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Gloom Deepens In The Banking Sector As Hbos Profits Plunge 60 Per Cent

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http://www.independent.co.uk/news/business...ent-877992.html

HBOS, the mortgage lender at the centre of bid speculation following its spectacular rights issue flop, is expected to add to the gloom surrounding its brand this week by disclosing that its first-half profits are 60 per cent lower than last year.

Andy Hornby, chief executive of HBOS, will report its interim results on Thursday. Other banks also reporting include Lloyds TSB, Alliance & Leicester (A&L) and Allied Irish, in a bellwether week for the troubled UK banking sector.

In the past week, HBOS has been at the centre of market speculation that Spain's second-largest bank, BBVA, is considering making a bid. The British bank's £4bn cash call flopped nine days ago after just 8.3 per cent of shareholders took up their rights. This left underwriters Morgan Stanley and Dresdner Kleinwort with a £3.8bn "rump" of shares, representing just under 6 per cent of the company.

The bid speculation intensified on Friday after it emerged that JPMorgan, the US investment bank, had held talks with several interested parties about breaking up HBOS.

JPMorgan was reported to have spoken to National Australia Bank (NAB) about buying HBOS's Australian division, BankWest, and its corporate banking arm. The investment bank is also claimed to have spoken to the Spanish banking giant Santander – which a fortnight ago agreed to take over A&L – and private equity firms.

However, that rumour was widely dismissed by sources close to the institutions said to be involved in the talks. The speculation was further dampened on Friday, after NAB wrote down an additional A$830m (£400m) from its investments in US housing mortgages, and analysts raised concerns about another A$4.5bn the bank holds in loan assets.

"We're not sure this is a clever time to make acquisitions," NAB's chief executive, John Stewart, said, shortly after announcing the writedowns.

Investors initially seemed opposed to the prospect of a break-up of HBOS, with shares down 3 per cent in early trading before closing up 2.9 per cent at 310p, above the rights price of 275p.

Banking analysts Mark Phin and James Hutson at Keefe, Bruyette & Woods (KBW), expect it to reveal pre-tax profits of £1.16bn – a 61 per cent drop on the same time last year – after it absorbs £1.02bn of Treasury losses.

Alex Potter, banking analyst at Collins Stewart, said he believed HBOS was now discounting too much bad news: "Earnings will be far less closely watched than movements on writedowns, as well as management's willingness to engage in self-help," Overall, he expected the so-called banking results season to be characterised by a "myopic obsession with the balance sheet and capital ratios".

If true will HBOS share collapse even further???

Considering we are only just entering the dip and HBOS and other banks are already in serious trouble how bad will it get????

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Maybe we''ll end up with the Halifax Alliance and Bingley Rock Bank of Scotland ----- owned by Santander with all the shitty stuff stuffed down the trousers of the the taxpayer.

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Don't worry, Brown is determined to get house prices rising again and this will save the loansharks:

"I'm getting on with the job and I think it's important that in difficult economic circumstances we take the right decisions for the future to get fuel prices down, to get food prices down, to make sure we get the housing market moving..."

http://news.bbc.co.uk/1/hi/uk_politics/7527142.stm

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a "myopic obsession with the balance sheet and capital ratios"

LOL? :lol:

I can't believe someone would write this.

I quite agree. Being obssessed with still being able to function as a bank is, on the whole, a bloody good thing when it comes to banks.

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HBOS offered a 10% reg saver not too long ago, that probably didn't help them.

there was a time when you borrowed at 4 lent at 5 and made 1 profit

now HBOS borrows at 10 lends at 6 and makes a loss of 4 :lol:

the real question is, will the banks work together illegally to keep their profits up by passing them onto the consumer (ie mostly mortgage holders by putting mortgage rates up) or will they sit there and take the spanking??

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the real question is, will the banks work together illegally to keep their profits up by passing them onto the consumer (ie mostly mortgage holders by putting mortgage rates up) or will they sit there and take the spanking??

The banks would never operate as a cartel would they!!!!

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Don't worry, Brown is determined to get house prices rising again and this will save the loansharks:

"I'm getting on with the job and I think it's important that in difficult economic circumstances we take the right decisions for the future to get fuel prices down, to get food prices down, to make sure we get the housing market moving..."

http://news.bbc.co.uk/1/hi/uk_politics/7527142.stm

Broon is a loan shark ( a pathetic one )

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This is indeed bad news for pundits saying it will all be over by CHristmas.

The WHOLE plan is to save banks and allow them to dripfeed losses into the system so that they can TRADE out of it.

Trouble is, if profits are way down, and i wouldnt think HBOS is much different to many other banks, then the length of time to trade through is going to be much longer than some may be predicting: 140% longer maybe, if they used 2007 profits to guage an estimate.

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Brown has and will continue to keep the printing presses running 24/7 and spout out lies about inflation being 2-3% and this will continue to contribute to the value of the pound going down which will lead to more inflation and more printing.

The $USD going into meltdown will not help and apart for buying euro's (ECB plays the same game too) i don't have a clue how to protect my money now Gold/Silver has boomed.

I Keep stocking up on food and getting ready for the storm but don't know if i'll make land fall when it's all over.

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Considering we are only just entering the dip and HBOS and other banks are already in serious trouble how bad will it get????

just by applying simple laws, it will get at least as bad as the boom.

as much as prices have got out of control (like crazy priced), the downside will also be as unrealistically obtuse.

sick. this might be a very sick country circa 2012

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  • 396 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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