Loans and Finance

Loans and Finance

Text

News and information about loans, money, debt, finance and business issues.

Thursday, September 30, 2010

Lloyds Tops List of Shame

I see that, not content with topping the FOS's list of shame, Lloyds has also topped the list of shame published by the Financial Services Authority (FSA).

The FSA report that Lloyds received more than 280,000 complaints in the first six months of 2010.

Barclays received 259,266, and Santander 244,978.

Well done lads!

Lloyds are unapologetic, they claim that its their size that generates the volume of complaints and note that the complaints came from less than 1% of their 30 million customers.

So that's alright then!

The British Bankers' Association (BBA) also tried to weasel out of the criticism, the BBC quote them:

"The banking industry welcomes greater transparency but is concerned that the separate publication of complaints data by the Ombudsman and the regulator could lead to data overload. What should be a useful overall summary could become a complex and confusing exercise."

Pathetic!

Tuesday, September 28, 2010

Ohh Lah! Lah!



France's ex-justice minister Rachida Dati MEP mixed up the words "fellatio" and "inflation" - which sound similar in French - during a TV interview.

Monday, September 27, 2010

Wolseley To Leave The UK

Wolseley the world's largest plumbing, heating and building materials supplier, will leave the UK and relocate to Switzerland, where it regards the tax regime to be less "uncertain".

Corporate tax rates in Switzerland are regarded as being more "competitive" than the UK.

Wolseley expects its underlying tax rate to come down from 34% to 28%.

Friday, September 24, 2010

Breaking Up Is Hard To Do

The Independent Commission on Banking (ICB), which was set up three months ago to assess the power of Britain's banks and how to boost competition, has issued its first report.

In the report the ICB sates that it will look at separating banks' retail and investment divisions, will look at imposing limits on proprietary trading and investing and look at reforming market infrastructure.

The FT reports that the British Bankers Association (BBA) welcomed the report, always a sure sign of discomfort.

Despite this "experts" predict that enforced break ups would be unlikely, as "niche" banks are viewed as being less resilient during times of crisis.

The ICB has until the end of 2011 to issue its final report.

The bottom line is that those who expect a major shake up of the banking industry are going to have to wait sometime, and may well be disappointed with the final outcome.

Thursday, September 23, 2010

Mortgage Lending Falls

The British Bankers' Association (BBA) report that new mortgage approvals fell in August to 31,767 during the month, a 16 month low.

Gross mortgage lending fell to £8.1BN, 7.6% lower than August 2009.

The BBA are of the view that lower demand for mortgages is the reason for the decline. That in itself may be the case. However, they may care to consider why demand is falling.

Could it be that the terms/conditions that the banks are attaching to mortgage offers are simply not attractive/viable for potential borrowers?

Wednesday, September 22, 2010

Murky

Despite Vince Cable's speech to the Liberal Democrat conference today, in which he refers to "murky corporate practices" and notes that "capitalism kills competition"; the capitalist world to which he refers is the world that he, and the rest of us, live in and rely upon for our survival.

To this end, ie the survival of our capitalist economy, the Bank of England are considering a further economic stimulus.

The recent Monetary Policy Committee (MPC) minutes show that there is a gradual movement within the committee towards doing more to support the economy. Given that interest rates are at 0.5%, the main alternative open to the Bank is that of further quantitative easing.

The US Federal Reserve has already signaled that it may restart purchases of government debt, ie quantitative easing. Given that the US and UK central banks are coordinating their monetary policy, it is highly likely the the Bank of England will follow suit.

Tuesday, September 21, 2010

Clegg Plays To The Gallery

The coalition Deputy PM, Nick Clegg, has used his party's conference as an opportunity on BBC radio to play to the gallery and indulge in "bashing" banks' bonus schemes.

The Independent reports that he warned the banks that the government would not stand idly by if they paid senior staff "gratuitously offensive" bonuses. He has raised the prospect of a new levy on banks, insisting that the government reserved the right to take "serious action" if banks went ahead with "ludicrous, sky-high bonuses".

All very well as a soundbite.

However, in reality were the government to continue down the path of "punishing" the banks and trying to regulate bonuses schemes, the banks will simply "up sticks" and move their offices and staff to other less "hostile" regions. The resultant fall in tax revenues will far outstrip any revenues that a bank levy might hope to raise.

Monday, September 20, 2010

AAA Rating Stays

Not everything about the UK economy is doom and gloom, that at least is the verdict of Moody's who have kept Britain's credit rating at AAA.

Moody's is of the view that the British economy is strong enough to withstand George Osborne's austerity package.

Had Moody's downgraded their rating, the cost of servicing the UK's debt would have risen.

However, Moody's did issue a cautionary "sting in the tail" of their rating. They noted, quite correctly, that the UK has used up its protective "cushion"; ie the "rainy day" money has more or less gone.

This means that if the UK suffers another economic shock, it may not be in a position to withstand it.

Time will tell as to whether Moody's are right, and as to whether the government can manage the economy and the political backlash from the austerity measures.

Wednesday, September 15, 2010

Unemployment Rises

The Office for National Statistics (ONS) has reported that the number of people claiming unemployment benefit has risen by 2,300 in August, the first rise since January.

Whilst the rise may seem "small" (unless you are of course one of the 2,300), it goes against the expectations of the "experts" who had predicted a fall of 3,000.

On the face of it, this of course is not good news. However, it kicks in the teeth the nonsense being spouted by some sections of the media recently that within 2 years Britain will be luxuriating in a boom that will drive interest rates up to 8%.

Tuesday, September 14, 2010

Well Done Lloyds!

Lloyds Banking Group, which is partly owned by the taxpayer, has achieved a new accolade by being on the receiving end of over 25% of new complaints received by the Financial Ombudsman Service (FOS).

The FT reports that in the first 6 months of 2010, the FOS received 84,000 new complaints, of which over 22,000 related to Lloyds and its subsidiaries.

Well done lads!

Monday, September 13, 2010

Bank Capital Base Deal Reached

A deal has been reached in Basel this weekend, between 27 "heads of supervision" of the world's banks, as to the capital base requirements of banks.

It has been decided that, in order to reduce the risks of future banking failures, banks will be required to more than double their reserves (common equity and retained earnings) from a minimum of 2% to 4.5%.

Additionally, banks will be required to build up an extra buffer that will take their total capital reserves to 7%.

This of course means that banks will have less money to lend, hence those trying to borrow money will find it harder to obtain a loan at an affordable rate.

Friday, September 10, 2010

Royal Mail To Be Sold/Privatised

Unsurprisingly the government, in the form of Vince Cable no less, has announced that the Royal Mail will be sold/privatised.

Also unsurprisingly, the unions representing post office workers have reacted with "irritation" to the announcement.

I recommend that you post your Christmas cards now, if you want them to arrive in time for the festive season!

Thursday, September 09, 2010

Interest Rates Remain At 0.5%

The Bank of England's Monetary Policy Committee (MPC) has left interest rates unchanged at 0.5%, they have been at this level since March 2009.

Ironically, as those with debts or who are trying to borrow money may have noticed the cost of borrowing has not remained static during this period but in fact risen.

Funny that, isn't it?

Still, the banks have to make money somehow!

Additionally, the MPC has left its £200BN quantitative easing programme unchanged.

So much for the media hysterics who have been talking up interest rates of 8% within 2 years.

Wednesday, September 08, 2010

Banks and Casinos

The Business Secretary, Vince Cable, is not very happy with the appointment of Bob Diamond currently head of Barclays Capital as CEO of the Barclays next year when the current CEO (John Varley) steps down.

Mr Cable was quoted on the BBC as saying:

"We are worried about this combination of the casinos and the traditional banking."

Having made the criticism, he then tried to suggest it was not his business to comment on the appointment:

"It isn't government's job to appoint the head of a private bank."

Irrespective of the government's feelings about the appointment, the markets have not exactly jumped for joy (possibly detecting that the bank's future relationship with the government will be "stressful"), as the share price fell by around 3% today on top of yesterday's 2.7% fall.

However, the proof of the pudding will be in the eating. Mr Diamond is no fool, and will doubtless do his best to prove his detractors wrong.

Time will tell.

Tuesday, September 07, 2010

Trade Minister Role Finally Confirmed

The government has finally filled the role of Trade Minister (unpaid) that has lain vacant for for months since the formation of the new government.

The role will be taken by the current chairman of HSBC, Stephen Green, who will step down from HSBC before the end of the year in order to take up the position.

Several other leading business figures had turned down the role; aside from working for free, Mr Green will have to put his assets into a "blind trust" during the period of tenure.

Mr Green will report to the Business Secretary Vince Cable and to the Foreign Secretary William Hague.

Monday, September 06, 2010

Pillocks!

Millions of commuters face travel chaos from Monday evening as 10,000 London Underground staff stage a 24-hour strike causing widespread disruption to Tube services.

Source The Telegraph