Wednesday, Jan 23, 2008
UK banks don't have enough reserves
FT: Sore bottoms in store for UK banks (especially HBOS)
UK banks don't have enough reserves if write-off levels go up to 1992-1993 levels. Scary plot shown. Run for cover when hpc starts in earnest.
Posted by happyrenterz @ 05:03 PM (1099 views) Add Comment
14 Comments
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1. happyrenterz said...
2. Urine Trouble said...
This is why the Government / Bank will not allow HPC
3. drewster said...
That's pretty scary! Are we likely to see a run on HBOS tomorrow?
The article refers to a bank called "St Ch", probably me just being thick but does anyone know which bank that is?
4. japanese uncle said...
If the run should take place on H--S, GBP will drop by 60%, surely and FTSE by 50%.
5. Judith said...
St Ch = Standard Chartered?
6. su said...
@Drewster
I think it's Standard Chartered Bank
7. Bricksnmortarhaha said...
Standard Chartered?
8. lvmreader said...
@Japanese Uncle
The prospect of any of the Big 4 going under will sink what little confidence the rest of the world has in the UK. Barclays may already have been bailed out covertly (thank the Lord as long as they replace ALL the senior management), but the UK GBP is at significant risk.
9. su said...
Yep. It's definitely Standard Chartered Bank. I've just noticed it's mentioned in the article. :-)
10. who stole my pension? said...
If a big one suffers a run they will all suffer a run. There is no way the government will be able to stop it this time.
11. jack c said...
Techieman has made several posts recently regarding the next run on a uk bank - perhaps he'll comment on the article/table and it's findings.
12. alan said...
This seemed to be the key phrase....
"We see a high possibility that HBOS will either need to raise new equity or sharply disappoint on loan volumes".
However, the folk I know in the company say that they are cautious lenders, with a good customer base, so I guess that may mitigate their 2008 losses and their need for external cash. Personally, I thought A&L and B&B showed the least regard for "repayability" on the part of the borrowers, and they were most vulnerable to a run, having smaller customer bases.
13. happyrenterz said...
But why have they put themselves at such risk? Is it the fools chant "this time it will be different". Maybe it comes down to what George Soros wrote in that earlier post. The securities got so complex that no one understood the risks anymore.
14. drewster said...
Thanks guys - was being a bit thick there! Surprising that the list includes Standard Chartered but doesn't include Natwest - perhaps their figures weren't available. Time to close my Alliance & Leicester account....