Bradford and Bingley Comeback

Reestit_Mutton

SammyJnr wrote: »

Don't worry - B&B is secure. If you read what the analysts say and not the hysterical stuff you'll see. They are not another Northern Rock. They have billions of pounds in reserve - NR did not.

Not wishing to fan the flames of hysteria but why would a company with "billions" of pounds in reserve announce a rights issue for a mere £300m...and why would it then feel the need to adjust the issue price downwards and sell almost 1/4 of the business for a price tag south of £200m?

Call me a cynic but something doesn't smell right here.

Reestit Mutton

KeithEssex_2

To be fair there are a couple of differences when comparing B&B with NR :-

1. Bradford & Bingley relies on the wholesale markets for half its funding, leaving it far less exposed than the Northern Rock which drew three quarters of its funding this way.

2. Savers are now guaranteed 100% of the first £35,000 of their money making a run on any company much less likely.

3. Bradford & Bingley has already secured funding for the next 2 years.

Savers are going to be fine. It is the shareholders who have lost out.

ManAtHome

But if they have secured funding for a couple of years (so presumably don't need the dosh right now), why the 7% all of a sudden?

bristolleedsfan

ManAtHome wrote: »

But if they have secured funding for a couple of years (so presumably don't need the dosh right now), why the 7% all of a sudden?

B+B has only stated that its secured funding into 2009 as far as im aware, its done this partly by selling off some of its loan books and partly by offering constant loss leading. fixed term savings rates.

As time passes these fixed term accounts will mature causing funds to get withdrawn from B+B so B+B has to constantly offer loss leading fixed term rates.

Loss leading fixed term savings rates is a contributory factor to Bradford and Bingley making less profit which causes its share price to reduce which causes some people on here to blame "Carpetbaggers" from nearly a decade ago.

When Building Societies announce reduced profits or even a loss,( should they announce a loss), nobody bats an eyelid bar the "carpetbaggers" :rotfl: due to their being no share price to analyse.

skoolmaster

... after an appaulling week of bungling incompetence to refinance B&B

this is a desperate attempt to staunch the flow of savers and investors deposits above £35000 to "safer" bolt holes ... B&B is haemorrhaging cash at an alarming rate ...

anything beyond 1 Year Fixed Bond would be foolish ... for amounts above £35000 ... the time is now ... move your money ...

If TPG own a 1/5 of the refinanced B&B what guarantees safeguard your money against them taking their assets away from B&B at a future date ...?

ad44downey

skoolmaster wrote: »

...

anything beyond 1 Year Fixed Bond would be foolish ... for amounts above £35000 ... the time is now ... move your money ...

?

No need for any depositor to do this. The government would step in and save the day as in the case of Northern Rock. The precedent has already been set. The political consequences for the government not to do so would be catastophic .

However, shareholders should bale out immediately.

KeithEssex_2

ManAtHome wrote: »

But if they have secured funding for a couple of years (so presumably don't need the dosh right now), why the 7% all of a sudden?

To counter people taking their money out because of all the bad publicity I guess. All organisations would struggle to cope if their depositors started to withdraw funds on mass.

As long as you have less than £35k in them I can't see any reason for savers to worry and cause the precise problem that everyone fears by withdrawing their cash !

Many of the Banks (and former Building societies) have made some very stupid investment decisions over the last few years. God knows why they have paid their CEO's such huge bonuses to do this. They should have been sacked without compensation for poor performance.

The main thing now is to ensure the stability of the Banking System and the security of people's savings.

The best thing we can do to help is not to overreact to some poor trading results.

thor

KeithEssex wrote: »

Many of the Banks (and former Building societies) have made some very stupid investment decisions over the last few years. God knows why they have paid their CEO's such huge bonuses to do this. They should have been sacked without compensation for poor performance.

I quite agree. Unfortunately the system is weighted in favour of these fat cats so that they more or less get what they want all the time even if the companies they are supposedly running are doing crap.

ad44downey

More lies:

http://news.bbc.co.uk/1/hi/business/7444185.stm