Northern Rock Share Discussion Threads

[scribbler101] 31/8/2008 11:17

'This plan is financial insanity and would seriously threaten the country's long-term future. It is so complicated, basically all smoke and mirrors, that almost no one really understands it. But Mr Brown is adamant this is what he wants.


Sounds VERY GB style.

[miata] 31/8/2008 11:00

A £40bn plan for State-backed mortgages has fuelled the bitter feud between Gordon Brown and Chancellor Alistair Darling.

A Treasury insider said: 'This plan is financial insanity and would seriously threaten the country's long-term future. It is so complicated, basically all smoke and mirrors, that almost no one really understands it. But Mr Brown is adamant this is what he wants. He thinks it's the big bang the Government needs to relaunch.

[scribbler101] 29/8/2008 22:19

But wasn't their man manslaughtered?

[scribbler101] 28/8/2008 12:14

MIATA - your last para must be wrong.

It is inconceivable that Her Majesty's Government would mislead the public.

[greycioud] 28/8/2008 11:47

adyfc may not be eloquent but his investment knowledge is superior to many on here.

[miata] 28/8/2008 11:18

I am neither for or against compensation. The indications are that it will be negligible.



Northern Rock borrowers falling more than 90 days behind on mortgage payments were rising at much faster rates than the overall mortgage market, Standard & Poor's (S&P) said. Repossessions of Rock mortgagees were also rising at a far higher rate.

Arrears of 90 days or more in mortgages held by Granite soared by two thirds between this year's first and second quarters, with £508 million of loans turning sour. By contrast similar trusts run by rival banks saw relatively small increases in delinquencies in the quarter, S&P noted.

S&P also alerted investors to another potential risk of mortgages in Granite. Average loan-to-value ratios (LTVs) were 77 per cent for Granite, as against 60 per cent typically in other trusts. Just under 30 per cent of Granite loans were at LTVs of 90 per cent or more. That means a large proportion of borrowers would be in negative equity if house prices fall further.



It emerged that at the time of the nationalisation, in February, when the Government was assuring voters that Rock could ultimately be sold back to the private sector for a profit, it was being privately advised by Goldman Sachs that the saga was most likely to lead to a loss of between £450 million and £1.28 billion.

[onsider] 28/8/2008 10:59

It's a shame that under HMG control the Rock has been allowed to fall into such disarray.

At least the failures of HMG are not damaging the bond holders, thanks to the robust policies put in pl,ace prior to their involvement...

This didn't happen prior to the seizure of the bank by the Government.

[onsider] 28/8/2008 10:54

adyfc - 27 Aug'08 - 13:16 - 1500 of 1502
"your not going to get none so move on."

That's the best news I've heard all week. So what are we getting, if we're not getting nothing then?

[onsider] 28/8/2008 10:52

LOL, yet still he copntinues to spout. Doubt it is anything of value, having systematically failed to provide anything useful in his/her posts in the past.

So, does anyone actually have any reasoned thoughts on NRK, be they either for or against compensation???

[sbs] 28/8/2008 08:24

adyfc - one year on it's good to benefit from hindsight.

[coogar] 27/8/2008 13:34

How's this for posting rubbish, bryanmuppet? ...


From The Times
August 27, 2008

Northern Rock defaults leave taxpayers facing bill
Patrick Hosking, Banking and Finance Editor

Fears that taxpayers may end up footing an even bigger bill for Northern Rock intensified yesterday after it emerged that the nationalised bank was suffering dramatically high default rates.

Northern Rock borrowers falling more than 90 days behind on mortgage payments were rising at much faster rates than the overall mortgage market, Standard & Poor's (S&P) said. Repossessions of Rock mortgagees were also rising at a far higher rate.

The problem was identified in Granite, the £40 billion offshore trust that holds many of Rock's mortgages and provides monthly performance figures to its bondholders.

Granite was performing substantially worse than similar securitisation vehicles set up by Barclays, HBOS, Abbey, Alliance & Leicester and Standard Life, S&P said.

Andrew South, S&P's senior director for structured finance, said that any financial pain of a major blowout in defaults would be shared between Granite bondholders and Rock. "The deteriorating book increases the chances that taxpayers, ultimately, might have to shoulder some of the cost," he said.

Arrears of 90 days or more in mortgages held by Granite soared by two thirds between this year's first and second quarters, with £508 million of loans turning sour. By contrast similar trusts run by rival banks saw relatively small increases in delinquencies in the quarter, S&P noted.

Repossessions of properties in the Granite porfolio soared from 134 a month in the first quarter to 353 a month in the second, again a much worse deterioration than in the industry generally.

S&P also alerted investors to another potential risk of mortgages in Granite. Average loan-to-value ratios (LTVs) were 77 per cent for Granite, as against 60 per cent typically in other trusts. Just under 30 per cent of Granite loans were at LTVs of 90 per cent or more. That means a large proportion of borrowers would be in negative equity if house prices fall further.

A Rock spokesman said: "At this stage Granite is performing within its parameters. Investors [bondholders] are well aware of this and are protected by the reserve fund [a cushion that protects bondholders in the event of default]."

The spokesman said that the arrears figures in Granite were consistent with figures issued by Rock with its half-year results on August 5. At the time, Rock said that arrears levels, including Granite loans, had doubled since the start of the year to 1.18 per cent of the total residential mortgage book. Repossessions were up from 2,215 at the start of the year to 3,710.

On top of the £40 billion Granite book, Rock holds £37 billion of mortgages on its own balance sheet, which it says are of similar quality to Granite's loans.

S&P said that Granite's relatively poor performance on credit quality remained even after allowing for the fact that it was shrinking its book as mortgages matured or borrowers took their business elsewhere. The Granite book is down from £46 billion at the start of the year.

Rock suffered a cataclysmic depositor panic last September, forcing the Government to guarantee deposits and later to nationalise it after failing to orchestrate a private sector rescue.

It emerged this weekend that at the time of the nationalisation, in February, when the Government was assuring voters that Rock could ultimately be sold back to the private sector for a profit, it was being privately advised by Goldman Sachs that the saga was most likely to lead to a loss of between £450 million and £1.28 billion.

Since being nationalised, Rock has repaid £9.4 billion of government loans, reducing its outstanding debt to £17.5 billion. It is negotiating with the Treasury to swap up to £3 billion of government loans for fresh equity to strengthen its balance sheet.

[greycioud] 27/8/2008 12:14

OK Muppet!!

[greycioud] 27/8/2008 07:35

LOL!!!!!!!!!

[sbs] 27/8/2008 06:55

In reality, all banks were in the same boat on solvency. Look at the rights issues which have been going through.

Even assuming the government's rules on valuation, NRK may have been able to get a good price in an acquisition eg by Santander. It's a bit odd to get a US valuer - I wouldn't have expected them to be very knowledgeable about the UK market, but WDIK?

[scribbler101] 26/8/2008 22:25

Does that mean that you are no longer full of sh1t?

[coogar] 26/8/2008 19:29

don't bother filtering bryansupermuppet, as he's always good for a laugh.

ROFLMFAO

[diydan] 26/8/2008 16:19

bryan2
I think you are right in thinking the BOE had a hand in getting those banks to support the BB. situation and I would love to know what price those banks got from the BOE and HMG for that support?
Lets be honest all, why would those banks want to take the risk of buying more mortgage business from BB. when they have enough problems with their own books? I may have a look at the barc thread I am sure the shareholders of Barc having just put their hands in their pockets to support the bank will be thrilled to see how they spent the money???

[diydan] 26/8/2008 16:04

One thing this article does show is that the then NR boards offer was better for tax payer and shareholders than Virgin.
I also note the article does not say the in house bid would have cost tax payers money it simply says the costs would be,
"made up of financial risks left with the Government." The word "risk" is just that, not a cost.
As far as I can see NR were paying penal rates for the loan as agreed by BOE rules?

[bryan2] 26/8/2008 15:28

The manic posters Coogarprat and Graycloud continue to post rubbish.
Save yourself the effort of reading them by the use of the filter.
Rational posts are most welcome, even if I dont share the same point of view.

[coogar] 26/8/2008 14:06

bryanmuppet, the banks you refer to were underwriters to the B&B rights issue.

You really have no idea how the financial markets work, do you?

SUPER-MUPPET!!!