2009 to hold its challenges for the building societies

May 18th, 2009 by admin | Filed under Daily News, Savings Accounts, The Budget, UK Bank Accounts, UK Banks.

Harrogate in the North of England is almost a nice place to spend a few days. Their stay might be slightly less than pleasant for the chief executives of the UK’s building society sector who are due to gather there for their annual industry conference in Harrogate. 2008 was, to say the least, a difficult year for UK building societies, and 2009 liiks already that it will be just as challenging. Cracks are beginning to show at the West Bromwich Building Society amid speculation that the finacilly challenged society are on the lookout for a buyer. Its an open secret that many building societies have found themselves on shaky ground having diversified into issuing commercial property and subprime mortgages.

U.K.’s recession is beginning to make its mark on the online clothing market, where it was reported that sales are down for the first time in nearly a decade.

Web-based clothing sales dropped by two percent compared with the previous month, recent reports have it. Possibly distractions might have been Easter shopping, as well as mother’s day. Overall online retail sales in the UK were still on the rise in April, up 14 per cent from March, with online beer, wine and spirit purchases being the pacemakers, up by ten percent as warmer weather and Darling’s unwelcome two percent tax pushing sales figures upwards.,

The world of banking was shaken but not stirred by the news that the chairman of Lloyds Banking Group (LBG), Sir Victor Blank is to call it a day in June 2010. Sir Victor announced to the LBG board that he felt it was “the right time for the Group to appoint a new chairman”.

Sir Victor had faced considerable shareholder criticism for their decision last year to buy HBOS, the troubled owner of Halifax. These day. the UK Treasury is the principal shareholder holding a 43% in LBG.

On the news of chairman Blank ’s intended step down shares in LBG rose 1.6 percent (1.4 pence to 89.2)

The Competition Commission and the Financial Services Authority have apparently begun a crackdown on a controversial form of insurance , that has been costing banks and insurance companies hundreds of millions of pounds. Among those affected are Lloyds Banking Group, Royal Bank of Scotland by concerted efforts to reform payment protection insurance.

High street retail giant, Marks and Spencer are reported to be on the verge of announcing a dividend cut this week, with some analysts saying that it could be by as much as half. Expectation are that the full year payout per share will be 11.3 pence down from 22.5 in 2008. M&S are expected to announce their results on Tuesday.

On the FTSE ON Friday, property companies were again under the sword. The U.K.’s second-largest real estate investment British Land Plc trust declined 1.3 percent (5.25 pence to 391.75) Eurasian Natural Resources Corp. also followed suit , down 1.8 percent (10.5 pence to 592.5) while Carnival Plc on news that they are likely to cut dividends fell 2.4 percent (42 pence to 1702) .

The world’s largest mobile- phone company Vodafone Group Plc (are expected to announce any day now their eagerly awaited plan to speed up their one billion pound cost-cutting program. Shares fell 2.3 percent (2.9 pence to 123.2)

U.K. yellow pages provider , the Yell Group Plc are expected to announce a one billion pounds write-down on its Spanish subsidiary, which has been severely affected by the country’s severe economic Yell shares dropped by 6.9 percent (3 pence to 40.5)

U.K. stocks fell backwards slightly on close of business on Friday. The FTSE 100 Index fell 14.47 to close on 4,348.11.37, while the FTSE 250 settled down for the weekend on 7427.87.

The pound receded slightly against the dollar and rose strongly against the Euro on currency markets yesterday.
· Pound/US dollar 1.5144
· Pound/Euro 1.259
· Pound/Japanese Yen 143.767
· Pound/Swiss Franc 1.703
On Wall Street, the Dow Jones closed on Friday down 62.68 points to 8268.64, while the Nasdaq held its ground more or less, down 9.07 points to 1680.14.

The US Treasury Department announced that they will make federal bailout funds available to a number of companies in the life insurance sector, after impassioned pleas to receive much needed government help.

The Treasury plan to inject up to $22 under last Autumn’s Troubled Asset Relief Program. On the news, shares of U.S. life insurers rose sharply on Friday. The life insurance companies who are eligible to receive aid have been on hold for weeks with some applications going back as far as November 2008.

The economies of the 16 Eurozone countries have declined by 2.5% in the first three months of 2009, according to a recent report. Forecast were for a drop of only 2%, with the sharp fall in German exports acting as a key factor in the decline.
GDP in the Eurozone has fallen by fell 4.6% annually up to the end of March 2009/

Commodity prices were huffing and puffing over the weekend, Crude oil was up 5 cents a barrel at an average of $56.15, Gold dropped by 7 cents an ounce to $930.60. Copper continued its recent steady decline finishing at $200. 25 down $2.55