Banking turmoil could pay off for Clydesdale’s local branch

Tuesday 21st April 2009, 2:29PM BST.

Foreground, from the left, Alison Middleditch, Camacha Jones and Ali Martel toast Clydesdale Bank’s new branch watched by Steven Jones, Steve Chandler, James Blower and Nathan Long. (Picture by Adrian Miller, 0757548)

THE recent banking troubles hold no fear for Guernsey’s newest bank, Clydesdale Bank International, according to its managing director.

In fact, James Blower believes the bank’s set-up and recent events could provide the deposit-taking operation with a number of advantages.

‘Clydesdale’s name hasn’t been in the papers through this turmoil. It hasn’t been associated with negative headlines and that has encouraged people to do business with us.

‘People’s perception before was that a bank was a bank and all they thought about was what sort of rate it offered, but because of what’s happened people have started asking the right questions.

‘People are interested in banks that are independent, have a strong balance sheet and are not involved in toxic debts.’

The local business is a branch of Clydesdale Bank in Scotland, which is owned by parent National Australia Bank.

The fact it is a branch and not a subsidiary is also a positive, according to Mr Blower, as all the money stays with Clydesdale and is not upstreamed.

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1
ginga ninja

April 21, 2009 at 4:45 pm

Duh. The journalist really needs to check his facts. The fact that it is a branch means 100% of the money is “upstreamed” and you are betting on clydesdale/NAB. If that is a quote from the “MD” (of a branch ?????) then it is misrepresentation

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2
Bert

April 27, 2009 at 5:28 pm

Exactly.

Does it matter if you’re a branch or a subsidiary ? If your parent bank goes bust, you’ll get dragged down as well either by the receivers or by the run on the local branch that’ll follow the media headlines.

This is just an advert for the Clydesdale Bank and the Guernsey Press has given it to them for free.

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3
Noway Jose

April 30, 2009 at 2:00 pm

I agree with ginga ninja and Bert. Besides, why would anyone risk depositing savings in Gsy when its compensation scheme is reduced pro rate in the event of a default if eligible assets exceed £100m. Gsy banks and BSs generally have several times that maximum so you would only get a fraction of your £50k back if the bank went bust.

Depositing in the UK is safer every time. But if you’re barred from doing so because of not currently having a UK address then I would prefer the Isle of Man in light of their track record of rescuing savers.

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4
Stephen John

May 1, 2009 at 12:42 pm

Noway jose

I just wonder how many of Guernsey’s residents realise just how exposed they will be in the event of another bank folding within the last 5 years.

It is instructive to recall the view after the collapse Northern Rock that another collapse of a bank was unthinkable.

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5
David

May 1, 2009 at 10:46 pm

Stephen
For what its worth and without wanting to scaremonger there is little future at all in retail offshore banking. The risk of banks collapsing is far too great for Guernsey and other small offshore jurisdictions to manage and I anticipate that there will be legislation before long which will limit the size of offshore banks relative to the size of the overall economy in the offshore jurisdiction. That could well “price” Guernsey out of the game except perhaps for branches if banks where another jurisdiction takes responsibility for the obligations of the offshore branch, but there is still risk to the offshore jurisdiction if the head office bank goes under. The landscape is bound to change.

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6
Stephen John

May 2, 2009 at 2:34 pm

David

Agreed which is why I specifically mentioned Guernsey residents.

Whilst Guernsey residenst suffered no loss from the Northern Wreck mess up, I just wonder if the UK will be so willing to bail Guernsey residents out the next time a bank goes to the wall.

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