Posts Tagged ‘money’

Banks aren’t making as much money… what next?

October 21st, 2014 No Comments By Mof Gimmers

Bank 300x193 Banks arent making as much money... what next?Those beloved banks of ours aren’t making as much money as they’d like, so they’re saying that they’re going to have to cut everyone’s pay. This is according to a senior regulator at the Bank of England.

Sir Jon Cunliffe, the central bank’s deputy governor for financial stability, said that it’s all well and good that shareholders have suffered since the financial crash, but salaries and bonuses are still far too high.

He said: “It is noticeable that, since the crisis, for the industry as a whole, employees have received a larger share of a smaller pie relative to shareholders. In the new world, pay bills may well have further to adjust.”

Cunliffe said that in the decade before the crash, profits attributable to shareholders were around 75% of total pay at UK banks and 60% for global banks. “Since the crisis that picture has changed markedly,” he added. Shareholders in global banks get 25% of total pay now.

“Across the big UK banks in 2013, the fraction had fallen to just 2% – i.e. to 2 pence per pound paid to staff,” said Cunliffe. He added that it is “unlikely that we will see or want to see again” the kind of returns that were being made before the crisis, with respect to the tougher rules brought in to make banks safer.

“It is important, in seeking to restore returns, that banks and investors do not think in terms of back to the future” he added; “with less leverage and more liquidity in banks, required returns ought generally to be lower than prior to the crisis. Trying to offset that by taking excessive risk or evading regulation will not, I think, be tolerated in the new world.”

All in all, we can expect that this will be passed on to the customer because, when banks want to find more money, overdraft charges and the like will suddenly start working against customers.

old man 300x196 Should you be allowed to cash in on a rubbish pension?Ministers are calling for pension reforms, which will mean that pensioners who are locked into dreadful deals would be able to cash them in.

Sounds good doesn’t it?

Pensions minister, Steve Webb said he wants to help those tied to poor-value annuities: ”I know many people who have locked into an annuity are feeling rather bitter that they came just the wrong side of the line.”

“It’s been gnawing away at me and I want to say to those affected: I know how you feel. If it were possible for people who would rather have a capital sum than a regular income, in principle I would like to be able to help, and this is something the next government should have a look at.”

The government have pledged that, as of next April, savers who are about to retire will be given full discretion as to how they use the funds from their pension. If you’re over 55, you will be allowed to treat your pension like a normal bank account. Don’t spend it all at once though eh?

However, there’s a problem with those who have already bought annuities because they’ll be excluded from this rule as it stands. Webb continued: “If we accept the annuity market was broken, we also must accept it was so 10 years ago.”

The thing here is that Webb’s views haven’t turned into proper policies yet, so if you’re a codger, don’t get out the celebratory vodka just yet.

There’s also talk of policing the pension sector to ensure that savers get a fair deal and that something needs to be done about the high charges that chip away at funds during retirement.

Ever get the feeling that the government might ‘fix’ all this by simply putting the retirement age up to 230, so no-one has to worry about it?

Violent stock market crash imminent

October 16th, 2014 1 Comment By Ian Wade

stock market Violent stock market crash imminentA stock market crash so violent that it can probably bend time is being mooted.

The state of the world’s financial markets suggests that a break is about to happen at any point! We’re doomed!

The Bank of International Settlements said that suspiciously low levels of volatility in the markets seen this year, suggest a lack of liquidity that could trip up investors who assume they can dispense of assets when a sell-off begins.

These remarks follow as the FTSE 100 index suffered another day of losses, dropping 2.8% and mirroring falls across Europe. Guy Debelle of BIS said global investors were buying assets on the misguided presumption of liquidity that does not exist and that in a possible sell-off, volatility and price movements “will be exacerbated by the reduced capacity and inventory of market makers”.

Despite the world issues flying around causing markets to wobble, the BIS observed that volatility in fixed income, equity and foreign exchange markets has fallen to historically low levels.

Debelle, who is also an executive at Australia’s Reserve Bank, said: “While there is more forward guidance from central banks in place than in the past, investors do not have to believe it. I find it somewhat surprising that the market (in aggregate at least) is willing to accept the central banks at their word and not think so much for themselves”.

Referencing the US bond crash of 1994, Debelle warned that exits in the present bonds market could be even more violent in future with “a fair chance that volatility will feed on itself”.

It’s all somewhat worrying isn’t it?

In his speech, Debelle also referred to tightened regulation in the sector introduced in the wake of the financial crisis, adding: “Regulatory changes have, as intended, increased the cost of market-making, and hence shifted some liquidity risk to end investors. There have also been some strategic decisions taken by institutions and internal constraints have been imposed which have reduced capacity”.

Minimise the risk of fraud with your bank

October 14th, 2014 1 Comment By Mof Gimmers

bank sign Minimise the risk of fraud with your bankThere are millions of bank account holders who are leaving themselves wide open to fraud, according to Britain’s tops banks.

Industry body the British Bankers Association (BBA) has teamed up with the police to launch a campaign which they hope will raise the public’s awareness on all things fraud, looking at the most common scams that will happen online or down the phone.

Based on the results of a YouGov poll, the BBA said that eight million people are vulnerable to voice phishing scams, four million may transfer money to fraudsters, three million could potentially carry out “test transactions” and 1.7 million would hand their bank cards to couriers on their doorstep if they had a convincing form of ID.

Best not to answer the phone or door to anyone, ever.

Anthony Browne, chief executive of the BBA, said: “Being defrauded is a devastating experience for anyone which is why we are launching this campaign. The more people know about fraud, the less likely they are to become victims.”

“Our Know Fraud, No Fraud campaign will help you spot some of the tactics used by scammers. Your bank would never send someone to your home to collect your cash or ask you to transfer funds to a new account.”

So, for your records to be printed out and stapled to grandma’s forehead as a reminder to her and everyone else, here’s the BBA’s List of Things That Your Bank Will Never Ask For.

- Ask for your full PIN number or any online banking password over the phone or via email
- Send someone to your home to collect cash, bank cards or anything else
- Ask you to email or text personal or banking information
- Send an email with a link to a page that asks you to enter your online banking log-in details
- Ask you to authorise the transfer of funds to a new account or hand over cash
- Call to advise you to buy diamonds or land or other commodities
- Ask you to carry out a test transaction online

Biggest fall in UK shopping thanks to warm weather

October 14th, 2014 No Comments By Mof Gimmers

shoppers Biggest fall in UK shopping thanks to warm weatherReports are saying that we’re currently looking at the weakest performing high street since the worst bits of the 2008-09 recession.

An unusually warm September was blamed on all this, even though they would’ve blamed it on wet weather if that was around. Basically, people don’t know why we’re not shopping as much as we used to. Maybe its because we’re skint?

The British Retail Consortium said that the year-on-year drop in consumer spending was the most pronounced since December 2008, but said that there is some comfort to be taken from the fact that spending on big-ticket items such as furniture continued to be strong.

Helen Dickinson, the director general of the British Retail Consortium, said: “In September, we saw the lowest retail sales figures since December 2008, excluding Easter distortions. This can be attributed to a number of factors including the continuing decline in food sales.”

“Furthermore, there was exceptionally low demand for items such as boots and coats, resulting in the lowest fashion sales performance since April 2012. However, demand for big-ticket items continues to be strong, with furniture outperforming all other categories.”

David McCorquodale, head of retail at KPMG, said: “After a bumper summer, this is a disappointing outcome for retailers and has undoubtedly reversed some of the sales gains made in August. However, if temperatures drop to a more seasonal level this cooler weather will quickly turn around retailers’ fortunes and help them to sell their autumn-winter ranges.”

“The grocers had another challenging month, with further price cuts and promotions announced by most. With a rebasing of margins in the grocery sector throughout the year, this final quarter will see sales go to those who are most focused on their customers.”

Hiya mate, could you tweet us a tenner?

October 13th, 2014 1 Comment By Mof Gimmers

Twitter Logo1 Hiya mate, could you tweet us a tenner?A French bank have said that they’re about to launch a service which allows people to transfer money to each other by Twitter.

Great. Now people will not only spam you with photos of their lunch, but they might expect you to chip in for the bill now.

Group BPCE will operate the cash transfers through the S-money subsidiary. Olivier Gonzelez of Twitter said: “We warmly welcome this innovation developed by Groupe BPCE and the service it provides to Twitter users in France by integrating its S-Money service into a live, public, conversational dimension characteristic of Twitter.”

Jean-Yves Forel, the banks CEO, said they would become the bank to offer a service like this, “where they can transfer money with a simple Tweet” which “opens up a whole new range of payment possibilities on the social networks.”

Of course, with loads of problems with virtual currencies, and hackers having the time of it causing social networks and the like endless problems at the moment, there’s a lot of security concerns around transferring money on Twitter.

Either way, looks like Twitter are very keen on getting money changing hands through their system, as they’ve been experimenting the ability to buy things through them with ‘Twitter Buy’ and, if this payment service works in France, they’ll be rolling it out worldwide. As we all know, there’s good money in being a middle man in the world of finance.

Zapp app 275x300 Asda, Sainsburys and others to accept mobile payments in 2015A host of shops are going to accept mobile payments from next year… even though they’ve already been doing it for a while with a whole host of apps.

Nevertheless, Asda, Sainsbury’s, Spar, Shop Direct and House of Fraser  have all teamed up with Zapp, whose app will allow users to pay for goods and services using just their smartphone and a mobile banking app.

You’ll be able to pick up your shopping as usual, but at the till, you’ll press a button that will indicate they are paying by Zapp.

Once they’ve logged into their banking app, and selected the desired account they want to pay for it with, a six-digit code will appear on the phone.

Payment for a low-value amount of shopping can be made simply by waving the phone all airy fairy over a reader without authentication being needed.

A chief executive of Zapp, named Peter Keenan reckons these partnerships “means millions of consumers will be able to shop at tens of thousands of merchants up and down the UK at launch”.

Anglian Water, Bristol and Wessex Water and Sutton and East Surrey Water have also signed up for the scheme, meaning some people could be able to pay bills via their mobile.

Water bills! Paid for by phone! This is bucket list stuff.

Lloyds replace staff with robots

October 7th, 2014 No Comments By Ian Wade

Lloyds Banking Group 001 300x180 Lloyds replace staff with robotsIt’s all rumness with Lloyds, as the bank is set to close down more branches and axe thousands of jobs in favour of computers.

The 25% state-owned bank is looking at sacking off employees in the mortgage processing and new account divisions as it goes full steam with its digitisation strategy.

It’s all part of a plan, as ever, spread over three years of what employees will be left, will be upgraded and fully cybernised.

The company has only caused 30,000 job losses since the financial crisis. Bless.

This is all very well, but it’s not much joy for bank customers stuck at in the back end of nowhere with no bank for a thousand miles or something. But them banks claim they are forced to close branches due falling numbers of customers visiting as more people use online banking.

NatWest, part of State-owned Royal Bank of Scotland, is also set to shut at least 27 branches across Britain over the next four months – of which 25 are the only ones left in that community.

We take another step close to Futurama.

 

wine Brits spend more on prostitutes and drugs than on wine and beerThe Office of National Statistics have unveiled some figures on British spending habits and there’s quite a surprising result in amongst the crunched numbers.

If you think we collectively drink a lot of wine and beer, it’s nothing compared to  how much we spend on drugs and prostitutes.

This is the first time the ONS have included narcotics and sex workers into their calculations of Gross Domestic Product in order to ensure “comparability in measuring Gross National Income across EU countries.”

So here’s the kicker: In 2013, Brits spent £11bn on wine and beer, while spending £12.3bn on prostitutes and illegal drugs.

The figure for the procurement of sex workers in £4.3bn alone, with the rest disappearing up noses and the like. Drugs are split into crack cocaine, powder cocaine, amphetamines, ecstasy and imported and home produced cannabis, worth £6.7bn a year according to the ONS.

So the real story is this: British people spend over £23bn on having a really fun time.

Oh no! We’re going to run out of money!

September 26th, 2014 No Comments By Mof Gimmers

money 300x168 Oh no! Were going to run out of money!We might as well kill ourselves right now because the company who print the money for the Bank of England are in all kinds of trouble. We’re clearly going to have to resort to trading in turnips and song, or even worse, Dogecoin.

Shares are tumbling (by 26% no less) thanks to De La Rue issuing a profits warning. Presumably, they’re not allowed to just print a load of tenners off and sort the whole thing out.

De La Rue make banknotes for loads of countries, as well as being the folks who print the UK’s biometric passports. They’ve said that trading conditions had “deteriorated” and their profits for this year are now expected to be £20m lower than last year.

We’re clearly doomed and there’s no conceivable outcome where we’ll have any money. We’re finished. We’re entering a Mad Max style Dystopian nightmare, complete with Tina Turner theme song.

De La Rue have said that prices and margins for their printing services and secure paper used for banknotes were lower and that the rates of growth in new business had been slower than expected. To kick them while they’re crying on the floor, they were chosen to print Bank of England notes for the next decade, but the value of the contract is going to be lower than they first assumed.

The company said that they expect “the current difficult market conditions” to continue into the next financial year. WE’RE DOOMED! OH GOD WE’RE SO DONE FOR!

Wait.

De La Rue’s operating profits last year were £89.3m instead of the forecast £90m.

“While disappointing to announce this trading update De La Rue, as the market leading banknote printer, remains a strong, profitable and cash generative business. We will continue to pursue efficiency gains, invest in the business and in R&D for the future,” said De La Rue chairman Philip Rogerson.

Perhaps we overreacted. Oh well. Normal service resumes.

car crash 239x300 Theres going to be some overhauling in the car insurance marketThings are getting shaken-up in the world of car insurance. Does it mean cheaper car insurance for all? Of course it doesn’t. Did you have glue for your breakfast this morning because that’s a stupid thing to think.

Basically, the Competition and Markets Authority (CMA from now on) have said that exclusive pricing deals between motor insurers and price comparison websites need to be banned. Basically, because of these deals, insurers are being denied the chance to make their products available for cheaper, elsewhere.

The CMA also noted that consumers need better information on no-claims bonus protection insurance.

This review came about after the Office of Fair Trading asked the CMA to get stuck into the motor insurance market, and after a year of weighing things up, this is what the CMA have come up with.

They say that, because of the deals being struck between insurers and price comparison websites, it is pushing the price of premiums up across the board.

“They certainly help motorists look for the best deal, but we want to see an end to clauses which restrict an insurer’s ability to price its products differently on different online channels,” said CMA deputy panel chairman Alasdair Smith.

The CMA also tossed some work to the Financial Conduct Authority who should be examining how insurers tell consumers about add-on products to car insurance policies and the like.

“The way motor insurance-related add-on products are sold makes it hard for consumers to obtain the best value,” Smith added, with no-claims bonus protection being a particular concern: ”We are requiring insurers to provide much better information.”

Alas, the CMA said that they weren’t able to work a way around the problem of high car hire and repair charges for drivers who were not at fault in an accident.

Fixing that, they say, would require a “fundamental change in the law”.

Tesco invent £250m in their profits and suspend execs

September 22nd, 2014 2 Comments By Mof Gimmers

tesco extra Tesco invent £250m in their profits and suspend execsEveryone enjoys it when Tesco make a pig’s ear of something. They’re too big for their boots, so even if these cock-ups don’t necessarily mean that they’re in trouble, we should take every opportunity to mock them when it presents itself.

And so, Britain’s biggest supermarket have overestimated their profits by £250m, like the massive idiots they are.

They were talking about their expected profit for the half year, and invented a whole load of money ”due to the accelerated recognition of commercial income and delayed accrual of costs”.

“On the basis of preliminary investigations into the UK food business, the Board believes that the guidance issued on 29 August 2014 for the Group profits for the six months to 23 August 2014 was overstated by an estimated £250m. Some of this impact includes in-year timing differences. Work is ongoing to establish the extent of these issues and what impact they will have on the full year,” the company said in a statement.

The stupid gits.

Tesco have gone off crying to Deloitte and asked them to undertake an independent and comprehensive review of this balls-up, as well as consulting Freshfields, their external legal advisers.

Once they get this sorted, they will provide a further update of their interim results, which will now be shared with the world on the 23rd October 2014.

We can only hope that even more money goes missing, because we’re petty and cruel.

*update*

Tesco have gone and suspended four executives, including its UK managing director, after their overegging of profits and have launched an investigation, which will be undertaken by Deloitte.

As a result of this debacle, the company’s shares fell 10%. ”We have uncovered a serious issue and responded accordingly,” said Tesco chief executive Dave Lewis.

Lewis said “a number of people” had been suspended from duty, and one of those is UK managing director Chris Bush, according to the BBC.

Lewis added that he expects Tesco “to operate with integrity and transparency” and that they ”will take decisive action as the results of the investigation become clear.”

Directors bonuses must now be justified

September 17th, 2014 No Comments By Mof Gimmers

fat cat rich man 300x300 Directors bonuses must now be justifiedAre you one of those people on the internet who likes hitting out at ‘fat cats’? Like griping about those who make loads of money because you  can’t stop mentioning your socialist leanings down the pub, much to the mild irritation of your pals?

Well, get this – all companies (so, not just banks) will have to be able to prove that director’s bonuses are linked to their performance thanks to a new City code.

You see, there’s a review of the corporate governance code and it has been decided that companies are going to have to provide more information for shareholders. This will include all manner of performance things, as well as details on the risks being run and details about how long a business would be able to run for under their current financing arrangements.

Unbelievably exciting isn’t it?

The Financial Reporting Council (FRC) have told the City that the next review is going to tackle diversity in the boardroom and they’ve got two years to make some changes.

“Diversity can be just as much about difference of approach and experience. The FRC is considering this as part of a review of board succession planning and will consider the need to consult on these issues for the next update to the code in 2016,” it said.

More pressing changes ask for an extension of clawback arrangements which bankers are already working to. Basically, this new code says that companies should have arrangements to allow them to “recover or withhold variable pay when appropriate to do so”. It’ll also require companies to look at how long a director should wait before receiving any bonuses and that any extra pay should be link to performance.

“The changes to the code are designed to strengthen the focus of companies and investors on the longer term and the sustainability of value creation,” said Stephen Haddrill, chief executive of the FRC. ”The changes on remuneration also focus companies on aligning reward with the sustained creation of value rather than, as before, simply on retention – a focus that has tended to promote pay escalating and leap-frogging.”

So, from now on, companies will make two statements: One will be based on accounting rules and the other will require directors to assess their ability to stay in business for more than 12 months. Could play havoc with our Deathwatch articles, but there you go.

Either way, those ‘fat cats’ are going to have to justify their bonuses now, which they inevitably will be able to, much to the chagrin of those who can’t abide these upwardly mobile swine.

Britons: rubbish at pensions

September 12th, 2014 No Comments By Mof Gimmers

pensiner 300x225 Britons: rubbish at pensionsAround most half of Britons who are not yet retired aren’t very good at preparing for the winter of their lives, according to some musings by the Office for National Statistics.

These figures show that 45% of men and 49% of women did not have any private pension savings, which means in the future, there’s going to be a lot of old people complaining about freezing to death while living in a McDonald’s bag on a hard shoulder, on social media.

Barnett Waddingham’s senior consultant Malcolm McLean said: “The figures released by the ONS this morning paint a worrying picture of the state of unpreparedness for retirement of a significant proportion of the working age population.”

‘Unpreparedness’ there. We were hoping he would’ve gone for ‘unpreparedity’ or something. Anyway, the there seems to be some areas of employment where people are more clued-up about their future years in the wilderness.

In the accommodation and food service industries, 95% of men and women didn’t pay into a private pension, while those working in public administration, defence and social security, only 7% of men and 9% of women choosing not to contribute to a private pension.

McLean continued: “This illustrates how important that particular government initiative is to secure an improvement in this situation. Not surprisingly perhaps, wealth is also unequally distributed – with those households with a private pension being seven times more better off than those without.”

So there you have it. Stop buying Maoams and cans of gin and tonic and go sort yourself out a pension.

The Big Six to return £153m to overpaying customers

September 10th, 2014 No Comments By Mof Gimmers

energy The Big Six to return £153m to overpaying customersThe Big Six energy companies have launched an initiative which aims to give former customers £153m back that’s been sitting in their coffers as unclaimed credit from closed accounts.

The scheme is called MyEnergyCredit and has been launched by Energy UK and comes about thanks to a demand from Ofgem back in February.

Energy UK said that they want customers who have switched suppliers or moved home without leaving a forwarding address to get in touch with their old company if they suspect that they left money in an old account.

So basically, the initiative is: We’ve been sitting on your money for no reason so would you come and get it because we couldn’t be arsed giving it you back at the time.

That said, Energy UK announced changes to try and stop this from happening in the future, but as of now, there’s going to be a two-year deadline for collection of credit. If you don’t claim it, they’ll keep it. The Big Six say they’ll give the money to vulnerable customers, but don’t hold your breath.

Energy UK’s chief executive Angela Knight said: “We are urging former customers to come forward and make a claim. Customers who think they haven’t left a forwarding address or a final meter reading when they moved or switched should contact their old supplier.”

“The web site myenergycredit.com will help you do this. Inevitably, there will be some former customers who will not be found and so the major suppliers are announcing what will happen to credit balances from now on.”

“In future, after two years, the credit balance will be used to help vulnerable customers – and suppliers will make it very clear what is happening.

“By 2018, these new arrangements are expected to add up to around £65m of help to those in difficulties. The suppliers will kick start this process now by donating £38m for the first two years combined.”

Ofgem chief executive Dermot Nolan said: “Today’s industry announcement is an encouraging first step by the six largest energy companies to address Ofgem’s call to reunite customers with their cash. It is good news for consumers and if you think you could be owed money we recommend that you contact your previous supplier.”

“This issue is part of a wider challenge of delivering good customer service that the industry must crack if they are to rebuild customer trust and confidence. Failure to deliver on the initiatives announced today could trigger further action by Ofgem, including enforcement.”