"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Monday, August 18, 2008

Richard Pym ex A&L skips to B&B and increases salary/ benefits x 2.5

Bradford & Bingley plc have kindly told us that Richard Pym is now the CEO with immediate effect - apparently stooping down to pick up a guaranteed £2.25m for the next 10 months' work. . We last wrote of him in October when he was the popsie put forward by J C Flowers as CEO of Northern Wreck before they saw the books and pulled out sharpish. see Friday, October 26, 2007 Northern Rock - BOE Borrowings now exceed £25 Bn. and rising - Is there an alternative to calling in the administrators ?

He was of course CEO of Alliance and Leicester plc before his dramatic departure in February 2007 "Alliance & Leicester chief in surprise exit as profits rise" Independent when the share price was £11.49 and is today struggling along at 350p having hit 220 at one stage in June before Bank Santander announced their takeover.

Pym will be remembered for his high handed method of dealing with the Mail on Sunday's questioning the A & L's "redemption administration charge " - the fee charged if borrowers left A & L for another lender. A&L first introduced a single administration fee of £195 from 5 January 2004 called the Early Closure Administration Charge and this fee was increased in August 2004 to £295. This was the highest of any lender (at the time Northern Wreck were close behind charging £250) and even x3 of some lenders - the FSA considered a maximum charge could be £200.

At least one person who objected to paying was refunded in full having threatened to go to the small claims court. Go here for instructions to obtain repayment if you have been charged such a fee.

Mail on Sunday wrote to Mr Pym after Mortgages director Stephen Leonard refused to talk about the charge and asked why it was so high.

Mr Pym evaded answering the question: 'You have focused on one fee, but a mortgage comprises a range of fees. We believe that the key issue for customers is overall value.'

As a token concession however to his most loyal customers, Mr Pym, who took less than 30 minutes to earn £295 in his £1 Mn. annual salary, agreed to borrowers with mortgages of less than £10,000 could pay £195 instead.

Now taking his £300,000 annual pension from A & L , 59 next month MrPym is also from today taking a basic salary of £750,000 from B & B (and no doubt a car, etc., etc.,) but is guaranteed the same again as a cash bonus by next June and the same in free shares. He also gets £1.5m worth of share options based on today's price.

Curious thing about Building Societies that turned into banks is that so much of the money involved was funnelled into the Directors pockets and those of their advisors.

Rights issue a disaster

B&B is due to publish first-half earnings on August 29 and also announced today that the bankers have been left with over 72.2 % of its £400 Mn. rights issue and Underwriters Citi and UBS now have until Friday to place the remainder of the cut-price, twice-restructured offering.

Of the 27.8% taken up by shareholders it is assumed the major shareholders (Standard Life, Legal & General, Prudential's M&G and HBOS's Insight) supporting the issue took up their full entitlement leaving only 17% of small shareholders taking up their entitlement.

Why B&B failed
The charts (click to enlarge)show how Buy to Let and Self Certified took over as commission driven sales threw caution to the wind and how they increasingly relied on short term money and (what turned out to be fraudulent ) now you see it now you don't money juggling schemes.

We wait until the 29th August to see the damage for the first 6 months of the current financial year and what made Mr Steve Crawshaw ill.

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