Member Info for Jinny122

BigDano... AGREED! This is the EXACT business model and goals that MTRO are still working to as of right now!

The insight it gives on VH's passion for the project, thought process and confidence is the clearest indication to all on his likely expectations from any takeover offer. He ABSOLUTELY lives and breathes the company and its business model, and has executed it to great success before. Someone in the room asked him what he does in his spare time to relax, his answer: Golf and MTRO!! Its that simple.

Guysss DONT be so easily sidetracked here re: COdey's post. KEEP focus on the important discussion points. DONT allow topic to be changed so easily to a bear case.

Cant see him agreeing a sale at £3/share (£0.5bn).

JimJam.... or anyone else, can you point to a SINGLE instance in the last 10 years where a UK bank was sold for materially less than balance sheet book value?

Yuri..... how does discounted cashflow value of future profits capture the CURRENT ASSET VALUE of a £14bn loan book for instance?? - it doesnt, as discounted cashflow analysis is only concerned with future profits.

So the value equation has to be: Current Asset Value + Net present value of Future Profits. Now do that for MTRO and you'll start to see how a premium over book value may be justified given its growth prospects at the hands of a better resourced acquirer.

5 year fixed resi mortgage at 75% LTV

RBS; 1.65%, £999 fee, plus £250 cashback
MTRO: 2.24%, £999 fee

IMHO MTRO are charging uncompetitive mortgage rates because they have to in order for the economics to work. It is not where they want to be IMHO. Key question is how much of that mortgage book is due for refinancing in the next few months, because if it stays like this they will lose a lot of mortgage customers to hungry larger rivals. Its a ruthless market

Minimum starting point has to be book value of £10/share, otherwise shareholder wealth is being sacrificed. Then its up to the acquirer to justify why the assets should be sold for less than book value. If multiple acquirers are interested, then it goes for premium to book value depending on value assigned to synergies and future profitability that can be unlocked.

Alreafy pointed out that big banks have access to capital markets, and yes BOE funding too (which is cheap debt).

MTROs model however, is 100% deposit funded.

YES - the answer to your question in one word.

MTRO had around £14bn of deposits and £14bn of loans as at Sept 2019.

Stop arguing and educate yourself!! No one knows everything, kerp an open mind.

Illbetabuck..... I strongly suggest you learn more about MTRO before investing. Seriously.

MTROs loan to deposit ratio as at September 2019 was approx 100%. Every £1 borrowed was covered by £1 in deposits.

Dont try to be too clever, you'll trip yourself up!!

Guyssss.... connect the dots here.

How does MTRO fund its mortgages?? Its through deposits. How does the big players fund theirs?? they have benefit of access to capital markets at significantly lower rates than MTRO pays for its deposits. Lloy alone has a near on £300bn resi mortgage book for crying out loud.

MTROs mortgage rates are higher because its costs of funding the mortgages are higher. Its not by choice to charge an uncompetitive rate. MTRO prides itself as a very low risk lender, its default rates are miniscule, so its not going sub prime or thereabouts.

Illbetabuck..... you seem to have selective reading.

Other comparisons have been provided showing that in addition to HSBC, RBS and Santander are substantially lower rates than MTRO. And thats before we talk about Lloyds or Barclays.

Resi mortgages are the core of MTROs lending business, again as I pointed out already, 72% of its loan book is resi mortgages.

All the major lenders have massively increased appetite on mortgages. HSBC alone wants to find additional customers to lend £35bn more to.

On your other point, how does a bank (MTRO in this case) decide it no longer wishes to have anything to do with its core lending business?? Whats the alternative?? Where will it be more competitive to compensate for 72% gap in its lending book??

More comparisons: 2 year Resi fixed mortgage at 75% LTV

RBS: 1.25%, £995 fee
Santander: 1.39%, £999 fee

UNBELIVEABLE THAT MTRO IS OFFERING 2.09%, £999 fee!!!!!

Funding costs advantage of larger players is decisive.

Typo: MTRO 2 year fixed rate is at 2.09% at 75% LTV and £999 fee.

Versus HSBC at 1.34% at 75% LTV and £999 fee

And Resi mortgages makes up a whopping 72% of MTROs lending!!!

Crazy the level of uncompetitiveness

MTRO best 2 year fixed rate mortgage rate: 2.89%, with £999 fee at 75% LTV.

HSBC equivalent: 1.34%, with £999 fee at 75% LTV

How this is sustainable is boggling the mind.

Investor6..... Even better, balance sheet book value was £1.7BN as at the end of Sept 2019. The £1.4Bn you mention is historic as at the end of Dec 2018 I believe. I agree with you, expectations are lower than a snake's bum here., should be aiming substantially higher

Think about this people..... shorters will make most money by allowing the SP to get fat and then slaughtering it from there. INSTEAD, what we see are determined efforts to keep it lean. WHY will this be, no better explanation IMHO than they expect news soon which may drive a spike in SP which they wont be able to bring back down. This tallies up with working with a potential non-bank acquirer

In Observation, the shorts appear to be serving the interests of any potential non-bank acquirer pretty well. Draw your conclusions on the likely beneficiaries. I dont believe shorts are in this and so exposed for just another 50p upside, thete is a wider angle to this IMHO.

And strangely, increasing shorts may be a sign of impending good news. As its the best time for any acquirer to have SP as low as possible so any offered premum appears larger.