anyone else have a big amount in A&L esaver?

greekgirl

Hello

I have some money from a house sale - 130k - the full lot is sitting in my esaver with a little bit in their ISA. Ive been reading the last few days that A&L's new name is A&E... and obviously worried. I lose interest if i withdraw money before July... does anyone think they may collapse in the next two months. Can things happen that quickly? I was fully prepared to start splitting the money into 35k's come July.... but every day seems to bring more bad news for this bank.

Please any suggestions??

Many thanks
Greekgirl

MarkyMarkD

No saver lost a bean when Northern Rock crashed. Nor will anyone lose a bean if A&L was to crash, which it won't.

All A&L has announced is some write-downs. It will still be profitable in 2008, like it was in 2007 when it also announced big write-downs.

There is no reason to panic.

tradetime

It's a time when the doom and gloom merchants love to spread their wares. Dunno if I'd be as catagorically positive as MarkyMarkD, but I agree there's no reason to panic.
Here's a read may help a little
http://www.forbes.com/markets/feeds/afx/2008/05/15/afx5012909.html

MarkyMarkD

Thanks, tradetime.

Maybe I should expand on what I said before.

Northern Rock ran out of money; it didn't actually cease being profitable either.

A&L has enough money for the next year, in terms of replacing its expiring credit facilities. That's what the Forbes link says, and that's what has been publicised by A&L for the last six months or so.

And Northern Rock were lending money like there was no tomorrow; A&L is actually lending negative amounts - it is lending less than people are repaying it. It was slagged off by the stock market when it announced this at its AGM this week, but I'm not sure why - it is what they said they were going to do at the start of the year, and it's a prudent way to behave in a market where it is getting funds, not lending them, which is difficult.

So the likelihood of A&L "doing a Northern Rock" is minimal.

tradetime

As things look at the moment with the information available I'd be inclined to agree.

As far as the stock market is concerned the slagging off would be relevant to shareholder position. Since a lender's main source of income revenue stream is from lending money, to cut back on that reduces it's earning potential going forward, possibly puts the dividend under pressure and therefore makes it less attractive to shareholders. All the stock market is interested in is "profit or bust" ironic really since "bust" isn't exactly good for shareholders either
As you point out lending money like there is no tomorrow clearly isn't the way to go so A&L seem to be exploring a more prudent route, shore up the capital base, and ride out the storm.

KeithEssex_2

I don't believe that you are running any significant risk by waiting until July to split into £35 chunks.

Dan29

You can withdraw on the 1st of June without loss of interest.

tradetime

Dan29 wrote: »

You can withdraw on the 1st of June without loss of interest.

Only if she withdraws the entire amount, if she wanted to leave £30K odd in it to take advantage of pretty good rates then she would lose a months interest on that £30k which would be c £130.

molly_mandy_2

There's probably a greater risk by announcing to the whole world exactly how much you have in which accounts !

Dan29

tradetime wrote: »

Only if she withdraws the entire amount, if she wanted to leave £30K odd in it to take advantage of pretty good rates then she would lose a months interest on that £30k which would be c £130.

It would only lose £130 in interest if it spent the month in an account which paid no interest.

If Greekgirl wants to use non-fixed term accounts she could put £32,500 in each of 4 accounts paying over 6% interest so less than £20 in lost interest.

Then she could either put the £32,500 back in A&L in July, move some or all into fixed term accounts at higher rates than 6.5% or possibly just consider that £20 is a small price to pay for peace of mind

tradetime

That's true, personally I'd just wait til July when it's free.