather than heing the right amount of generous. Paying the very best rates (as well as still loaning at decent rates) is not something that's sustainable unless you have absolutely the lowest costs and best infrastructure in the industry; you wouldn't expect one group to be perpetually the best. Generally each of the decent providers will have their time in the sun and then let someone take over at being the 'best' for that type of account for a bit, depending on their appetite for new customers of different types on both the saving and borrowing side.

https://www.coventrybuildingsociety.co.uk/content/dam/cbs/consumer/pdf/get-in-touch/media-centre/2017_Year_End_Financial_Results_News_Release.pdf

The year end results are about what profits they made (past tense) over the course of the year, which won't always translate to what they will make next if they keep the same customer profile and borrowing costs and account terms that existed on the last day of the year.