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Deckard

Help, Gom Highjacked My Thread !

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http://www.bloomberg.com/apps/news?pid=206...id=azIrDGLExqWk

Sept. 4 (Bloomberg) -- Royal Bank of Scotland Group Plc and Barclays Plc, two of Britain’s biggest banks, cut lending even after promising the government to give more credit to borrowers and help revive the economy.

RBS and Lloyds Banking Group Plc, the two biggest banks bailed out by the government, and Barclays Plc reduced lending globally by 165 billion pounds ($270 billion) in the first half, according to company filings. RBS and Barclays reduced loans by about 11 percent, the most among Europe’s largest banks.

RBS and Barclays are at risk of missing the government’s target to boost their U.K. net lending by 36 billion pounds this year. The two banks cut lending to U.K. homeowners and businesses by 9.5 billion pounds in the first half, the filings show. London-based Lloyds, which is 43 percent owned by the taxpayer, declined to disclose its net U.K. lending.

“This is a bearish sign for the economy,†said Jonathan Loynes, chief European economist at Capital Economics Ltd. in London. “For there to be economic growth, bank lending needs to rise. It is pretty clear that there are supply constraints.â€

The Treasury has committed 1.4 trillion pounds to rescue the nation’s banking system through direct investments, asset insurance and loan underwriting amid the worst recession in 60 years. Banks may not be lending the extra cash as they seek to bolster capital, Bank of England Deputy Governor Charles Bean said last week. Consumers repaid debt at a record pace in July, according to the Bank of England.

Lending Shrinks

Global lending fell by an average of 5.4 percent at the five largest U.K. banks in the first half, five times more than at the 10 biggest banks in continental Europe, company reports show. RBS, which is 70 percent government-owned, shrunk its global loan book by 91 billion pounds, Barclays by 50 billion pounds, and Lloyds by about 24 billion pounds, the filings show.

Fiona MacRae, a spokeswoman for Edinburgh-based RBS, said the bank had planned to shrink its loan book after receiving a government bailout. London-based Barclays said the reduction in lending was due to a decline in cash held against derivative trades and a stronger pound. Lloyds spokeswoman Eve Speight said the bank was committed to lending to “creditworthy†borrowers.

In all, Europe’s 15 largest banks by market value cut lending to customers by 2.9 percent from a year earlier, the company filings show. Banks provide about 70 percent of corporate financing in Europe compared with about 20 percent in the U.S., where borrowers sell commercial paper and corporate bonds to fund the majority of investments, according to the European Central Bank.

...

Easing Demand

Banks say the lending slowdown is largely the result of a drop in demand from borrowers, a consequence of the recession. U.K. consumers, the most indebted in Europe, are paying back mortgages and credit card debt as interest rates drop.

RBS said U.K. net lending, which takes customer repayments into account, fell by 3.2 billion pounds in the first six months. The bank agreed to increase annual net lending by 25 billion pounds in February as a condition for state support. David Gaffney, an RBS spokesman, said businesses are looking to reduce their debt levels rather than increase them.

Barclays reduced its outstanding loans in the U.K. by 6.3 billion pounds in the first half even as it made 17 billion of new loans to households and businesses, indicating the bank may struggle to meet its target to increase lending by 11 billion pounds this year. Barclays spokeswoman Gemma Abbott declined to comment on the figures.

A Treasury spokesman said RBS’s lending targets are legally binding and apply over the 12 months from March. Barclays, which didn’t receive a government bailout, isn’t legally bound to increase lending, he added.

Brown Under Pressure

The failure to get credit flowing increases the pressure on Prime Minister Gordon Brown, who nationalized banks, insured assets and is underwriting loans to spur lending. Politicians have repeatedly criticized banks for failing to boost credit after receiving government bailouts and guarantees.

“The banks are still not playing fair,†said John Wright, chairman of the London-based Federation of Small Businesses, which represents 215,000 entrepreneurs. “Small businesses are still having difficulty getting finance from banks, and those that are fortunate enough to get finance face higher interest payments.â€

Edited by VoteWithYourFeet

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hey VWYF,

the banks are still rebuilding those depleted balance sheets, to try to offset those off balance sheets with all the mark to fantasy stuff on. :ph34r:

ps - I notice you post a lot of banking stuff, you said you have 15 years of financial experience, can I ask what you did btw?

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hey VWYF,

the banks are still rebuilding those depleted balance sheets, to try to offset those off balance sheets with all the mark to fantasy stuff on. :ph34r:

ps - I notice you post a lot of banking stuff, you said you have 15 years of financial experience, can I ask what you did btw?

PM me dude, I don't fancy getting lynched on the main forum ;)

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PM me dude, I don't fancy getting lynched on the main forum ;)

that's why I am asking. ;)

Listen I know we have a few discussions about the pound & the UK, but why are you so bullish on the pound ? I mean you said you have euro assets so surely it's in your interest for parity then ?

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that's why I am asking. ;)

Listen I know we have a few discussions about the pound & the UK, but why are you so bullish on the pound ? I mean you said you have euro assets so surely it's in your interest for parity then ?

Thanks for highjacking my banking thread :rolleyes:

As I already explained to you, I believe in diversification as a means to reduce risk.

I have assets in £, in Euro and in other ccys too.

Of course, the £ portion of my portfolio is higher than the Euro portion - as I believe that the Euro is currently overvalued.

But I also know that the market can stay irrational for a very long time, and what if my views are proven wrong?

Anyone who puts all their eggs in one basket (like you seem to be doing with PMs) is taking on board an excessive amount of risk IMO. You gotta have some kind of hedge.

You are all geared up for the hyperinflation/Mad Max/TFH scenario. What if it doesn't happen?

Going back to the banking topic, one of the reasons why I believe the Euorozone will suffer is that EZ banks have not even started to mark to market their assets (see the Santander thread as an example) - and some of the big ones have twin exposures to US subprime and Eastern Europe bad debts.

The German bad bank is just a political trick aimed at fooling the sheeple ahead of the GE.

European banks' problems will have to be dealt with at some point.

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Screw debt, kids should be innoculated against it by their parents. They should know what the disease does to you.

Banks can provide deposit services and clear cheques. Who really wants them fabricating money from thin air and charging you for it? It's a mugs game.

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Thanks for highjacking my banking thread :rolleyes:

As I already explained to you, I believe in diversification as a means to reduce risk.

I have assets in £, in Euro and in other ccys too.

Of course, the £ portion of my portfolio is higher than the Euro portion - as I believe that the Euro is currently overvalued.

But I also know that the market can stay irrational for a very long time, and what if my views are proven wrong?

aren't you concerned about your euro assets if you live in the UK though.

I have just sold my french property because I am concerned about exchange controls being implemented & if you hold european bank accounts or other assets but live in the UK, this may be a problem.

cg warned of this in 2007 which got me thinking. I would prefer to be in the same country as my assets during a depression.

another angle for you to think about ?

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I note they say its not the lending they cut because they want to, but people are cutting back.

int he absence of lendign for many businesses, owners have either closed or cut back and are using their BRAINS to find a way through rather then the easy way of just spending.

the government however, think the easy way is the only way.

As the housing boom was only fed through finance, then as lending to productive Private sector falls, so the ability to borrow for most house market players becomes less. this will feed through to prices.

it will also feed through to the tax take, so Public services are going to need a serious overhaul....maybe get rid of the surfeit of high wage jobs, rather than cut services....a 25% cut in wages, would cut a huge amount cost at a stroke. and preserve many jobs.

Borrowing is not good for the private person...it just removes his future spending power. Borrowing CAN be good for business, but not in all cases. Borrowing is ALWAYS good for banks...at least in the short term...

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aren't you concerned about your euro assets if you live in the UK though.

I have just sold my french property because I am concerned about exchange controls being implemented ....

This cannot happen unless the UK leaves the EU - if that were to occur you would have plenty of warning, its a process that would take a few years. The UK pays its EU levy in Euro.

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This cannot happen unless the UK leaves the EU - if that were to occur you would have plenty of warning, its a process that would take a few years. The UK pays its EU levy in Euro.

unprecedented times my friend calls for unprecedented actions.

borders will be closed & access to foreign banking systems will also be stopped, perhaps only temporarily but then only re-opened with assisted access perhaps ??

That's without a cyber issue btw. :ph34r:

there has/have already been warnings about this btw in 2007. This played a big part in me deciding to sell recently.

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aren't you concerned about your euro assets if you live in the UK though.

I have just sold my french property because I am concerned about exchange controls being implemented & if you hold european bank accounts or other assets but live in the UK, this may be a problem.

cg warned of this in 2007 which got me thinking. I would prefer to be in the same country as my assets during a depression.

another angle for you to think about ?

Exchange controls? You are a complete TFH nutter aren't you? :rolleyes:

Anyway, with my moniker and avatar I would have thought you'd put 1 and 1 together, but obviously not.

I STR'd my London pwoperdee in Nov 07 and accepted a job offer in sunny Italy (I speak the lingo).

Before you ask, I get paid in Euro.

I am happily renting and waiting to see how this global recession/depression pans out before planning the next move.

I don't rule out coming back to the UK in the future if things improve significantly, hence my ongoing interest in UK house prices - plus it feels great to get confirmation that I sold very near to the top B)

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Exchange controls? You are a complete TFH nutter aren't you? :rolleyes:

Anyway, with my moniker and avatar I would have thought you'd put 1 and 1 together, but obviously not.

I STR'd my London pwoperdee in Nov 07 and accepted a job offer in sunny Italy (I speak the lingo).

Before you ask, I get paid in Euro.

I am happily renting and waiting to see how this global recession/depression pans out before planning the next move.

I don't rule out coming back to the UK in the future if things improve significantly, hence my ongoing interest in UK house prices - plus it feels great to get confirmation that I sold very near to the top B)

but your english though I am assuming ?

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but your english though I am assuming ?

At heart yes, technically no.

Edited by VoteWithYourFeet

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why ?

I just always thought you were english, it doesn't matter if you are not, why would it ??

My view is that the main board should be for debate on house prices and the economy - not the personal circumstances of individual posters.

I for one find it annoying when people blab on endlessly about themselves on here, so I guess I'll stick to my guns ;)

Edited by VoteWithYourFeet

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aren't you concerned about your euro assets if you live in the UK though.

I have just sold my french property because I am concerned about exchange controls being implemented & if you hold european bank accounts or other assets but live in the UK, this may be a problem.

cg warned of this in 2007 which got me thinking. I would prefer to be in the same country as my assets during a depression.

another angle for you to think about ?

I too have just sold a French property and was thinking of keeping a significant chunk of it, in €

However someone else will post about potential EZ problems and I'll change my mind again.

Maybe I should buy a house in the North. 8% yields seem possible ;)

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aw, come on, this is personal - PM me if you are so interested

WTF!?!?!

How very odd. Why would anyone be bothered about divulging their nationality in an anonymous forum.

Someone from the BNP could I suppose get your I.P address then come and burn your house down.

I don't think he was really really that interested. Just maybe you're a bit far up your own ass.

Cockadoody.

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