Sancho Panza Posted July 9, 2013 Share Posted July 9, 2013 (edited) Just googling NAB for reseach and noticed the following anomaly.CEO says it's profitable,but actions speak louder than words. http://www.bloomberg.com/news/2013-05-05/clyne-discards-everything-he-once-said-in-driving-nab.html 'Cameron Clyne, catapulted to the helm of National Australia Bank Ltd. (NAB) in the depths of the global financial crisis, saw only one way out. Throwing away the playbook he had used as a management consultant advising banks to embrace risk to achieve higher returns, Clyne adopted a more conservative approach for Australia’s largest lender by assets. The 6-foot-6 (1.98 meters) former rugby player closed an investment-banking unit, shrank the ailing U.K. property portfolio and broke away from his biggest competitors by luring borrowers with lower mortgage rates, he said in an interview last month in Sydney. Shares have been weighed down by NAB’s U.K. operations, where mounting bad debts last year triggered the first drop in profit since 2009. The U.K.’s foundering economy torpedoed Clyne’s plans to sell the business or expand through acquisitions, leading him to shrink the unit by cutting more than 1,400 jobs starting last year. As CEO, Clyne immediately began paring risk. He told investors three months after taking over that his primary focus would be on improving shareholder returns, which had been weighed down since 2001 by losses and writedowns at a Florida mortgage business that was subsequently sold. He also shut the investment-banking unit, nabCapital, which had racked up losses during the global financial crisis. Clyne moved assets he wanted to exit -- mainly U.K. and U.S. investments, including collateralized debt obligations, commercial property and structured-asset-finance holdings --into a new unit with a portfolio valued at about A$26.5 billion ($27.2 billion) at the end of March 2009. He moved 5.6 billion pounds ($8.7 billion) of commercial real estate onto NAB’s own balance sheet in October, and in March he said the remaining U.K. operations had become profitable.' http://www.propertytribes.com/problems-with-nab-t-8012.html 'Problems with NAB 10-05-2013, 01:31 PM mary pilling 'I have been told by Yorkshire that I need to have re valuation of my commercial property and I have to pay for the pleasure (£600.00 +) I have five years to run on the mortgage with a liability of around £90000.00 do I have to agree to this bearing in mind I have repaid the first mortgage and for some crazy reason re mortgaged in 2007 to purchase a house, now the bank are demanding my accounts as i have now been passed to a central lending unit in Glasgow even though I have not missed any payments and I can easily afford the repayments. What I need to know is do I have to agree to this request. I am not worried about the re valuation it just makes me wonder given the latest press about NAB weather there is some sinister motive given the are recalling or getting out of commercial mortgages as reported in the press. Can you insist on a different business manager, as the present one is my life difficult and it seems there is a "clash of personality" it would appear from telephone conversations that she wants me to repay in full. ' '10-05-2013, 11:31 PM Post: #2 Kevin Wright Offline Mute Senior Member *** Posts: 496 Joined: Mar 2009 Reputation: 2 Subscribers: 0 RE: Problems with Nab You have correctly understood the real agenda here Mary. The revaluation strategy is a common tactic to manufacture an excuse for YB to issue you with a formal demand for full repayment of the loan. The valuation will come in low, you will be informed that you have breached your loan covenant by being above the maximum ltv allowed. Thus, they will have to call the loan in. You might just be given the option of making a cash lump sum payment large enough to reduce the o/s mortgage to within their acceptable ltv threshold but don't bank on that (sorry, no pun intended).....and even if you could to do so it would only be delaying the inevitable; better to put that money to a new mortgage with a new lender. You have also correctly understood the underlying cause of these actions, NAB's complete withdrawal from commercial lending by their UK subsidiaries Yorkshire and Clydesdale Banks. One way to hasten that exit is to invent as many pretexts as possible to call in loans. A perfect payment history is completely irrelevant here, sadly; as is your affordability to make the payments. Can you insist on a different business manager ...you can always ask, it may or may not be granted but as far as gaining any useful advantage, as that great analogy says, it will be the equivalent of re-arranging the deckchairs on the Titanic Once you are in their sights, your fate is sealed Mary, the loan will be called in at some point and that will be before the five years remaining is up. The only question is will you be able to remain the owner of the property when it is. If you adopt a 'rabbit in headlights' stance you wont. If you make some contingency plans to refinance with an alternative lender before YB take control of your property, you might. Should you pay their valuation fee? Whether you do or whether you don't, the outcome will be the same. Kevin Wright 07889 526979 kevinwright@thinkpositive.co.uk' ' 11-05-2013, 05:15 AM Post: #3 Vanessa Warwick Online Mute Landlord & Co-founder of Property Tribes* Posts: 8,832 Joined: Feb 2009 Reputation: 6 Subscribers: 6 RE: Problems with Nab Thanks for your input here Kevin. What a worrying situation for Mary & other landlords in the same circumstances. I was wondering if there might be a case of them going for "low hanging fruit" ... i.e. those customers who do not put up a fight? If Mary resists and threatens to report them to the Financial Ombudsman, might that encourage them to invest their efforts in customers who do not put up any resistance? It seems grossly inequitable that they are are doing this to customers who are paying on time. Surely there must be some legal stance against them forcing this scenario? Their circumstances/policy might have changed, but the customer's hasn't. I don't understand why the customer should be penalised for this (unless of course they are in arrears etc).' ' 11-05-2013, 01:33 PM Post: #5 Lisa Orme Offline Mute Property Investor & Mortgage Adviser **** Posts: 3,584 Joined: Apr 2009 Reputation: 2 Subscribers: 0 RE: Problems with Nab Yes seeing a lot of this and as Kevin said the outcome is inevitable so best tackled head on and find your own exit first. It is vitally important to check and adhere to your T&Cs especially with commercial loans. I'm aware of Lloyds calling in a huge multi million pound loan that's got a perfect payment history because the investor didn't send them a copy of the tenancy agreements each year! The fact they never asked is irrelevant! MX are currently doing physical inspections of properties looking for breaches of T&Cs and ensuring borrowers are staying on top of maintenance etc. I agree with Simon so many people opted for commercial facilities and still do thinking they will have more weight with the bank and the opposite is true - you're handing control to the bank! It has its place but there is a lot to be said for not putting all your eggs in one basket! Buy to let and commercial is unregulated so there's little to no comeback with the Ombudsman unless the lender has outright breached their terms. Lisa ' ' 13-05-2013, 12:14 PM Post: #8 Kevin Wright Offline Mute Senior Member *** Posts: 496 Joined: Mar 2009 Reputation: 2 Subscribers: 0 RE: Problems with Nab As long as you realise Mary that doing so will.... ....at best grant you a temporary reprieve before they refocus their attention on you ....not get YB off your back, they will gladly take your money, then continue to hound and harass you for full repayment of the loan....play into the well known bank strategy of wringing you dry of any additional cash they can extract from you in your attempts to placate them.... then just calling in the receivers as they always intended to do anyway Adam says "If you refuse to offer the required documents and access, the Bank may have a valid reason to call in the Finance due to you not complying with the Terms or reasonable requests. If you refuse the Bank may find valid reason to call in Finance." ....I would suggest YB have already made that decision to call in the loan. All that is happening now is they are determining the exact strategy they will adopt to achieve their objective. In other words, they will find a way to get a valid reason, whether you provide them with one or not Kevin Wright 07889 526979 kevinwright@thinkpositive.co.uk ' ' Problems with Nab 17-05-2013, 01:12 AM Post: #11 Paul Barrett Offline Mute Longstanding Senior Member **** Posts: 1,486 Joined: Dec 2011 Reputation: 0 Subscribers: 0 RE: Problems with Nab Work on the worse case scenario! Get all assets out of your name if possible. Get as much debt as you can as you won't be paying it back!Try and get 2nd interests in name of trusted party for all the equity you have in your resi property plus about £150000 to take account of the remaining term of the mortgage on your resi property for expected equity increase. NAB will stick a 3rd charge on your property as you will have the 2nd interest in the name of a trusted party won't you!! Don't just electronically transfer the resources to other 3rd party accounts as that creates audit trails. Draw all the monies out in cash and then feed it into the 3rd party accounts. Any OR will ask you what you did with all the money you took out of your accounts; your response; spent it gambling and living a high old life, OR cannot prove you didn't!! Make sure any vehicles are NOT in your name. Cash in ISA's close down etc The works! You need to show you are a lady of straw! You can retain your resi property even if still in your name providing you have a large enough 2nd charge to cover potential property increases over the remaining term of your mortgage. You need to get on this now as it takes time to put the 2nd interest on the resi mortgage. Ideally have a 2nd charge on your resi rather than a 2nd charge. If it is a different mortgage provider then you should be OK. But you must move quickly as the commercial lenders will apply to put a restriction on your resi title. They tried it on me but fortunately I was too quick for them and they are 3rd in line and I can't see my property increasing by £100000 in the next 18 years!!!!!!!!!!!!!!' 21-05-2013, 07:45 PM Post: #12 steven bell Offline Mute New Member * Posts: 2 Joined: May 2013 Reputation: 0 Subscribers: 0 RE: Problems with Nab hello folks im with the dreaded NAB originally with Yorkshire bank but I think NAB is trying to sell clydsdale and Yorkshire bank but no one wants them as they have lots of large property portfolio loans or possible toxic debt,so NAB who are the parent bank to both Yorkshire and clydsdale in there wisdom have taken over all commercial property debts. NAB`S main goal and objective is to get rid of all property accounts,in short there finding anyway to get all there money back that's loaned to property.I am one of thousands of those customers but in my case I was strongly advised to change my property loans to TBL`S tailored business loans with a very high fixed penalty clause! fixed until 2018 now a few clever little clauses attached to these loans are ; revaluations every 36 months at my cost,up to date accounts and rent schedules,as people are saying some have a clause if you don't meet the banks loan to ratio criteria then they can ask you to add cash or even call in the loan!!! At this moment in time NAB are insisting I pay £12000.00 to revaluate my properties at my cost which will give me cash flow problems as I have also this year tax bill to pay in july and they wont give me an overdraft as im connected to property as previous people here I had been with Yorkshire for nearly 20 yrs and never mist or been late with payments and Yorkshire bank never in this time asked me to revaluate but the dreaded women at NAB is pushing me hard to have revaluations done!! im dragging my heels at the moment and she `s becoming very bullish and aggressive and I know I will have do it .They want you to leave but are not prepared to help you in anyway they refuse to drop the high cost penalties on my loans because if they would I would leave tomorrow anyone else in this horrible situation I would love to hear from them???!!! ' Apologies if this has been posted already.I realise the date's are circa 2 months old.However,it's interesting to see deflation in action in terms of LL's getting capital calls.Clearly things are deteriorating despite outward signs of calm from some of the major banks. The reactions of some of the LL's are telling, in that they clearly don't understand how fractional reserve lending works-not that I'm fully able to grasp it's finer nuances-whereas others can see the writing on the wall,not least that king of 'thinkpositive' Kevin. I've posted many of the replies in full,to give a flavour of the disbelief and at the same time,acceptance.Also of note is the post from one of the site owners,who's understanding of contract law underpins her orange glow. From what I understand,NAB are the first to be heading down the capital call route.It's not something I've seen before and was prompted to google it courtesy of a potential oppurtunity that's arisen as a result. It's surprising how years of easy money have encouraged people not to research clearly evident risks before plunging headlong into a 15 year loan. Edited July 9, 2013 by Sancho Panza Quote Link to comment Share on other sites More sharing options...
Sancho Panza Posted July 9, 2013 Author Share Posted July 9, 2013 PS Is there an edit button? Quote Link to comment Share on other sites More sharing options...
@contradevian Posted July 9, 2013 Share Posted July 9, 2013 (edited) PS Is there an edit button? Yes! Edit | Multiquote | Reply bar (RHS at the bottom of the post). http://www.yorkshire...banks-1-5501544 NATIONAL Australia Bank insisted it was right not to toss its Yorkshire Bank "problem asset" overboard in a "desperate firesale". The group has been under pressure to retreat from the UK by selling Yorkshire and Clydesdale banks, as they drag down the Australian lender's performance. But NAB said it was right to hold on to its UK arm, where a restructure is "well advanced". Edited July 9, 2013 by Secure Tenant Quote Link to comment Share on other sites More sharing options...
The Knimbies who say No Posted July 9, 2013 Share Posted July 9, 2013 (edited) PS Is there an edit button? I think you may have to request the 'Edit' feature, or you get it automatically after a while. Good find, it's noteworthy that the CEO of NAB was happy to advise sloshing the dough around when it wasn't his ultimate responsibility. Pretty much the whole problem in a nutshell, now he talks about throwing away the playbook. It could be that he was just a BSer with scant appreciation for the enormity of what he was advocating until it was his own finger on the button. Still, at least he did change behaviour when he got in charge. So the reduced valuations on UK CRE trigger the conevant breaches on LTV, giving NAB the cover to call in the loans. You have to wonder how bad their portfolio is, it was transferred from Clydesdale towards the end of last year. Here's an article from May: Mr Thorburn said the major factor in the financial turnaround had been "the successful transfer of £5.6bn of commercial real estate assets to our parent in October". NAB said the portfolio had now "pleasingly" shrunk to £5bn, slightly above the previously-quoted £4.8bn. Asked why so many affected small businesses had complained about the CRE transfer, prompting MPs' questions in the House of Commons about a heavy-handed squeeze on borrowers, dampening effects on the economy, and lack of accountability in the switch to NAB, Mr Thorburn said: "Any customer who is unhappy with the result of that we very much regret and we do try to do something. "It is one of the unfortunate consequences... colleagues at NAB are doing their level best and there should not be any less accountability." NAB said the CRE portfolio had made a loss of £149m, after a bad debt charge of £185m – a reduction from the £249m six months earlier. The Melbourne-based bank was reporting a 3.1% rise in earnings on a year earlier, and a reduction in underlying bad debts on the previous half-year. http://www.heraldscotland.com/business/company-news/clydesdale-returns-to-profit-after-shake-up.20947703 Still, £5Bn of CRE positions to get rid of. Edited July 9, 2013 by cheeznbreed Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted July 9, 2013 Share Posted July 9, 2013 (edited) It must be raining...the banks are demanding their umbrellas back. Mind you, some of the advice on that thread is just insanely stupid....draw out cash, hundreds of thousands and move it...get assets out of your name....Cheese and Rice, follow that and the BORROWER will end up in Prison. Edited July 9, 2013 by Bloo Loo Quote Link to comment Share on other sites More sharing options...
Sancho Panza Posted July 9, 2013 Author Share Posted July 9, 2013 Yes! Edit | Multiquote | Reply bar (RHS at the bottom of the post). http://www.yorkshire...banks-1-5501544 Thanks,still can't alter the capital letters in the title frame. The restructure from what I'm seeing involves repoing performing CRE and selling it at a loss.It's certainly a novel way to restructure. Quote Link to comment Share on other sites More sharing options...
The Knimbies who say No Posted July 9, 2013 Share Posted July 9, 2013 (edited) Thanks,still can't alter the capital letters in the title frame. The restructure from what I'm seeing involves repoing performing CRE and selling it at a loss.It's certainly a novel way to restructure. Just deperate to get rid despite being in profit overall, although the bad debt provisions suggest not all of it is in the same boat as Mary. Edited July 9, 2013 by cheeznbreed Quote Link to comment Share on other sites More sharing options...
Sancho Panza Posted July 9, 2013 Author Share Posted July 9, 2013 I don't believe they have any recourse to the Financial Ombudsman. Quite.I can imagine her business manager laughing into their 'frothychino'. That CEO must be sat reading propertytribes wondering what on earth his predecessors were thinking when they extended these people credit. Quote Link to comment Share on other sites More sharing options...
Sancho Panza Posted July 9, 2013 Author Share Posted July 9, 2013 (edited) You have to wonder how bad their portfolio is, it was transferred from Clydesdale towards the end of last year. Here's an article from May: You have to wonder why they tranferred the assets to NAB before selling?Capital ratio's out of kilter? Afraid of causing a run on YB/Clydesdale? Edited July 9, 2013 by Sancho Panza Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted July 9, 2013 Share Posted July 9, 2013 Quite.I can imagine her business manager laughing into their 'frothychino'. That CEO must be sat reading propertytribes wondering what on earth his predecessors were thinking when they extended these people credit. yes, for all of 10 years they were wondering how they kept getting away with it. Quote Link to comment Share on other sites More sharing options...
The Knimbies who say No Posted July 9, 2013 Share Posted July 9, 2013 You have to wonder why they tranferred the assets to NAB before selling?Capital ratio's out of kilter? Afraid of causing a run on YB/Clydesdale? It might have been simply to avoid Clydesdale getting the bad PR, better some Aussie bank you've never heard of. Quote Link to comment Share on other sites More sharing options...
The Knimbies who say No Posted July 9, 2013 Share Posted July 9, 2013 I would suggest the tax benefits of having the losses with the parent...and then selling off the 'profitable' business. Otherwise you'd be in the position of selling a loss making business with the losses attached which would reduce the number of interested parties. Good point. Quote Link to comment Share on other sites More sharing options...
dryrot Posted July 9, 2013 Share Posted July 9, 2013 Remember it was NAB who brought to the UK the delights of the 'Aussie Mortgage'....essentially the first offset mortgage - write a cheque against your equity, why don't you. Not exactly the peak of prudence that product I would suggest. Certinly not in most people's hands anyway. No doubt some bright spark will pipe up how good it has been for them personally. A "bright spark" pipes up... I used the "offset" Mortgage from Virgin One and thought it excellent - rather than have a mortage of £50 that costs 5%, and £4k cahs on deposit paying 2%, and 1k cash in a current a/c that pays nowt, you just have a 45k mortgage. Better all round and pay off debt easily and tax efficient. Esp with proper interest rates ? Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted July 9, 2013 Share Posted July 9, 2013 A "bright spark" pipes up... I used the "offset" Mortgage from Virgin One and thought it excellent - rather than have a mortage of £50 that costs 5%, and £4k cahs on deposit paying 2%, and 1k cash in a current a/c that pays nowt, you just have a 45k mortgage. Better all round and pay off debt easily and tax efficient. Esp with proper interest rates ? I calculate you save 267 per year initially.....shame about the FSCS you lose out on....but that is a risk you may wish to take. Quote Link to comment Share on other sites More sharing options...
dryrot Posted July 9, 2013 Share Posted July 9, 2013 (edited) I calculate you save 267 per year initially.....shame about the FSCS you lose out on....but that is a risk you may wish to take. Well, they were off-the-top figures. But I admired the offset mortgage plan, and it was only when switching to it that I realised the old bank scam - they take my current and savings accounts and lend them back to me for a fee... It was also a sobering reminder when you put the cashpoint card in and saw the actual amount you owed, right there... EDIT: splung Edited July 9, 2013 by dryrot Quote Link to comment Share on other sites More sharing options...
Sancho Panza Posted July 9, 2013 Author Share Posted July 9, 2013 It might have been simply to avoid Clydesdale getting the bad PR, better some Aussie bank you've never heard of. For sure,although I'm certain there's a fair amount of schadenfeude when Joe Public sees BTLer's getting burned. The issue going forward to me,is whether or more likely when,the forebearing generosity of the UK's retail banks gives way to this sort of desperate grasping at equity in the residential sector.These LTV clauses are in most mortgage contracts as far as I'm aware. I think with NAB,they can see the writing on the wall for the Aussie market thanks to Ireland,Greece,Portugal,Spain,Italy etc...yes,yes,I know Australia is different......and are aiming to be the bank that blinks first. I would suggest the tax benefits of having the losses with the parent...and then selling off the 'profitable' business. Otherwise you'd be in the position of selling a loss making business with the losses attached which would reduce the number of interested parties. They made circa AUD$5.4 billion in 2012. You wouldn't want potential investors questioning the quality of YB/Clydesdale's residential mortgage book would you? Quote Link to comment Share on other sites More sharing options...
rantnrave Posted July 9, 2013 Share Posted July 9, 2013 Thanks,still can't alter the capital letters in the title frame. I don't think any of us can. Mods? Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted July 9, 2013 Share Posted July 9, 2013 Is this an example of the dreaded 'margin call' by another name? Quote Link to comment Share on other sites More sharing options...
@contradevian Posted July 9, 2013 Share Posted July 9, 2013 (edited) Is this an example of the dreaded 'margin call' by another name? I was just thinking that. There was a popular poster on here who predicted this (can't remember his name at the moment, but he moved to Australia in the end) and it does appear to be happening. Update: just remembered, it was Paddles. Edited July 9, 2013 by Secure Tenant Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted July 9, 2013 Share Posted July 9, 2013 I was just thinking that. There was a popular poster on here who predicted this (can't remember his name at the moment, but he moved to Australia in the end) and it does appear to be happening. Update: just remembered, it was Paddles. Indeed. Why seize only depositors assets when you can seize borrowers assets too?! Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted July 9, 2013 Share Posted July 9, 2013 Indeed. Why seize only depositors assets when you can seize borrowers assets too?! Actually, this margin call thing was brought to the boards attention by Moneyweeks Merryn. Paddles took a look at a few contracts and some had the clause, some didnt, some were badly worded with much leeway for a Margin calls to be inserted. Private Borrowers need not be bothered by this type of thing, but BTL are business loans and they have a higher onus on themselves to get their side of the contract correct than consumers....who rely on the experts to be fair to them from the outset. Quote Link to comment Share on other sites More sharing options...
Sancho Panza Posted July 9, 2013 Author Share Posted July 9, 2013 Actually, this margin call thing was brought to the boards attention by Moneyweeks Merryn. Paddles took a look at a few contracts and some had the clause, some didnt, some were badly worded with much leeway for a Margin calls to be inserted. Private Borrowers need not be bothered by this type of thing, but BTL are business loans and they have a higher onus on themselves to get their side of the contract correct than consumers....who rely on the experts to be fair to them from the outset. If private borrowers have no need to worry then why are the clauses present? Quote Link to comment Share on other sites More sharing options...
the_duke_of_hazzard Posted July 9, 2013 Share Posted July 9, 2013 YB offer some of the best mortgage rates for residential purchase: http://themortgagemeter.com/#/best_buys I'm not sure whether this is related to residential? Quote Link to comment Share on other sites More sharing options...
Venger Posted July 9, 2013 Share Posted July 9, 2013 Quite.I can imagine her business manager laughing into their 'frothychino'. That CEO must be sat reading propertytribes wondering what on earth his predecessors were thinking when they extended these people credit. I had been with Yorkshire for nearly 20 yrs and never mist or been late with payments Quote Link to comment Share on other sites More sharing options...
Fishbone Glover Posted July 9, 2013 Share Posted July 9, 2013 For sure,although I'm certain there's a fair amount of schadenfeude when Joe Public sees BTLer's getting burned. I'm certainly feeling it, seeing BTLers suffering always warms my heart slightly Quote Link to comment Share on other sites More sharing options...
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