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Zurich Stops All British And Irish Property Lending

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http://www.irishtimes.com/newspaper/breaking/2010/0716/breaking13.html

Swiss insurer Zurich Financial Services AG stopped all property lending to Ireland and Britain, and sharply increased provisions to shield against loan losses in these hard-hit real estate markets.

The group, which had been financing commercial property developments but did not give out mortgages to retail clients in these markets, said today it had set aside an additional $330 million to cover losses.

"Loan provisions are regularly reviewed but given the continuing deterioration in the UK and Irish property markets, the group has carried out a further review of its property development loan books and the respective provisioning levels," Zurich said in a statement.

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and sharply increased provisions to shield against loan losses in these hard-hit real estate markets.

When one of them admits to making large provisions against real estate losses, the others will look fraudulent for not doing so.

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This could be really bad for many developers.

Loans taken out with Dunbar have always had a first condition of loan that that loan can be recalled by the bank at any time of its choosing.

Even if they do not call in the loan. If a developer is half way through a project and no further money is lent at the next stage draw down it is all over.

The only chance is to get funding from another source. This will be very difficult!!

This the leads to bankrucy and forced sales of half finished developments.

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http://www.irishtimes.com/newspaper/breaking/2010/0716/breaking13.html

Swiss insurer Zurich Financial Services AG stopped all property lending to Ireland and Britain, and sharply increased provisions to shield against loan losses in these hard-hit real estate markets.

The group, which had been financing commercial property developments but did not give out mortgages to retail clients in these markets, said today it had set aside an additional $330 million to cover losses.

"Loan provisions are regularly reviewed but given the continuing deterioration in the UK and Irish property markets, the group has carried out a further review of its property development loan books and the respective provisioning levels," Zurich said in a statement.

The news is spreading:

WSJ, 1 hour ago: http://online.wsj.com/article/BT-CO-20100716-702639.html

FT, 9 minutes ago: http://www.ft.com/cms/s/0/217c628e-90be-11df-85a7-00144feab49a.html

It it leads other insurers in the same direction this can get really big.

Edit links.

Edited by Tired of Waiting

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http://www.irishtimes.com/newspaper/breaking/2010/0716/breaking13.html

Swiss insurer Zurich Financial Services AG stopped all property lending to Ireland and Britain, and sharply increased provisions to shield against loan losses in these hard-hit real estate markets.

The group, which had been financing commercial property developments but did not give out mortgages to retail clients in these markets, said today it had set aside an additional $330 million to cover losses.

"Loan provisions are regularly reviewed but given the continuing deterioration in the UK and Irish property markets, the group has carried out a further review of its property development loan books and the respective provisioning levels," Zurich said in a statement.

From the WSJ: "In the U.K., the loan loss provision compared to the overall portfolio were increased to 18% in the second quarter, up from a previous 5%. Zurich said the increase partly reflects the fact that its U.K. portfolio includes undeveloped land, a market segment that has "experienced significant deterioration" during the housing market crisis in the U.K." http://online.wsj.com/article/BT-CO-20100716-702639.html

From the FT: "Zurich Financial Services said it would take a $330m hit on bad property loans in the UK and Ireland in the second quarter of this year, more than the $231m hit it took for mortgage impairments in the whole of 2009" ( :blink: ) http://www.ft.com/cms/s/0/217c628e-90be-11df-85a7-00144feab49a.html

.

Edited by Tired of Waiting

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Guest sillybear2

I guess the state owned banks will be forced to step up to the plate, the bad always drives out the good.

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I guess the state owned banks will be forced to step up to the plate, the bad always drives out the good.

I sincerely hope not.

Well, at least we will find out if the new government has balls.

If they have them, they must let the crash crash.

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Although many banks are no longer lending to property developers, Dunbar is a specialist bank lending only to property companies.

They did not stop lending in the early 90's recession.

I think they are in trouble this time.

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Well, at least we will find out if the new government has balls.

If they have them, they must let the crash crash.

I don't think it will give you much satisfaction though.

Remember that the banks and previous government have arranged for you to guarantee hundreds of billions of crap paper. You'll end up paying the bills ... to the very banks that created that crap in the first place!

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The group, which had been financing commercial property developments but did not give out mortgages to retail clients in these markets, said today it had set aside an additional $330 million to cover losses.

That's peanuts. What percentage of the market do they have?

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I don't think it will give you much satisfaction though.

Remember that the banks and previous government have arranged for you to guarantee hundreds of billions of crap paper. You'll end up paying the bills ... to the very banks that created that crap in the first place!

I am a private tenant, waiting to be FTB. I will benefit from a correction in HP. I am also a tax payer, but I will share the cost of a bailout with other tax payers across the whole country. Capital losses from a HP crash will be shared only amongst property owners - reducing their windfall gains from these past decade. I prefer a crash.

Besides, see my sig. As a country, we have no option.

But more importantly, have you seen this thread? http://www.housepricecrash.co.uk/forum/index.php?showtopic=145026&st=40

Edited by Tired of Waiting

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  • 195 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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