Opinions on HBOS situation

RichyX

link

My luck being what it is I just put a substantial amount away for a year with Halifax Ireland.
I also have some money in one of their flexi saver accounts.

How safe is my money, considering the bank has shred half its value in 2 days?

stepbar

RichyX wrote: »

link

My luck being what it is I just put a substantial amount away for a year with Halifax Ireland.
I also have some money in one of their flexi saver accounts.

How safe is my money, considering the bank has shred half its value in 2 days?

How long is a piece of string?

RichyX

stepbar wrote: »

How long is a piece of string?

Not as long as the sigh I let out when I read your response

stepbar

RichyX wrote: »

Not as long as the sigh I let out when I read your response

You might want to ask yourself is there a god as well ......

I don't think anyone can accuratly answer that one.

Jet Black

I think there is limited cover afaik most Irish banks have this under the investor compensation act of 1998 20k or 90% whichever is lesser.
Link
http://www.finance.gov.ie/viewdoc.asp?fn=/documents/news/1998/may/mcc237.htm


Ive copy/pasted the below
•Halifax/Bank of Scotland (Ireland) is part of the Financial Services Compensation Scheme. It provides protection to compensate customers if authorised firms cannot meet claims made against them.
•Where a customer has made deposits in a savings or bank account, payments under the scheme are 100% of the first €20,000.
•The amount of any payment under the scheme is worked out on all accounts in the name of a depositor held with the bank or building society concerned, including the depositor's part share in a joint account.
•Therefore, if two people held money in a joint savings account then each would have a potential claim for up to €20,000.

brettmirl

From RTE - http://www.rte.ie/business/2008/0917/hbos.html

HBOS in merger talks with Lloyds TSB
Wednesday, 17 September 2008 09:47
Troubled UK mortgage giant HBOS was today the subject of speculation that it could merge with rival Lloyds TSB.

Earlier, shares in the group plunged for a third day in a row amid funding fears, diving as much as 50%, but later recovered to stand just 7% lower after the report from the BBC.

The broadcaster said HBOS and Lloyds TSB were in advanced talks over a combination. HBOS has declined to comment.

Meanwhile, Britain's financial watchdog the Financial Services Authority said today that HBOS was 'well capitalised' despite sharp losses to its share price this week.

'Since the beginning of the current extreme difficulties in the financial markets, the Financial Services Authority has worked intensively with all major UK banks to ensure they have credible capital and liquidity plans,' the FSA said in a brief statement.

'We are satisfied that HBOS is a well-capitalised bank that continues to fund its business in a satisfactory way,' it said.

HBOS is the UK's biggest mortgage lender and savings bank. It already has £258 billion of retail deposits, and around 15 million savers.

Lloyds TSB, which does the bulk of its mortgage lending under its Cheltenham & Gloucester brand, is the UK's third biggest lender in terms of outstanding home loans. During 2007, the latest year for which figures are available, it wrote 8% of all mortgages in the UK.

HBOS sought yesterday to reassure investors over its funding, but it failed to prevent its shares slumping for the third day in a row. The bank's stock fell almost 40% at one point yesterday before closing 22% lower.

Analysts have said HBOS needs to refinance more than £100 billion of funding during the coming months, which could be more challenging after the blow to confidence from Lehman's demise. Inter-bank lending rates increased sharply yesterday and overnight, making funding more expensive.

There were also suspicions today that HBOS might have been a victim of 'short-selling', where investors make money by effectively betting on the price of a company falling.

damnyanks

Too big to fail. It's safe

DJDC

Yep HBOS aren't be going be let fail, too many average joes with mortgages tied up.

There is only really one bank in the UK and Ireland that would probably be let collapse and I dont really want to talk about it for obvious reasons.

unclebill98

Its amazing the panic that hit my branch today. Share prices have been all over the place for the last few months and now people take notice!!!!

The government here should really raise the level of protection on peoples money.

parsi

unclebill98 wrote: »

The government here should really raise the level of protection on peoples money.

Or the banks could operate more responsibly and thus reduce the moral hazard...

stepbar

parsi wrote: »

Or the banks could operate more responsibly and thus reduce the moral hazard...

It takes two to tango my friend......

unclebill98

Ok, years ago some of the new comers to banking started to change the way banks gave out money. Low interest rates and 100% mortgages (biggest moan of any 1st time buyer was the deposit)gave way to a lot more people being able to get a foot on the ladder. It's what people wanted and the banks simple gave it. All the other banks needed to go that way or be left behind. I've not come across one reckless loan in 5 years in the bank. Most banks only changed the amount given ie 100% mortgage and all of the responsible banks stressed all applicants at 2% above the rate they where being given.

I fail to see how its the banks fault. People bought houses that where valued at too much, builders built houses on land that they paid over the odds on. Blame estate agents who inflated the price or blame the people selling the land who got greedy.

People wanted something and they went about getting it off those who supplied it. So who is really to blame??

BobbyD10

Do Ulster bank and First active have higher security balance..ie the 20k as the owner is a british bank...probably not as they regulated here...??

unclebill98

BobbyD10 wrote: »

Do Ulster bank and First active have higher security balance..ie the 20k as the owner is a british bank...probably not as they regulated here...??

Nope, there regulated by Irish Law.


Also, people are going on about 20k this 20k that. People don't seem to know its a limit of 20k based on a max of 90% of your balance. So if people have 20k in 10 banks they still only get back 90% ie 18k.

parsi

Ah grand then.

I realise now that it's Joe Public's fault. They asked for more and were given it.

It will be Joe Public who pays to bailout the banks and the builders.

Joe Public didn't see much of the profits made by the banks and the builders.

Capitalism - business keeps the profits but shares out the losses....

Jet Black

Anything over €22222 and you get 20k back. You lose 2222 one way and 2k with the other. I suppose most people are not aware of this. Just putting 20k in every bank

unclebill98

heymcflyx wrote: »

Anything over €22222 and you get 20k back. You lose 2222 one way and 2k with the other. I suppose most people are not aware of this. Just putting 20k in every bank

I know, everyone you called me heard its 20k on certain day time radio shows!

Clytus

IMHO I feel that the credit crisis has been exasperated by private hedge funds selling short on the banks, the banks themselves not being honest on their levels of exposure to potential write downs and the obvious bubble in property...it all came together like a perfect storm.

I was amazed listening to Joe Duffy today, apparantly lucid clear thinking people talking about pulling their savings out of irish banks for fear of a banking collapse. Dont any of these people realise the profits banks made over the last 10 years??
Take AIB for instance....they sold their Ballsbridge offices to Sean Dunne & Co. in a lease back deal for €800,000,000 (I think)...they had profits before tax in excess of 1.2 billion for the previous 2 years.BOI aint that far off and given the conservative nature of the bank should be able to see through the credit squeeze.

people have to remember that the like of Lehman, Bear Sterns, Goldmans,Morgan are all investment banks where they made killings buying up subprime loans...divying them up and selling them as bonds...as opposed to deposit banks where cash is on deposit.

unclebill98

Thats it really. There is a massive difference between here and the US. As for UB they did that rights issue and raise 12 billion and there still opening branches here, don't sound like a bank in trouble.





Disclaimer: hope that statement does not come back to haunt me

Marksie

As regards the HBOS situation, I am not going to worry unduly as with the announced merger i belive that stabilises halifax to a greater extent.

i have just looked at what groups my accounts belong to: Ulsterbank- natwest, first active- royal bank of scotland. Angloconnect have expressed interest in aquisitions.

TBH its a mass panic at the moment, but if worried spread your money over several banks and keep it under 20K in each. That way your capital, or most of it is protected.

My investments are another matter, but that is for another days worry.

Of course I am no economic expert, but then again look at what the economic experts have managed to cook up lol.

Its just a matter of keeping calm and spreading your money into as wide a group as possible

Diarmuid

parsi wrote: »

Ah grand then.

I realise now that it's Joe Public's fault. They asked for more and were given it.

It will be Joe Public who pays to bailout the banks and the builders.

Joe Public didn't see much of the profits made by the banks and the builders.

Capitalism - business keeps the profits but shares out the losses....

Banks lent money recklessly, now their owners are paying for it with their shareholdings being wiped out. Their management and employees will be fired/made redundant so they are paying for their mistakes.

People taking the mortgages they can't afford should share the blame too, they are paying for it with (best case) negative equity and (worst case) having their house repossessed.

The regulators and politicians who left these lending practices happen are also guilty. Hopefully they will be made pay in the next election.

Plenty blame to go around and it shouldn't be directed at just one group, and unless you have a better system that you've been keeping to yourself, I'll stick with capitalism.

rrpc

If people are worried about their bank, they should look up their accounts if they want reassurance. All these rumours about banks are totally unfounded. You can have a look at the AIB half year accounts from July here.

They made 1.1 billion in the first half of this year and have €37 billion in liquid assets.

It's a lot more sensible to read the accounts than to listen to Joe Duffy

stepbar

There has been some amount of scandalous media coverage given over to the state of Irish banks over the past number of days. Even entertaining the thought that one of our leading banks would be let go under is utterly ridiculous. It's pure scare mongering. Misinformation like this could lead to a suitation like what happened to Northern Rock. Nobody wants that.

Marksie

stepbar wrote: »

Nobody wants that.

except sepculators looking to make a killing on cheap shares and sudden surges in share prices following a collapse, at one stage HBOS surged 40% yesterday

daveirl

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stepbar

daveirl wrote: »

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Ask yourself where does the Government keep their money and then ask yourself what would a Government do if the likes of BOI was in trouble bearing in mind that BOI was banker to the Government for many a year and still have connections with same.

Banks borrow on the interbank market but as you know they don't rely on it entirely.

daveirl

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stepbar

daveirl wrote: »

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And that's the risk shareholders take. Customers are protected in any event. There's a clear difference.

daveirl

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stepbar

daveirl wrote: »

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Invest in another share. That's why "most" people have diversified portfolios to reduce the amount of risk.

daveirl

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stepbar

Well maybe if you had money in a US bank. But I can safely say that an Irish bank will not be let go under. A system that is regulated to the extent of the Irish one should ensure a suitation like this will not happen.

ixoy

I can't recall for sure, but is it right to say that Northern Rock would have weathered their storm if all their customers hadn't pulled all their money out suddenly and given them severe liquidity issues? Isn't this the real reason the Government have pumped up the bank deposit rather than the banks not having cash to hand?