The Lemon Fool

Has anyone reviewed the 'risk' of this instrument? Skipton seems to be an estate agent with the Building Soc. bolted on the side nowadays.

Half-Yearly-Financial-Reports-2023: https://www.skipton.co.uk/about-us/-/me ... -2023.ashx
(More: https://www.skipton.co.uk/about-us/financial-results)

BobGe wrote:Has anyone reviewed the 'risk' of this instrument? Skipton seems to be an estate agent with the Building Soc. bolted on the side nowadays.

The agent albeit large is relatively small in the Group... hadn't realised the Skipton are the 4th largest BS... CET1 is up a little, Fitch & Moodies are good, the estate agents swung from profit to loss but I imagine they develop a good deal of mortgage business.
The Nottingham BS owns an agent, one can imagine synergy.

Yield on the PIBS does not suggest market concern, however they are certainly into diversification, let's hope it doesn't become diworsification.

V8 (small holder)

88V8 wrote:The agent albeit large is relatively small in the Group...

But is it? Not suggesting your appraisal is wrong but just looking at the 2022 FY, (round figures) the B.S. income 450m, Estate Agency 1000m. Admittedly the PBT figs. are 220m and 67m respectively, so the ratio then was more like 75/25.

But go to the 2023 HY, Estate Agency income is falling away resulting in PBT figs. of 127m and (-6m) - a 70m negative swing - with the outlook suggesting the 2023 FY won't be any better. So it seems like the Estate Agency is a potential drag which could get worse as the effect of higher (for longer?) interest rates bite. Ok they could take steps to reduce the EA overhead to mitigate. But if EA business drops away - less transactions - that might suggest less mortgage referrals / development. At a time when there is increasing stress on the loan book. So I was thinking Skipton BS looks a bit like a leveraged play on the UK economy.

SKIP is a small issue but and perhaps things would need to get a lot worse first but I was just wondering how safe the coupon is and if that was suitably reflected in the current yield.

At the moment there is a 1% difference between SBSA and SKIP (8.5% v 12.875%). The former yields 7.2% and the latter 8.2%. From a contractual perspective there isn't anything that separates them. What appears to be causing the price difference is a lack of access on the SKIP (it is a paper based security that can't be easily purchased via Crest based settlement systems e.g. HL, AJ Bell, IBKR etc.).

For those able to hold SKIP in SIPPs/ ISA the SKIP is a great buy. From a capital perspective, their Pillar 3 disclosures show CET1 >25%, which for those who understand capital - is an absurdly high level of capital to hold and renders the risk of the PIBS to be low and on a par with Nationwide.

The PIBS can't be cancelled, called or redeemed so they are a great place to park capital from the BoI redemption. I would expect all the building societies to try and tender for all PIBS series over the next 3 years - meaning there is a decent chance of a premium over current market prices.

Jwdool wrote:At the moment there is a 1% difference between SBSA and SKIP (8.5% v 12.875%). The former yields 7.2% and the latter 8.2%. From a contractual perspective there isn't anything that separates them. What appears to be causing the price difference is a lack of access on the SKIP (it is a paper based security that can't be easily purchased via Crest based settlement systems e.g. HL, AJ Bell, IBKR etc.).

I agree. The antiquated paper based settlement of SKIP (also CVBP and LBS) is clearly distorting the market and should be resolved by issuers. It is also causing delays in interest payments. II have told me my CVBP interest was a week late because of problems reconciling for a paper based security.

I have been banging on at all 3 issuers for nearly 6 months now. They make all the right noises but nothing has happened. A very frustrating situation especially as other issuers of PIBS with the same features (eg Newcastle BS) have managed to set their PIBS up for electronic settlement with a problem.

In the meantime, a helpful anomaly is that you can trade SKIP online using the ii mobile app but not on the ii website.

OldBoyReturns wrote:

Jwdool wrote:At the moment there is a 1% difference between SBSA and SKIP (8.5% v 12.875%). The former yields 7.2% and the latter 8.2%. From a contractual perspective there isn't anything that separates them. What appears to be causing the price difference is a lack of access on the SKIP (it is a paper based security that can't be easily purchased via Crest based settlement systems e.g. HL, AJ Bell, IBKR etc.).

I agree. The antiquated paper based settlement of SKIP (also CVBP and LBS) is clearly distorting the market and should be resolved by issuers. It is also causing delays in interest payments. II have told me my CVBP interest was a week late because of problems reconciling for a paper based security.

I have been banging on at all 3 issuers for nearly 6 months now. They make all the right noises but nothing has happened. A very frustrating situation especially as other issuers of PIBS with the same features (eg Newcastle BS) have managed to set their PIBS up for electronic settlement with a problem.

In the meantime, a helpful anomaly is that you can trade SKIP online using the ii mobile app but not on the ii website.

I'm finding no problems currently trading SKIP with AJ Bell, and interest has been paid on time.

In the meantime, a helpful anomaly is that you can trade SKIP online using the ii mobile app but not on the ii website.[/quote]


OBR , very very grateful for this info . Although I’m expecting the phone to ring now and tell me I can’t do what I’ve just done .

I have SKIP and Leeds Building Society (LBS) in my isa with Interactive Investor. I have tried to transfer these to my London SouthEast isa (Jarvis)
Jarvis will not accept these, quoting they cannot be traded electronically and will not accept certified stock. Was intending to close my II isa because of the increased costs,(I only hold the leeds and Skip and do little or no trading with them). What to do ? I considered selling them to buy back through Jarvis The spread is wide and having 12 K of each stock, this seems an expensive way to transfer from one broker to another
Anyone have any thoughts Thanks

Rhinocol wrote:I have SKIP and Leeds Building Society (LBS) in my isa with Interactive Investor. I have tried to transfer these to my London SouthEast isa (Jarvis)
Jarvis will not accept these, quoting they cannot be traded electronically and will not accept certified stock. Was intending to close my II isa because of the increased costs,(I only hold the leeds and Skip and do little or no trading with them). What to do ? I considered selling them to buy back through Jarvis The spread is wide and having 12 K of each stock, this seems an expensive way to transfer from one broker to another
Anyone have any thoughts Thanks

You don't have to pay the whole quoted spread it you are taking both sides of the trade. You can phone and ask your brokers to do the trade with each other via a common market maker. (Some people refer to this as a negotiated trade). The market maker will take something like £50 in the spread for his trouble, and you will likely pay the telephone dealing commission to each broker. If you can do it for under £100 total cost then that's less than 1%, which is not too bad for a once-off.


GS

Rhinocol wrote:I have SKIP and Leeds Building Society (LBS) in my isa with Interactive Investor. I have tried to transfer these to my London SouthEast isa (Jarvis)
Jarvis will not accept these, quoting they cannot be traded electronically and will not accept certified stock. Was intending to close my II isa because of the increased costs,(I only hold the leeds and Skip and do little or no trading with them). What to do ? I considered selling them to buy back through Jarvis The spread is wide and having 12 K of each stock, this seems an expensive way to transfer from one broker to another
Anyone have any thoughts Thanks

You could try iWeb . Currently offering no opening charge and no ongoing monthly fee I believe .

Holts wrote:

Rhinocol wrote:I have SKIP and Leeds Building Society (LBS) in my isa with Interactive Investor. I have tried to transfer these to my London SouthEast isa (Jarvis)
Jarvis will not accept these, quoting they cannot be traded electronically and will not accept certified stock. Was intending to close my II isa because of the increased costs,(I only hold the leeds and Skip and do little or no trading with them). What to do ? I considered selling them to buy back through Jarvis The spread is wide and having 12 K of each stock, this seems an expensive way to transfer from one broker to another
Anyone have any thoughts Thanks

You could try iWeb . Currently offering no opening charge and no ongoing monthly fee I believe .

I've just checked on IWeb and they don't recognise SKIP at all and for LBS say "Investment into this asset is currently unavailable through our service", which means you can hold and sell it if you've already got it but you can't buy it. Dunno whether they'll let you transfer LBS in or not, I'd recommend calling them before trying.

mc2fool wrote:

Holts wrote:You could try iWeb . Currently offering no opening charge and no ongoing monthly fee I believe .

I've just checked on IWeb and they don't recognise SKIP at all and for LBS say "Investment into this asset is currently unavailable through our service", which means you can hold and sell it if you've already got it but you can't buy it. Dunno whether they'll let you transfer LBS in or not, I'd recommend calling them before trying.

For all that we moan about ii, when it comes to FI they seem less worse than many intermediaries.

V8

88V8 wrote:

mc2fool wrote:I've just checked on IWeb and they don't recognise SKIP at all and for LBS say "Investment into this asset is currently unavailable through our service", which means you can hold and sell it if you've already got it but you can't buy it. Dunno whether they'll let you transfer LBS in or not, I'd recommend calling them before trying.

For all that we moan about ii, when it comes to FI they seem less worse than many intermediaries.

V8

What I didn’t like was in the transfers over the last three or four years was that each new owner reduced what they were offering on fixed income stocks , they did seem to suggest when I spoke recently that they were finding more interest in FI and they may review , but as OBR said , making all the right noises but nothing happens .

Holts wrote:

88V8 wrote:For all that we moan about ii, when it comes to FI they seem less worse than many intermediaries.

What I didn’t like was in the transfers over the last three or four years was that each new owner reduced what they were offering on fixed income stocks , they did seem to suggest when I spoke recently that they were finding more interest in FI and they may review , but as OBR said , making all the right noises but nothing happens .

Don't disagree, but for a relatively small-time player is there anyone better?
One has read that Cannacord are no great shakes nowadays.

V8

88V8 wrote:

Holts wrote:What I didn’t like was in the transfers over the last three or four years was that each new owner reduced what they were offering on fixed income stocks , they did seem to suggest when I spoke recently that they were finding more interest in FI and they may review , but as OBR said , making all the right noises but nothing happens .

Don't disagree, but for a relatively small-time player is there anyone better?
One has read that Cannacord are no great shakes nowadays.

V8

Fair point , I abandoned Cannacord when they introduced the account on file fee as I was largely buy and hold .

One note on the SKIP anomaly via their App , you can buy but not sell on it .

The Skip and Leeds PIBS I hold in my isa are held in a nominee a/c. II now tell me I will have to change them from the nominee into my own name and then they will be able to electronically transfer them Jarvis . Waiting with baited breath. Thanks for the suggestions to date.

Rhinocol wrote:The Skip and Leeds PIBS I hold in my isa are held in a nominee a/c. II now tell me I will have to change them from the nominee into my own name and then they will be able to electronically transfer them Jarvis . Waiting with baited breath. Thanks for the suggestions to date.

Ummm...but AIUI holdings in ISAs have to be held by a nominee, no?

I would get (written, or at least secure message) confirmation from both II and Jarvis that doing that won't somehow "de-ISA" them, and also from Jarvis that they'll actually then accept the transfer that way.

Contacted both II and Jarvis as you suggested. Awaiting reply from II; however Jarvis have said "They would not accept these even if registered in my name as they cannot accept certificated shares which cannot be deposited electronically" Now getting rather confused by all this !! Is this part of the problem fools discussed on the earlier pages of this thread ?

Rhinocol wrote:Contacted both II and Jarvis as you suggested. Awaiting reply from II; however Jarvis have said "They would not accept these even if registered in my name as they cannot accept certificated shares which cannot be deposited electronically" Now getting rather confused by all this !! Is this part of the problem fools discussed on the earlier pages of this thread ?

It is , I wrote to their Treasury Department a couple of years ago and they had no idea there was a problem and to their credit they did something about it and trading became easier , however they then came back to holders some months later to say there was an issue matching bargains or size and the result was back to square one .

Unfortunately Interactive have now closed the anomaly OBR had found for buying SKIP .