A Question For You

  • royallyshafted
  • 14/10/08 31/05/09
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Posted: Thu, 06/11/2008 - 14:41

Apologies as this needs a poll and I dont know how to create one, but my question to others is this:

If someone takes over KS&F IOM as a going concern, would you be happy to leave your business with them?

Personally I had 2 business accounts and a personal account and I am down 6 figures as I write. However I realise as I look around at alternative banks that "Singers" was a damned good bank and it offered all the services I needed without stupid huge minimum requirements. It was nothing to do with their own lending practises or anything as to why it went bust as we all know, so if someone with a halfway reasonable pedigree is prepared to take it on, I for one am prepared to continue to support them with my business.
Judging from Mike Simpson's comments yesterday it seems there are still interested parties and I think that is fantastic news. Generally we are (or were) generally a well heeled bunch and surely the business and goodwill from that is worth having.

I wondered how others feel? Would you stay or would you go?

Can anyone make this into a poll since the answer is binary and may be of interest to a perspective buyer and to Mike SImpson. If we could make this serious and not just say yes becaus you think it might help you, I think it is a serious question.

My considerations have been I need offshore and I need multi currency accounts, English speaking staff, gross interest, convenient time zone, reasonable minimums, debit cards, on the UK payments system and the Channel Islands have zero compensation scheme. So although a wiser person now, I'd stay with Singers if anyone wants to buy it. It would have been nice maybe if the IOM Govt had temporarily nationalised it, but then I suppose they were worried about a precedent.

Thanks.

I wonder could the depositors have formed a CO-OP? Does anyone have any ideas how that could work? Would others depositors support it?

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This brings bach the idea of depositors buying the bank

  • Podcarson
  • 25/10/08 31/05/09
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  • Thu, 06/11/2008 - 17:49

I think it's possiable, and this is why:

The main asset the bank has is the loan book and it is worth 410M.
The next asset, probably a solid one, are the cash and certificates with external banks, worth another 182M.
If we give up, for the mean time, the money the British government owes us (or the Icelandic government for that effect), the banks’ total assets are – 592M.

The main liabilities the bank has are to the depositors – 927M.

If we can match the liabilities to the assets – the bank can resume working.
So if depositors will agree for a set back of their accounts – we may reach that target.

How can this be done?
First of all – we use 50M GBP of the DCS to compensate depositors wishing to leave the bank at this stage.
That would mean our liabilities stand at 877M GBP.
Than we put in the 100M GBP still left in the DCS as Capital for the bank – and making the banks’ assets 692M.
At this point we are short "only" by 185M GBP, which we will agree to deduct from our accounts (each account 21%), trading the 21% of each account for shares of the bank (obviously – if you have more money in your account you will get more shares).

The liabilities will be at this point 692M GBP and the assets 692M. perhaps at this stage the bank can get its’ license back under a new ownership (us!) – and we, well, we’ll all get our lives back…

This is quite feasible, and I don’t see any other procedure the will gain us our money back.

This will require the co-operation of the Isle of Man government and some 8,000 depositors…
I’m willing to come to the UK to do all I can in order to make this work – but I would like to hear what you have to say about it before hand…


This brings back the idea of depositors buying the bank

  • royallyshafted
  • 14/10/08 31/05/09
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  • Thu, 06/11/2008 - 18:20

I agree with Podcarson. I dont need the cash except for day to day needs but need a home for what cash is still generated by my business and pay to my business expenses from. I realise that the bank probably couldnt pay top interest rates but I am more concerned with return OF capital than return ON capital right now and I think so are many other people.

I dont think it is any good saying that capital MUST be locked up for two years or whatever as people have needs and individual circumstances, but having banked there for 9 years I was and am quite happy to leave money there and to keep banking there. If we were shareholders it would be very much in our own interests to support it and peace of mind is a great thing. If the compensation scheme is not going to give us all of our money back then I would settle for the compensation and some shares in the new bank and I think most of us would if it was set up properly.

My thoughts borrow a leaf out of the old Tyndall Bank whom I banked with back in the early 1990's. They were eventually taken over by Cater Allen and then in turn Abbey and they lost the plot then I think as now they are just another High Street Bank. However, Tyndall Bank made a major point that they only loaned money to borrowers such as local authorities where they knew they would get their money back.

It is my belief that with the present jaundiced view of banks that if we could re-float Singers by leaving whatever we can get back (be it all or part at this stage) and make it known that the bank has no dodgy debts, no need to borrow more and that it is fullying intended to be an old fashioned "safe as houses" (dont laugh) Captain Mainwaring style bank, then I believe that we can get other depositors to come and bank with us too. I actually think they'd flock as the publicity machine got going as its a great news story.

There are so many other banks out there that impose £25k or more account minimums and really dont deliver anything special for it, but treat you as if they are doing you a favour taking your money. I am absolutely convinced this is a go-er if its run properly. I am a businessman and I can assess risk and I like this idea, but I dont know how to run the day to day minutia of running a bank. SO if anyone else does or has ideas about how we can get this going then for God's sake lets attack that option as hard as we are trying to fight Brown and Darling et al as well, because just somehow we may be able to get the two ends to somewhere meet in the middle.


Our efforts might be better spent on a proper resolution

  • sami
  • 10/10/08 31/05/09
  • a depositor
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  • Thu, 06/11/2008 - 18:15

I would question whether this arrangement would suit everyone. For some it might, but I believe our efforts would be best spent pressing for what is rightfully ours: the return of our savings.

I realise it's a hypothetical suggestion you've made at this stage, and maybe if the worst came to the worst, then it might suit us.

In your example, a 21% write-off in one's savings might suit depositors with small amounts, where the actual amount is less significant. But say we were talking about £100,000s - that might be difficult to swallow.

No, I feel this would not be for me personally!


New Owner

  • Peasant
  • 10/10/08 31/05/09
  • a depositor
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  • Thu, 06/11/2008 - 17:44

If I was in the position of considering buying the bank, I would make it a pre-condition that none of the existing funds, assuming they can be found, would be available to depositors for two years at least.


Leaving money in the bank

  • austria
  • 14/10/08 30/03/14
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  • Thu, 06/11/2008 - 17:36

Theoretically, with the right guarentees, we would. Our reality is that we need the majority of that money NOW. We requested it on the 6th, not because we were worried about the bank (silly us), but because the exchange rate was finally something approaching reasonable. If we don't get it within the next 4 weeks, we are going to have to get a loan to finish our guesthouse. We will then be in more debt than we've ever been in our lives. Not the plan when we put our life savings in the bank!


the unfortunate problem here

  • sleeplessnight
  • 10/10/08 30/06/09
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  • Thu, 06/11/2008 - 17:45

the unfortunate problem here is that there is no money to leave in the bank now.


new KSFIOM?

  • mikeinfrance
  • 12/10/08 28/09/09
  • a depositor
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  • Thu, 06/11/2008 - 16:21

Having banked with the original Singer & Friedlander since 1990 I would agree with your sentiments., although I'm not sure that they did anything to fully inform their customers that the bank was being taken over by an Icelandic bank and that its status would be changing from that of a UK subsidary to that of an Icelandic subsidiary, Compounded by the fact that they continued to trade as Singer & Friedlander for some 18 months after having been taken over by Kaupthing !

Nevertheless under new management..........

It would at least avoid all the hassles of trying to open another bank account!

One specific advantage I found was that you only needed a minimum balance of £5,000 to keep your accounts open whereas other banks I looked at recently require you to maintain higher balances which didn't suit me.


Reality about keeping funds in KSF IOM

  • ItsTheft
  • 10/10/08 31/05/09
  • a depositor
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  • Thu, 06/11/2008 - 15:48

The reality is some of us would keep funds in KSF IOM (under different ownership or brand) but probably only up to the compensation limit. There would also be a bit of a "Bradley affect" where people would say they would keep deposits in the bank and ultimately lose their nerve and grab the cash.

Many factors would affect this. For example, if the deposits business of this bank were bought by a big brand like Barclays or Santander (Abbey), then it is likely that many of us would leave our deposits based on confidence of parent bank garantees, not based on safety of keeping money in IOM.

A more interesting question may be "would you leave your money in the bank if you promised not to withdraw it (or a big portion of it) for 1 or 2 years?", thus taking away the threat of a run, and givnig the new bank a cash asset which it can sell on to the likes of Abbey or Barclays. Given that choice vs "Or would you rather have say, 50% of your deposit back now and call it the end of the matter?" Of course, the bank would have to have assets to cover the deposits which is where the plan runs into a problem. Why would a bank buy deposits (liability) without the reserves (asset) to cover the deposits? And if KSF IOM (e.g. Mike Simpson) has to collect enough assets to cover the deposits he may as well just give us our cash back so we can decide which bank to put it in (or which mattress to put it under, whatever). The only benefit of that plan is that some people in IOM get to keep their jobs, which I wouldn't see as a bad thing.

The reality is that KSF IOM had more than enough reserves, but as we all now know, no bank can withstand a full on run. And we ran on KSF IOM (to the tune of about £30m per day!!), while others were running on KSF UK (hence the big loan of £550m?), Icesave, etc. KSF IOM did ask the parent bank, Kaupthing hf, for a quick loan to fund this run and it was refused, either because they didn't have it or didn't see the IOM as a high enough priority given that they were caught in the Icelandic meltdown that caused all this. So even if HMG didn't step in all the KSF banks (UK, IOM, Iceland) would have went down in a matter of days or hours.

And if by some chance KSF IOM were to be sold as a going concern then you can bet that the interest rates on deposits would be quite unattractive. To pay interest on savings, banks have to invest the money (e.g. lend to other banks, buy fancy financial products, etc.) to yeild enough return to cover the interest. And there aint much of that happening on the market right now. However, you would get your exceptional customer service back (which I agree with), but certainly wouldn't get the high interest rates or the great flexibility - no bank expecting to survive will be that flexible with it's savings restrictions given the current crisis.


Nicely expressed.

  • go mann
  • 10/10/08 31/05/09
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  • Thu, 06/11/2008 - 16:08

Nicely expressed.

The reality is some of us would keep funds in KSF IOM (under different ownership or brand) but probably only up to the compensation limit. There would also be a bit of a "Bradley affect" where people would say they would keep deposits in the bank and ultimately lose their nerve and grab the cash.
Many factors would affect this. For example, if the deposits business of this bank were bought by a big brand like Barclays or Santander (Abbey), then it is likely that many of us would leave our deposits based on confidence of parent bank garantees, not based on safety of keeping money in IOM.

The big issues are the value of those guarantees, and the credibility of the Bank itself. My current MAJOR concern is that I still have a large 6-figure sum [OK, lucky me] looking for a home.

BOS International? I have £100k with them in Jersey, and their incompetence staggers me. Over the last 10 months, I have given them just 2 instructions ... and they got BOTH wrong [including my telephone instruction on 7 Oct to stop sending my interest payments to KSFIOM]. That's a "work in progress"!!!

Barclays? I'm much less comfortable since they "sold out" to the Middle East. I was planning on going to Barclays Wealth, but I'm not sure now. Interest rates adjusted downwards to ensure the Executives continue to get ludicrous bonuses, free of UK Govt control? I don't think so.

Santander/Abbey? What guarantees do they offer? As a Jersey depositor, I have not yet seen any meaningful parental guarantee. And the States of Jersey are still considering what they'll do on depositor protection ... when they're not all away on conferences in France. And I bet they won't EVER cover my deposit. So I rely on Santander not being over-exposed in S. America? Oo-err, missus.

HSBC? No guarantee either, but I'm forming the view that if HSBC goes down, so will the entire planet. And as they get more secure, they don't need to bump interest rates to attract savers, so then I can't even cover inflation [Jersey running over 6%].

Isn't this fun? And ERNIE only paid us £50 this month and nothing last month ... we were getting close to 4% tax free until then.


Like your humour

  • ItsTheft
  • 10/10/08 31/05/09
  • a depositor
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  • Thu, 06/11/2008 - 16:13

There is a view that cash won't be king for much longer, so the only thing left is to get lots of gold. It will go up along with the inflation that is coming. At least that is the view according to some guys with an excellent sense of humour (www.dailyreckoning.co.uk). Here's hoping that we recover something that we can stick under the mattress!

And for the purposes of an online poll I would vote 'yes' to leaving my money in the bank if given the choice. Most of us didn't need the cash immediately, we were just running on the bank out of fear. Can't see that it would hurt in this instance.


Yes, I would retain my deposit in KSF

  • sami
  • 10/10/08 31/05/09
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  • Thu, 06/11/2008 - 15:05

I would retain my deposit in KSF - it was a good account and from comments I've seen here, customers were happy with the business.

I am also encouraged by Tony Brown's actions in supporting us, and feel that although he obvious has the Isle's future in mind, he also is a decent man. I would want to reward this by showing loyalty.


Very kind thoughts ... but

  • go mann
  • 10/10/08 31/05/09
  • a depositor
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  • Thu, 06/11/2008 - 15:16

Very kind thoughts ... but I'm afraid my higher loyalty is to my lifetime's savings.

Certainly I would be disinclined to deposit more than the maximum of their compensation scheme, and THAT needs some efficiencies introduced before I'd feel really happy.


very kind thoughts

  • steve
  • 14/10/08 31/05/09
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  • Thu, 06/11/2008 - 15:21

quite agree, but if a reasonable number of us would leave up to the compensation limit, it would be a good start, and might encourage an interested party. As things are, why would anyone want to even consider taking KSF on?


retain deposit in KSF

  • steve
  • 14/10/08 31/05/09
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  • Thu, 06/11/2008 - 15:14

Yes royallyshafted, I think this is a very inportant issue and needs serious consideration. I would be happy to leave a decent amount in, but by no means all (I know its theoretical at the moment, but we can hope) Seriously though, this needs addressing and our feelings made known to the liquidator


May I make a point here,

  • expat
  • 10/10/08 31/05/09
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  • Thu, 06/11/2008 - 15:24

May I make a point here, there is a lot of effort going to try to achiebve a resulyt on this, whan and if the day comes that the/a bank can be put back into operation, and it is far more feasible than some would have it, then I for ne will be leaving my money in subject to contract as they say. If that helps think about it when and of course if the time comes.


Expat, in this volatile

  • go mann
  • 10/10/08 31/05/09
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  • Thu, 06/11/2008 - 17:30

Expat, in this volatile world, all options remain open. Certainly KSFIOM served me better [until 6 Oct] in every way than ALL the other off-shore institutions I deposited with.

But you can only be a virgin once, I believe .... ;-)

I shall watch developments with great interest.

Hope you're well, relatively speaking?


may I make a point

  • steve
  • 14/10/08 31/05/09
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  • Thu, 06/11/2008 - 15:30

expat, for you to support this should encourage others. Do you think it is time to have a poll on this? I think this could make a huge impact on our cause.


i don't want to influence

  • expat
  • 10/10/08 31/05/09
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  • Thu, 06/11/2008 - 17:22

i don't want to influence just make people think about what they do, so yes I would like to poll this, it helps in talks with iom!! thanks for going this route, it can be done, maybe it is difficukt, but it is more doable than many realise!