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gruffydd

Northern Rock Shares Base Valuation From Citigroup

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http://business.guardian.co.uk/markets/sto...2173041,00.html

Tom Rayner of Citigroup cut his target price for Northern Rock's shares to 150p following the government's announcement. He believes the bank could still be worth as much as 220p a share if a buyer emerged, but thinks this is unlikely. If the bank is wound-down in an orderly fashion, investors could get around 130p a share, he calculated.

In the worst-case scenario, where savers withdraw all their deposits and Northern Rock has to rely on the Bank of England for expensive emergency funding on a long-term basis, the shares would be worth just 6p.

"This is clearly an aggressive assumption and one that seems highly unlikely to play out, but we believe it provides a useful base valuation," said Mr Rayner.

Edited by gruffydd

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This article is complete rubbish as we would expect from the tabloid press such as the guardian. New savers with NR will have the same safeguards as they would enjoy with any other british bank. citigroup have a reputation of always being wide of the mark on predictions. Basically do the opposite of what citibank says and you wont go too far wrong.

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Unfair, the article is clearly referring to the 100% protection of deposit as announced by Alistair Darlin earlier this week.

Anyhow, do all banks offer the same protection? I am sure some banks I enquired about last year had opted out of the scheme.

http://investing.reuters.co.uk/news/articl...RTHERN-ROCK.xml

"Since it would otherwise be unfair to other banks and building societies, the arrangements would not cover any new accounts set up after September 19, other than re-opened accounts," the Treasury said on Thursday.

Edited by gruffydd

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any evidence that savers are continuing to withdraw funds? I would be sh*tting myself if my retirement savings were tied up in NR.

Clearly, this gvt has no morals - they are bailing out NR because it speculated on sub-prime investments (which appeared to pay handsomly before) and yet they refuse to compensate Equitable Life's former 'non-gars' who were, according to the recent EU Commission, cheated into subsidising those with GARs.

Gordon Brown has the right surname for a turd.

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Unfair, the article is clearly referring to the 100% protection of deposit as announced by Alistair Darlin earlier this week.

Anyhow, do all banks offer the same protection? I am sure some banks I enquired about last year had opted out of the scheme.

http://investing.reuters.co.uk/news/articl...RTHERN-ROCK.xml

"Since it would otherwise be unfair to other banks and building societies, the arrangements would not cover any new accounts set up after September 19, other than re-opened accounts," the Treasury said on Thursday.

Not unfair at all. The article makes out that new savers will not have protection. Of course they will. They will have the normal protection within certain limits we all have . I dont think any british bank is allowed to "opt out " of the compensation scheme. The temporary 100% compensation scheme is only in place to stop a run on the bank by existing savers at NR

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any evidence that savers are continuing to withdraw funds? I would be sh*tting myself if my retirement savings were tied up in NR.

Gordon Brown has the right surname for a turd.

unfortunately existing savers are safer with NR than any other saver in any other saving institution in Britain at the moment. I dont agree with it but its a fact.

i do agree with the GB bit.

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unfortunately existing savers are safer with NR than any other saver in any other saving institution in Britain at the moment. I dont agree with it but its a fact.

Although I feel sorry for the savers I feel so annoyed that in many instances this government is supporting the money recyclers rather than the money makers... where was government support of the steel industry, the car industry and the coal industry, and many more? If they can pull money out of a top hat like this, surely they could have done more to protect and grow our industrial base?

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This article is complete rubbish as we would expect from the tabloid press such as the guardian. New savers with NR will have the same safeguards as they would enjoy with any other british bank. citigroup have a reputation of always being wide of the mark on predictions. Basically do the opposite of what citibank says and you wont go too far wrong.

"New savers with NR will have the same safeguards as they would enjoy with any other british bank..."

http://uk.biz.yahoo.com/20092007/214/north...es-sliding.html

and not a penny more than £32k les 10%...

Northern Rock terms send shares sliding again

LONDON (ShareCast) - Shares in mortgage lenders slumped again Thursday as the government indicated its rescue of Northern Rock (LSE: NRK.L - news) (Advertisement)

would only apply to accounts opened or re-opened by last night.

The move could put off any potential bidders for the beleaguered group, say analysts. Lloyds TSB had been rumoured to be considering an offer of around 200p per share.

In a statement, the government said it its proposed guarantee for mortgage lender depositors would cover all accounts existing at midnight on Wednesday 19 September and reopened accounts.

It has agreed to cover future interest payments, movements of funds between existing accounts, new deposits into existing accounts and existing, renewed wholesale deposits and existing and renewed wholesale borrowing that is not collateralised.

"Since it would otherwise be unfair to other banks and building societies, the arrangements would not cover any new accounts set up after 19 September, other than re-opened accounts," the Treasury said on Thursday.

The government added that the guarantee will not cover other debt instruments including covered bonds, securities issued under the "Granite (GRNT.TA - news) " programme, and subordinated and other hybrid capital instruments.

Northern Rock, meanwhile, has been criticised by taxpayers group for insisting it will pay its latest dividend despite effectively going bust. A spokesman for the Taxpayers' Alliance told reporters that Northern Rock shareholders should be made to "take a hair-cut" while the government was underwriting the bank's operations

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http://business.guardian.co.uk/markets/sto...2173041,00.html

Tom Rayner of Citigroup cut his target price for Northern Rock's shares to 150p following the government's announcement. He believes the bank could still be worth as much as 220p a share if a buyer emerged, but thinks this is unlikely. If the bank is wound-down in an orderly fashion, investors could get around 130p a share, he calculated.

In the worst-case scenario, where savers withdraw all their deposits and Northern Rock has to rely on the Bank of England for expensive emergency funding on a long-term basis, the shares would be worth just 6p.

"This is clearly an aggressive assumption and one that seems highly unlikely to play out, but we believe it provides a useful base valuation," said Mr Rayner.

6p - why so much?

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6p - why so much?

Will Hutton on CH4 News (on now) said these NR mortgages are fine after Peter Snow implied that they were junk.

I'm convinced.

What's their market cap' at 6p ?

Edited by Ash4781

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"New savers with NR will have the same safeguards as they would enjoy with any other british bank..."

http://uk.biz.yahoo.com/20092007/214/north...es-sliding.html

and not a penny more than £32k les 10%...

exactly. So why should that fact alone put off potential bidders ? It would make no difference to any other bank contemplating a takeover of NR. I would not be suprised if the government are doing what they did to railtrack. Artificially drive the share price down to rockbottom by withdrawing the safety net and then nationalise it.

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Guest Popalot
unfortunately existing savers are safer with NR than any other saver in any other saving institution in Britain at the moment. I dont agree with it but its a fact.

i do agree with the GB bit.

safer perhaps.........but in the most warped possible way.....so not necessarily for longer than the wind takes to change.................. :blink:

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