That would make for very good news if only the Royal Bank of Scotland (RBS) hadn’t succeeded in making a loss of £24.3 billion shortfall in 2008. For 2009 RBS has announced losses for 2009 of just £3.6 billion after losing their struggle to recover billions of pounds of bad loans. Considering that city analysts had expected losses of around five billion, this is not a bad result for the bank whose Chief executive Stephen Hester said had "exceeded all the principal milestones" set for the first year of their turnaround plan.

Hester went on to add that t the group’s core business saw profits rise from £4.4 billion in 2008 to £8.3 billion last year, while bad debt increased to £13.9 billion from £7.7 billion in 2008. On an optimistic note, RBS announced positive signs of a peaking in the number of "toxic loans" being held by the bank, with the fourth quarter looking better for corporate clients.

Hester also revealed that in discussions with the Government about altering its lending commitments to "reflect the economic circumstances" over the next year, that they were very open to increasing its lending levels to

customers. However, strained economic environment still remained a factor that had caused many of the bank’s customers to reduce their borrowings.

As part of its bailout terms, the firm agreed to make an extra £25 billion available to customers in loans with £9 billion being allocated for mortgages and the remaining £16 billion for business lending.

Mr Hester summed up by saying that 2009 was "a year of substantial progress" for the bank.

On the controversial subject of bonuses, Hester requested that RBS should not be singled out and that the financial community as well as the UK public should recognise that that important staff would leave if pay was not competitive. Alistair Darling obviously agrees, because he has cleared the payment of £1.32 billion in bonuses to staff at the bank.

The announcement came just a few days after Stephen Hester opted not to take his £1.6 million bonus, with the CEO apparently still waiting to see if any of his colleagues at the bank will follow suit.

Also subject to change will be Northern Rock’s 100% savings deposit guarantee that is now to be lifted on the 24th May.

From that date, the UK government has decided that their deposits guarantee will no longer apply. The day has obviously been timed to specifically allow, savers exactly 12 weeks to decide what to do about any money that they have on deposit with the north east based building society, As was the case before the Rock began to crumble, savers who still have deposits worth up to £50,000 will be covered by the Financial Services Compensation Scheme. However those holding larger amounts will no longer enjoy the government’s protection. .

The decision may have come as result of complaints by other banks and building societies that the 100% guarantee has given an unfair advantage to the bank, with an increasing large number of deposit holders happy to deposit large amounts there, despite lower interest rates due to the 100% protection.

Leaders of the leading British unions have described a “still fragile” the labour market , despite the fact that recently released figures showed that unemployment surprisingly fell by 7,000 in the quarter to November 2009 to just below 2.5 million. Correspondingly e the number of people claiming jobseeker’s allowance was also around 15,000 lower in December at 1.6 million. However, the union leaders claim, thousands of job losses have only been announced in recent weeks, raising fears that unemployment will start to climb in the flat period that typically occurs in the run-up to a general election.

The TUC said it will be looking for a number of key signs in today’s figures, including a fall of more than 30,000 in unemployment and a reduction in the number of “involuntary” temporary workers. According to the TUC, the number of people taking temporary or part-time jobs because they can’t find permanent work has risen considerably. .

Operating profits at British Gas soared by 58% last year to £595 million, compared with £379 million in 2008. Its parent company Centrica said the figures beat the previous high of £573 million in 2007.

British Gas announced earlier this month it was reducing its gas prices by seven percent.

The U.K.’s second- largest department-store retailer Debenhams Plc, who recently acquired the Denmark based Magasin du Nord retail chain, are considering acquiring similar companies in the future. A spokesman for Debenhams stated that the company would like to become less reliant on the difficult home market. According to the British Retail Consortium Retail sales in the UK rose at the slowest pace in 15 years last month with London-based Debenhams, who operate 142 stores in the UK, obviously feeling the pinch. Until January’s acquisition of the six-store chain for £12.3 million pounds Debenhams’s overseas presence had been restricted to 11 stores in neighboring Ireland and about 50 franchised outlets.

On the foreign exchanges, the pound continued to fall, reaching $1.5266, whilst reaching .1245 against the Euro.

U.K. stocks dropped after a report showed confidence among U.S. consumers fell in February to the lowest level since April 2009. In London, the FTSE 100 dropped 64.69 points to close on 5278.83.

Overall, the FTSE 100 has gained around five percent since early February. as U.K. companies continue to confound the experts and expectations grow that the strengthening global economic recovery will signal further economic growth.

Confidence among U.S. consumers fell more than anticipated in February to the lowest level since April 2009 as the outlook for jobs diminished, a report showed today.

Federal Reserve chairman Ben Bernanke said there was a "nascent economic recovery" in a testimony before Congress.

US stocks jumped more than 1%, led by banks, as some had feared that the cost of borrowing would start rising soon.

Although the US economy is growing, some worries remain about its strength because unemployment remains high, meaning that the "Fed "has begun to gradually undo some of the emergency measures that they had implemented during the financial crisis.

The Dow Jones Industrial Average rose 47 points to close on 10,321.03 while the NASDAQ Composite also recovered by 25 points to close on 2,234.22

Ben Bernanke is taking a very close look at the role of Wall Street firms in helping Greece to cover up the extent of their financial troubles, with Goldman Sachs apparently under closer scrutiny than most.

Bernanke hinted that both the Fed and the US financial watchdog were "looking into a number of questions" related to banks’ arrangements with Greece, whilst stopping short on the question of whether an official inquiry was under way

financial

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Tags: Alistair Darling, Bank, Banking, Ben Bernanke, British Economy, British Gas, British Pound, Centrica, Currency, Debenhams Plc, Dow Jones, Economics, Economy, Employment, Financial News, Financial Services Compensation Scheme, FTSE, Goldman Sachs, jobseeker’s allowance, Magasin du Nord, Money, Money Markets, NASDAQ, Northern Rock, RBS, Recession, Retail, Stephen Hester, Stock Markets, Stocks and shares, TUC, UK Banks, UK Economy, UK government, UK Recession, US economy

Figures released yesterday confirmed that the UK economy grew by 0.1% in the last quarter of 2009, meaning that the recession is finally over, but later and which much less impact than the US or the Eurozone economies. Britain’s economy had been in recession for eighteen months, the longest period since quarterly figures were first recorded in 1955.

The news was widely anticipated with signs such as last week’s UK unemployment figures that fell for the first time in 18 months.

Analysts now predict that no matter which party wins this year’s election when it happens, the loser will be the pound/ Reasons given are that neither David Cameron or Gordon Brown will be able to muster sufficient support in parliament to control the UK’s budget deficit, which is the largest in the in the Group of 20.

Strategists have pruned back their forecasts on the sterling versus dollar pair by as much as 2 percent this month, to the lowest level since June 2009, with Sterling liable to be weighed down by possibility of the first parliamentary stalemate in more than a generation and growth levels that lag far behind Britain’s rival industrialized economies. Add that to a fiscal shortfall that has ballooned to almost 13 percent of gross domestic product and the picture for the pound looks less than rosy.

Previous precedents do not bode well for the pound, as when the last time a U.K. election failed to produce a clear winner in 1974, Sterling fell in value by 28 percent in the next two years, with the government’s failure to fund its deficit leading to the International Monetary Fund stepping in to bail-out the economy.

The UK’s so-called ‘Big Six’ group of energy suppliers is on course for a profits windfall due to the extremely cold weather conditions experienced in the UK during December and early January. Consumers were forced to turn up their thermostats when the country experienced the coldest weather conditions for decades with the daily demand for gas hitting an all-time high on Jan. 7th of 454 million cubic meters. Analysts predict that accumulative profits for the big six (Centrica, EDF, E.ON, Scottish and Southern Energy, ScottishPower and RWE npower) could easily reach an additional £100 million for the period.

The Chelsea and Yorkshire building societies are expected to finalise details of a merger this week. Doing so will mean the creation of the second biggest society in Britain, after the Nationwide. Yorkshire Building Society members are liable to give their thumbs up for the merger, following the lead of the Chelsea Building Society who gave their support to the deal on Friday. A successful deal would mean the consolidated company would have combined assets of £35 billion pounds, around three million members and 180 branch offices around the UK.

On the news that Barclays plans to defer bonuses for top executives including Chief Executive Officer John Varley for up to three years, stock in the company 4.1 percent, to 271.35 pence.

Pilots at British Airways pilots have been warned by the labor unions representing the cabin crews not to become strike breakers if an employment dispute leads to a work stoppage. News that caused BA’s stock to decline 0.8 percent, to 207.9 pence.

Prudential Plc, the U.K.’s largest insurer have announced plans to cut back expansion in developed markets to focus on growth in developing Asian countries, such as Malaysia, Vietnam and Indonesia. Shares in Prudential shares dropped 0.4 percent to 605.5 pence.

Sterling rose slightly against the dollar and the Europe in early week trading. The pound closed at 1.6144 against the dollar, with the Euro being traded at 1.146

Shares in the FTSE 100 took a minor downturn, despite the news that the recession was over in the UK. It closed on Tuesday down 26 points to 5,276.85.

A calmer mood prevailed in markets on Monday and Tuesday after a three day downturn that knocked 5 per cent of its values. Reports coming out of Washington over the weekend suggesting that Ben Bernanke looks like being reappointed chairman of the Federal Reserve for another four-year term settled the markets which had closed at fresh a 15-month high as recently as last Tuesday.

The Dow Jones rose by 84 points, to close at 10255.28, while the NASDAQ recovered 14 points, to finish at 2210.53.

According to the National Association of Realtors (NAR) sales of previously-owned US homes fell 16.7% in December, after having risen in the three months from September to November as first-time buyers took advantage of tax credits. However the decline in December came as no surprise as most buyers had rushed to complete deals before the original 30 November deadline. The first-time buyer tax credit has since been extended until 30 April, causing the NAR to predict that there was likely to be another surge in sales in the spring. December sales fell to a seasonally-adjusted annual rate of 5.45 million from 6.54 million in November, 15% higher than in the comparable period in December 2008.

Computer giant Apple have announced a 50% increase in profits after seeing a bumper Christmas period, with sales of iPhones doubled from a year ago.

Net income rose to $3.38 billion (£2.08 billion) in the three months to 26 December, from the $2.26 billion in the same period in 2008. A spokesman for Apple announced that they had succeeded in selling 8.7 million iPhones in the quarter. Sales of Macs also rose 33%, although iPod sales fell by 8%.

General Motors (GM) has confirmed that Saab is to be eventually acquired by Dutch luxury carmaker Spyker.

GM has been trying to sell Sweden’s Saab since January 2009 although recently they announced that they would begin the procedure of winding down the company while still continuing their search to find a buyer.

Wind-down activities have now been suspended, "pending the close of the transaction".

Saab lost £255 million in 2008, and has not made a profit since 2001.

In the commodities market, gold took advantage of the relative stability in the dollar, to rise to $1,097 an ounce. Oil also rose by 0.5 percent to $74.92 a barrel.

financial

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Tags: Apple, Banking, Barclays, British airways, British Economy, British Pound, Centrica, Chelsea Building Society, Credit Crunch, David Cameron, Dow Jones, E.ON, Economics, Economy, EdF, Federal Reserve, Financial News, FTSE, General Motors, Gordon Brown, International Monetary Fund, iPhone, John Varley, Money, NASDAQ, National Association of Realtors, Nationwide, Prudential Plc, Recession, RWE npower, Saab, Scottish and Southern Energy, ScottishPower, Spyker, UK Banks, UK Economy, UK government, UK Recession, Yorkshire Building Society

According to Royal Bank of Scotland its chief executive, Stephen Hester UK Taxpayers will lose out if the bank unable to pay bonuses, in what some could construe as a veiled threat o what could happen if the intense public scrutiny faced by the bailed-out bank is not eased and bonus hungry staff continue to seek greener pastures.

When the bank released their half year profits, an uninspiring increase in profits of £15 million was offset by “poor” net attributable loss to shareholders of £1.1 million.
Hester, whose £9 million pay deal only delivers if the shares reach 70 pence within three years, said the bank had suffered a “damaging but not yet destructive” exodus of staff. He said some guaranteed bonuses were being paid, but that they complied with the demand by the Financial Services Authority of being for no longer than 12 months.

Meanwhile Spanish bank, Santander has shown RBOS the meaning of profit, with an increase of 41 per cent in the first half of this year, totaling £790 million for their UK businesses.
Santander, who owns Abbey, Alliance & Leicester and part of Bradford & Bingley, reported revenues had also increased by 20 per cent, aided by increased cost savings, as also increased their deposits by 66 per cent, following the integration of Alliance & Leicester and Bradford & Bingley.

Santander’s gross mortgage lending through its UK brands totalled £10.8 billion in the first six months of the year, giving it a 16 per cent share of the market. António Horta-Osório, chief executive of Abbey, announced that the first half of the year has been a very good one for the bank.

Company liquidations and individual insolvencies in England and Wales soared to record levels in the second quarter as the economy was throttled by recession and the global credit crisis, data from the government’s Insolvency Service showed Friday.

There were 33,073 individual insolvencies in the second quarter on a non seasonally adjusted basis, the highest level since records began in 1960. That compared with 30,253 in the first quarter of this year

Company failures remained at a 16-year high in the second quarter, but figures on Friday revealed a marked slowdown in the rate of firms falling victim to recession. The Government’s Insolvency Service recorded a 39 percent rise in liquidations in England and Wales.

The Office of Fair Trading has approved Centrica’s bid to buy a 20 percent stake in British Energy from EDF. The £2.3 billion deal will allow Centrica a share in both electricity as well as future profits from four soon-to-be-built nuclear power plants, in addition to claiming 20 percent of British Energy’s un-contracted power output. The OFT granted the approval after concluding that a Centrica-EDF tie-up would be unlikely to create volatility in energy prices,

BAA Aviation has announced that they will be raising their annual cost cuts target by £14 million to £30 million as it continues to identify acquisition opportunities during the economic downturn. The aircraft-servicing company continued to outperform the market despite posting a two percent drop in half-year revenues to £550 million and a similar fall in pre-exceptional operating profits to £50.6 million.

Pre-tax profits declined from £46.7 million pounds to £25.8 million pounds after taking £12.6 million of exceptional charges into account, partly for restructuring. The company’s debt dropped from £554 million to 449 million, while the dividend remained static at 2.3 pence.

Health and beauty retailer Superdrug reported a pre-tax loss of £7.4 million pounds in 2008, compared with a profit of £21.6 million in 2008 For the year to December 27 2008, revenue at the AS Watson-owned group declined marginally by two percent to £1.07 billion.

Signet the jewellery group, has announced that its outlook on both sides of the Atlantic remains “uncertain” after it reported a four percent drop in total sales. The group said like-for-like sales in the UK declined by 4.2 percent in the six months to August 1, with H Samuel falling by 2.2 percent and Ernest Jones down 6.5 percent

Shares in Smith & Nephew edged 0.8 per cent higher at 474 pence on renewed speculation it might become a takeover candidate for US giant Biomet. The speculation follows a period of underperformance for S&N stock, which has slipped 14 per cent from its 2009 high as the weakening economy led patients to delay hip surgery.

Shares in sporting goods retailer, Sports Direct lost 2.5 per cent to close 89 pence on news that the Competition Commission are liable to examine its purchase of 31 stores from rival JJB Sports. If the commission arrives at the conclusion that competition was lessened by the sale. It could bar trading at five overlapping stores, or even place an embargo on the entire sale.

In the banking sector Royal Bank of Scotland fell for the first session in eight, losing 12.1 per cent to 47 pence after it provided a downbeat outlook statement with wider underlying losses than analysts had expected. Lloyds Banking Group, whose more optimistic view of 2010 led its stock to surge this week, took a minor retreat on Friday falling 2.6 per cent. However Barclays continued to remain supreme, gaining 3.1 per cent to close on 365 pence.

The UK’s FTSE 100 index finished for the weekend up 41 points, or 0.9%, at 4,731.56 – its highest close since early October. The FTSE 100 has rebounded 34 percent since March 3 Meanwhile the FTSE 250 continued to climb, rising on Friday by a further 43.91 points to close on 8,421.46

The pound continued to wobble against the other major currencies on Friday.
Pound/US dollar 1.6717
Pound/Euro 1.1761
Pound/Japanese Yen 162.2643
Pound/Swiss Franc 1.8033

Leading US and UK shares closed at their highest levels since last year after better-than-expected US jobless data boosted investor confidence. On the news, the Dow Jones index jumped 114 points, to close for the weekend at 9,370.07, its highest level since November of last year. The NASDAQ also did better, up 27.09 points to close at 2000.25

US President Barack Obama said over the weekend that the fact that the US economy lost only 247,000 jobs in July meant “the worst [of the recession] may be behind us”.
The unemployment rate fell to 9.4%, down from 9.5% in the previous month, the first drop since April 2008.

After reporting a rare loss in the first three months of the year, US financier Warren Buffett’s investment firm has reported a jump in profits.
Between April and June, Berkshire Hathaway made a profit of £2 billion up 15% on the same period a year ago, although revenues fell slightly too around £20.5 billion
In the first quarter, the company made a loss of around £1 billion.

According to official figures, German exports have risen by 7% in June, the fastest pace in nearly three years. In the latest sign of recovery in Europe’s economy, exports for the period totalled 67.4 billion Euros (£57.8 billion) which, while imports of 56.4 billion Euros, brought the country’s trade surplus to 11 billion Euros. These figures are the latest positive signal from the export-focused economy. At the same time, France reported that its trade deficit widened to 4 billion Euros in June, from 3.137 billion Euros for May.

Joining the ever increasing chorus that recovery is just around the corner were the European based Organisation for Economic Co-operation and Development,

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Tags: Abbey, Alliance and Leicester, BAA, Bank, Banking, Barack Obama, Barclays, Bradford & Bingley, Centrica, EdF, Financial News, Financial Services Authority, JJB Sports, Royal Bank of Scotland, Smith & Nephew, Superdrug, UK Banks