''With regards to the resumption of interest payments, it will be necessary for the losses that the Society has reported since the 31 March 2009 financial year end (and any subsequent losses reported) which have been written down against the Profit Participating Deferred Shares (PPDS) to be made good. From that point onwards, up to 25% of any net profits will be paid to PPDS holders and the Board then has the discretion to pay PIBS holders interest which is equivalent to the rate paid to PPDS holders up to a maximum of 6.15%.''
It could be a very long time before The West Bromwich make any payment on these PIBS, based on there recent above statement. its on the West Bromwich website
An original £75 million pibs were issued so I make that £4.6Million interest a year.
There are now £182.5million PPDS notes in issue.
I have been trying to find accumulated profit and losses for West Bromwich Building Society linked to the ppds and therefore pibs it appears accumulated losses of £99million stand against these shares the last 2 years of stated profits of £14.5million reduce this to £84.5Million. So if West Bromwich continues to make profits of £12million a year in 7 years they may make a payment on the PIBS.
They only have to pay 25% of profits out to shareholders, so in 7 years time they may make a dividend or coupon payment of 1.1pence per pib and ppds.
I wonder what peoples views are on the PIBS? I have held them since issue and wonder if I should not just sell them at the current 46p or have I missed something I just do not understand? Is there more value to these PIBS than I realise.
With potential income of 1.1 p in 7 years ''and the board then has the discretion'' my bear case for the PIBS is 5p.
I note the board of directors salaries and benefits are massive compared to profits from the building society or am I just jealous as the £738 income I used to receive from my 12000 PIBS was a nice little sum but is dwarfed by directors pay.
I would love to hear peoples views and opinions, if they are as bad as mine, let me know first so I can head for the exit. If I have missed the point or my facts are wrong let me know and I can look forward to a healthier retirement.