What are our top building societies doing?

baby_boomer

IIRC Britannia BS, a failing mutual, took over the Co-op Bank and failed again. Now Coventry BS, a successful mutual, is proposing to take over the mess Britannia created. Nationwide is proposing to take over Virgin Money. Neither BS knows what they are doing. They should stick to their knitting. No votes for members - so much for mutuality! But we know that the board salaries will sky-rocket. I shall be going to both AGMs to protest. I wonder what Martin thinks? Regards. Ord.

WillPS

You recall incorrectly. Co-op Bank rescued Britannia (who were not far from failure) and ended up almost collapsing a few years later as a result. Any comparison with a building society using a surplus to take over a profitable bank is bogus. 

They know precisely what they're doing and that's making hay while the sun shines. 

baby_boomer

You are right. Two failed mutuals rescued by US hedge funds and my Coventry BS wants to take them over! Do they know what's under the bonnet? And does my Nationwide know what's under the Virgin Money bonnet? Regards. Ord

Hoenir

The banking industry has come a long way since the GFC. The remaining weaker players are now being weeded out. With so much activity conducted on line. Consolidation is envitable. Retail banking is a pure numbers game that requires volume allied to excellent risk management. 

eskbanker

baby_boomer said:

You are right. Two failed mutuals rescued by US hedge funds and my Coventry BS wants to take them over! Do they know what's under the bonnet? And does my Nationwide know what's under the Virgin Money bonnet? Regards. Ord

You could always read and/or post on some of the existing threads making similar points repeatedly....

https://forums.moneysavingexpert.com/discussion/6516643/vote-now-proposed-take-over-of-virgin-money-nationwide-members-should-be-given-a-vote
https://forums.moneysavingexpert.com/discussion/6511397/nationwide-take-over-of-virgin-money
https://forums.moneysavingexpert.com/discussion/6491078/coventry-bs-bids-for-the-co-op-bank

masonic

If only the boards of these organisations had tapped in to the extensive expert opinion within this forum instead of performing conventional research and due diligence...

baby_boomer

Coventry's email to members this morning assured them that the board had already consulted member focus groups and that members would continue to be informed. What a relief!

EssexHebridean

baby_boomer said:

Coventry's email to members this morning assured them that the board had already consulted member focus groups and that members would continue to be informed. What a relief!

Ahh there you go then, all’s well that ends well, clearly. I’m sure we’re all delighted that your mind has been set at rest…

(I literally just read the email and headed straight here to see the oUtrAgE… 😆)

Altior

masonic said:

If only the boards of these organisations had tapped in to the extensive expert opinion within this forum instead of performing conventional research and due diligence...

Get the point obviously, but there is definitely supreme expert opinion vocalised on this forum. And quite often, superior to what is evidenced by both multiple public and private organisations and institutions. For example I read on here detailed analysis of the risk and over exposure to short term market shocks of the multiple (now deceased) challenger domestic energy suppliers. Either Ofgem knew all about this and didn't care, or had no clue. Neither alternative is that great. However readers of this forum were far better informed than the people paid handsomely to be so. Of course, there's a shedload of nonsense to wade through as well, as inevitably applies to any public online space. 

Hoenir

Altior said:

masonic said:

If only the boards of these organisations had tapped in to the extensive expert opinion within this forum instead of performing conventional research and due diligence...

Get the point obviously, but there is definitely supreme expert opinion vocalised on this forum. And quite often, superior to what is evidenced by both multiple public and private organisations and institutions. For example I read on here detailed analysis of the risk and over exposure to short term market shocks of the multiple (now deceased) challenger domestic energy suppliers. Either Ofgem knew all about this and didn't care, or had no clue. Neither alternative is that great. However readers of this forum were far better informed than the people paid handsomely to be so. Of course, there's a shedload of nonsense to wade through as well, as inevitably applies to any public online space. 

Hindsight is a wonderfull tool.  Human nature being what it is. There's always some that look to exploit the situation to their own benefit. While the UK lost a number of energy suppliers. Germany has lost a cheap source of energy that transformed the economy from being the sick man of Europe in the late 90's to a manufacturing powerhouse. Every decision carries risk of some kind.   

Altior

Hoenir said:

Altior said:

masonic said:

If only the boards of these organisations had tapped in to the extensive expert opinion within this forum instead of performing conventional research and due diligence...

Get the point obviously, but there is definitely supreme expert opinion vocalised on this forum. And quite often, superior to what is evidenced by both multiple public and private organisations and institutions. For example I read on here detailed analysis of the risk and over exposure to short term market shocks of the multiple (now deceased) challenger domestic energy suppliers. Either Ofgem knew all about this and didn't care, or had no clue. Neither alternative is that great. However readers of this forum were far better informed than the people paid handsomely to be so. Of course, there's a shedload of nonsense to wade through as well, as inevitably applies to any public online space. 

Hindsight is a wonderfull tool.  Human nature being what it is. There's always some that look to exploit the situation to their own benefit. While the UK lost a number of energy suppliers. Germany has lost a cheap source of energy that transformed the economy from being the sick man of Europe in the late 90's to a manufacturing powerhouse. Every decision carries risk of some kind.   

It's absolutely not hindsight. It is/was Ofgem's mandate. From their own website: 

• Ofgem’s principal statutory objective is to protect the interests of existing and future gas and electricity consumers.

And this happened:

28 energy companies collapsed in 2021, displacing over 4 million customers who have been transferred to other suppliers.

Those suppliers would not have been permitted to put consumer deposits on Red, I assume. But that's what they effectively did, placing big bets on the forward price of energy that they had agreed to supply, remaining stable. It does not take a market genius to work out that not hedging that risk (not being mandated to as a condition of license) was a massive (and existential) gamble.

Now all consumers are footing the cost of their bailout via standing charges and the energy price floor. 

The key point is not about Ofgem specifically, I could cite multiple examples. It's that there is definitely expert opinion to be tapped into on these boards. Perhaps if institutions like Ofgem and HMRC did just that, we might all be better off. In my own area of expertise I was exposing the vast, gaping holes in the bounceback loan calamity. On the day it was announced (not on here, admittedly).