CarpetBagging- The best accounts to open at each Building Society

IanManc

Old_Slaphead wrote: »

Not quite!

There was a payout with Mercantile BS "merger"

Thanks - you're right Mr Slaphead.

I'd forgotten that the Mercantile merger was as long ago as 2006. I'll remove it from my post.

DetainWino

No information here about which use charitable assignments to prevent carpet bagging.

Also now Cheshire, Derbyshire and Dunfermline Building Society's are part of the Nationwide there's no point opening new accounts there.

DetainWino

IanManc wrote: »

Carpetbagging is dead.

Every building society that paid windfalls and converted into a bank failed financially, so it is very unlikely that anyone would follow that utterly bankrupt business model again.

As well as that, in the last few years the Derbyshire, Cheshire, Dunfermline, Chelsea, Barnsley, Norwich and Peterborough, Scarborough, Stroud and Swindon, and Chesham have all merged with - i.e. have been rescued by - other building societies, and Britannia was taken over by Co-operative Bank, and not a penny in windfalls has been paid in any of these cases.

The point of the windfall is that it's paid to the previous owners (members) in order to get the new company. In the case of the first 3 you name at least they were taken over in order to protect a failing BS, not to take a profitable one so a windfall is not valid.

planteria

just to say, this thread is fantastic. i have used bristol's freepost list many times:T

Fella wrote: »

Carpetbagging is +EV, it always has been.

what does that mean??

bowlhead99

+EV = Positive Expected Value. Expected value is the net cost or benefit from an activity times the probability of it happening.

The suggestion is presumably that if you park your money in a building society rather than a bank paying the same interest, it is not really going to cost you anything to do it - and if you have a small amount deposited that ends up paying a hundred quid windfall, that would add a great % onto your returns so even if the probability is low, your 'expected value' increases.

Of course, as noted by IanManc in the last discussion on this thread over a year ago, there are at least 10 building societies in recent memory (less recent now because he was writing it a year ago) that have undergone life-changing events for themselves without paying a penny in windfalls to accountholders.

So mathematically, carpetbagging potential changed those accountholders' expected return from their accounts for the better (say £X of free cash, times a probability of y% that the free cash would happen, even if you'd signed away your rights to the free cash to charity). But the reality is, there's not usually been any free cash in recent history and so, particularly as they all have charity signaways anyway, you are wasting your time opening new accounts now and maintaining your passbook with your nominal deposit being eroded by inflation.

Good to see that having used this 'fantastic' thread many times you finally got round to reopening it by asking what Fella's comment meant over five years after he made it. For me, it was definitely worth the wait. :cool:

planteria

to be honest i was seeing the individual post, linked from another site, and not actually being logged in to MSE.
thank you for your explanation:)

planteria

IanManc wrote: »

Every building society that paid windfalls and converted into a bank failed financially, so it is very unlikely that anyone would follow that utterly bankrupt business model again.

i think Nationwide has the scale to be a successful Plc: a retail bank with a focus consumer savings and good quality mortgage loans. we will see whether that ever comes to pass:A

IanManc

planteria wrote: »

i think Nationwide has the scale to be a successful Plc: a retail bank with a focus consumer savings and good quality mortgage loans. we will see whether that ever comes to pass:A

It certainly has the scale, but anyone who has opened an account with Nationwide since 1997 has signed away their rights to any monies payable on a conversion as part of Nationwide's standard terms and conditions, and the same condition was imposed on Derbyshire, Cheshire and Dunfermline members when their societies were rescued. So the number of members of Nationwide who would benefit from a conversion is reducing every year, as people die off. That lessens the likelihood of members voting to convert simply with the passage of time. Eventually people who wouldn't get a windfall from a conversion will be in a majority. And of course Nationwide members voted not to convert when they were balloted in 1998.

evenasus

planteria wrote: »

i think Nationwide has the scale to be a successful Plc: a retail bank with a focus consumer savings and good quality mortgage loans. we will see whether that ever comes to pass:A

People thought the same of other building societies - look what happened to them.

I've been a Nationwide saver for over 30 years and I would never vote to convert.

jimjames

IanManc wrote: »

So the number of members of Nationwide who would benefit from a conversion is reducing every year, as people die off. That lessens the likelihood of members voting to convert simply with the passage of time. Eventually people who wouldn't get a windfall from a conversion will be in a majority. And of course Nationwide members voted not to convert when they were balloted in 1998.

I guess it also depends if the members are altruistic and would vote so that charity got a big windfall even if they didnt personally benefit.

My mortage is with Nationwide but I've not really seen a lot of difference between them and any of the banks other than not needing to be bailed out. Their board don't appear to get a lot less than bank directors.