Bank Run on Santander UK?

[Mey]

Yeh he came to visit the branch network not to long ago, all the male staff had to use the toilets in the shopping centre incase he needed to use the staff toilet.

 

[Chilly]

Yeh he came to visit the branch network not to long ago, all the male staff had to use the toilets in the shopping centre incase he needed to use the staff toilet.

What an absolute fucking cunt.

 

[Tom]

You often find that such decisions are taken by people working for him - he's probably completely unaware of such nonsense.

I remember one TV company being so afraid of a certain Man Utd footballer that we were told explicitly that there were to be no retakes, because he wouldn't do them. We just ignored them as they were talking utter bollocks, and the footballer of course was only too happy to do whatever we asked of him.

 

[Mey]

They asked for the council if they could park his limo (he has a massive entourage) next to the particular branch the council quite rightly refused and he had to walk! Heaven forbid! He also did a dinner with all the managers in the network, they all had to fill in a four page brief about themselves, name, family, hobbies that kinda thing, so he could pretend he knew them. At the dinner that they all had he had a different main and had his own wine which was different to everyone else.

The guys a knob imo and should have walked after he went off sick for three months in Oct! Clearly not cut out for running one of the biggest banks in the UK. There was plenty of senior staff more than capable of stepping up to the mark who have be side stepped because of his Job for the boys mentality.

 

[Ono]

Your viewpoint seems to be consistent with my mate's, who works in head office about this guy. He went off on stress (or officially lack of sleep) and part of the reason was because he micro-managed when a CEO should delegate. He comes back, promises to change and few weeks later was back to his old ways. Most of the team he got in from his old place are actually afraid of him and a couple barely speak English fluently and run big areas?? So my mate says.

 

[Mey]

Aye sounds about right..

Don't get me started on his "postage" cost-cutting scheme..

 

[pez]

I dont think its anything to do with that - the last govt brought in rules to slow down repossesions and help people stay in their homes to avoid a property crash.

That may add some fluff around the edges but what about property as security for businesses? The government can't legislate to make property irrecovable as security it would freeze up lending to SMEs in seconds. Banks are stringing it out for as long as possible, interest only mortgages, remortgages, payment schedules, out and out taking the hit - anything to avoid being on the front page of the daily mail with a woman and 4 kids stodd outside a repossessed home with sad faces on.

 

[MYstIC G]

Hadn't really thought about that but you are right, I have friends who are in over thier heads and have been since the recession started but despite not having the money to make full payments for the best part of 5 years the bank has yet to really start pressuring them. Thing is they were given a mortgage that is something like 6-7 times thier annual income and neither of them are high earners or have been in very stable longterm jobs. They got in too deep and by rights they should be forced to sell it on if they can't make the payments, even if that lands them in some serious negative equity. The situation as it stands though is they are living in a house they cannot afford and them being there along with many others in the same boat is keeping house prices artificially higher than they should be considering the economic mess we are in.

The banks are probably taking what they can get, then when times are better they can fuck people over either by demanding larger payments or by kicking them out when the property prices reinflate.

 

[rynnor]

That may add some fluff around the edges but what about property as security for businesses? The government can't legislate to make property irrecovable as security it would freeze up lending to SMEs in seconds. Banks are stringing it out for as long as possible, interest only mortgages, remortgages, payment schedules, out and out taking the hit - anything to avoid being on the front page of the daily mail with a woman and 4 kids stodd outside a repossessed home with sad faces on.

Its not in the interest of banks who are sitting on billions of pounds worth of loans on property to cause a crash in property prices. In the good times they will hound the late payers and re-posess but in the bad times its self defeating and could actually put the banks into negative equity.

They dont give a crap about the families.

 

[pez]

I doesn't work like that though. Despite what many of you and the slavering tabloids probably believe, banks can't actually lend as much magic money as they want. There are very strict capital retention requirements they cannot exceed and which have recently been put up (you could argue the limits are too low but that doesn't change the fact they are there). Every lend they do has a risk factor and the higher the risk factor the higher the amount of capital that has to be set aside (probability of default/loss given default). All risk modelling is based around this and all UK banks have to have a robust risk model in place.

Suffice to say, mortgages in arrears are not low risk lends. Therefore although though the amount lent remains the same then amount the bank holds against the lend increases. Every pound held against a shitty low value mortgage is a pound not lent out at low risk to a large corporate which makes a much higher return (around double). There is no financial reason for them not to reposs, they are much better getting it off their balance sheets and out earning them money again.

If you think any large corporate gives a crap about the families you're wrong but then you honestly telling me you think none of the big banks care about their public image? Trust me, any other recession this long and deep where bankers weren't in the spotlight, reposessions would be all over the shop dragging property prices back to a sensible level.

 

[rynnor]

I doesn't work like that though. Despite what many of you and the slavering tabloids probably believe, banks can't actually lend as much magic money as they want. There are very strict capital retention requirements they cannot exceed and which have recently been put up (you could argue the limits are too low but that doesn't change the fact they are there). Every lend they do has a risk factor and the higher the risk factor the higher the amount of capital that has to be set aside (probability of default/loss given default). All risk modelling is based around this and all UK banks have to have a robust risk model in place.

This is known as closing the barn door after the horse has bolted - in the bad old days banks were giving out 100%+ mortgages.

Risk modelling was a nonsense because it was assumed that house prices would continue rising forevermore (Brownian Economics ).

Mortgages were largely funded from the money markets not from existing capital.

Basically our banks are not so far away from the Spanish/Irish banks sitting on what's potentially a load of bad debts with security worth less than loan amounts if the market goes bad. If they reposess en mass they will cause a house price crash that could potentially devastate them.

This isnt like previous recessions for 2 reasons:

Banks lent without due diligence to people who lied about their income.

Banks didnt source mortgage lending from existing capital - the whole thing was a huge credit bubble funded by the money markets.

 

[cHodAX]

I doesn't work like that though. Despite what many of you and the slavering tabloids probably believe, banks can't actually lend as much magic money as they want. There are very strict capital retention requirements they cannot exceed and which have recently been put up (you could argue the limits are too low but that doesn't change the fact they are there). Every lend they do has a risk factor and the higher the risk factor the higher the amount of capital that has to be set aside (probability of default/loss given default). All risk modelling is based around this and all UK banks have to have a robust risk model in place.

Suffice to say, mortgages in arrears are not low risk lends. Therefore although though the amount lent remains the same then amount the bank holds against the lend increases. Every pound held against a shitty low value mortgage is a pound not lent out at low risk to a large corporate which makes a much higher return (around double). There is no financial reason for them not to reposs, they are much better getting it off their balance sheets and out earning them money again.

If you think any large corporate gives a crap about the families you're wrong but then you honestly telling me you think none of the big banks care about their public image? Trust me, any other recession this long and deep where bankers weren't in the spotlight, reposessions would be all over the shop dragging property prices back to a sensible level.

You said it way better than I could ever hope to. Thanks.

 

[pez]

This is known as closing the barn door after the horse has bolted - in the bad old days banks were giving out 100%+ mortgages.

Risk modelling was a nonsense because it was assumed that house prices would continue rising forevermore (Brownian Economics ).

Mortgages were largely funded from the money markets not from existing capital.

Basically our banks are not so far away from the Spanish/Irish banks sitting on what's potentially a load of bad debts with security worth less than loan amounts if the market goes bad. If they reposess en mass they will cause a house price crash that could potentially devastate them.

This isnt like previous recessions for 2 reasons:

Banks lent without due diligence to people who lied about their income.

Banks didnt source mortgage lending from existing capital - the whole thing was a huge credit bubble funded by the money markets.

For some banks thats true. What of those insititutions that never lent money they didn't have? Buldings Societies? Some banks?

To quote Ratings Agency Fitch

"'The majority of building society funding comes from retail savers, a traditionally stable form of funding. 'In most of the building societies included in this review, capital is at least reasonably strong and is not a cause of concern in any.' [Talking about Principality, Yorkshire and West Bromwich and Britannia as well as others]

To Quote HSBC on their response as to why they don't take part in the National Loans Garauntee scheme

"HSBC is mainly funded by customers deposits - we have more customer deposits than lending - so unlike other banks we are not reliant on wholesale markets to provide lending to UK businesses; therefore the scheme does not enable HSBC to access cheaper funding. "

I don't dispute the causes of recessions but the fact is, blind public anger at financial insitutions it keeping house prices artificially high. Its too easy to go 'na na na, banks' but its stopping them and building societies performing an important economic function.

 

[cHodAX]

Indeed, those bad loans need to be culled which in turn will drive down the prices to reasonable and stable levels. It was a hot and overinflated housing market that got us into this mess in the first place, good sense needs to prevail and property prices need to return to 3-4 times the average annual salary, the real average salary and not the one inflated by London weighting payments etc.

 

[rynnor]

Indeed, those bad loans need to be culled which in turn will drive down the prices to reasonable and stable levels. It was a hot and overinflated housing market that got us into this mess in the first place, good sense needs to prevail and property prices need to return to 3-4 times the average annual salary, the real average salary and not the one inflated by London weighting payments etc.

Its actually 10x worse in the commercial property market than retail - banks are bending over backwards to anyone who will pay something on those commercial loans that were made at the height of the boom.

As to banks/building societies lending based on their capital (mostly building societies) sure it didn't die out but the majority of the boomtime loans were on the money markets.

I disagree that its 'public anger at banks' keeping the prices up - its pure self interest on the banks side.

Edit: Oh and prices in London will never come down because it still has a booming economy.

 

[Chilly]

Edit: Oh and prices in London will never come down because it still has a booming economy.

Population is the word you are looking for. Thousands upon thousands of migrant workers from elsewhere in the UK and abroad are putting intense pressure on housing. A lot of these people do bullshit jobs earning sod all so their usefulness is questionable, especially in a city as crowded as London. I'm getting close to getting out of London purely because of population pressure. I have a great job, live in a great house with some great people but there's just no space, privacy or freedom here.