TSB Website Crashes

The newly launched TSB bank (split for Lloyds) has had a less than stellar first day, as its website has crashed.

Hardly a good augury for the future!

Lloyds Back In Profit

Lloyds Banking Group has returned to profit, and has made £2.1bn in the six months to the end of June. This compares very favourably with the loss of £456m for the same period last year.

The BBC reports that the bank stated that it had made substantial progress on strengthening its balance sheet, although "further work remains to be done".

Lloyds is 39% owned by the UK government (ie the taxpayer) and, based on the good results and the fact that bank said it would be talking to regulators in the coming months about resuming paying a dividend on its shares, people are now betting that the publicly held shares will be sold off (ie the bank will be privatised) and that the announcement of the privatisation will be made within the coming days.

The Treasury have just stated that there is no set target price or timetable for privatisation. However, it also stated (as per Reuters):

"..we have said that we are now actively considering options for sales of the taxpayer's shares in Lloyds."

Shares in Lloyds are up around 4% on the day.

Banks Retry Debits

Banks, as we all know, love to make money out of their customers' financial cock ups. Therefore it should come as no surprise to learn that banks make around £200M per annum from penalty fees on unpaid items.

Step forward, in the manner of a knight on a plodding donkey, the FCA which has done what the FSA should have done years ago; namely force banks to take full account of the money customers pay into their accounts each day, even if it arrives after direct debits and standing orders have been paid out.

The FCA has decided, quite correctly, that because direct debits tend to be taken from accounts first thing in the morning (before receipts are credited) the banks had stacked the rules of the house in their favour.

Simon Gompertz reports that the UK's seven largest banks, including Barclays, HSBC and RBS, have agreed to operate a retry system in the afternoon, probably between 3pm and 4pm, which takes accounts of new credits, salary payments and cheques which have cleared during the day.

Lloyds Banking Group has also signed up, but is being tardy and claims that it is as yet unable to retry all payments in the afternoon. However, any Lloyds customer who incurs a late payment charge because money hasn't been properly credited will be able to claim a refund (if they remember to).

It's All At The Co-op Now!

Simon Gompertz writes that as a result of an order from our European overlords (requiring Lloyds to hive off a large number of branches) 3.5 million customers of Lloyds TSB will start receiving letters from the bank from tomorrow, informing them that their accounts will be moved to a new bank (TSB) owned by the Co-op.

Lloyds PPI Chickens Coming Home To Roost

The old saying "what goes around, comes around" springs to mind when reading that Lloyds has been forced to make an additional PPI provision in Q3 of £1BN.

The total amount set aside by Lloyds for the PPI mis-selling scandal is £5.3BN, giving rise to a Q3 loss of £144M.

Lloyds has paid out £3.7BN in compensation thus far. However, it may have to make further additional provisions next year.

The Telegraph reports that Lloyds is less than pleased to be on the receiving end of fraudulent claims for compensation, driven in part by the plethora of claims management companies that are pushing people to make claims. Lloyds has written to the Financial Ombudsman Service asking for claims management companies to be forced to meet the cost of spurious requests for compensation.

The Stench of Corruption and Greed Overwhelms Britain's Financial Services Industry

Britain's tarnished financial services industry and banking sector seems intent on bringing about its own self destruction. Over the years there has been a litany of scandals eg:

- endowment mis-selling
- subprime mortgages
- PPI mis-selling
- LIBOR fraud
- NatWest computer meltdown
- Northern Rock, RBS etc etc to name but a few

However, it seems that the industry is determined to add to its list of self inflicted shame and dishonour. Step forward the usual suspects ie; Barclays (a familiar name), HSBC, Lloyds and RBS which have all admitted to mis-selling interest rate hedges to small and medium sized business customers.

Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland have all agreed to immediately halt the sale of complex interest rate hedges to smaller businesses and have pledged to compensate potentially thousands of customers who have been screwed by them.

According to the Telegraph the FSA is of the view that about 28,000 businesses had been sold interest rate hedges.

Another nail in the coffin of the tarnished reputation of the UK's financial services industry.

The financial services industry is now fully immersed in its own self created shit, and quite clearly is on the verge of implosion.