The Banks

[Benzowner]

Is this one of the reasons why the country is continuing to struggle? The current base rate is 0.5% my companies bank phoned me yesterday to renegotiate out overdraft facility which was at 4%, a year old. The new rate.........well, the bank manager said he didn't think it right to charge us the correct rate, 9% so offered us 6%, gobsmacked. He tried telling me that borrowing money was expensive, sorry but that fell on deaf ears. What does the collective think?

 

[Chattonmill]

The Inter bank rate has taken a hike recently, so he is not lying to you, but 9% would be taking the provebial!

 

[stevieb15]

Is this one of the reasons why the country is continuing to struggle? The current base rate is 0.5% my companies bank phoned me yesterday to renegotiate out overdraft facility which was at 4%, a year old. The new rate.........well, the bank manager said he didn't think it right to charge us the correct rate, 9% so offered us 6%, gobsmacked. He tried telling me that borrowing money was expensive, sorry but that fell on deaf ears. What does the collective think?

4% this time last year was very low, bizarrely so infact , so it sounds as if you've had a really great deal over the past twelve months. I don't know if you generally agree your rates against BOE base rate, your banks "base" or libor, all of which can offer different "benefits" dependent upon what markets are doing.
6% doesn't sound that bad especially if it is fixed for twelve months.
I agreed in August of last year to collar my borrowing for the next 5 years against the BOE base rate at 3.5% low and 6% high, I pay a 2% premium to my bank for the borrowing facility and although I am losing out at the moment, to say I am delighted to get such a brilliant long term arrangement is an understatement.
To be honest I didn't want to do this at the time but hedging in this way was a condition of the bank agreeing the facility and it has allowed me to concentrate on running the business rather than worrying about medium/long term interest rates

 

[Baron_Samedi]

Reckon your bank is trying to pay back its debts using just your money!

 

[oldcro]

Shetland has a total population of 23000 inhabitants. We also have 6 banks employing between 60 and 100 employees in total.
How else do you expect them to make massive profits, own the biggest most expensive buildings in London and pay all their wages without charging obscene interest rates?
If banks were forced to limit their lending rates to say 2% above interest rates, then they might take more care of peoples money instead of gambling it away on worthless assets.

 

[EDZ649]

Is this one of the reasons why the country is continuing to struggle? The current base rate is 0.5% my companies bank phoned me yesterday to renegotiate out overdraft facility which was at 4%, a year old. The new rate.........well, the bank manager said he didn't think it right to charge us the correct rate, 9% so offered us 6%, gobsmacked. He tried telling me that borrowing money was expensive, sorry but that fell on deaf ears. What does the collective think?

Just been through exactly the same thing with HSBC. Our overdraft was up for renewal and guess what? Yep, the rate went up to about 6%.

What really makes me laugh is that the Banks are responsibly for the current economic crisis, yet they want us to pay for their mistakes and get them out of a giant hole.

 

[Benzowner]

Just been through exactly the same thing with HSBC. Our overdraft was up for renewal and guess what? Yep, the rate went up to about 6%.

What really makes me laugh is that the Banks are responsibly for the current economic crisis, yet they want us to pay for their mistakes and get them out of a giant hole.

Interesting, guess what bank we are with?

 

[AbbieCadabra]

just had our business overdraft renewed with Natwest, 5.85% over their base rate, so we all seem to be about the same.

 

[crockers]

3 month Libor is 1.25% one year around 1.8% ... so add onto that a risk premium (chance of default) - expenses etc and then a profit margin..to get a fair rate.

 

[Smatt]

Remortgaged late last yr- 1.29% above baserate lifetime tracker, so currently 1.89%

However, thinking of move(houseswap) & I was quoted 3.99 above baserate this week, for the difference between current & new(larger) mortgage. I would advise you to look around!

 

[crockers]

Remortgaged late last yr- 1.29% above baserate lifetime tracker, so currently 1.89%

However, thinking of move(houseswap) & I was quoted 3.99 above baserate this week, for the difference between current & new(larger) mortgage. I would advise you to look around!

Libor and base rate are different animals...I gather your mortgage is linked to BOE rate. Business overdrafts are usually linked to Libor as they are usually short term unsecured lendings renegotiated usually annually.

 

[Smatt]

Libor and base rate are different animals...I gather your mortgage is linked to BOE rate. Business overdrafts are usually linked to Libor as they are usually short term unsecured lendings renegotiated usually annually.

sorry I missed the 'company' bit!

 

[Deleted member 6183]

Bank rate of 0.5% is Bank of England base rate, if banks could borrow at this rate then we could be charged far lower rates.

Have a look at savings rates, 3 or 4% can be achieved, so you could argue that banks are paying up to 4% for new money and it makes no sense to lend this new money out at a loss.

Having said all that the biggest factor at the moment is risk, banks are very risk adverse currently and are pricing accordingly.

 

[Beetnik]

HSBC's last response to us was take it or leave it - at 9.99% over base (apparently their system won't take two digits before the decimal point so we should count ourselves lucky). Only got this after three appeals and a threat to move lots of other business away from them as we are 'in a sector they no longer support'.

 

[EDZ649]

What the hell is wrong with the Banks? The government told them to start lending to small businesses again so what do they do, they clam up and start choking us to death!

 

[janner]

...(apparently their system won't take two digits before the decimal point so we should count ourselves lucky)...

It seems to work fine on the deposit account we have.