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’No clean exit from RBS
Attention George Osbourne.
The UK taxpayer will not get out of RBS clean. There will be no early return to recent share price highs and the bank will not meet its return on equity targets (15 per cent by 2013!),
HBOS remembered
We said earlier on Monday that only one bank came off badly in the interim report from the Independent Commission on Banking.
We were wrong.
There’s another bank that comes in for some criticism.
[Darling: Budget Highlights 2010] And the analyst verdict is…
Ah-ugh. (click for sound effect.)
At least, that’s the initial view from City analysts. Here’s a fresh batch of commentary on the UK’s budget for your reading pleasure.
First the highly reactive and always prolific Howard Archer,
[Darling: Budget Highlights 2010] A bitter sweet cider party?
UK Chancellor Alistair Darling’s decision to raise duty on cider has already caused a bit of a stir. We note the term is trending on Twitter, with many tweets advocating an impromptu cider party for the nation on Wednesday night.
[Darling: Budget Highlights 2010] Lending
Are you listening Mr Hester and Mr Daniels? From Reuters:
DARLING-HAVE AGREED THAT RBS AND LLOYDS WILL PROVIDE 94 BLN STG NEW BUSINESS LOANS OVER NEXT YR
[Darling: Budget Highlights 2010] GDP and borrowing stats
The bond markets will be squinting at these. GDP projections, via Reuters once more:
DARLING FORECASTS GDP TO GROW BY 1-1.5 PCT IN 2010
DARLING FORECASTS GDP TO GROW BY 3-3.5 PCT IN 2011, IN LINE WITH BOE FORECASTS
DARLING SAYS GDP FORECASTS FOR FOLLOWING YEARS UNCHANGED
And on to borrowing projections:
[Darling: Budget Highlights 2010] The Colour Purple
Ok, so who told everyone to wear purple?
The Conservatives, by the way, stuck to a blue theme.
Some purple facts from Wikipedia:
Blue + Red = Purple
In Japan, purple is known as the colour of death.
[Darling: Budget Highlights 2010] Housing
And on to housing. Via Reuters again:
DARLING – RAISES STAMP DUTY EXEMPTION THRESHOLD TO 250,000 STG FOR FIRST-TIME BUYERS
DARLING – STAMP DUTY EXEMPTION WILL APPLY FROM MIDNIGHT FOR THIS YEAR AND NEXT
And take this,
Pimco makes it personal in the UK
Pimco has laid into the UK again – this time having a go, specifically, at the Labour government.
In an interview with Dow Jones Newswires, Scott Mather, head of global portfolio management, said there was an 80 per cent chance of a credit rating downgrade for the UK if the chancellor’s debt reduction plans remain as they are.
HMRC bank payroll tax clarification!
Right, here it is. The headline-grabbing news (as expected) is that insurance companies, asset managers and stockbrokers will be exempt from the banker bonus tax.
That’s right, all non-banker financial types in the UK will escape with their bonuses intact this year.
Dear HM Revenue & Customs
A draft version of a letter 11 independent UK stockbrokers are set to send to the HMRC:
Dear Sirs
Arden Partners plc, Oriel Securities Limited, The Evolution Group plc, Numis Corporation plc, Altium Capital Limited,
Bonus backlash
A copy of the letter sent by Joanthan Keeling, chief executive of Arden Partners, to the FT:
Dear Sir,
Bank Payroll Tax
As CEO of a quoted stockbroker I am angry to find that the draft BPT legislation appears to capture our firm,
Darling’s fiscal fiction
BNP Paribas’ Alan Clarke is not the only City economist seriously displeased with Wednesday’s pre-Budget report.
Citigroup’s Michael Saunders also has a few choice words for the chancellor, who he accuses of trying to create a fiscal fiction that the UK’s huge deficit can be resolved by taxing the ‘few and not the many’.
‘Alistair in Wonderland’ believes in Santa Claus, BNP Paribas says
BNP Paribas’ UK economist Alan Clarke has issued a scathing critique of Wednesday’s pre-budget report.
And we do mean scathing. Consider the following from Clarke’s note, emphasis ours:
The Pre-Budget Report was a political exercise and delivered little in the way of concrete details on how the government intends to narrow the budget deficit.
UK’s Darling tightens screws
UK chancellor Alistair Darling on Wednesday outlined the first steps in the drive to cut Britain’s massive budget deficit, raising taxes on middle-income earners, raiding City bonuses and imposing deep cuts across much of Whitehall.
CDS report: Sovereigns continue to dominate
Gavan Nolan of Markit wrote this CDS report
European credit spreads continued to widen today as sovereigns took yet more punishment. The Markit iTraxx Europe index widened by nearly 3bp to 84.25bp, underperforming lower stock markets and other credit indices.
UK PBR – recipe for a downgrade?
Analyst reaction to the UK’s pre-Budget report, announced on Wednesday, has begun to make its way into the FT Alphaville inbox.
Here’s a small selection, starting with Monument Securities’ Marc Ostwald,
Banker tax – further details (updated with bonus maths)
From page 48 of the pre-Budget report, unveiled on Wednesday (emphasis ours):
Box 3.2: Banking Bonuses
The Government attaches great importance to tackling the remuneration practices that contributed to excessive risk taking by the banking industry.
Banker tax unveiled
From the pre-Budget report, via Reuters:
DARLING – WILL CHARGE BANKS 50 PCT TAX RATE ON STAFF BONUSES OVER £25,000
DARLING – TAX ON BANK BONUSES EXPECTED TO YIELD £550m
And from FT.com:
The Treasury estimates that the move – which comes into immediate effect and runs until April 5 next year – will affect 20,000 bankers.
PBR preview, bankers’ bonus edition
We all know the chancellor is going to announce a bankers’ bonus tax in Wednesday’s pre-Budget report. What we don’t know are the details; Things like the level at which the tax will kick in and whether it will be levied on bonus pools or individual bonuses.
UK to levy one-off bonus tax
The UK chancellor will levy a one-off tax on the billions of pounds set aside by banks to pay bonuses in his pre-Budget report, in an attempt to underline the government’s response to public anger over bankers’ remuneration.
Darling to detail 14% budget cuts
UK chancellor Alistair Darling will flesh out the biggest squeeze in public spending for a generation in his pre-Budget report, with only schools, hospitals and the police being spared average cuts of about 14% over three years.
Presenting RBS’s toxic assets
As you may have read, HM Treasury has released full details of the toxic RBS assets being guaranteed under the Asset Protection Scheme.
Annex A of the 100 page report (which was quietly put up on the HM Treasury website on Monday) provides the full breakdown of the £282bn assets being insured.
Darling lines up assault on bonuses
Alistair Darling, chancellor, is preparing a crackdown on “extraordinarily high” bankers’ bonuses when he makes his pre-Budget report on Wednesday, but is expected to reject a windfall tax on bank profits.
Bank windfall tax looms
According to PestoWire:
The Treasury is preparing to levy a windfall tax or super tax on British based banks, which could be announced as soon as Wednesday in the pre-budget report and would raise considerably more than £1bn a year for two or three years.
RBS bankers brace for bonus battle
The UK Treasury has warned top bankers at RBS not to expect bumper bonuses next year, as Alistair Darling, chancellor, prepares to get tough on bankers’ compensation. The Treasury’s hard line has prompted RBS directors,
UK banks could face more scrutiny
The UK Treasury is considering tougher requirements on bankers’ pay disclosure than those proposed last week by Sir David Walker.
Alistair Darling, the chancellor, announced a formal consultation on Monday on whether legislation should go further than the Walker review,
Darling: UK recession worse than forecast
Alistair Darling will admit in next month’s pre-Budget report that the recession has been much deeper than he forecast in March, the FT has learnt. The chancellor is expected to say that the economy contracted by 4.75% in 2009,
Lloyds to be cleared for refinancing
UK chancellor Alistair Darling is set to approve Lloyds’ ambitious plan for a £25bn refinancing, in a clear sign that he is willing to release the partly state-owned bank from the government’s toxic asset insurance scheme.
Brown and Darling rebuke King
Gordon Brown and Alistair Darling on Wednesday rebuked Mervyn King, Bank of England governor, over his call this week to break-up Britain’s biggest banks. King, who is increasingly seen as an opponent of government policy,