Stay or move from the Bradford+Bingley?

ventureuk

An elderly relative has 130k tied up in a Bond with B&B until October, they are having sleepless nights and the situation has overwhelmed them. This amount is the bulk of their savings and to lose most of it would destroy them.

I have advised them not to worry but is that realistic ?

The T&Cs will not allow the money to be removed before the term according to staff, anyone know of a workaround to get hold of the money if the risk of loss is real ?

bristolleedsfan

http://www.referenceforbusiness.com/history2/69/Bradford-Bingley-Plc.html

barak

bristolleedsfan wrote: »

...As has been pointed out on here Bradford and Bingley dont appear to be actually in trouble, in any case a full takeover bid could yet be made for B+B.

I think a company whose share price has plummeted from 422p to 68p in 12 months could be said to be in a bit of trouble

Masomnia

ventureuk wrote: »

I have advised them not to worry but is that realistic ?

The T&Cs will not allow the money to be removed before the term according to staff, anyone know of a workaround to get hold of the money if the risk of loss is real ?

I doubt there's a way out without losing a heck of a lot of interest. But, don't worry. Really. The chance of them collapsing is tiny. It's a completely different situation to Northern Rock for example. The Fitch ratings have them as F2 for short term credit rating meaning "Moderately Strong. Indicates a satisfactory level of intrinsic liquidity and capacity for timely payment of short-term policyholder obligations, but the margin of safety is not as great as in the case of the higher ratings." So it's not bad.

Plus, I can't see the government letting them go bust, since it could so easilly have knock on effects in other institutions and be a complete disaster.

MiserlyMartin

Fella wrote: »

Carpetbaggers haven't been responsible for the conversion of one single building society ever.

If the group of 60 odd members (carpetbaggers) had not submitted the resolution to the board on converting to plc, they would have stayed a plc at that time.

Fella wrote: »

Every single conversion vote has gone the way that the building society board recommended. When the board has wanted a conversion they've got one. And when they haven't wanted one, they've ensured they didn't get one.

Not true. Refer to my earlier post concerning the board of Bradford & Bingley's strong case they made for voting against the resolution to convert to PLC. It still happened. Members were greedy and thought they are in for big windfalls, screw the future.

It turned out that the windfalls were worth a lot less that £4000 figure being branded about. And now you have a different board who probably would not have made the diasterous decision to gamble on buy to let.

If B&B was still mutual, IF it had gone down the BTL route, it would have been in less trouble than it is now. Trouble is with plcs, you have one sniff of bad news and people exit. This doesn't happen with mutuals. A mutual would have to be run by a lunatic to get into as much trouble as B&B now.

bristolleedsfan

A number of Building Societies faced Member challenges around the time in question,e.g Skipton/Portman and Chelsea BS, all these avoided holding changes in status votes or where they were held the boards of the Societies concerned made it clear that such a vote would only be seen as a "advisory message".

Mr Rodriguez C.O.E of B+B at the time, from memory had a PLC history prior to his role at B+B and made no attempt to deter the "carpetbaggers" from holding and winning a conversion vote.

I believe that history shows that while some Building Society boards fought tooth and nail to preserve mutuality, Mr Rodriguez merely wanted an excuse/reason to go down the PLC Road and allowing a conversion vote to both be held and to win gave him that reason/excuse.

Before someone refers to the B+B message already posted that they believed that they would be better off as a BS, Northern Rock were critisized for not publicly coming out in favour of mutuality, NR response was to run a series of TV ads proclaiming its love of mutuality and remaining a BS.( Minimum account opening balance at that time was 2500)

A week later NR announced plans to convert to PLC status.

Building Societies used to use two "key/buzz" words, one was "mutuality" and the other was "Local Interests" When Board of directors choose to do a deal with another BS board to merge, "Local Interests" gets kicked into touch. Ask the people of Staffordshire as one example, and what about the people who didnt want their nice friendly Building Society swallowed up, was that the fault of the carpetbaggers as well :huh: :huh: :huh:

As has been pointed out on here, many former Building Societies that converted to PLC status previously stated that they had no plans to convert to PLC status, many on here have the memory of Nationwide BS once upon a time being rumoured to have plans to buy National and Provincial BS ( subsequently bought by "Abbey National Building Society, who then converted) and convert to PLC status. Beliefs are that it was due to Nationwides difficult merger with Anglia BS that enabled Abbey to jump in and do a deal with N+P and from then onwards Nationwide BS have staunchly proclaimed that they believe that they are better off as a BS.

Point of above is that Building Societies Boards of Directors have been known to change their minds quicker than a lightbulb can be turned on/off. Some have an opinion, and I would tend to agree that Building Society Boards Of Directors tend to do whats best for THEMSELVES.

My opinion is that "one" big mistake that both NR + B+B made was its obsession to remain "independent" unlike Woolwich, C+G and Halifax.

SammyJnr

ventureuk wrote: »

An elderly relative has 130k tied up in a Bond with B&B until October, they are having sleepless nights and the situation has overwhelmed them. This amount is the bulk of their savings and to lose most of it would destroy them.

I have advised them not to worry but is that realistic ?

The T&Cs will not allow the money to be removed before the term according to staff, anyone know of a workaround to get hold of the money if the risk of loss is real ?

I am so sorry to hear that your elderly relative is losing sleep. I think the scaremongering in the press is totally irresponsible and the worry your relative has would not exist were it not for the delight the media takes in running B&B down.

My experience of B&B is one of very little queuing with nice staff who genuinely care. The staff in my branch are telling those of us that have asked that their money is safe and B&B is secure - incidentally there are no queues of people wanting their money that I have seen!

Reassure your relative. There is nothing to worry about. B&B are well funded and once the rights issue is over will be one of the strongest banks in the UK. They may make a bit less profit but you'll get the benefit with great savings deals!

campins

If they are going to raise the rate for mortgage borrowers, http://news.bbc.co.uk/1/hi/business/7439469.stm ,then maybe they will do the same for savers as a way of keeping customers :T

Banderman

B&B savers: STAY. The government will pay up if the worst came to the worst. As in Northern Rock

B&B shareholders. SELL. Don't give them any more money to waste in the rights issue. The housing market isn't going to get an better in the next few years.

campins

I might take up their third issue internet saver offer, what do you think