N&P to pay up to £57m in Keydata costs
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Norwich & Peterborough Building Society has set aside £57m to pay customers who invested in Keydata products through the society.
N&P is writing to Keydata investors inviting applications for ex gratia payments, transferring the rights to the investment to N&P.
It follows protracted talks over the level of payments to be made with the FSA and the Financial Services Compensation Scheme.
Some 3,200 N&P customers bought Keydata plans between 2005 and 2009. Keydata was placed into administration in 2009.
N&P chairman Gordon Horsfield says: “The society has been deeply concerned for its customers who have suffered following Keydata’s failure and is very sorry for the hardship and anxiety that has occurred.”
The news on payouts for Keydata investors comes as the society publishes its annual results for 2010.
N&P made a pre-tax profit of £5.1m for the year to December 31,2010, up from £1.3m in 2009.
Including the £57m Keydata provision, the society posted a post-tax loss of £48.9m for the year, compared to a profit of £900,000 in 2009.
It emerged last week N&P was holding merger talks with Yorkshire Building Society.
In its result statement the society says due diligence will take several weeks to complete and that discussions are progressing well.
N&P is also looking for a replacement chief executive, following January’s announcement that Matthew Bullock is retiring. His last day with the society will be March 31.
Sales and marketing director Mike Hounsell has resigned and left the society at the end of February.
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Readers' comments (7)
Mike Fenwick | 22 Mar 2011 11:22 am
Did the protecated talks with the FSA and FSCS also encompass the amounts N&P will pay for the costs of those discussions and meetings, or are these to be left to everyone else?
That questioned - seems N&P, by seeking subrogation rights to the underlying investments, may have understood what I was saying here:
http://www.moneymarketing.co.uk/regulation/recovering-fscs-claims/1026581.article
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Anonymous | 22 Mar 2011 11:32 am
Great news for these investors but what about those in structured plans backed by Lehmans. As the providers of these plans were effectively forced into administration after the FSA found serious deficiences in the marketing literature such that it was considered the providers would not be able to meet the cost of compensation this leaves the FSCS as the option of last resort for investors yet they have refused to compensate them because in their opinion the literature was "adequate"
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Gareth Fatchett | 22 Mar 2011 11:44 am
N&PBS Group
When people act together much can be achieved.
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Anonymous | 22 Mar 2011 12:33 pm
Does the £57m include repayment to FSCS of amounts paid out by FSCS - when do we get the rebate of the overpaid amount in the FSCS levy
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Peter Herd | 22 Mar 2011 2:23 pm
It's interesting to note that Yorkshire Building Society was until recently offering a similar types of structured bond products through Credit Suisse. I recently ran a campaign to get this type of product band and to highlight the danger by running a street campaign and collected over a hundred signatures from the general public. I passed this onto our local MP voicing my concerns over Chelsea Building Society and Yorkshire Building Society use of advertising for this Guaranteed Protected Account offering a guaranteed rate of return of 18%. (over 6 years in the small print) See enclosed link for further details.
http://essentialifa.wordpress.com/2010/11/18/chelsea-building-society-misleading-18-capital-protected-bond/
It's amazing that the FSA is so slow to act on this type of advertising, even with the backdrop of Key Data and Norwich and Peterborough. The people that really lose out in this type of deal is the consumer and I for one think it's about time that the regulator banned this type of product entirely as it only benefits the organisation that offers it.
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Anonymous | 22 Mar 2011 4:58 pm
Very True Gareth
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John A. | 28 Sep 2011 5:43 pm
Informative article pointing the right direction.
Keep more like this coming.
Tips about money advice are welcome always.
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