Saturday, July 25, 2009

Surely they aren’t profiteering?

Banking costs 'put up mortgages'

Financial website Moneyfacts claimed mortgage profits had increased nearly fourfold in recent months, with typical fixed-rate deals also going up. The British Bankers Association has defended the rise in the cost of borrowing - despite the base rate remaining at a record low.

Posted by alan @ 08:53 PM (1287 views)
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7 thoughts on “Surely they aren’t profiteering?

  • tenyearstogetmymoneyback says:

    The base rate might be at a record low, but Halifax have just increased the
    rate for savers on their Regular Saver account to 5%. I’m sure they wouldn’t
    have bothered had they been awash with money.

    Reply
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  • Banks must make profits under low transactions circumstances.

    So the low rates are not meant to help the FTB but the banks.

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  • It’s time to shut the banks down.

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  • 3. devo said… It’s time to shut the banks down.

    It’s going to happen anyway, so let’s cut to the chase.

    Who knows, it could be fun!

    Reply
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  • Maybe we’re seeing a new phase of the ‘credit crunch’. The spectre of deflation means that the only way for banks to rebuild their balance sheets (inflating their debts away won’t work) is to … rely on deposits.

    Good lawd. Its like old fashioned banking again.

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  • tenyearstogetmymoneyback says:

    Paul said “Good lawd. Its like old fashioned banking again.”

    Next thing you will need an interview to get a mortgage.

    “So tell me Mr Bloggs, is it normal for an estate agents chauffeur to earn £80000 a year ?” 🙂

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  • It would be nice to get a more open take on this from the banks…

    We know they were sourcing funds from overseas, borrowing short to lend long; and it would be unsurprising if they are having difficulty rolling over those arrangements. But what’s the scale of this? What sort of interest do they have to pay if these loans ARE rolled over?

    Then there’s their original customers with tracker deals, now enjoying rates so low that the lenders are losing heavily. But I don’t see any analysis showing how many of these there are, how much they’re losing, and when these deals will be expiring.

    And the costs of sorting repo’s on existing loans – we get some broad data on this, but the detail is lacking.

    And of course, some banks got caught holding dodgy CDO’s. While some of these are probably proving worthless, others will be showing value – but again, scale? losses?

    If the banks and mortgage lenders want to rebutt Mr Darling’s whinges, they really need to be a bit more open about their problems.

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