With the Banks all talking down their prospects and those of the
economy too, it beats me why there's all this foolish optimism
around. It's tough and it's going to get tougher before everyone has
to settle down to 20 years of scrimping and saving ! {the
alternative being the attainment of one's lifespan}
XXXXXXXXXX CS
=================================
TELEGRAPH 8.5.09
[What ARE they on about? This is the FULL "Market" section of the
Telegraph at 5.30! The actiual close for the FTSE 100 was 1.4% UP-cs]
Gold: Gordon Brown's decade of regret?
When Gordon Brown started to sell-off our gold reserves it was $282/
oz - now it's $900/oz.
Banks fall again as FTSE 100 gives up gains [down]
FTSE 100 holds on to gain as global rally falters [steady]
FTSE 100 loses gains as global rally fades [down]
FTSE 100 up on year as global rally continues [up - NOW who's
confused? ]
===================
2. Barclays was right on the money
First quarter results from Barclays highlight how right it was to
fight to keep out of the Government's clutches. I can't imagine
Labour being happy part-owning a bank where investment banking
delivered a 361pc increase in pre-tax profit to £907m and a 79pc
increase in income to £5bn. Less squeamish shareholders can sit back
and enjoy a recovery in Wall Street trading rooms with the
expectation of more to come in London, as Barclays expands investment
banking here.
Government control would have hobbled its natural business
development and investors would not be sitting on 438.5pc gains since
its lows earlier this year. Instead they'd be looking at the more
mundane returns of the likes of Lloyds (up 140pc). Thanks to
Barclays' obstinacy, the two are today very different businesses. One
has prospects, the other doesn't. Lloyds is dealing with the awful
legacy of the HBOS corporate loan book and issued what amounts to a
profit warning yesterday after revealing that losses from this
business are mounting.
The increasing toxicity of the HBOS book is starting to put the whole
Lloyds TSB-HBOS merger in jeopardy. At one point it looked as if a
new retail giant could emerge. But losses last year, this year and
probably next could prove too much to bear. At this rate a break-up
is likely to be supported by Lloyds' own shareholders, never mind
politicians, regulators and rivals.
===================AND-------->
3. RBS expects bad loans to mount in 2009 at 5:20PM BST
Royal Bank of Scotland, the biggest British banking casualty of the
financial crisis, warned on Friday it expects bad loans to mount
during the rest of the year as the global economy remains mired in
recession.
The warning came as RBS revealed that it had a pre-tax loss of £44m
for the first three months of the year as its bad loans and credit
writedowns hit £4.9bn.
Chief executive Stephen Hester, who was parachuted in as chief
executive at the peak of the banking crisis in the autumn, said: "We
remain cautious and continue to plan and manage our businesses in the
full expectation that both 2009 and 2010 will be very tough years for
RBS."
Built into a sprawling empire by disgraced former chief executive Sir
Fred Goodwin, RBS said that bad loans in its retail and commercial
rose "reflecting economic weakness across all geographies and
consumer sectors." Non-performing or problem loans totalled 3.5pc of
all loans and advances, RBS said, up from 2.69pc at the end of last
year and 1.38pc at the end of the first quarter of 2008.
RBS delivered its update a day after Lloyds Banking Group, formed
through Lloyds TSB's controversial takeover of HBOS, predicted that
more of its loans to companies will sour this year as the recession
shatters corporate profits.
RBS, which has pledged to increase lending to businesses and
homeowners since the Government took a majority stake in the bank,
added that demand for credit from big businesses remains 'weak', as
companies focus on reducing their level of debt.
Earlier this week, Mr Hester completed his management overhaul and
unveiled a team he hopes will lead the lender back to profit. Gordon
Pell, deputy chief executive and head of the retail operations, and
Alan Dickinson, chief executive of UK corporate banking, will retire
next year, at age 60. Neither will receive a pay-off but will draw
their pensions.
RBS's update comes as governments around the world are stepping up
their efforts to rebuild investors' confidence in the financial
system. The US Treasury last night published results of its stress
tests, which estimated that US banks need a further $75bn in new
capital.
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