Recapitalised banks ‘cherry picking’ applications.

The only banks that are truly ‘open for business’ are those that have received state funding, and this is on both sides of the book.

On the deposit side Anglo are paying market leading rates, they are now fully nationalised, and because their new owners have the deepest pockets the ‘better banks’ who didn’t need a state sponsored bailout cannot compete.

On the lending front only two banks are actively engaged in lending at somewhat regular levels, and they too were saved by the taxpayer (because that is where the state get their money from). However, rather than being the ‘saviours’ of the banking sector they are merely taking the best of applications and opting for the cream of the crop, any ‘increase’ in lending is as much down to artificially low margins on rates (state sponsored), and gaining customers that would have gone elsewhere in an operational market (because if every other bank is unable to obtain state funding to lend with then they have to lose customers to those that did …

Read More

Recapitalised banks 'cherry picking' applications.

The only banks that are truly ‘open for business’ are those that have received state funding, and this is on both sides of the book.

On the deposit side Anglo are paying market leading rates, they are now fully nationalised, and because their new owners have the deepest pockets the ‘better banks’ who didn’t need a state sponsored bailout cannot compete.

On the lending front only two banks are actively engaged in lending at somewhat regular levels, and they too were saved by the taxpayer (because that is where the state get their money from). However, rather than being the ‘saviours’ of the banking sector they are merely taking the best of applications and opting for the cream of the crop, any ‘increase’ in lending is as much down to artificially low margins on rates (state sponsored), and gaining customers that would have gone elsewhere in an operational market (because if every other bank is unable to obtain state funding to lend with then they have to lose customers to those that did …

Read More

Broker vs bank, should you use a broker or a bank?

We are often asked by clients ‘what is the difference between a broker and a bank?’. The answer is that one is a financial institution that issues loans (bank) and the other is a financial institution that organises loans and advises on them but doesn’t actually give you the money (broker). Perhaps the way to think of it is like this, if you want to eat you can get food at a supermarket, using a broker though is like going to a supermarket and getting advice on different items as to which is the best for your health and the best price for what you purchase.

Every loan ends up in a bank so its not an accurate question in one respect to ask whether the actual loan is going to be different via a broker or a bank. The loan you obtain via a broker is a bank loan, the difference is that a broker will help you choose the best solution for your needs whereas a bank will only ever advise you on the loans they can offer …

Read More