Banks?

[kleinboet]

Can somebody who knows about high finances please explain to me why Barclays and HSBC can make obscene profits, while Northen Rock/ LloydsTSB (which we own a percentage of whether we like it or not!) makes obscene losses - or is it nothing to do with high salaries and pensions for failling?

[barry luxton]

Can somebody who knows about high finances please explain to me why Barclays and HSBC can make obscene profits, while Northen Rock/ LloydsTSB (which we own a percentage of whether we like it or not!) makes obscene losses - or is it nothing to do with high salaries and pensions for failling?

 

Barclays made the profit out of it's commercial sector, they keeped out of the banking crises by good management and where not sucked into bad buy outs like Lloyds who were sold a pup by this so called government. If Lloyds had not taken part in 'helping' out the government, they would have made a profit.

 

Barclays did not take up any offers of taxpayers money. I beleive they done well in taking over the good parts of an american company that was failing, can't remember the name of them, Leyman brothers? We need more companies like them. Another poor decision by this excuse of a government, they bought into a company on our behalf , northern rock, that is loosing money like it's going out a fashion. Even now being 'run' by the government it's bad debt is still rising. It's not high finance, just good housekeeping.

 

The government took the responsibility of bank control away from the bank of england and gave control to a ngo that they set up. It's the failings of this ngo in controlling the bankings system that has failed, no doubt at another enormous cost to the taxpayer. The conservatives have promised to reverse this. If the current recession is global as reminded constantly by this eeerrrrr government, how come GB is in a worse position than nearly all other countries.

Edited August 4, 2009 by barry luxton

[Alan Stubbs]

Barclays made the profit out of it's commercial sector, they keeped out of the banking crises by good management and where not sucked into bad buy outs like Lloyds who were sold a pup by this so called government. If Lloyds had not taken part in 'helping' out the government, they would have made a profit.

 

Barclays did not take up any offers of taxpayers money. I beleive they done well in taking over the good parts of an american company that was failing, can't remember the name of them, Leyman brothers? We need more companies like them. Another poor decision by this excuse of a government, they bought into a company on our behalf , northern rock, that is loosing money like it's going out a fashion. Even now being 'run' by the government it's bad debt is still rising. It's not high finance, just good housekeeping.

 

The government took the responsibility of bank control away from the bank of england and gave control to a ngo that they set up. It's the failings of this ngo in controlling the bankings system that has failed, no doubt at another enormous cost to the taxpayer. The conservatives have promised to reverse this. If the current recession is global as reminded constantly by this eeerrrrr government, how come GB is in a worse position than nearly all other countries.

 

Put simply, two different business models with contrasting management. Northern Rock operated on a 'pile-it-high, sell-it-cheap' mentality - they were always the cheapest to offer personal loans and often to less-than-top notch credit-worthy customers. The thing is, they weren't known for 'merchant banking' (apart from their management style!) and hadn't got that to bolster their balance sheet. Northern Rock expanded exponentially using the wholesale money market for their cashflow, unlike Barclays who had a far larger customer and deposit base which meant that their reliance on the vagaries of the wholesale market was far less and cheape for Barclays than Northern Rock as they had a higher S & P rating. They are also far more demanding in the credit worthiness of their borrowers meaning they make more on better quality business than NR did.

 

NR's problems have ome home to roost as they had a more poisonous loan portfolio than Barclays and now have double the national banking average of defaulting loans as well.

 

NR relied on commercial borrowing wholesale and then retailing that money to riskier customers at rates lower than more traditional banks would lend. Moreover they had to borrow more expensively and had riskier customers who are now not able to pay the borrowings back and at the same time had only retail banking as a sorce of revenue, unlike both Barclays and HSBC.

[Vagabond]

What infuriates me is that many years ago I decided Northern Rock's offers sounded too good to be true, so in all probability they were.

 

So......

 

I did not buy shares in Northern Rock

I did not entrust Northern Rock with any of my money.

...and I most certainly did not borrow money from them.

 

So their crash had absolutely nothing to do with me.

 

Yet this government has forced me, as a taxpayer, to buy shares in them, with no prospect of selling those shares, and diddly squat chance of ever seeing a dividend.

[barry luxton]

What infuriates me is that many years ago I decided Northern Rock's offers sounded too good to be true, so in all probability they were.

 

So......

 

I did not buy shares in Northern Rock

I did not entrust Northern Rock with any of my money.

...and I most certainly did not borrow money from them.

 

So their crash had absolutely nothing to do with me.

 

Yet this government has forced me, as a taxpayer, to buy shares in them, with no prospect of selling those shares, and diddly squat chance of ever seeing a dividend.

 

 

Bet you do have shares in barclays though.

 

I remember seeing the videos of the rats leaving a sinking ship when it was first announced that the preverbial hit the fan. Poor soles.

 

Next question, there must be someone out there who confirms they voted labour, surly.

[Dales]

Surely the purpose of Banks is to make a profit , why are people moaning when they fulfile this duty.

 

They are not their to ensure we can all get mortgages or so small business's can secure short term liquidity.

 

The banks in question did not have to go cap in hand to the government for funding, so if they make huge profits its their business and not ours.

 

Financial instituations like northern Rock were based on very poor business modules and surprise surprise they failed. As far as I am concerned that's how they should have stayed. Why should the government waste tax payers bailing out this poorly run instituations.

 

You run a crap business and it goes bust tuff luck, it's survival of the fittest.

 

Their are exceptions to the rule, when some financial instituations are so important you can not let them fail, but Northern Rock were not one of them.

[kleinboet]

Dales I agree that there is no such thing as free lunch. However, the government decided (in their wisdom) to intervene (WHY?) and leave us ALL in debt, they also pumped OUR money into Northen Rock (WHY?) and now show obscene losses.

 

How come, with all the money pumped into the bank, and, with the government's "guidance" they made a loss!! I think they need to employ somebody from HSBC!!

[Alan Stubbs]

Surely the purpose of Banks is to make a profit , why are people moaning when they fulfile this duty.

 

They are not their to ensure we can all get mortgages or so small business's can secure short term liquidity.

 

The banks in question did not have to go cap in hand to the government for funding, so if they make huge profits its their business and not ours.

 

Financial instituations like northern Rock were based on very poor business modules and surprise surprise they failed. As far as I am concerned that's how they should have stayed. Why should the government waste tax payers bailing out this poorly run instituations.

 

You run a crap business and it goes bust tuff luck, it's survival of the fittest.

 

Their are exceptions to the rule, when some financial instituations are so important you can not let them fail, but Northern Rock were not one of them.

 

 

No argument with the fundamental point at all, however, the government's attitude was that if they allowed NR t go under, it would have a domino effect on the UK banking system - the very system that is largest earner of foreign currency in the UK economy.

 

Question: Do you believe them?

 

Ironically, I used to do work for a competitor of NR and 6 years ago they were waiting for them to go 'tits up'.

Edited August 5, 2009 by Alan Stubbs

[Dales]

Dales I agree that there is no such thing as free lunch. However, the government decided (in their wisdom) to intervene (WHY?) and leave us ALL in debt, they also pumped OUR money into Northen Rock (WHY?) and now show obscene losses.

 

How come, with all the money pumped into the bank, and, with the government's "guidance" they made a loss!! I think they need to employ somebody from HSBC!!

 

 

Yes I just don't get it, it's like throwing away good money after bad. If we are going to bale out these banks we should show the door to the people at the top as part of the deal and replace them with some one else. They messed running them up once, so we give them more cash and see if they can get it right next time around.

 

Plenty of banks are in trouble at the moment, but at the same time many others are doing fine, the government has invested enough in certain banks to be able to change the hierachy, so sack the management and head hunt some one from a better performing bank, like you said HSBC. Maybe if they changed the structure we might have a chance of getting some of the cash back.

 

 

Ahhhhh, I forgot they cocked up the whole baling out thing by saying they were not going to interfere with the running and did not want to be bankers. So why the hell pour so much money in to banks if you don't want to be a banker

 

What is the point of being the major investor in a company if you dont get involved yourself. If you don't personally want to do the day to day running yourself, you go out and hire the best person you can find. If they do a bad job, you fire them and replace them with some one better.

 

It is so annoying, seeing some banks doing ok and very little change in the banks the government have bailed out.

[chesters1]

the way to bolster the country would have been to give us the money not give it to gamblers .

if we got £xxxx each some would have spent it giving money to shops who then could pay money to the banks to cover loans OR some would save it giving it directly to banks either way we would benefit and so would everyone else giving it directly to the shysters and gamblers who lost it was foolhardy in the extreme even keeping it under the mattress is better!

Edited August 5, 2009 by chesters1