Lloyds Launches Cheapest Ever 10 Year Mortgage

 Lloyds Bank has launched a 10 year loan with an interest rate of 1.66pc. Mortgage brokers said this was the cheapest on record, beating the previous market-leading rate of 1.74pc from TSB. Lloyds' previous lowest rate was 1.99pc.

The Lloyds loan is restricted to remortgage customers who have at least a 40pc deposit, and a £1,000 fee applies. Borrowers who wish to switch away from the bank in the first five years must pay an early repayment charge of 6pc. Brokers said this exit fee was slightly above the market average. After five years this penalty decreases to 1pc on a sliding scale.

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Don't Trust Banks With Your Money

How customers of Lloyds Bank suffered from fraud committed by bank employees and weren't believed. - https://t.co/1vea3m7Wph

— Rebecca Cave (@TaxwriterLtd) October 6, 2017

£2BN Lloyds Spring Sale

The government will be offering ordinary investors bonus shares and a 5% discount, as part of the £2bn Lloyds share sale in Spring 2016. This will mark the final stage of Lloyds Banking Group’s return to the private sector.

UK Financial Investments, the Government's vehicle for holding assets acquiring during the financial crisis, has already cut its stake in Lloyds from 40% to less than 12% through a series of sales to institutional investors.

Members of the public will be given a 5% discount to the trading price, and one bonus share for every 10 shares they hold for more than a year - up to a maximum of £200 worth of bonus shares.

Priority in the sale will be given to individuals applying for less than £1,000-worth of shares.

RBS To Leave Independent Scotland

In the event that Scotland votes "Yes", it has emerged that RBS (without any sense of irony) and Lloyds will leave Scotland and decamp to England setting up their HQ's in London.

With a week to go until the vote, markets are reacting to the daily poll results (they rise when "No" leads, and fall when "Yes" is in the ascendancy). As I have noted before traders are doing very nicely out of the politically induced volatility, let us trust that none of them have foresight of the polls before they are published!

Banks Do A Wonga

The Telegraph notes that after revelations that Britain's high-street banks issued legal letters from what appeared to be independent law firms demanding that they repay money owed to the banks, the chairman of the Treasury Select Committee, Andrew Tyrie, wrote to the banks asking for an explanation.

The letters, despite being headed with names that make them look like they are from separate law firms, were actually from the banks' in-house legal teams.

In his response to Mr Tyrie, Lloyds chief executive Antonio Horta-Osorio said the bank had used the name of SCM Solicitors, a business purportedly based in Hove, East Sussex, because customers in financial difficulty did not respond to letters from the bank itself.

Mr Tyrie is somehwat less than impressed and, according to the Telegraph, is of the view that the letters were "calculated to mislead".

Lloyds claims that letters were "intended to encourage customers to speak with us".

RBS, Nationwide and HSBC also used the names of law firms when sending correspondence from their own departments. 

Cynics have noted that Wonga were not fined for their letters because the mainstream banks were all playing the same dishonest game.

Britain's financial services industry is pox ridden!

Government Sells 7.8% of Lloyds - Legalised Theft

The government has today announced that it has sold 7.8% of shares in Lloyds Banking Group, at 75.5p per share.

The government has now sold 36% of its original stake in Lloyds, which now stands at 24.9%.

Chancellor of the Exchequer, the Rt Hon George Osborne MP, said:

"I can confirm this morning that we have sold a further £4.2 billion of shares in Lloyds Banking Group at 75.5p a share, taking the taxpayer’s stake down to below a quarter of the bank. This represents good value for the taxpayer and the money will again be used to reduce the national debt.

This is another step in the government’s long term economic plan to deliver a more secure and resilient economy. It is another step in repairing the banks, in reducing our national debt and in getting the taxpayer’s money back."

The taxpayer paid an average of 73.6p per share when it was forced to rescue Lloyds in 2008. Thus the "profit" is little more than 1.9p per share, or £106.4M.

The sale comes at a time when Lloyds has been exposed as unilaterally reducing payouts to people who were mis-sold PPI. The bank’s behaviour has been described by one expert as “a scandal coming out of a scandal”.

An investigation by the BBC has found evidence to suggest that in some months the bank provided more than one in four PPI claimants – a figure that the bank disputes – with “alternative redress” – an obscure loophole that allows Lloyds to assume victims who were wrongly sold single-premium PPI policies on loans would have bought a cheaper regular premium PPI policy. Single-premium policies involve one-off payments, rather than monthly outlays.

Claims management companies told BBC Radio 4 that when they challenge Lloyds’ reduced offers on behalf of clients, the financial ombudsman has overruled the bank in every single case.

Cliff D’Arcy, an expert on the PPI scandal, said he believes Lloyds has reduced payments by tens of millions of pounds over the past year. He is quoted by the Independent:

“Frankly, I’m amazed that this problem has existed throughout the last year and hasn’t emerged into the light.

What’s happening here is a taxpayer-sponsored bank depriving taxpayers of their rightful compensation by using a loophole. It’s a scandal coming out of a scandal.”

The MP John Mann, who sits on the Treasury Select Committee, said:

 “This appears to be legalised theft and yet again it shows Lloyds as the unacceptable face of banking. This raises major questions for the Treasury, which has a multibillion-pound stake in the bank. ”

The government may be itching to relieve themselves of their stake in Lloyds, lest other scandals emerge that destroy value.

Lloyds Returns To Profit

Lloyds bank (which is 33% owned by the taxpayer) returned to profit in 2013, it made a pre-tax profit of £415M in 2013 compared with a £606M loss in 2012.

Antonio Horta-Osorio (its CEO) is entitled  to a deferred shares bonus worth £1.7M, and the overall pool of bonuses for staff has increased to £395M from £365M the previous year.


Lloyds expects to apply to the regulator in the second half of this year to pay a dividend in 2015, its first since 2008.

The return to profit and the resumption of dividend payments means it likely that more shares will be returned to the private sector in the near term, all the more so because George Osborne has said he wants to sell more shares before the next election in 2015.

Lloyds Banking Group's £10BN PPI Bill

Lloyds Banking Group's bill for PPI mis-selling claims has risen to almost £10BN, after the group raised its provision for compensation payments by another £1.8BN.

However, the group still expects to make a "small" profit for 2013; the projected "underlying" profit being around £6.2BN.

By happenstance it is now preparing to sell some of the 33% shareholding that rests in the hands of the taxpayers, back to the taxpayers. The earliest the sale could be would be March this year, as and when the 2013 audited results are released.

Antonio Horta-Osorio, chief executive of Lloyds, is quoted by the Telegraph:

"Our profitability, despite legacy issues, is testament to the strength of our business model and the commitment of our people, and has enabled the UK government to start to return the bank to full private ownership."

TSB Website Crashes

The newly launched TSB bank (split for Lloyds) has had a less than stellar first day, as its website has crashed.

Hardly a good augury for the future!

Lloyds Back In Profit

Lloyds Banking Group has returned to profit, and has made £2.1bn in the six months to the end of June. This compares very favourably with the loss of £456m for the same period last year.

The BBC reports that the bank stated that it had made substantial progress on strengthening its balance sheet, although "further work remains to be done".

Lloyds is 39% owned by the UK government (ie the taxpayer) and, based on the good results and the fact that bank said it would be talking to regulators in the coming months about resuming paying a dividend on its shares, people are now betting that the publicly held shares will be sold off (ie the bank will be privatised) and that the announcement of the privatisation will be made within the coming days.

The Treasury have just stated that there is no set target price or timetable for privatisation. However, it also stated (as per Reuters):

"..we have said that we are now actively considering options for sales of the taxpayer's shares in Lloyds."

Shares in Lloyds are up around 4% on the day.

Banks Retry Debits

Banks, as we all know, love to make money out of their customers' financial cock ups. Therefore it should come as no surprise to learn that banks make around £200M per annum from penalty fees on unpaid items.

Step forward, in the manner of a knight on a plodding donkey, the FCA which has done what the FSA should have done years ago; namely force banks to take full account of the money customers pay into their accounts each day, even if it arrives after direct debits and standing orders have been paid out.

The FCA has decided, quite correctly, that because direct debits tend to be taken from accounts first thing in the morning (before receipts are credited) the banks had stacked the rules of the house in their favour.

Simon Gompertz reports that the UK's seven largest banks, including Barclays, HSBC and RBS, have agreed to operate a retry system in the afternoon, probably between 3pm and 4pm, which takes accounts of new credits, salary payments and cheques which have cleared during the day.

Lloyds Banking Group has also signed up, but is being tardy and claims that it is as yet unable to retry all payments in the afternoon. However, any Lloyds customer who incurs a late payment charge because money hasn't been properly credited will be able to claim a refund (if they remember to).

It's All At The Co-op Now!

Simon Gompertz writes that as a result of an order from our European overlords (requiring Lloyds to hive off a large number of branches) 3.5 million customers of Lloyds TSB will start receiving letters from the bank from tomorrow, informing them that their accounts will be moved to a new bank (TSB) owned by the Co-op.

Lloyds PPI Chickens Coming Home To Roost

The old saying "what goes around, comes around" springs to mind when reading that Lloyds has been forced to make an additional PPI provision in Q3 of £1BN.

The total amount set aside by Lloyds for the PPI mis-selling scandal is £5.3BN, giving rise to a Q3 loss of £144M.

Lloyds has paid out £3.7BN in compensation thus far. However, it may have to make further additional provisions next year.

The Telegraph reports that Lloyds is less than pleased to be on the receiving end of fraudulent claims for compensation, driven in part by the plethora of claims management companies that are pushing people to make claims. Lloyds has written to the Financial Ombudsman Service asking for claims management companies to be forced to meet the cost of spurious requests for compensation.

The Stench of Corruption and Greed Overwhelms Britain's Financial Services Industry

Britain's tarnished financial services industry and banking sector seems intent on bringing about its own self destruction. Over the years there has been a litany of scandals eg:

- endowment mis-selling
- subprime mortgages
- PPI mis-selling
- LIBOR fraud
- NatWest computer meltdown
- Northern Rock, RBS etc etc to name but a few

However, it seems that the industry is determined to add to its list of self inflicted shame and dishonour. Step forward the usual suspects ie; Barclays (a familiar name), HSBC, Lloyds and RBS which have all admitted to mis-selling interest rate hedges to small and medium sized business customers.

Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland have all agreed to immediately halt the sale of complex interest rate hedges to smaller businesses and have pledged to compensate potentially thousands of customers who have been screwed by them.

According to the Telegraph the FSA is of the view that about 28,000 businesses had been sold interest rate hedges.

Another nail in the coffin of the tarnished reputation of the UK's financial services industry.

The financial services industry is now fully immersed in its own self created shit, and quite clearly is on the verge of implosion.

QEII Launched Into Choppy Waters

Hot on the heels of yesterday's launch by the Bank of England of QEII (valued at £75BN),
Moody's cut its ratings on a number of British banks.

RBS was dropped by two notches from A2 to Aa3, Lloyds TSB dropped by one notch to A1 from Aa3, Santander UK, Co-operative Bank, Nationwide and seven other smaller British building societies were also dropped.

The rationale being that Moodys' is of the view that the British government may not support certain banks in the event that they face collapse.

Unsurprisingly, George Osborne stated that he has confidence in the viability of the UK's banks.

The Treasury, as it happens, is also fighting tooth and nail any attempt by the EU to force UK banks to increase their capitalisation as a result of the soon to premiere "Stress Test III".

Is the reluctance by the Treasury based on their confidence in the banks?

Errmm..no.

It is a reluctance based on pragmatism, namely that were RBS to require more capital, the Treasury would be forced to buy shares (using taxpayers' money) at around 50p (as per the agreement with RBS) compared to the current price of 23p.

The alternative would be for the government to fully nationalise RBS.

Neither option appeals to Osborne.

In other news, a certain London based financial newspaper (which heavily relies on advertising revenue from banks) is continuing to spread the rumour that there is a plan for saving the Euro and the European banking system.

However:

Learn this,
Repeat this, and
Retweet this:

THERE IS NO PLAN!!

Went The Week Well?

It seems that this week is ending with shares around the world falling off the edge of a cliff, as investors panic and turn to gold.

Shares in banks such as Barclays, Lloyds Banking Group, HSBC and Royal Bank of Scotland (RBS) have taken a hammering and are now approaching levels last seen since 2009.

The rout of bank shares has been prompted by fears of a funding crisis in the European banking system, as European banks (instead of lending to each other overnight) are electing to deposit more overnight money with the ECB.

There is a genuine, and soundly based, fear that several European banks may have insufficient funds to continue operating.

In the absence of any decent political leadership on either side of the Atlantic, and unified global action to staunch the collapse, we are in danger of the fear of collapse becoming a self fulfilling prophecy.

Banks Cave In Over PPI - Or Do They?

The British Bankers' Association (BBA) has stated that banks will drop their legal challenge to paying compensation for mis-selling Payment Protection Insurance (PPI).

The volte face is a result of Lloyds giving up the fight last week, and announcing that it would set aside a £3.2BN compensation fund, closely followed by Barclays announcing that it has thrown in the towel.

However, before those with "£ signs" in their eyes start popping the champagne corks in anticipation of receiving a payout, customers of the banks should consider this. Banks will simply fund these claims by putting up charges on loans/credit cards and, most likely, will introduce charges for current accounts.

One way or another, it will not be the banks that end up paying the compensation.

Lloyds Ends 2010 On A "High"

Lloyds ended 2010 in much the same "spirit" as it besported itself during the year, by mistakenly double charging some 200,000 of its credit/debit card customers for transactions effectuated on New Year's Eve.

Well done lads!

Lloyds Loses Touch With Reality

Lloyds Banking Group has appointed Santander's UK head, Antonio Horta-Osorio, as its chief executive. He will replace the current CEO, Eric Daniels, early next year.

Financial analysts, and so called "financial experts", seem on the whole to be delighted with this appointment.

All very well, maybe.

However, is this not the same Santander bank with the highest proportion of customer complaints in the UK (216,158 complaints in the first half of 2010), where complaints came in at the rate of one per minute in the first half of this year?

Jeff Prestridge wrote in the FT is September:

"..administrative problems at Santander including customers not being able to review their accounts online, customers’ savings accounts not set up promptly, as well as suddenly inoperable accounts even though they were set up on an enduring power of attorney.

There's more.

Customers have been designated dead when they are very much alive, customers' accounts have been set up in the wrong name, customers have been held on expensive telephone lines for ages, and branch staff have contradicted instructions given by the bank's call centres.

In terms of administrative meltdown, I've never seen anything like it in more than 25 years of personal finance journalism.."

Has Lloyds (one of the "people's banks") taken leave of its senses?

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!