BCP.ie Deposit Products

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Duke of Marmalade

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I have been keeping an eye on BCP to see if they are flogging any more KO bonds. Not yet thankfully. The return of sensible interest rates has put them in more conventional territory. I attach a brochure for a current Deposit offering. On the face of it quite attractive with a 3.53% AER subject to 33% DIRT. No Deposit Guarantee and the only default exposure seems to be to a Dutch subsidiary of NatWest, not even to BCP. I haven't studied it in detail but subject to the Nat West default risk, it looks attractive. Anyone agree/disagree with that? Minimum investment €100k.
 

Attachments

  • BCP NatWest 3_53% AER 5 Year Deposit (Issue 2) Brochure.pdf
    665.2 KB · Views: 276
The attached is available to private individuals, min investment €50k.
Interested in a critique by those more expert in the area than I.
2.65% p.a. subject to DIRT over 3 years certainly beats the pants of State Savings. The 64k question is around default risk.
 

Attachments

  • BCP Societe Generale 2_65% AER 3 Year Deposit.pdf
    484.9 KB · Views: 199
Duke of Marmalade said:
Do you think Pensions includes ARFs?
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I'm not sure to be honest. It might be up to the ARF provider? On their website they say its been submitted for approval on the Aviva SDIO platform.

They've also got a 3 year deposit which is open to individuals (2.65%), but I haven't read the full brochure yet.
 
Yes I posted that one earlier.
 
It's an odd one. To me it sounds like there is something like a Credit Default Swap on the back of this... There is yield being generated somewhere...
 
Sunny said:
It's an odd one. To me it sounds like there is something like a Credit Default Swap on the back of this... There is yield being generated somewhere...
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Possibly but do we care how they do it. What matters is the default risk of the deposit taker or maybe there is also a default risk if BCP gets insolvent though the brochure seems to suggest that SocGen credit risk is the "only" worry.
This seems to be the only risk. They mention others like liquidity and inflation but sure we know that. No BCP risk mentioned so I presume there is none.
 
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Only guessing but Soc Gen are providing daily liquidity prices and only talking about capital security at maturity which suggests there is something in the background. I agree with the 'Do we care how they do it?' to a certain point. But this is not the same as walking into your local branch and putting 100k in a deposit account. Would like to know exactly is happening.... Soc Gen are wiping their hands of it in the disclaimers.....
 
Sunny said:
Soc Gen are wiping their hands of it in the disclaimers.....
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Wow! Good spot.
This was the only disclaimer I found and it was T&C 20. That is just ridiculous as the whole brochure is patently Soc Gen - more than 50 references. If I was buying this product I would be asking the Central Bank what are the implications of this disclaimer (good luck with that!).
 
Sunny said:
I agree with the 'Do we care how they do it?' to a certain point.
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I was once involved in a court case against ACC for geared trackers. The plaintiff's opening statement made some point about the Tracker Deposits being invested in derivatives. The judge asked "does it matter if they are bet on the horses?" which I found surprisingly astute.
 
BCP have launched 2 new 'term deposit' products.

But it seems that private investors are no longer allowed into the products.
 
NatWest issued a 5y bond yesterday @ 5y Swaps + 120 (~ 4.60%). not the Dutch entity as I understand it but the UK Holding company. Slightly different risk but relatively decent return. Possibly difficult to access although I believe Degiro will add bonds to their platform on request.
 
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