INBS - should we be concerned?

Its explained below that in the brochure?

A: Amount withdrawn
B: different between prevailing market rate of interest on the account and the rate on the account
C: Number of months remaining in the term
 
Thanks for replying, but what is "prevailing market rate"? Is it the ECB? If the penalty is A times B% times C months it must mean that I will have to pay more in penalty thatn I have in the account - or is it only me being bad at maths......???
 
rmelly said:
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.
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Ultimately, withdrawals would indeed have an indirect impact on the value of the organisation. However, the reduction in the number of qualifying members would have a direct and immediate affect.
 
Inge said:
Thanks for replying, but what is "prevailing market rate"? Is it the ECB? If the penalty is A times B% times C months it must mean that I will have to pay more in penalty thatn I have in the account - or is it only me being bad at maths......???
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You're right it is a bit vague!

I'm guessing its the difference between the current rate offered to a new customer today and the rate you have. You'll just have to call them to ask what the penalty would be.

For eg. you have €20,000 in a 1 year account that was opened when the rate was 5.2% in say, January. The rate is now 5.6%. That's 0.4% difference.
You are taking out the 20k now so its 20,000 x 0.4% X 4 (months remaining). Result €320
The interest you would have got (if you had let it in there for the term) nett of DIRT was €832. Your nett interest will be €832-€320=€512

Do let us know if this turns out to be right!!!!
 
Thanks Moneyminder! Rang the bank today. Your calculation is absolutely spot on. Less loss than I thought, but I'm NOT taking the money out. Hope that it will show to be the right move...
 
Brendan -

Are you sure that a share account in a building society is covered by the government guarantee scheme ?? Could it be technically seen as an equity a/c as opposed to a deposit a/c ?

Thanks
 
Ollie12 said:
Brendan -

Are you sure that a share account in a building society is covered by the government guarantee scheme ?? Could it be technically seen as an equity a/c as opposed to a deposit a/c ?

Thanks
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The Financial Regulators website gives a list of what deposits are not eligible for cover under the Scheme. See [broken link removed]
 
Folks - this thread is about the Irish Nationwide.

Please do not take it off topic by discussing other banks.

Brendan
 
Irish Nationwide debt rating cut by Fitch

External »

The Irish Times take no responsibility for the content
or availability of other websites

Irish Nationwide Building Society's senior debt ratings have been cut Fitch Ratings, the because of its exposure to the deteriorating property market.
It is the second agency in a week to downgrade the lender.

The cut in Nationwide long-term issuer default rating to BBB+ from A- “reflects Fitch's continuing concerns about the uncertain outlook for commercial and residential property lending in Ireland and the UK,” the ratings company said in a statement.

Irish Nationwide's ratings were cut by Moody's on September 4th.

Irish house prices are declining and unemployment rising as the economy faces its first recession in more than two decades.

House prices fell 9.4 per cent in July from a year earlier.
Bloomberg
© 2008 irishtimes.com
 
Fitch now have them at BBB+ so it was a one notch downgrade. Short-term, they are still F2
 
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If you are nervous then just keep €20K or less with any bank regulated by IFSRA and part of the Irish deposit protection scheme and stick some or all of the rest in Northern Rock for 5% and a 100% guarantee courtesy of the UK government.
 
Within two days, downward pressure on the bond's price had boosted yields 27% as spreads topped 1,000 basis points, far higher than other Irish financials. The five-year fixed-rate bond was issued in June 2007 with just a 63-point spread.
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The content of the article is interesting and useful but it seems to me to be much more dramatic in its language than is justified by what has happened in reality.

I first thought that the yields were 27% - there are actually 10% (1,000 basis points)

far higher than other Irish financials.
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Does anyone know how much higher is "far higher"?

Did yields generally rise last week or was it just that of the Irish Nationwide?


Brendan
 
I've a 100K in INBS and it is coming out tomorrow when the notice period is up.

I am diversifying the funds as I am not totally comfortable with it being deposited in one place.

€20K into Anglo at 6%
€40K into NIB at 5.3%
€25K left with INBS in a Freedom account should they ever demutualise
The balance will go into an AIB online 7 account

I just can't justify leaving the money in one place in light of the current banking climate.
 
have a brother working in the INBS and the anger in relation to the press speculation is real with them, they are solid and they know it but the Reuters report and numerous misinformed comments on tv and radio is fuelling the 'no smoke without fire' ethos, dj on galway bay fm made a throw away dumb comment today not realising the worry that it would cause which could result in serious problems for the INBS, their staff and investors when there should be none
 
Hard to know what to believe really, was reading about substantial INBS repayments due mid 2009 in the Indo last wk, could this present a problem? I know the media fans the flames but I'm not all set to believe reassurance from Fingleton either. As I can only leave the 20K in there for another 2 yrs max I'm wondering if its worth risking it, can't see them coming within an ass's roar of demutualisation in the next yr or two and I'm wondering now would I be better off with a Northern Rock risk free account, any thoughts?
 
My brother opened a new 6% fixed term account with INBS this week for a six months period, If he withdrew 30k what penalties would occur.
 
Quote from the [broken link removed]

10. Withdrawals or closures prior to the account maturity date may result in a
penalty equal to the cost to the Society of replacing the amount withdrawn. This
penalty will be calculated using the following formula: A x B % x C
A - is the amount withdrawn.
B % - is the difference between the prevailing market rate of interest for the term
remaining and the rate on the account.
C - is the number of days remaining in the term.
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So it's the cost to them of giving you the money back before the normal term.
 
The new limit is 100,000EUR so members can go back into the 6% term deposit.
INBS was one of the strongest BS out there & it is a pity that if the CB orders a transaction that the withdrawals were partially to blame.
However clearly the downgrading was in the pipeline.
Any more than 100,000k could be divided up with NIB as a Danish owned entity, N Rock as a Sovereign entity & AN Post - Postbank standing out with parents standing behind them being rated
Danske Bank currently are Aa1 Moody’s; AA- Standard & Poor’s and AA- Fitch.
N Rock : UK-AAA & Rabo AAA & An Post - Ireland& Fortis.
Of course all Irish entities up to 100,000 also stand out
MF
 
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