‘Banks could be forced to lose 10% of customers’

October 30, 2009 at 2:35 pm

The European Commission wants RBS to give up 10% of small business customers as a penalty for the state aid it received. It also wants Lloyds to give up 10% of its personal accounts for the same reason.

RBS is now 70% state owned following the bail-out last year, and Lloyds is 43% state owned. That means RBS would have to give up 100,000 of its one million business customers, and Lloyds would lose a staggering 22 million customers. RBS controls a third of the small-business market in the UK, and Lloyds holds more personal accounts than any other bank in the country. Needless to say, neither bank is delighted at the prospect.

The reason the EC is making such drastic proposals is down to a process known as ‘divesting assets’. The aim of this practice is to restore competition to the market following government bail-outs. According to the EC, a 10% cut at RBS could make the difference in competition in the market.

However, analysts have predicted that after all the talks go through and the deals are struck, a more realistic figure is likely to be about a 5% cut in business for RBS.

Both banks are now said to be considering the best ways in which they can shed the accounts. The EC has suggested to Lloyds that it could package its personal accounts under the Halifax brand and sell it off, which Lloyds is adamantly opposing as there is too much to lose.

There have been no new developments as of yet, but a spokesman for Lloyds told The Times that “We continue to engage in dialogue with the Treasury and the European Commission,” and RBS is quoted as saying that it is “working with the Treasury to try and reach a satisfactory outcome”.

Posted in Uncategorized | No Comments »

‘Loop-hole in law could cost you dearly’

October 23, 2009 at 4:12 pm

"Finders keepers, losers weepers", says the old rhyme and sadly that is exactly what one online bank customer (ironically employed by one of the High Street banks) has found. Mis-typing a digit has proved to be an extremely costly mistake for Clare Logie, who accidentally transferred £2000 to a total stranger who now refuses to repay Ms Logie’s hard earned cash.

Bizarrely there is nothing that can be done to recoup the money, with the law and the Financial Ombudsman being equally powerless. Of course one wonders about the morals of a person who would knowingly profit from another’s innocent error but sadly there will always be people around who fail to recognise the effect that their behaviour has on others.

Once the account holder realises that they have made a mistake all they can do is contact their bank to see whether the recipient’s bank can get permission from the recipient to repay the funds. If they say no, or ignore the request, then there is nothing further that can be done by the bank. They are not even permitted under the Data Protection Act to provide details of their customer for the person who made the mistake to take action against.

Strictly speaking it is not theft and Alison Steed of is trying to gather evidence to “plug this loophole in consumer protection”.

In the meantime she offers the following advice to avoid losing money:

  • Always double check the numbers you type
  • Be particularly careful when selecting your payee from a drop down list – it is very easy to select the name above or below the one you want
  • If you know you have made an error, get on to your bank straight away, in the hope that the money has not yet left your account
  • If large sums are involved, go to the bank to transfer the money or transfer the amount online in several smaller amounts to avoid losing a large sum of money, should you make a typing error

Posted in Uncategorized | No Comments »

‘?Need some moolah for your skyrocket??’

October 15, 2009 at 10:51 am

Cash Machine, a company which operates 2500 ATMs across the UK, has introduced five Cockney cash machines in East London.

Customers who choose the Cockney option get told first that the machine is ‘readin’ your bladder of lard’ (card). They are able to get their Sausage and Mash (cash) in the normal way by entering their Huckleberry Finn (PIN). Cash can be ordered in amounts of Speckled Hen (£10), Horn of Plenty (£20), Dirty (£30) and Double Top (£40) and the customer’s balance can be shown on Charlie Sheen (screen).

The three-month experiment may not ring true to genuine Cockneys born within the sound of Bow Bells but the company hopes that the introduction of these machines will help to keep the dialect alive. Ron Delnevo, Bank Machine managing director, says ‘we wanted to introduce something fun and of local interest. We expect some residents will visit the machine to just have a butcher’s (a look).’

The Cockney ATMs can be found at:

Murco Service Station, Hatch Lane, Chingford, E4
447 Roman Road, E3
73 Commercial Street, E1
24 High Street, Walthamstow, E17
197 Mays Lane, Barnet EN5

Cash machines in other countries have offered a choice of language for a while now but should this experiment be successful (and it has garnered interest from around the world) Brummie, Geordie, Scouse and Scots ATMs could also be introduced.

If I hadn’t seen it with my own mince pies I never would have Adam and Eved it.

Posted in Uncategorized | No Comments »

‘A year of recession, no lessons learned’

October 9, 2009 at 3:56 pm

On the 15th September 2008, Lehman Brothers Holdings, Inc. filed for Chapter 11 bankruptcy protection. At the time, the investment bank was one of the largest financial institutions in the US, employing some 26,000 people. When it finally collapsed, the bank owed $768 billion in bad debt.

Ironically, Lehman provided risk assessment services to major financial institutions, protecting them from mismanagement and insolvency, and helping to develop investment ‘hedge’ funds. The bank ultimately became the archetype of the ‘bad bank’ –a major institution felled by its own debts and misgivings.

One year on, Gordon Brown has warned banking executives against complacency, after the bonus culture that helped distort the UK economy resurfaced anew during August. The Prime Minister echoed recent comments made by US President, Barack Obama, who called for bankers to embrace reform.

Bob Diamond, the puppet master behind Barclays Bank, was handed a £7.4m bonus at the end of last year, bringing his total earnings for the half-decade to £80m. As one of the few banks to survive the recession in one piece, Mr. Diamond ought to be praised, but few could justify spending seven million pounds at the Christmas party.

Harvard professor, Jeffrey Miron, was unhappy with lax executives, content to ignore the rubble of Lehman: “Bankers have learned the lesson that if you take excessive risk you get bailed out. Five or 10 years down the line we could end up with a similar situation all over again."

Experts are convinced that the recession is in decline; the Bank of England vehemently disapproves, but while house prices continue to fall, and unemployment continues to rise, media-driven optimism holds little value for hard-up taxpayers.

This morning, UK unemployment levels reached 2.47m, an increase of 210,000 over the figures for May, June, and July. Britain’s General Union, the GMB, insinuated that unemployment among young people could reach one million – a ‘magic number’ heralding the loss of an entire generation to the Job Centre.

Posted in Uncategorized | No Comments »

‘Interest rates held at 0.5%’

October 1, 2009 at 1:06 pm

The Bank of England (BoE) has frozen interest rates for the sixth month in a row, a move that has been welcomed by UK businesses.

Despite excessive media optimism, the BoE remains conservative about its funds. The bank has refused to commit to conjecture, preferring instead to watch from the sidelines.

The decision to hold the interest rate at 0.5% speaks volumes about the state of the economy – survival depends on elements that are circling the drain; elements that could drown in muddy waters if the paper boats arrive too late.

Quantitative Easing (QE), a fat artery pumping cash into the economy, will continue in much the same vein as before, pending completion in November. Minutes taken at a BoE meeting revealed that a plan to boost the funds available to QE by £75 billion was shot down by board members.

David Kern, economist at the British Chambers of Commerce, warned that business lending was too low to guarantee economic recovery. Mr. Kern implied that interest rates could fall to a negative figure to discourage the hoarding of cash, and to bait high-street banks into lending more money.

"Persistent weakness in lending to businesses, particularly to small firms, poses serious risks to the early signs of economic recovery," Mr. Kern explained. Experts have questioned whether cutting interest rates below 0.5% would help or hinder economic recovery.

Executives ought to be suspicious. The recovery of the housing market fell on its face at the weekend; Brits cannot afford to buy new houses, and lenders are reluctant to dole out thousands of pounds to property developers.

It is very unlikely that full economic recovery will materialise before the end of 2009, or even the end of 2010. Simple patience may yet prove to be the sword that finally dispatches the credit monster.

Posted in Uncategorized | No Comments »