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Anthony Jenkins, Barclays Bank CEO since Aug 2012.
today increased the amount of money it has to provide for cover mis-sold
financial products to consumers and business by more than £1bn.
The bank said on Tuesday that it will be making
an additional £600m provision for mis-sold PPI (personal protection insurance),
and £400m for interest rate swaps.
Craig Lowther, managing director of PPI
claims company, MoneyBoomerang, commented: "These
latest provisions drive home once and for all the gargantuan scale of the banks'
mis-selling to both individuals and SMEs.
"It wasn't too long ago that Barclays made a £700m provision for PPI. Even now I
don't expect this to be the end of it.
"We expect provisions for interest rate swaps, like PPI, to continue to rise
over time. The overall provision in 12 and 24 months' time will be a world apart
from what it is now. It will be a mirror image of PPI.
"In fairness to Barclays, it is taking the lead on meeting its obligations, is
proactive in the claims process and is putting many other banks to shame.
However, there remains a deep-seated intransigence at many banks, an instinct to
delay rather than play ball. Either that or to pass valid claims through to the
Financial Ombudsman Service, which is struggling.
"We continue to call on both the FSA and the FOS to increase pressure on the
lenders who are dragging their heels."
BP, the UK oil giant, today reported that fourth quarter net profit, adjusted for
non-operating items and accounting effects, fell to $3.98bn from $4.99bn a year
The decline mainly resulted from the sale assets
to pay for liabilities arising from the 2010 oil spill disaster in the Gulf of
The company disposed of $37.8bn worth of assets
since the oil spill and has incurred charges against profits of $42.2bn.
UBS, Switzerland's biggest bank,
today reported a fourth quarter net loss in 2012 of 1.9bn Swiss francs due to
lawsuits related to LIBOR interest rate fraud and restructuring.
UBS reported a net profit of 324m francs in the
fourth quarter of 2011 after a $2bn rogue trading scandal.
The said the fourth quarter loss mainly to "net
charges for provisions for litigation, regulatory and similar matters as well as
net restructuring charges and an own credit loss."
Justin Doyle, Investec Bank Ireland, said
"Just when you thought it was safe to go
back into the water. Eurozone concerns are back to the surface yet again as
they take a lump from the bubble of burgeoning global risk appetite;
At he heart of the turn in sentiment is the
Spanish PM and calls for him to resign over a corruption scandal involving
past illegal payments. He denies any wrongdoing obviously. It also seems
that Silvio Berlusconi is doing slightly better in the polls than was
previously expected ahead of the Italian general elections later this month;
The current Spanish government falling apart
and Silvio Berlusconi back in power, now there’s a few sleepless nights that
Angela Merkel and Mario Draghi could do without;
European, U.S. and Asian equity markets took
a pasting yesterday and overnight with most of the major global indices
posting anywhere between a 2% and 3% loss on the day;
After a stellar January, European sovereign
bonds and the single currency had their first big down day since the
beginning of the year. The Euro has corrected nearly 2% against the dollar,
sterling and yen since close of business on Friday evening."
Economic View: January Exchequer figures
boosted by sale of CoCos; Juliet Tennent, economist at
Goodbody, comments - - "Just in time for the Troika, which is currently on a
review mission, the first piece of data on the Irish public finances of 2013 was
released yesterday in the form of the January Exchequer Returns. While it will
be some months before trends start to emerge initial indications are on balance
positive. On a headline basis the Exchequer posted a surplus of €704m in January
but that was largely due to the sale of the contingent capital notes in Bank of
Ireland which netted the exchequer over €1bn in January.
On an adjusted basis the Exchequer posted a
deficit of €406m, which is c.€60m better than the adjusted deficit recorded for
the opening month of 2012. On the tax side, revenues increased by 3%, compared
to January 2012, to €3.774bn. Adjusting for the timing of corporation tax and
the Health levy, underlying receipts grew by 5.6% on an annual basis.
Encouragingly, this was driven by a 10% increase in income tax and a 1% increase
in VAT. Current expenditure increased by 7.2% when compared with January 2012
but this is mainly as a result of timing issues for public service and social
welfare paydays which should even out over the course of the year. However, we
expect that controlling the Health budget will again prove problematic, given
that overspending in this area led to a supplementary health budget at the end
of 2012. The Troika has already expressed their concerns in this regard and a
successful conclusion to the on-going negotiations to extend the Croke Park
agreement will ultimately be the key to achieving savings in the area.
While the January figures suggest that the
underlying momentum remains positive it is too early to discern any underlying
trends. However, we expect Ireland to meet its 7.5% deficit target this year. A
task made less onerous following a better than expected outturn for the public
finances in 2012."
Banks: Tensions growing between Government and Central Bank; Eamonn
Hughes and Colm Foley comment - - "A report in today’s Irish Independent
indicates that tensions are growing between the Central bank and the Government
on the pace of action from the pillar banks in relation to arrears. A new
cabinet sub-committee has been set up by the Government to bring greater
emphasis to the issues of mortgage arrears, small businesses, lending and
dealing with debt.
The Government believe, since the Personal
insolvency bill was passed, that all the tools are in place for the banks to
deal with the arrears issue, however, the Central Bank argue it is already
working with the banks to find resolutions and that setting specific targets for
debt forgiveness and mortgage arrears reductions may see the first applicants
given relief in order to reach targets.
The evidence suggests that the banks are
beginning to deal with the issue in a more meaningful way but that the
Government has yet to see the expected headline figures. The level of mortgage
restructuring at the banks has accelerated in recent months and we anticipate
further engagement between the banks and indebted customers under the Personal
insolvency legislation. Whilst the legislation has measures to protect the
family home, we anticipate a substantial pick-up in the rate of repossessions
particularly in the buy-to-let sector."
In New York Monday, the Dow
fell 130 points or 0.93% to 13,880.
The S&P 500 slid 1.15% and
the Nasdaq dropped 1.51%.
The MSCI Asia Pacific Index dipped 1.3% in Tokyo Tuesday.
The Nikkei 225
fell 1.90%; China's Shanghai composite index rose 0.20%; South Korea's Kospi
fell 0.77%; Australia's S&P/ASX 200 slipped 0.51%; in Mumbai, the Bombay Stock
Exchange's Sensex 30 dipped 0.46%.
In Europe, the
Dow Jones Stoxx Europe 600 gained 0.46% in morning trading Tuesday.
reports that for the
first year since the futures were created, Brent crude is poised to overtake
West Texas Intermediate (WTI) oil as the world’s most-traded commodity.
in Brent jumped 14% to average 567,000 contracts in the year to November 20
compared with all of 2011, while WTI fell 17% to 575,000, according to data from
the ICE Futures Europe exchange in London and New York Mercantile Exchange
compiled by Bloomberg. The number of Brent futures changing hands has exceeded
those for WTI every month from April through October,
the longest streak since at least 1995.
Brent, produced in the
North Sea, is gaining favour among traders because of its role as the benchmark
for energy prices from Saudi Arabia to Russia. Prices have climbed 34% in the
past two years, reflecting everything from war in Libya to the embargo on Iran.
WTI, the main grade in the US, has risen 9% as the nation, which prohibits crude
exports, has struggled to clear a glut at Cushing, Oklahoma, the delivery point
for Nymex futures.