April 10th, 2008
Despite continuous warnings of not breaking up for three years the newly nationalized bank, Northern Rock promised that it would repay the ?24bn state loan till the end of 2010. The bank has also added that after the pre tax loss of about ?167.6m in 2007, it would again be making huge losses in the current year. It was also revealed that the bank would be paying Adam Applegarth, the former chief executive an amount of about ?785,000 which is a part of the severance agreement.
On the other hand the shareholders have heavily criticized the various payout plans of the bank as it was already in various problems. In 2007 the bank was helped by the Bank of England as it was very close to solvency. According to the spokesmen’s of the bank, it ran into further depth of problems because of its efforts to avoid nationalization. These efforts which included payments to government and the professional advisors cost the bank something around ?50m.
On the other hand on its efforts to curb losses, the bank will be cutting down costs by about 20 percent along with a reduction of manpower to about a third of the existing one. There are also various small business plans on the way which would bring down the balance sheet of the company to about ?50bn from ?106bn of the previous year. The main reason for the collapse of the bank has been referred to the global credit crisis, led from the slow market in the US.
Popularity: 90%
Posted in UK Banks | No Comments »
April 9th, 2008
Despite continuous warnings of not breaking up for three years the newly nationalized bank, Northern Rock promised that it would repay the ?24bn state loan till the end of 2010. The bank has also added that after the pre tax loss of about ?167.6m in 2007, it would again be making huge losses in the current year. It was also revealed that the bank would be paying Adam Applegarth, the former chief executive an amount of about ?785,000 which is a part of the severance agreement.
On the other hand the shareholders have heavily criticized the various payout plans of the bank as it was already in various problems. In 2007 the bank was helped by the Bank of England as it was very close to solvency. According to the spokesmen’s of the bank, it ran into further depth of problems because of its efforts to avoid nationalization. These efforts which included payments to government and the professional advisors cost the bank something around ?50m.
On the other hand on its efforts to curb losses, the bank will be cutting down costs by about 20 percent along with a reduction of manpower to about a third of the existing one. There are also various small business plans on the way which would bring down the balance sheet of the company to about ?50bn from ?106bn of the previous year. The main reason for the collapse of the bank has been referred to the global credit crisis, led from the slow market in the US.
Popularity: 91%
Posted in UK Banks | No Comments »
April 4th, 2008
Economic slowdown, persisting problems in the banking sector, reducing bonuses and the falling profits rates of the business concerns have posed severe concerns regarding the future of the UK financial sector. The experts have been estimated huge cuts in jobs following the volatile nature of the market. According to CEBR, centre for economic business research, the total number of job losses would be near about 10,000 in the current year. This prediction is somewhere around 50 percent more than what was estimated three months back. According to the various experts the upcoming months would be very crucial in deciding the fate of the financial sector.
According to the survey taken over by PricewaterhouseCoopers and CBI, the financial sector would be terribly bitten by the credit crunch that is arising. The survey reveals that the financial sector would be facing the worst ever period since the last five years. These are accompanied by speculations of the problems persisting till the end of the year. The problems gravitated after the FTSE 100 index slumped down by about 5.5 percent in January this year.
This fall in the FTSE index has been one of the worst in the last six years with a loss of 100 points. The fear of job loss is also because of the failures of Northern Rock to refinance the mortgages in the money market along with its nationalization in the early part of the year. Northern Rock was followed with the collapse and takeover of the Bear Stearns, one of the largest investment banks of the US.
Popularity: 100%
Posted in Business, Featured | No Comments »
April 3rd, 2008
As per recent surveys it was found that more than half of the adult youngsters are living off their parent’s savings. About 55 per cent of parents had polled that they had shelled out approximately £12,610 to their children or grand children. This was obtained from a survey done by the Scottish widows.
It was found that four out of every ten children used the money to pay off their debts whereas one out three used it to get on the property ladder. From the YouGov poll, 5,783 adults suggested that there was a 16 per cent increase in the number of parents who lent money to their children from the 39 per cent in the previous year. More than half also stated that they were expected to hand over some more money in the future.
From the 36 per cent who were asked said that their intention was to use the money during their retirement. However 63 per cent of them say that they were happy to help out their children. With the ever increasing needs of people and the lethargy of children to start working, lending money from parents seems to be the easiest way out.
The mistake lies with the parents who don’t think twice in lending money to children at an age when they should be earning. The typical uses of money are endless. From paying off previous debts to housing loans youngsters don’t realize that now is the time for them to work and let their parents sit back and enjoy a retired life.
Popularity: 99%
Posted in Business, Featured | No Comments »
