Lord Dennis Stevenson (former HBOS and Pearson chair ) sent two rather telling letters to the FSA in 2008. Both were mentioned during Tuesday morning’s session with the Parliamentary Commission on Banking Standards and one of which claimed HBOS was “in as secure a position as it could be” roughly half a year before its collapse.
No “lurking horrors in our business or balance sheet” either.
Oh dear. Read more
Kleinmanwire has suddenly pattered back to life!…
One of the former executives who led HBOS to the brink of collapse in 2008 is to be hit with a massive fine and a lifetime ban from the industry, I can exclusively reveal. Read more
Meeting the public clamour for “action” on the British banking shambles that left half the sector a ward of the state, the FSA has published a “censure” against Bank of Scotland for the failings of its corporate division between January 2006 and December 2008.
Here’s the final notice, which runs to 37 pages… Read more
The investigation into the Societe Generale sell-off looks like it could quickly descend into farce. Read more
Charts via short-selling information specialists Data Explorers, incorporating a gauge of securities lending in both the financials currently subject to the short-selling bans, and in their markets.
Compare and contrast: Read more
It seemed too good to last… and it was.
Lloyds Banking Group has bucked the trend in the UK banks sector and reported a disappointing set of half year figures. Read more
What’s this that has quietly appeared in the correspondence section of the Treasury Select Committee website?
It’s only a letter from FSA chairman Adair Turner announcing plans to publish (yes publish) a report into the downfall of fat bloke finance house HBOS. Read more
Sir Victor also insists that enough due diligence was done on the deal, in two tranches and that the risks in HBOS’s property portfolio were understood. The problem was the speed with which the economy collapsed, pulling down HBOS with it.
“What happened was very unforgiving and the losses came much faster than anyone anticipated,” he said. “What we did not anticipate – and to be fair nobody else did either – was that in the last quarter of 2008 and the first quarter of 2009 it would be so negative in terms of GDP. The economy fell off the edge of a cliff. Read more
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. Read more
Lloyds Banking Group, the part UK state-owned bank, has again drawn more customer complaints than any other UK institution, accounting for nearly one in four new cases with the Financial Ombudsman Service, reports the FT. The FOS on Monday repored that more than 22,000 of the 97,000 complaints from dissatisfied customers in the six months to Dec 31 related to a Lloyds subsidiary. The group also topped the list in the 2010 first-half. Lloyds TSB, the group’s retail banking arm, attracted 12,234 new complaints – partly reflecting the fact it is Britain’s biggest bank by customer numbers. Bank of Scotland, another Lloyds subsidiary, received 6,743 new complaints. Nearly 90% of general insurance complaints about Black Horse, a division of Lloyds, were upheld in customers’ favour. The FOS also said that Santander UK drew the highest number of pure banking and credit related complaints.
Emergency Liquidity Assistance (ELA) — or short-term liquidity programmes courtesy of national European central banks — has made headlines recently.
Not least because Irish banks are supposedly using over €50bn of the stuff. We say supposedly, because the details are still sketchy. Ireland’s central bank never actually breaks out ELA funding — it just publishes the figure somewhere in the ‘other assets’ line in its monthly balance sheet. At the end of 2010 that figure was €51.09bn. Read more
Which anarchist added this to the list of public responses sent to the UK’s Independent Banking Commission? (H/T to the FT’s Paul Davies):
While again emphasising that this is a personal view, I do believe that in the interests of competition, the merger of HBOS and Lloyds was misconceived and Lloyds Banking Group should be broken up. Under normal circumstances this would never have been allowed and nothing has happened since to make the decision any more correct… Read more
First the good news. House broker UBS remains extremely on bullish Lloyds Banking Group.
We remain convinced that the group can, by 2013, deliver a mid- to high-teens RoE on a capital base and net asset value considerably higher than the current level. Our 12-month price target is 100p. Read more
More bedtime reading for the UK’s Independent Banking Commission; this time from research house Autonomous.
The report was referenced in Tuesday’s Wall Street Journal as a curtain raiser to the publication on Friday of the IBC’s ‘Issues Paper’. But it is well worth revisiting because it highlights just how fast margins on mortgage lending have risen in the UK. Read more
Here’s some reading for the UK’s Independent Banking Commission, ahead of its first public appearance on Friday.
It’s an in-depth report from JP Morgan on the profitability of Lloyds Banking Group’s retail operations. Read more
Was it £1.6bn, £1.3bn, or £280m?
You can literally take your pick of Lloyds’ pre-tax interim profits. Read more
Breaking pre-market news on Monday,
- Lloyds sells HBOS integrated finance division to Coller Capital – statement. Read more
Lloyds Banking Group is to close the last 265 of its Halifax agency outlets as it proceeds with the integration of its HBOS acquisition made 18 months ago, reports the FT. The UK bank will also make redundant the equivalent of 650 full-time staff from the 107,000 it employed at the end of last year. The restructuring will see the desks of Halifax agents disappear from estate agencies and mortgage brokers across the UK.
Bankers at the loss-making private equity arm of HBOS will continue to manage its assets after the planned £500m sale of the unit’s investments by Lloyds Banking Group, which owns HBOS reports the FT. In a deal expected to be agreed later this month, buy-out firm Coller Capital will take a stake of about 60% in the portfolio built up by the Bank of Scotland integrated finance business, which was part of HBOS.
The banks team at Citigroup advising clients on Wednesday morning to ‘buy’, ‘buy’, ‘buy’ UK financials. And specifically: Barclays and, Lloyds reports FT Alphaville. That’s because they say there has been “a profound structural change in the UK banking industry following the credit crunch. As new entrants have disappeared, the six big lenders have strengthened their grip. They now control 85 per cent of the market and have regained significant pricing power.” Read more
Yep, the CEO of Lloyds, is going to waive his 2009 bonus of £2.33m.
Not that he had much choice in the matter after his opposite number at RBS, Stephen Hester, announced on Monday morning that he would forfeit an estimated £1.6m in bonus, and the two top executives at Barclays, John Varley and Bob Diamond, did likewise. Read more
Mark Kleinman at Sky.com had news on Wednesday, that Lloyds Banking Group is auctioning off a portfolio holdings in scores of British companies, together worth something in the region of £400m. Read more
The City watchdog is using external experts to conduct supervisory reviews into the actions of some of the UK’s struggling banks, including RBS and HBOS, reports the FT. The FSA engaged PwC to review RBS, Ernst & Young to look at HBOS – now part of Lloyds Banking Group – and BDO Stoy Hayward to review Bradford & Bingley. The Times adds that the probe so far has revealed a litany of internal breakdowns and flawed controls that masked the full extent of their failings.
David Blanchflower, the former Bank of England policymaker, has accused Bank governor Mervyn King of keeping “vital” information from him at the height of the financial crisis, reports the Daily Telegraph. Blanchflower, a member of the Bank’s Monetary Policy Committee until May this year, said he did not know about the £61.6bn in emergency loans granted to RBS and HBOS last autumn until King revealed them last week. Writing in the New Statesman, Blanchflower suggested that the decision to keep the loans secret from external MPC members compromised their ability to make informed decisions on rates and quantitative easing, and described the call as “questionable at best”.
Lloyds TSB shareholders were “mugged” when the bank agreed to buy HBOS last year without knowing that the stricken lender was being propped up by a secret £25bn loan, Jim Cousins, a Labour MP, said on Wednesday. Alistair Darling, the chancellor, was forced on to the defensive as he gave a Commons statement explaining the decision to keep secret the combined £61.6bn of emergency funds given to HBOS and RBS last year. Lloyds bought HBOS in a deal facilitated by Gordon Brown, who waived competition rules to allow the merger to take place.
Royal Bank of Scotland and HBOS came within minutes of closing cashpoints and normal business operations, the Bank of England confirmed on Tuesday, revealing that it extended £61.6bn in emergency funds to the banks in October last year. Paul Tucker, the Bank’s deputy governor, told the Treasury select committee that the Bank began a “classic lender of last resort operation” on Oct 1 with loans that peaked at £61.6bn before being repaid by January, after the government guaranteed other forms of banks’ funding and injected capital into both banks.
We finally have the details of the emergency liquidity assistance, or ELA, provided by the Bank of England to RBS and HBOS at the peak of the crisis last year.
The figures, which were deemed too sensitive to be released at the time, are now seen fit for public consumption given that RBS has signed up for the Asset Protection Scheme and Lloyds Banking Group has embarked on an alternative capital raising strategy. Read more
As the FT revealed overnight, ITV has finally found a chairman:
failed MP former Asda and Energis boss Archie Norman. Read more
It’s right there — on page 114 — in case you missed it. The full prospectus for Lloyds Banking Group’s heroic capital raising, finally confirms the following:
FSA supervisory review into historical HBOS disclosures
Some of you may have caught Bank of England governor Mervyn King’s appearance in the BBC Two documentary ‘The Love of Money,’ on Thursday evening.
If not, and if you are located in the UK, you can catch it here on BBC iPlayer. Read more