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An alternative to UK bank shares?

General discussions about equity high-yield income strategies
flyer61
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Re: An alternative to UK bank shares?

#337117

Postby flyer61 » August 31st, 2020, 11:08 am

Just the two banks in my portfolio Handelsbanken (I business bank with them) and Bank of Montreal (thank you Salvor!). Both in my forever SIPP.

Handelsbanken are not paying a dividend presently but given the fees I pay it shouldn't be to much longer before they resume :lol:

Maybe there will be a time to dip into UK banks but I cannot see it. The UK banks seem to be extensions of Government, possibly part of the DSS. They are certainly not run for shareholders benefit. In fact large swaithes of UK listed Companies do not seem to be run for shareholders benefit. Anything to do with Banks, finance, insurance....great if you are a director, employee but shareholder....nah.

Dod101
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Re: An alternative to UK bank shares?

#337122

Postby Dod101 » August 31st, 2020, 11:16 am

flyer61 wrote:Just the two banks in my portfolio Handelsbanken (I business bank with them) and Bank of Montreal (thank you Salvor!). Both in my forever SIPP.

Handelsbanken are not paying a dividend presently but given the fees I pay it shouldn't be to much longer before they resume :lol:

Maybe there will be a time to dip into UK banks but I cannot see it. The UK banks seem to be extensions of Government, possibly part of the DSS. They are certainly not run for shareholders benefit. In fact large swaithes of UK listed Companies do not seem to be run for shareholders benefit. Anything to do with Banks, finance, insurance....great if you are a director, employee but shareholder....nah.


Re UK banks I agree with you, but insurers for instance have mostly continued paying their dividends. Shares such as Admiral, Direct Line, Legal & General, Phoenix Holdings, Schroders, HL and others have as far as I know continued to pay dividends throughout the Covid crisis. In most cases they have actually increased their dividends.

Dod

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Re: An alternative to UK bank shares?

#342508

Postby Maylix » September 24th, 2020, 12:59 pm

Wizard wrote:I checked with Hargreaves Lansdown, where my SIPP is, with a W-8BEN in place the withholding tax on Canadian shares if held in a SIPP is 15%. Any expected income would have to be reduced accordingly. I think that would make the current yield on offer to a UK investor holding in a SIPP with a W-8BEN in place about 5.8%.


Hey Wizard, FYI I just bought some Canadian Bank Sharesfor the first time in my SIPP with AJBell YouInvest. When I queried them about Canadian witholding tax, this is what they replied:

The form which reduces Canadian witholding tax is in fact a NR_301.
However, A NR_301 form is not required for CA investments held within a SIPP as the CRA (Canadian Revenue Agency) recognises our
SIPP as a qualifying pension scheme and all qualifying CA dividends and interest are automatically paid to you free of any withholding
tax.

Might be worth you asking HL some more questions...

HTH
MAylix

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Re: An alternative to UK bank shares?

#342541

Postby Wizard » September 24th, 2020, 2:51 pm

Maylix wrote:
Wizard wrote:I checked with Hargreaves Lansdown, where my SIPP is, with a W-8BEN in place the withholding tax on Canadian shares if held in a SIPP is 15%. Any expected income would have to be reduced accordingly. I think that would make the current yield on offer to a UK investor holding in a SIPP with a W-8BEN in place about 5.8%.


Hey Wizard, FYI I just bought some Canadian Bank Sharesfor the first time in my SIPP with AJBell YouInvest. When I queried them about Canadian witholding tax, this is what they replied:

The form which reduces Canadian witholding tax is in fact a NR_301.
However, A NR_301 form is not required for CA investments held within a SIPP as the CRA (Canadian Revenue Agency) recognises our
SIPP as a qualifying pension scheme and all qualifying CA dividends and interest are automatically paid to you free of any withholding
tax.

Might be worth you asking HL some more questions...

HTH
MAylix

That is really helpful, many thanks.

dundas666
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Re: An alternative to UK bank shares?

#377835

Postby dundas666 » January 16th, 2021, 4:31 pm

GrahamPlatt wrote:Well, despite posting mischievously & tongue in cheek above, I had a look at the Strathbridge fund... trading at ~ NAV at a current $C 6.89, but MCP only £4.11m. Hardly HYP material, but interesting all the same to some.


Sorry not sure what you mean by MCP of only £4.11m? Is that market price?

Canadian banks and insurance company share prices have gone up in the last few months, so Strathbridge's "Top 10 Canadian Financial Trust" closed-end investment trust now has a NAV of $C 8.05, market price of C$ 7.80 and a yield of 7.49%, yet most individual shares seem to have a yield of between 4 to 5%. Management charge of 1.1% and service charge of 0.3%.

Can't see much of a downside to this in a SIPP because there's no withholding tax. Can anyone see a reason NOT to invest in this IT instead of buying the individual shares? Thanks.

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Re: An alternative to UK bank shares?

#377846

Postby GrahamPlatt » January 16th, 2021, 4:58 pm

dundas666 wrote:
GrahamPlatt wrote:Well, despite posting mischievously & tongue in cheek above, I had a look at the Strathbridge fund... trading at ~ NAV at a current $C 6.89, but MCP only £4.11m. Hardly HYP material, but interesting all the same to some.


Sorry not sure what you mean by MCP of only £4.11m? Is that market price?

Canadian banks and insurance company share prices have gone up in the last few months, so Strathbridge's "Top 10 Canadian Financial Trust" closed-end investment trust now has a NAV of $C 8.05, market price of C$ 7.80 and a yield of 7.49%, yet most individual shares seem to have a yield of between 4 to 5%. Management charge of 1.1% and service charge of 0.3%.

Can't see much of a downside to this in a SIPP because there's no withholding tax. Can anyone see a reason NOT to invest in this IT instead of buying the individual shares? Thanks.


MCP is the Market Capitalisation - SP x number of shares in issue. i.e. the “total market value” of the company. Having gone up a bit since I last posted, it’s now £4.76m - microcap. HYP investors usually use a cut-off MCP in the region of £1bn.

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Re: An alternative to UK bank shares?

#377849

Postby dundas666 » January 16th, 2021, 5:09 pm

GrahamPlatt wrote:
dundas666 wrote:
GrahamPlatt wrote:Well, despite posting mischievously & tongue in cheek above, I had a look at the Strathbridge fund... trading at ~ NAV at a current $C 6.89, but MCP only £4.11m. Hardly HYP material, but interesting all the same to some.


Sorry not sure what you mean by MCP of only £4.11m? Is that market price?

Canadian banks and insurance company share prices have gone up in the last few months, so Strathbridge's "Top 10 Canadian Financial Trust" closed-end investment trust now has a NAV of $C 8.05, market price of C$ 7.80 and a yield of 7.49%, yet most individual shares seem to have a yield of between 4 to 5%. Management charge of 1.1% and service charge of 0.3%.

Can't see much of a downside to this in a SIPP because there's no withholding tax. Can anyone see a reason NOT to invest in this IT instead of buying the individual shares? Thanks.


MCP is the Market Capitalisation - SP x number of shares in issue. i.e. the “total market value” of the company. Having gone up a bit since I last posted, it’s now £4.76m - microcap. HYP investors usually use a cut-off MCP in the region of £1bn.


Ah yes I see now - many thanks.

However it's not like I'd be investing directly in a single micro-cap company, as it's an IT so its assets are the underlying constituent investments which in this case are the big Canadian financials.

Unless there are other risks with a small IT, for example liquidity or a large bid/offer spread? I'd be investing on a long term buy and hold basis though, and happy just to bank the quarterly dividends.

SalvorHardin
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Re: An alternative to UK bank shares?

#462861

Postby SalvorHardin » December 3rd, 2021, 12:26 pm

Once again it is Canadian bank reporting week and it has been a pretty good week for shareholders. I only pay close attention to Bank of Montreal (in which I own shares), which earlier this morning increased its annual dividend by 25%. The other major banks have this week increased their annual dividends as follows:

Bank of Nova Scotia (aka Scotiabank) + 11%
Canadian Imperial Bank of Commerce +10%
Royal Bank of Canada +11%
Toronto Dominion +13%

This story was posted about 20 minutes ago: [url]"TORONTO — Bank of Montreal closed out Canadian banks’ results season with better-than-expected fourth-quarter earnings on Friday, as strong growth across all major businesses drove adjusted earnings up 38 per cent from a year earlier, and lifted its dividend 25 per cent."[/url]

https://financialpost.com/fp-finance/banking/bank-of-montreal-hikes-dividend-by-25-as-profit-beats-expectations

The big Canadian banks have paid dividends since 1940 without any cuts (Bank of Montreal has paid dividends in every year since 1829). In recent years the British banks haven't been able to go for more than a couple of years without cuts and/or cancellation.

https://financialpost.com/investing/why-canadas-big-banks-defend-dividends-in-coronavirus-market-rout-and-at-all-other-times

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Re: An alternative to UK bank shares?

#462866

Postby Dod101 » December 3rd, 2021, 12:34 pm

SalvorHardin wrote:Once again it is Canadian bank reporting week and it has been a pretty good week for shareholders. I only pay close attention to Bank of Montreal (in which I own shares), which earlier this morning increased its annual dividend by 25%. The other major banks have this week increased their annual dividends as follows:

Bank of Nova Scotia (aka Scotiabank) + 11%
Canadian Imperial Bank of Commerce +10%
Royal Bank of Canada +11%
Toronto Dominion +13%

This story was posted about 20 minutes ago: [url]"TORONTO — Bank of Montreal closed out Canadian banks’ results season with better-than-expected fourth-quarter earnings on Friday, as strong growth across all major businesses drove adjusted earnings up 38 per cent from a year earlier, and lifted its dividend 25 per cent."[/url]

https://financialpost.com/fp-finance/banking/bank-of-montreal-hikes-dividend-by-25-as-profit-beats-expectations

The big Canadian banks have paid dividends since 1940 without any cuts (Bank of Montreal has paid dividends in every year since 1829). In recent years the British banks haven't been able to go for more than a couple of years without cuts and/or cancellation.

https://financialpost.com/investing/why-canadas-big-banks-defend-dividends-in-coronavirus-market-rout-and-at-all-other-times


Thanks to SalvorHardin I have shares in Toronto Dominion. The shares have increased by 50% in the last 15 months or so since I bought them and I now have what by UK standards is unheard of for a bank, an increase of 13% in the dividend. I gather from a cousin who lives in Ontario that customer service costs are fairly high but everyone just accepts that that is the way of banks in Canada. She cannot understand how I can get free banking in this country.

Dod

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Re: An alternative to UK bank shares?

#463233

Postby flyer61 » December 5th, 2021, 11:59 am

Just the two banks in my portfolio Handelsbanken (I business bank with them) and Bank of Montreal (thank you Salvor!). Both in my forever SIPP.

Handelsbanken are not paying a dividend presently but given the fees I pay it shouldn't be to much longer before they resume :lol:

Maybe there will be a time to dip into UK banks but I cannot see it. The UK banks seem to be extensions of Government, possibly part of the DSS. They are certainly not run for shareholders benefit. In fact large swaithes of UK listed Companies do not seem to be run for shareholders benefit. Anything to do with Banks, finance, insurance....great if you are a director, employee but shareholder....nah.


nothing has changed to alter my thinking (apart from some insurer's). A stupendous result from BMO.

UK banks really do need root and branch reform to reflect the interests of shareholders otherwise why invest???

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Re: An alternative to UK bank shares?

#463239

Postby ADrunkenMarcus » December 5th, 2021, 12:23 pm

Dod101 wrote:She cannot understand how I can get free banking in this country.


Was it prior to the Big Bang?

I seem to remember reading it was the mid 1980s when some banks started offering 'free in-credit banking'. Before my time.

Best wishes


Mark.

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Re: An alternative to UK bank shares?

#463252

Postby Dod101 » December 5th, 2021, 12:57 pm

ADrunkenMarcus wrote:
Dod101 wrote:She cannot understand how I can get free banking in this country.


Was it prior to the Big Bang?

I seem to remember reading it was the mid 1980s when some banks started offering 'free in-credit banking'. Before my time.

Best wishes


Mark.


I have only really been involved with UK anks since I returned to this country in 1991. In that time, I think we have had more or less free everyday banking.

Dod

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Re: An alternative to UK bank shares?

#463253

Postby Dod101 » December 5th, 2021, 12:59 pm

flyer61 wrote:
Just the two banks in my portfolio Handelsbanken (I business bank with them) and Bank of Montreal (thank you Salvor!). Both in my forever SIPP.

Handelsbanken are not paying a dividend presently but given the fees I pay it shouldn't be to much longer before they resume :lol:

Maybe there will be a time to dip into UK banks but I cannot see it. The UK banks seem to be extensions of Government, possibly part of the DSS. They are certainly not run for shareholders benefit. In fact large swaithes of UK listed Companies do not seem to be run for shareholders benefit. Anything to do with Banks, finance, insurance....great if you are a director, employee but shareholder....nah.


nothing has changed to alter my thinking (apart from some insurer's). A stupendous result from BMO.

UK banks really do need root and branch reform to reflect the interests of shareholders otherwise why invest???


That is true but can you imagine the outcry if banks started a monthly charge for maintaining a current account? Yet why should they not, no other service is simply free?

Dod

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Re: An alternative to UK bank shares?

#463303

Postby Alaric » December 5th, 2021, 4:16 pm

ADrunkenMarcus wrote:I seem to remember reading it was the mid 1980s when some banks started offering 'free in-credit banking'. Before my time.


There used to be stamp duty on personal cheques. According to wiki, that was abolished 1st February 1971. I think free banking dates from around the same time. So bank charges went out with £ s d.

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Re: An alternative to UK bank shares?

#463362

Postby tjh290633 » December 5th, 2021, 10:53 pm

ADrunkenMarcus wrote:
Dod101 wrote:She cannot understand how I can get free banking in this country.


Was it prior to the Big Bang?

I seem to remember reading it was the mid 1980s when some banks started offering 'free in-credit banking'. Before my time.

Best wishes


Mark.

My recollection is of free banking if you kept a minimum balance of £100 in your account. I wrote a program for the BBC Model B computer to make sure that I did just that. Early 1980s, I think. Certainly before 1985.

TJH

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Re: An alternative to UK bank shares?

#463372

Postby Dod101 » December 6th, 2021, 12:30 am

tjh290633 wrote:
ADrunkenMarcus wrote:
Dod101 wrote:She cannot understand how I can get free banking in this country.


Was it prior to the Big Bang?

I seem to remember reading it was the mid 1980s when some banks started offering 'free in-credit banking'. Before my time.

Best wishes


Mark.

My recollection is of free banking if you kept a minimum balance of £100 in your account. I wrote a program for the BBC Model B computer to make sure that I did just that. Early 1980s, I think. Certainly before 1985.

TJH


And of course in these days, banks, like the rest of us, earned some interest on the balances. They need to get a grip on this sort of thing. It is actually costing them money at the moment I would have thought. In fact, the ring fenced UK banks have got so much money they have no use for it. Quite ridiculous.

Dod


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