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Banks may say they are lending more but who are they lending to?

Just take the lates Lloyds/TSB loan add - which adds at the end "available for Premier Account holders only"

In other words, you can get a loan but only if you already have plenty of money with us!

I agree with Jim in Aberdeen. The average person who borrows from a bank does it in the form of a mortgage, thus the relevant property is the collateral.

Why should Worrall Thompson and his ilk be given loans without some form of security.

It was a cheap shot by AT especially when no defence can be offered because of confidentiality, which it seems that the bank have done far better than many Government agencies, departments and employees have in recent times.

I know nothing of the profitability of AT business , historic or on going but from historic business knowledge of bank lending there is a huge difference between "equity" in property and the amount a bank in those years was prepared to lend.

For example a property valued at £300000 with a mortgage of £200000, may have an equity of £100000, but Bank's used to have a conservative view and take two thirds of the property value in this instance £200000 before taking off the mortgage to assess any possible lending value. Making it in this instance NIL

AT only mentioned "equity" in the properties and I suspect that was the impass.

In these times, I rather suspect the Bank have returned to those more traditional and tried and tested principles rather than the more recent pawnbroking of lending against equity or rising prices that has got us largely into the problems they have today.

The key is also property prices are falling and with a business model slightly at risk in his words "people only come out two days a week now" , then I understand why the Bank may have also requested a personal guarantee.

If an entrepreneur has assets outside the business, it also used to be the norm to tie in those where the outloook is a little uncertain, to give the bank more comfort against risky lending as well as effectively saying to the entrepreneur, you want us to back your business , will you back it yourself?

His answer was clearly no !!

Using guarantees has fallen by the wayside in recent years as lawyers have made their clients aware of what is exactly at risk if they fail and are saying don't sign it....if you do you might put at risk assets you own, but are not tied up in the business, which is also a get out for directors who can walk away with no personal loss if the business goes down.

Guarantees can be limited to a certain figure if necessary to limit the entrepreneurs risk

AT also said it takes a while to sell properties - quite, why should the bank have to wait if it needs to redeem the security of the properties he has.

No I suspect there are two sides to this story, one of a chef who has grown "soft" and never managed through difficult times because of recent banking practice of easy lending, a bouyant economy and a bank taking a more realistic view on what they should be doing in terms of lending.

For what it's worth AT bringing this to the public view was a PR stunt hoping to get him populus support with all the criticism of banks going on, but for me he has now fell well short of my expectation of him as a public figure.

This seems to be a simple case of someone (AT) wanting to build a business empire, to make himself very rich, by leveraging as much as he can, but wanting someone else to take the risk with their money.
I doubt AT is the only person in this situation but we can hardly start blaming the banks for taking a more conservative approach to lending when most believe it was their over lending that got us in this situation in the first place.
AT if your business is as good as you say then back it! Put your money where your mouth is and we will all applaud you if you make your millions, but don’t look for sympathy when you don’t seem to have the stomach or the real belief in the venture to take a few risks yourself.

I dont think many have sympathy for AT.

He attempted to come over as being confident of his business but not that confident that he would allow his house as security.

Looks to me like a PR stunt attempting to put all the blame on the banks.

He stated his financial advisors had also advised him not to put his house as security. Yes... well that isn't surprising more restaurants go out of business in an economic downturn. Consumers just stay in and eat at home.

Nice try AT but your PR stunt has failed!

Hi Declan,

I heard the words 'I am sorry', but they were carefully qualified and uttered devoid of ANY and ALL feeling, comprehension or meaning - it was said as if they'd lost a round of golf.

Put simply this was a financial 'freak' show for the benefit of 'vox populi', similar to the old communist 'show trials', and it satisfied no one.

The govt. and banks realising that the 'shock and awe' has worn off, have returned to 'running interference' while they try to fix 4 huge 'Humpty-Dumpty'.

To 'Run interference' -
to turn attention away from something.

For example, Billy ran interference with his parents to keep them from finding out that Tom was a bit drunk.

Etymology: from the activity of running interference in American football, in which a player keeps others away from the actual player with the ball.

IMHO the govt. are desperate to retain whatever power they can - in the vain belief that somehow they can pull off a miracle and win the next election ... while the 'Gang of Four' simply want access to YOUR 'seed corn' to fund their return to business as usual ('boom').

Close RBoS, HBoS, Northern Rock, with immediate effect and spend a week 'rebranding' then as 'UK International Banking Group' either that OR open RBoS (UKGlobal) Ltd, HBoS (UKGlobal) Ltd, Northern Rock (UKGlobal) Ltd, thus allowing those contracts, pensions, bonuses to be cancelled.

I admit this is a bold, complex, high-risk, 'position' unpopular with businesses and former executive employees - it could easily save the tax payer millions.

Blow the final whistle and shout, 'games a boggie' - before a CEO finds a way of sacking all of US.

Declan,

Reading today's article about the 'sacking' of Paul Moore from jis position as Head of Risk at HBOS, I am startled by the statement towards the end:

Mr Moore claimed he was "summarily dismissed" .....

The bank says Mr Moore was made redundant following a restructuring and was replaced by a banker with 20 years' experience....

Surely, even the Bank must understand that it is only redundancy if the role itself disappears, and the person currently holding the role cannot be retrained for another role. If the Bank claims it was redundancy, they are thereby admitting that they saw no further need for the role of "Head of Risk". If this report is accurate, it is damning.

I was in this situation myself, at about the same time, when my Boss made me "redundant" and replaced me with someone else. In just the same way he requested that the case be dropped and offered me substantial compensation. In just the same way, I accepted, and am now regretting it...

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Further, I read that the accusations by Paul Moore were "extensively investigated"at the time and found to have "no merit".

Yet it seems the "investigations" were carried out by HBOS itself, by the FSA (run by the person who "sacked" Mr Moore) and by KPMG, employed by HBOS and whom Mr Moore had left some years earlier to join HBOS. Hardly "independent" investigations!

I find it frankly unbelievable that someone in Sir James Crosby's position should consider that he can clear his own name by asking his friends, colleagues and paid consultants to do it for him.

The biggest question, though, is: If Paul Moore had not been the subject of a "gagging order" four years ago, could our current financial collapse have been averted?