- This topic has 16 replies, 9 voices, and was last updated 15 years, 11 months ago by
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Claire. personally I wouldn’t trust my savings with Santander Bank or any of their aquisitions, they may be large but I think they have and are taking on too much with Abbey, A & L, and now B & B, there is a lot of bad mortgage debt being taken on by them as well as all their defaults in Spain with customers inc. construction clients.
I wouldn’t be surprised to see them go pearshaped later, it’s costing them a fortune despite picking things up cheaply.
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I have recently opened an account with Santander. Judging by their share price, the market thinks they are one of the safest banks around today. For example, over 12 months Santander is down 16% compared to 39% for Barclays, 56% for Lloyds, and a whopping 62% for UBS. Based on share price, which in theory tells you all you need to know, Santander is one of the best performers amongst big international banks.
Then again, in these crazy times, you can’t be confident about anything. One minute flying high, next minute in the ditch. Every day the news gets more shocking.
Santander may do okay, but the same can’t be said about quite a few other Spanish banks, especially savings banks. There may be trouble ahead….
Mark
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Mark, the very fact that the market thinks they are safe would worry me, after all what do the market know in these times? They’ve so often got it totally wrong. It’s often said that people should do the opposite of what the market thinks as so many pundits talk markets up or down to suit their own positions.
IMO, Santander have taken on too much and might come a cropper later, as Claire says ‘maybe put your money under the mattress’.
Santander may be exposed to a lot of Spain’s financial problems with construction, what might come out of the woodwork?
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I might be worth considering that up to £35,000 of your savings is covered by guarantee in the UK with respect to a UK bank failing.
Overseas banks do not have the same guarantee.
I would deposit my money in the UK, and even spread it around if a large sum.
Personally, I can sleep easy knowing my £199.65 deposit is safe at Lloydstsb. 🙂
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Trouble is your coverage is only with one institution so if you had £35k in each of the banks owned by Santander eg Abbey, (not sure if cahoots counts as seperate account) A&L, and now B&B deposits thats possible £140k exposure only £35k protection and as more banks get taken over the situation will worsen
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My understanding is like Mark’s, that Banco Santander is one of the safest Spanish banks with considerable overseas earnings and comparatively little exposure to its domestic market. In respect of the first point it is like HSBC which although lost money on toxic investments is one of the best UK banks. However one can never say any institution is 100% safe even the UK government whose debt is AAA rated.
It seems to me the Financial Services Compensation Scheme (FSCS) that provides cover for £35,000 per depositer in the event of insolvency of a bank is largely irrelevant. It will only come into play if a retail bank is allowed to fail. The government fearing another Northern Rock with investors queuing around the block to withdraw cash is simply unwilling for this to happen, for the sake of its own reputation for prudent management of the economy as well as the potential domino effect. Logically it means all your savings are “safe” for now.
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Goodstich44
just think if you had millions? How hard could life get!
I working on it; trouble is my numbers just don’t seem to come up!
Still, they say money doesn’t make you happy 🙄
I hear that The Irish Government is providing a guarantee for 100% deposits. I guess there wil be a huge transfer of funds from around the World into these banks.
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I’m not sure if this is allowed by Mark or not, but here goes. It’s worth a read.
http://www.eyeonspain.com/blogs/realestate/627/why-are-spanish-banks-in-such-rude-health-when-uk-banks-are-ailing.aspx -
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Shakeel that is true but foreign banks may have a compensation scheme in their own country which would be topped up by the Financial Services Compensation Scheme (FSCS) to £35,000. For example for Icelandic banks the first 20,887 Euros or Sterling equivalent is covered by their deposit protection scheme. In the event of insolvency of an Icelandic bank a claim would have to be made to both schemes.
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On a lighter note I found this post on another forum
“Following the problems in the sub-prime lending market in America and the run on Northern Rock in the UK, uncertainty has now hit Japan.
In the last 7 days Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank announced plans to cut some of its branches.
Yesterday, it was announced that Karaoke Bank is up for sale and will likely go for a song while today shares in Kamikaze Bank were suspended after they nose-dived.
While Samurai Bank are soldiering on following sharp cutbacks, Ninja Bank are reported to have taken a hit, but they remain in the black.
Furthermore, 500 staff at Karate Bank got the chop and analysts report that there is something fishy going on at Sushi Bank where it is feared that staff may get a raw deal.”
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