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Fitch Has Downgraded Five Uk Building Societies

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Fitch Ratings-London-22 May 2009: Fitch Ratings has today downgraded the Long- term Issuer Default Ratings (IDRs) of five UK building societies: Chelsea Building Society, Newcastle Building Society, Principality Building Society, West Bromwich Building Society and Yorkshire Building Society. The Long-term IDRs of Britannia Building Society, Coventry Building Society, Leeds Building Society and Norwich & Peterborough Building Society are affirmed, while the Long-term IDR of Skipton Building Society is placed on Rating Watch Negative. A full list of rating actions follows at the end of this announcement. A separate press release will address any rating actions on covered bonds issued by the societies.

"Fitch's concerns are concentrated on higher-risk lending by societies, which includes buy-to-let, self-cert, adverse, purchased loans and commercial mortgages," said Matthew Taylor, Senior Director, in Fitch's Financial Institutions team

http://www.nasdaq.com/aspx/stock-market-ne...lding-societies

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Didn't many building societies lose a bundle in Iceland too? I am sure I read that Chelsea lost a couple of million.

So, do they get bailed or what?

Keep asking the same Q asked at this link , what next?

HPC Link

And here:

HPC Link

Edited by Sybil13

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Erm, I'm getting deja-vu. Wasn't this news a few weeks ago?

that was Moodys

I think I read at the time of the Moodys downgrades that if two of the ratings agencies downgraded a lender then this was much more serious for that lenders' ability to raise money than just one doing it

Edited by newdman

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anybody have a view on Birmingham Midshires, a best buy in Which Magazine.

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Can we expect a building society bailout soon or will they all just be forced to merge with the nationwide?

While the Nationwide merged with the Portman in 2006 & the Derbyshire and the Cheshire building societies in 2008 -- in other words bailing them out -- it didn't merge with the Dunfermline earlier this year but just bought the assets, retail deposits and prime lending book. I think the Nationwide has hit the limits of its ability to help out the building society sector.

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that was Moodys

I think I read at the time of the Moodys downgrades that if two of the ratings agencies downgraded a lender then this was much more serious for that lenders' ability to raise money than just one doing it

The FSA has just stress tested them as well :

the FSA is in the process of verifying whether all societies - not just the Moody's seven - have the capital to cope with further strains in the housing market and whether they have sufficient access to finance to withstand a prolonged drought of wholesale funding.

Societies unable to demonstrate they can absorb potential future losses comfortably will not be allowed by the FSA to retain their independence - unless the Treasury were to invest in them on taxpayers' behalf (not impossible).

As for those with adequate capital but inadequate access to deposits and wholesale finance, their future hinges on whether the Treasury and Bank of England relax their conditions for providing taxpayer loans and guarantees.

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While the Nationwide merged with the Portman in 2006 & the Derbyshire and the Cheshire building societies in 2008 -- in other words bailing them out -- it didn't merge with the Dunfermline earlier this year but just bought the assets, retail deposits and prime lending book. I think the Nationwide has hit the limits of its ability to help out the building society sector.

This week with regards West Brom read "Nationwide did not have the appetite for any more mergers". There was talk about Coventry or Yorkshire but they are both in trouble too. And Nationwide was downgraded by Moodys, it is not without its own problems

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Which, in turn, is part of Lloyds Banking Group... :rolleyes:

Do keep up at the back! :lol:

JUMP :o

Already decided to take money out but where to put it next!

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that was Moodys

I think I read at the time of the Moodys downgrades that if two of the ratings agencies downgraded a lender then this was much more serious for that lenders' ability to raise money than just one doing it

Yes, things are getting worse for building socities by the sound of it.

I heard a couple of weeks ago, on the news, that some of the local councils would be taking their money out of the buildig societies because of the Moody's downgrade.

They said that their money in the building socities, was not guaranteed by the government.

Now we have this Fitch downgrade, I bet more councils will be withdrawing big money from them.

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