Latest Banking News

July 22, 2008

BoE Governor calls for savers’ guarantees

by Kay Murchie
The Bank of England’s Governor, Mervyn King, has said today that banks should put billions of pounds into a fund over the next 10 years to compensate customers in the event of another Northern Rock collapse. Mr King was speaking members of the House of Commons Treasury Select Committee on the issue of banking reform, and said that he believed the ...

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July 21, 2008

Further delay in bank charges case

by Kay Murchie
Consumers who are looking to reclaim unfair overdraft charges will now have to wait a further six months after the Financial Services Authority (FSA) announced today that it is extending the waiver that allows banks not to pay out on claims. The FSA explained that it was extending the suspension of its normal rules, which require banks to deal with complaints ...

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Just 8% take up rights issue at HBOS

by Kay Murchie
It has been confirmed this morning that only 8.29% of shareholders of HBOS have signed up to the £4 billion rights issue. This amount was marginally worse than the market was expecting after Sunday papers suggested yesterday that the amount was a little as 10%. HBOS, which is the UK’s largest mortgage lender, will still receive the £4 billion it requires ...

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July 20, 2008

HBOS fundraising take-up expected to be low

by Kay Murchie
Reports in the Sunday newspapers have suggested that as few as 10% of shareholders have signed up to HBOS' £4 billion rights issue. The reports said the low take up would mean its underwriters Dresdner Kleinwort and Morgan Stanley would be left with £3.5 billion of unsold stock. Furthermore, according to the Sunday Times, the low take up would represent one of ...

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Second quarter results at Citigroup better than expected

by Kay Murchie
Citigroup, which is America’s largest bank, has posted a second quarter loss of $2.5 billion (£1.25 billion) as a result of further write-downs of $11.7 billion due to the credit crunch and mortgage related assets. Despite the loss, the results were better than Wall Street was expecting and shares gained 7.7% on Friday. Its shares have halved in the last ...

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July 18, 2008

Barclays secures £4.5bn

by Kay Murchie
Britain’s third biggest bank, Barclays, has announced it has secured £4.5 billion from investors to shore up its balance sheet but ordinary shareholders only took 19% of new shares offered at 282p each. Shares in Barclays fell a little over 2% to 284p in early trading this morning. The majority of the shares were sold to overseas investors including a Qatari sovereign wealth fund and institutional ...

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July 17, 2008

JP Morgan Chase hit by write-downs

by Kay Murchie
Investment banking giant, JP Morgan Chase, revealed that second-quarter profits fell 52% as it suffered a £550 million ($1.1 billion) loss on mortgage-related write-downs. Net income at the third-largest US bank fell to $2 billion compared with $4.23 billion a year earlier. Revenue fell by 3% to $18.4 billion, above analysts expectations of $16.6 billion in turnover for the second quarter. So ...

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HBOS announces job losses

by Kay Murchie
HBOS, Britain's biggest mortgage lender, said 650 workers are to lose their jobs over the next 18 months as part of plans to merge two of its business banking divisions. The banking giant also said that in addition to the 650 job losses, a further 350 staff within the new division will be transferred to alternative roles. It is merging its 1,000-strong business banking arm, ...

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B&B shareholders back £400m cash call

by Kay Murchie
UK troubled lender Bradford & Bingley (B&B) held its extraordinary general meeting today in Sheffield and its shareholders are backing the £400 million rights issue to shore up its balance sheet. Existing shareholders, who voted in favour of the rights issue, will now have the opportunity to purchase new shares. B&B, which is the UK’s biggest mortgage lender, has suffered due ...

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July 14, 2008

150 US banks to collapse: Dave Rove at Ladenburg Thalmann

by Brian Turner
According to Dave Rove, analyst with Ladenburg Thalmann, at least 150 US banks could collapse over the next two years. At present, there are over 7500 regional and national banks based within the United States. However, Mr Rove is at pains to suggest that this figure is far smaller than the 1000 or so banks that went bust during ...

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Santander to boost UK presence with Alliance & Leicester takeover

by Kay Murchie
Shares in Alliance & Leicester (A&L) have rocketed 47% this morning after it has been revealed that Spanish bank Santander has agreed a deal to buy the former building society in a deal worth £1.3 billion. Shares in A&L suffered, particularly last year, after many believed it would follow in the footsteps of Northern Rock as out ...

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July 13, 2008

US IndyMac Bank collapses

by Kay Murchie
California-based IndyMac Bank, which is one of the largest US mortgage lenders, has collapsed as fears over a credit crisis intensify. IndyMac has had its assets seized by Federal regulators after concerns that it might not be able to meet withdrawals by depositors. The bank has been struggling to raise cash and continue to trade after the US housing market slump continues with the ...

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July 9, 2008

Emergency cash available to US investment banks

by Kay Murchie
Investment banks in the US are being given access to emergency funds from the Federal Reserve if the current financial turmoil continues. The Fed’s chairman, Ben Bernanke, announced the decision yesterday and hopes it will allay the banking giant's fears on Wall Street who are facing a challenging time currently due to the credit crisis. Mr Bernanke added that the central ...

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Bradford & Bingley rescued by British banks

by Kay Murchie
Struggling former building society, Bradford & Bingley (B&B), is to be rescued by British banks due to pressure from the Financial Services Authority (FSA). The regulator has been taking responsibility for ensuring that B&B's capital-raising does not head towards disaster after the criticism it received for neglecting to foresee the problems that led to the demise of Northern Rock. The six banks: ...

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July 8, 2008

Barclays cuts jobs at its home loans division

by Kay Murchie
Barclays’ unit Firstplus is to axe 300 jobs at its home loans division in the Pentwyn area of Cardiff. Firstplus, which became part of Barclaycard in 2004 following Barclays’ acquisition of Woolwich eight years ago, said from 9 August it will no longer take on new customers due to slowing demand. It employs over 400 staff. The announcement will not ...

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July 7, 2008

B&B rescue plan under pressure as shares fall to all-time low

by Kay Murchie
Bradford & Bingley (B&B) saw its shares plunge to an all-time low of 42p today, well below the bank’s rights issue price of 55p, heightening fears about its fund-raising plans. This is just another blow to the lender after credit agency, Moody’s, cut its rating from A3 to Baa1, which resulted in US private equity firm Texas ...

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Bradford & Bingley hit with fees for failed TPG deal

by Kay Murchie
At the end of last week, Bradford & Bingley (B&B) announced it had been rescued by a group of UK investors, after US private equity firm Texas Pacific Group (TPG) pulled out of a deal, after credit rating agency, Moody’s, downgraded the lender’s debt. TPG walked away from a deal to inject £179 million into B&B in ...

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Financial recruitment grinds to a halt

by Kay Murchie
Recruitment in London’s financial services industry has ground to a halt according to international recruitment group, Michael Page. As the economy grinds to a virtual standstill, demand for staff in the banking industry has slowed considerably over the last few months said the group. Michael Page said several banks have been relocating staff to growing economies such as China, Dubai, Mexico and Russia. ...

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July 4, 2008

B&B rescued by investors after TPG walk away

by Kay Murchie
Struggling lender Bradford & Bingley (B&B) has been rescued by a group of UK investors after US private equity firm Texas Pacific Group (TPG) pulled out of a deal, after credit rating agency, Moody's, downgraded the lender's debt. This now means that B&B has the lowest credit rating out of all the major British banks which means raising funding ...

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July 1, 2008

Management overhaul at UBS

by Kay Murchie
Swiss investment bank, UBS, has announced the resignation of 4 of its 12 board members as it attempts to recover from losses linked to the credit crunch. The overhaul sees directors Stephan Haeringer, Rolf Meyer, Peter Spuhler and Lawrence Weinbach step down in October. The banking giant said nominations for their replacements will be announced well before the shareholder meeting on October 2nd. The bank, ...

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