HSBC’s third quarter numbers are out. We got a relatively unexciting underlying profit figure of $5bn but a whack of extra provisions totalling $1.15bn, including $800m more to cover the bank’s money laundering troubles in the US on top of the $700m already put aside.
From HSBC (our emphasis): Read more
Monday morning’s FT covered this announcement:
Lloyds Banking Group has launched a scheme that scraps all incentives linked to product sales in the latest attempt to clean up bad practices that have been blamed for causing mis-selling scandals.
Oh yay, Chinese consumer price inflation for July came in at a nicely subdued looking 1.8 per cent. And industrial production growth continued to slow. Q2 wasn’t the bottom after all. More easing ahoy! Right?
Not so fast… Read more
We’re fascinated by Provident Financial, the doorstep lender to low-income households, and its credit card business Vanquis Bank.
Earlier this week, the company hosted an investor day for this fast-growing business, which drip-feeds credit to people with poor repayment histories. The presentation slides are available on the Provident Financial website. Read more
Did you know? 0.4 per cent of British consumer spending could be coming from the banks this year.
To figure out why, all you have to do is look at the recently announced pay-outs on the Payment Protection Insurance sold by UK banks. As much as £6-9bn could be winding its way to the pockets of British consumers. Though, as UBS notes, the amount is likely to be somewhat smaller. Read more
In a sign that UK bank executives will increasingly be held accountable for their bank’s performance, Lloyds Banking Group on Wednesday signalled it could claw back part of the bonuses given to executives after taking a £3.2bn hit for mis-selling loan insurance, reports the FT. At the bank’s annual shareholder meeting, Sir Win Bischoff, chairman, said the part-nationalised bank was considering whether losses on payment protection insurance (PPI) should affect the pay of those responsible. No UK bank is believed to have reclaimed bonuses since new “clawback” rules were introduced last year. Lloyds emphasised no decision had been taken but said there could be cuts in bonuses that vest in future years. TheSource meanwhile says Lloyds new CEO Antonio Horta-Osorio “laid on much charm but little substance” in his first shareholders meeting. Read more
Lloyds Banking Group admitted defeat in the UK’s worst consumer mis-selling scandal in a decade as it made a surprise provision of £3.2bn to compensate customers who took out loan insurance cover, reports the FT. Its move to start refunding holders of much-criticised payment protection insurance policies is a blow to the industry’s hopes of reversing regulatory changes to the way the product is sold. The charge, more than double the amount analysts had expected, was revealed by António Horta-Osório, Lloyds’ new chief executive, alongside a disappointing set of first-quarter results. Including the PPI hit and £1.1bn of impairments relating to its deteriorating Irish portfolio, Lloyds reported a 1Q pre-tax loss of £3.5bn, rendering its return to profit last year short-lived. FT Alphaville looks at more bad news – and a bit of good – from Lloyds. Read more
Lloyds Banking Group was thrust back into the red in the first quarter of this year after taking a £3.2bn provision for potential compensation claims arising from payment protection insurance, a controversial type of loan cover, the FT reports. The bank – the biggest provider of PPI – is the first to take a hit following last month’s decision by the High Court to throw out an appeal from the industry against regulatory changes that would force lenders to refund past policies. The provision by Lloyds is far larger than expected – the Financial Services Authority had estimated that the changes could cost the whole industry £4.5bn and analysts had expected Lloyds’ share to be about £1.5bn. The hit, along with higher than expected loan losses from its tattered Irish real estate portfolio – higher than analysts had anticipated, at £1.1bn – pushed Lloyds into a first-quarter pre-tax loss of £3.47bn, compared with a £721m profit a year ago. Read more
Millions of consumers are set to share in the largest UK compensation pay-out in almost a decade, after the banking sector lost a High Court challenge over the sale of controversial loan insurance, the FT reports. In the latest twist in a long-running dispute over payment protection insurance, the court dismissed an appeal brought by the banks against regulatory changes that would force them to refund past policies worth billions of pounds. Read more
On Wednesday, official data showed that Eurozone producer prices in January had risen at their highest rate since the launch of the single currency.
As Reuters reported, prices at factory gates in the zone’s 17 countries rose 1.5 per cent month-on-month in January achieving a 6.1 per cent year-on-year rise. Read more
You wait all morning for the 0.8 bus and then three come along at once.
Three US indicators were released on Monday all showing 0.8 per cent increases in advance of the final FOMC meeting of the year. Read more
Yet another freaking economic indicator that you can file under “getting more attention than unusual because it’s the last one before QE2 blah blah fine great” is Friday’s consumer price inflation index for September
We’ll start with a couple of new graphs from the Cleveland Fed, both using data released since Wednesday: Read more
1Bernanke weighs in on robot wars; brings Keynes for backup
2Pump up, debase
3Further reading
4The risk of a Japanese VaR shock
5Collateral crunch-counting gets sophisticated
Show more6In which the FTSE puts the crisis behind it
7A Kazakh muddle
8Apple Operations International, facts (?) du jour
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