INBS - should we be concerned?

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Just read the leading article in today's Sunday Indo where Reuters have retracted a news article that stated INBS was in trouble. Although they've retracted and apologised, should we be concerned? No smoke without fire? What does everybody think? I've got a fair amount of money in there.
 
Irish Nationwide has very strong reserves so it's unlikely to get into liquidity difficulties.

However, there is no advantage to you in having "a fair amount of money" in the Irish Nationwide when you could have a UK Government guarantee with Northern Rock or triple A rating with Rabobank.

It's probably worth keeping the minimum amount required to get the windfall - €20,000.

This also happens to be the maximum amount for the compensation fund. If you have €20,000 on deposit and the Irish Nationwide fails, you will get €18,000 back - you will lose €2,000. If you have €100,000 on deposit, you will get the maximum which is €20,000 - so you will lose €80,000. (It is argued that the government will have to step in to save depositors, but I would not rely on this.)

What we do know about the Irish Nationwide:
Moody's downgraded it by two notches during the week. Most Irish banks have been downgraded.
There are only 4 directors which is very bad corporate governance. (It is a complete mystery why the Financial Regulator tolerates this.)
It is, in effect, run by one person, Michael Fingleton, which is a very serious issue of corporate governance as well.
A large proportion of its lending is to around 40 property developers, all of whom would be facing problems themselves.

I think Irish Nationwide is strong enough to withstand the difficulties, but as I say, there really is no need to take the risk for amounts in excess of €20,000.


Brendan
 
Isn't this how bank runs start? - Irish Nationwide might very well be in a strong position, but if people get nervous, and start withdrawing funds, there could be problems ahead.
(Incidentally, I remember reading an article a few weeks ago that stated that their wasn't enough money in the compensation fund to cover 90%)
 
Interesting and informative. I'll stay with N/Rock.
We shall watch the space with interest.
 
How long approx. would reimbursement take in such a situation for a company that did go out of business?
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The Central Bank & Financial Services Authority of Ireland (or liquidator, where one has been appointed) is expected to pay compensation to depositors within three months of a determination by the Central Bank & Financial Services Authority of Ireland that deposits are unavailable, or of a ruling by the court (subject to the terms and conditions set out in the Regulations).
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The fact the fund is a fraction of what it would need to be could extend this?
 
Maybe the rumours will scare some of the carpetbaggers into closing their accounts leaving a bigger slice of the cake for the rest of us?
 
Complainer said:
Maybe the rumours will scare some of the carpetbaggers into closing their accounts leaving a bigger slice of the cake for the rest of us?
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But also reducing the value of the cake and it's slices.....?
 
Complainer said:
No. The value of the cake is based on the reserves, not the deposits.
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Ultimately it would affect both deposits and reserves, ability to borrow, ability to lend etc. Customers deposits don't just sit there, without this money it reduces options and ultimately the value.
 
The Central Bank are the administrators of this Scheme but it is the government that sets the guarantee, don't they then have a legal obligation to come up with the funds to compensate savers in the unfortunate event of a bank collapse?.
 
You can rest assured that everyone would get their max payment (in any eventuality i don't think there's any shorterm risk and i have funds there) one way or another because if they didn't there would be a flight of capital so fast out of the country there wouldn't be a bank left standing.
As the british found to their cost,when these things go tits up you have to act fast.
 
Brendan, what are these reserves composed of? Gilts? Or gilt-edged? The breakdown is important, because, as we can see with the GSEs in America, a proportion of what is considered a strong reserve is not strong at all. TIA.

PS Also have money in INBS!
 
INBS have notice up on their website reassuring all members that the Societycontinues to be strong and profitable.
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What else would you expect them to say. Moodys have not changed there rating of them. 80% loan base to property etc. I withdrew funds straight away. I cannot afford to loose money, with them or any other institution, after all us JOE SOAPS will be the last to know what is going on.
 
Oh Reuters have retracted their statement [ was it on a technicality ] but Moodys rating still stands. Which i think is far more important.
 
Bessa said:
Oh Reuters have retracted their statement [ was it on a technicality ] but Moodys rating still stands. Which i think is far more important.
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See above, Bessa, the story was false. The source Reuter's were quoting either knows much more than it is possible to verify or were making it up to weaken INBS to gain financially. At this point I believe the latter, whatever one thinks about the longer term viability of INBS as an independent entity.
 
I agree. This story is completely false - see --> [broken link removed].

I can't even access the reuters story anymore because they have completely deleted it for obvious reasons.
 
I've some money in a Fixed Account in Irish Nationwide and I'm getting a bit nervous. Reading through the Terms & Conditions, I can't make no head nor tail out of the way they would calculate the penalty if I withdraw my money before time. A x B% x C ?????? Can anybody explain, please?
 
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