What’s up with the Nationwide? The back office is falling apart it seems. David Rigney and his operations managers, needs to start managing.
Two weeks ago I had a closure statement for a Capitalbond 92 account that I hadn’t even opened. Fortunately, there was no interest shown, but I would love to know where the phantom principal is.
Last week a family member received back her tear off slip in a window envelope, acknowledging that her bond maturity instructions had been received. Unfortunately, stuck behind her slip was a similar slip addressed to a Mr Alexander in Kilmarnock. The stray slip was handed in, same day at the local branch for forwarding to the rightful recipient. Staff at the branch at least took responsibility for sending it on, once I made it clear that it was nothing to do with me. So Sir, it should be with you soon!
And on Saturday, I eagerly opened a plain front envelope expecting a cheque for about 30p from Nationwide – more on this later. But the cheque was only for 2p and payable to a Mistry person. I will pass the wrong cheque to the local branch later today, so I hope the person who has my cheque will do likewise! Mistry will be 2p better off; but how much is First Class mail, even assuming Nationwide gets a bulk discount?
One of Nationwide’s problems is the internet offering. I can do transactions on the internet at home but can't send messages to Nationwide from home, without being timed out on the server. I therefore have to complain over the phone or via the terminal in the local branch.
As for the reason for the 30p cheque. There is a problem affecting people who have access to internet banking but who have not signed up for a FlexAccount. When an e-bond matures, it is automatically transferred into an e-bond maturity account if the final balance, is not reinvested on the bond maturity date. If a few days elapse before the reinvestment decision is made, the internet only gives the option to transfer the maturity date balance into a new account. The few days of accrued interest in the e-bond maturity account becomes orphaned. The actual amount of such interest is not however, displayed.
Nationwide advised me to use the close account option for the e-bond maturity account and the “hidden” interest would appear. Simple, you might think, but the balance from closing an e-bond maturity account can only be sent to a FlexAccount and not to an Instant Saver account, which is deemed to be a branch account. Therefore, on closing the e-bond maurity account, I was internet messaged to inform me that a cheque for the interest was being sent to me.
Why is Nationwide struggling? Are there too many ISA’s being opened now? Has the unemployment rate in Swindon suddenly fallen and they can’t get the staff? (I’ve been out of work for over a year now – I’d be happy to stuff envelopes)
Monday 29 March 2010
Saturday 13 March 2010
Repo 105 vs FSA soft touch regulation 101
Two things strike me about the Lehman Brothers accounting for the over-collateralised repos. What did the counterparties do in respect of their own accounting treatments of the repos and what anti-money laundering investigations were made?
If Lehman's booked a sale, how did the counterparties such as Barcap, UBS etc, account for the repos? Were they purchasing the assets on an outright basis or did they regard these as normal repo transactions?
Unfortunately we'll never know. Lehman's year end was November while European banks have December, and Japanese banks March year ends, respectively. Thus banks can readily teem and lade assets and liabilities in order to help each other present the best balance sheet possible at the year end.
Perhaps as part of the global reform of the banking system, all banks should have the same financial year end.
The money laundering angle is simply the case that if I, as a customer of a bank, were happy to accept $100 for liquid assets clearly worth $105, such a suspicious contract should lead to the bank investigating me for potential money laundering.
But then the FSA withdrew its rule book on money laundering in early 2006, relying on banks to use their own code of practice for "know your customer" procedures based on a risk-based approach.
A typical in-house code would require a bank to investigate customers entering loss-making transactions where the loss is avoidable or transactions which have no apparent economic purpose. Also any suspicion of illegal activity or attempts to hide money from law enforcement and tax authorities should be followed up.
What the risk in the risk-based approach has come to mean, is the risk that the activity is found out or that the FSA will admonish the financial institution. The FSA's light touch has been a soft touch as far as the banks are concerned.
If Lehman's booked a sale, how did the counterparties such as Barcap, UBS etc, account for the repos? Were they purchasing the assets on an outright basis or did they regard these as normal repo transactions?
Unfortunately we'll never know. Lehman's year end was November while European banks have December, and Japanese banks March year ends, respectively. Thus banks can readily teem and lade assets and liabilities in order to help each other present the best balance sheet possible at the year end.
Perhaps as part of the global reform of the banking system, all banks should have the same financial year end.
The money laundering angle is simply the case that if I, as a customer of a bank, were happy to accept $100 for liquid assets clearly worth $105, such a suspicious contract should lead to the bank investigating me for potential money laundering.
But then the FSA withdrew its rule book on money laundering in early 2006, relying on banks to use their own code of practice for "know your customer" procedures based on a risk-based approach.
A typical in-house code would require a bank to investigate customers entering loss-making transactions where the loss is avoidable or transactions which have no apparent economic purpose. Also any suspicion of illegal activity or attempts to hide money from law enforcement and tax authorities should be followed up.
What the risk in the risk-based approach has come to mean, is the risk that the activity is found out or that the FSA will admonish the financial institution. The FSA's light touch has been a soft touch as far as the banks are concerned.
Sunday 28 February 2010
AA - desperation from the owners
Having failed to float the company on the stock market, Acromas the private equity joint venture (funded by debt of course) has decided to rake in the cash to help solve its GBP6bn debt problem.
As the very wise, Ian Griffiths pointed out, in a recent Guardian report, Acromas had negative net assets and pre-tax losses of GBP300m in FYE January 2009, but the auditors still signed it off as a going concern. The investment bankers behind the flotation presumably took a dimmer view of the situation or had seen preliminary figures for FYE January 2010.
As for raking in cash, I don't mean that the owners of Saga and the AA are widening the services on offer, such as the AA's home repair and maintenance offering currently mooted, or Saga's attempts to woo the over-50 semi-silvers, or the insurance arm is fighting hard to gain market share, I mean that the AA is top of the moneysupermarket.com best buy savings accounts for internet only banking and the five year fixed rate bonds.
The Icelandic banks also shot to the top of the savings charts before going down, as they tried to suck in as much money as they could before the inevitable crash. So why has the AA has gone for the top spot just after its latest financial year end?
Admittedly deposits in the AA accounts are protected under the FSCS arrangement as the AA uses the Bank of Scotland as its cover. But then if you already have savings in BoS, Halifax or Birmingham Midshires, your GBP50k protection limit under one deposit taker might be quickly reached.
The Lloyds Banking Group (as the owner of BoS) must be quite happy for the AA to steal the show. Lloyds, given its market share and credit rating, does not need to raise money at these unusually high rates. While banks as a whole are still too heavily supported by purchased funds, Lloyds can easily address its need for deposits over time. One is left wondering if Lloyds is a major creditor of Acromas by any chance?
The AA must be hoping that the full-silver haired, retired Saga punters will put their money into the AA account, (they've been reining in their spending horns due to the low returns on their savings until now) and that Acromas survives. Perhaps the old folk now know that if a deposit rate is too good to be true then someone else will pick up the pieces.
As for the home maintenance plan, Centrica, the last real money owners of the AA, didn't seem to think that was synergy between car roadside rescue and British Gas bolier repairs. Perhaps they saw that cars were getting more reliable; we've certainly seen the number of AA patrolmen reduced since 2004.
Finally, as the urbane Mr Peston notes in his recent blog, the remaining 5,000 AA men are seeing their pension benefits come under pressure as the Acromas management target savings. We taxpayers and pension fund members should worry about the GBP190m deficit in the AA pension fund as we know who will pick up the tab for that when the Acromas cambelt breaks.
As the very wise, Ian Griffiths pointed out, in a recent Guardian report, Acromas had negative net assets and pre-tax losses of GBP300m in FYE January 2009, but the auditors still signed it off as a going concern. The investment bankers behind the flotation presumably took a dimmer view of the situation or had seen preliminary figures for FYE January 2010.
As for raking in cash, I don't mean that the owners of Saga and the AA are widening the services on offer, such as the AA's home repair and maintenance offering currently mooted, or Saga's attempts to woo the over-50 semi-silvers, or the insurance arm is fighting hard to gain market share, I mean that the AA is top of the moneysupermarket.com best buy savings accounts for internet only banking and the five year fixed rate bonds.
The Icelandic banks also shot to the top of the savings charts before going down, as they tried to suck in as much money as they could before the inevitable crash. So why has the AA has gone for the top spot just after its latest financial year end?
Admittedly deposits in the AA accounts are protected under the FSCS arrangement as the AA uses the Bank of Scotland as its cover. But then if you already have savings in BoS, Halifax or Birmingham Midshires, your GBP50k protection limit under one deposit taker might be quickly reached.
The Lloyds Banking Group (as the owner of BoS) must be quite happy for the AA to steal the show. Lloyds, given its market share and credit rating, does not need to raise money at these unusually high rates. While banks as a whole are still too heavily supported by purchased funds, Lloyds can easily address its need for deposits over time. One is left wondering if Lloyds is a major creditor of Acromas by any chance?
The AA must be hoping that the full-silver haired, retired Saga punters will put their money into the AA account, (they've been reining in their spending horns due to the low returns on their savings until now) and that Acromas survives. Perhaps the old folk now know that if a deposit rate is too good to be true then someone else will pick up the pieces.
As for the home maintenance plan, Centrica, the last real money owners of the AA, didn't seem to think that was synergy between car roadside rescue and British Gas bolier repairs. Perhaps they saw that cars were getting more reliable; we've certainly seen the number of AA patrolmen reduced since 2004.
Finally, as the urbane Mr Peston notes in his recent blog, the remaining 5,000 AA men are seeing their pension benefits come under pressure as the Acromas management target savings. We taxpayers and pension fund members should worry about the GBP190m deficit in the AA pension fund as we know who will pick up the tab for that when the Acromas cambelt breaks.
Subscribe to:
Posts (Atom)