T
Tomnail
Guest
Lots of people are rushing to put money with Investec. For some time now they've been agressively advertising very attractive deposit rates. Please be certain that every euro you put in with Investec is fully covered by deposit protection schemes either here or in the UK.
Upfront: I am not an economist or a banker. Just a lay observer who has been burnt before. For what my opinion is worth, here's what makes me nervous about Investec:
Upfront: I am not an economist or a banker. Just a lay observer who has been burnt before. For what my opinion is worth, here's what makes me nervous about Investec:
- When Investec entered the Irish market in 06 they proudly declared that they were targetting an underserviced sector of Irish mortgage lending: the subprime market (subprime wasn't a dirty word yet!) I don't know how deep they got into that or how much of it they had already exposed themselves to in the UK before they came here.
- Investec is listed on the London stock exchange yet it has not taken the hammering British and Irish bank shares have taken. This may be creating a false sense of reassurance. It may not be because they are somehow more stable than Barclays. I suspect it's partly because they are primarily a South African bank - approx 60% of their business is still in SA where they started relatively recently. And the SA banks have not yet been badly hit. Some would argue that's just a lag factor at work. (I fear they may be right. A worrying sign is that South African residential property prices have started to fall significantly in the last few months.)
- In the South African market, in my view, Investec would be much more similar to Anglo than to AIB. It is an 'investment bank' that lends a lot of money to a relatively small number of individuals/entities. It has exposure to big property developments all over SA as well as in the UK and Australia.
- The bottom line: the banks most desperate to get your cash probably most desperately need your cash. And judging by the rates Investec is offering, it seems like it might be pretty desperate.