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Sancho Panza

Nationwide building society hit by 50% collapse in buy-to-let lending

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10 minutes ago, Habeas Domus said:

The FSCS would pay compensation up to the limit of £85,000* per person, per authorised bank or building society... you (the depositor) will be paid any interest owed as part of your compensation amount.

https://www.fscs.org.uk/what-we-cover/products/banks-building-societies/

Thanks.  So on that basis it is up to £85k, and doesn't give a get out if exceeded?

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6 hours ago, Mine the wheatfield said:

Thanks.  So on that basis it is up to £85k, and doesn't give a get out if exceeded?

Exactly. But this doesn't mean that you rotor automatically lose everything over £85000. Retail investors are still more likely to be hit after the wholesale investors (ie bondholders ) and even then you would only likely lose a relatively small percentage of your savings above £85k. 

The most dangerous bank to have your money in iss probably a building society that is highly exposed to buy to let. Building Societies have fewer bondholders to ttake the risk first but have more concentrated risks. 

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On 18/08/2017 at 7:24 PM, Ash4781 said:

They seem to be spending alot on television advertising (and or I watch too much television).

Generation Zee???? it's Zed, we're British.

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2 hours ago, Ah-so said:

Exactly. But this doesn't mean that you rotor automatically lose everything over £85000. Retail investors are still more likely to be hit after the wholesale investors (ie bondholders ) and even then you would only likely lose a relatively small percentage of your savings above £85k. 

The most dangerous bank to have your money in iss probably a building society that is highly exposed to buy to let. Building Societies have fewer bondholders to ttake the risk first but have more concentrated risks. 

Ill shorten that - dont put more than 85k in a BS. All remaining BSs are heavily exposed to IO BTL.

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4 hours ago, Ah-so said:

Exactly. But this doesn't mean that you rotor automatically lose everything over £85000. Retail investors are still more likely to be hit after the wholesale investors (ie bondholders ) and even then you would only likely lose a relatively small percentage of your savings above £85k. 

The most dangerous bank to have your money in iss probably a building society that is highly exposed to buy to let. Building Societies have fewer bondholders to ttake the risk first but have more concentrated risks. 

Hinkley & Rugby BS is really sound by all accounts............................so you can't be referring to them.

In 2016 they 'achieved' a 34% increase in mortgage advances £172mn in total including £29mn on BTL..........................18% of the overall mortgage book.

Mortgage book 2015 £475mn 2016 £540mn,net interest margin 1.17%

 

 

 

Edited by Sancho Panza

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https://www.coventrybuildingsociety.co.uk/Intermediaries/about-us/2016yearendresults

Coventry BS doing nicely.

'2016: Record growth in mortgages: Mortgage assets increased by £3.5 billion, representing growth of 12%, more than four times faster than the market1. '

 

 

Edited by Sancho Panza

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18 hours ago, Sancho Panza said:

https://www.coventrybuildingsociety.co.uk/Intermediaries/about-us/2016yearendresults

Coventry BS doing nicely.

'2016: Record growth in mortgages: Mortgage assets increased by £3.5 billion, representing growth of 12%, more than four times faster than the market1. '

 

 

"Low margin: The Society aims to operate at a low net interest margin6. The comparatively low margin of 1.06% in 2016 is a tangible example of returning value to members, underpinned by low costs and low credit losses."

The above is quite a statement and good example. They are ramping up volume while the net interest margin is low.  All the can do is lend for housing. The boe can't help they'll push the margins low. If they don't have a good analysis of their risks they are toast

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7 hours ago, Ash4781 said:

"Low margin: The Society aims to operate at a low net interest margin6. The comparatively low margin of 1.06% in 2016 is a tangible example of returning value to members, underpinned by low costs and low credit losses."

The above is quite a statement and good example. They are ramping up volume while the net interest margin is low.  All the can do is lend for housing. The boe can't help they'll push the margins low. If they don't have a good analysis of their risks they are toast

Quite.If you look at it,they're expanding their mortgage book into what appears to have been a market peak.To compound matters,they're doing it with little room for manouevre if things go awry.With a net interest margin of 1.06%,there's hardly a lot of fat left to see them through the winter.

Quite why they've so obsessed with increasing the size of their mortgage book,I'll never know,given what happened in 2007/8.Lesson from history anyone?

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i think they sit and work out market share, and the compound of the market. The only thing they could do was hit the 'dangerously reckless' segment . Besides as history shows, banks are perfectly safe, the key is to get to big to fail. They will always be around as governments will bail out (thinking of their own home equity).

i do hope the next round of bail-ins will trigger some big large scale arrests, both for the banks and the overleveraged morons.  

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7 hours ago, Sancho Panza said:

Quite.If you look at it,they're expanding their mortgage book into what appears to have been a market peak.To compound matters,they're doing it with little room for manouevre if things go awry.With a net interest margin of 1.06%,there's hardly a lot of fat left to see them through the winter.

Quite why they've so obsessed with increasing the size of their mortgage book,I'll never know,given what happened in 2007/8.Lesson from history anyone?

Building societies do mortgages. That's what they do. It's in their nature.

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On 8/20/2017 at 11:43 PM, Sancho Panza said:

https://www.coventrybuildingsociety.co.uk/Intermediaries/about-us/2016yearendresults

Coventry BS doing nicely.

'2016: Record growth in mortgages: Mortgage assets increased by £3.5 billion, representing growth of 12%, more than four times faster than the market1. '

 

 

 

1 hour ago, Si1 said:

Building societies do mortgages. That's what they do. It's in their nature.

I get that.But this is about leverage and risk exposure.

Coventry BS (and loads of others) have got engaged in a financial arms race that they have neither the military or the money for.As they're ramping up lending,other bigger players are reining in.That's the point I was making.It wouldn't take much of an uptick in defaults or increase in deposit withdrawals and they'd be what Ash said.

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2 hours ago, jiltedjen said:

i think they sit and work out market share, and the compound of the market. The only thing they could do was hit the 'dangerously reckless' segment . Besides as history shows, banks are perfectly safe, the key is to get to big to fail. They will always be around as governments will bail out (thinking of their own home equity).

i do hope the next round of bail-ins will trigger some big large scale arrests, both for the banks and the overleveraged morons.  

Boom..!!!

And when you look at the likes of the smaller BS's,they're CEO's must be either hoping to show enough 'talent' to get on the big boys board room shuffle or grow organically to increase their remuneration..

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2 hours ago, jiltedjen said:



i do hope the next round of bail-ins will trigger some big large scale arrests, both for the banks and the overleveraged morons.  

I think your wish will be granted.Across the EU,they now have a blueprint for implemenatation.

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31 minutes ago, Sancho Panza said:

 

I get that.But this is about leverage and risk exposure.

Coventry BS (and loads of others) have got engaged in a financial arms race that they have neither the military or the money for.As they're ramping up lending,other bigger players are reining in.That's the point I was making.It wouldn't take much of an uptick in defaults or increase in deposit withdrawals and they'd be what Ash said.

I have known some middle management at the Skipton and Yorkshire building societies. Hpi bullishness is in their DNA. There's no technical oversight such as shareholders have over a bank. And the BoE sure as hell aren't reigning them in.

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9 hours ago, Sancho Panza said:

Quite.If you look at it,they're expanding their mortgage book into what appears to have been a market peak.To compound matters,they're doing it with little room for manouevre if things go awry.With a net interest margin of 1.06%,there's hardly a lot of fat left to see them through the winter.

Quite why they've so obsessed with increasing the size of their mortgage book,I'll never know,given what happened in 2007/8.Lesson from history anyone?

Nope. Io btl and btl are not mortgages, they are high risk commercial loans and should be charged accordingly.

 

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  • 224 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% +
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      • up 5%



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