British taxpayers are sitting on a 3.5 billion pound ($5.6 billion) paper profit on its stakes in Royal Bank of Scotland and Lloyds after both swung back to profit, driving their shares higher. Britain’s profit could be more than five times that amount — potentially bringing in much needed income for the cash-strapped UK government. “It now looks like the government’s huge bank bailout, far from costing the taxpayer money, will yield a 19 billion pound profit,” said Doug McWilliams from the Center for Economics and Business Research. His estimate was based on shares rising in line with nominal GDP and the stakes being sold ove...
Hungary hopes to emulate the few countries that have spurned IMF aid and emerge from crisis on their own, but it is much more likely to follow the example of other crisis-hit EU states and be forced back to austerity. It is no Malaysia or Turkey, the first of which rejected the International Monetary Fund’s demand it open its economy in the 1990s Asia crisis and the latter weaned itself off IMF backup in 2008 after enacting its own Fund-like fiscal plan. It more resembles Latvia or Greece, whose high public debt, large budget deficits and dependence on foreign financing eventually overruled their opposition to the Fund’s usual diet of bel...
Britain’s top share index was little changed early on Thursday as strong results from insurers were offset by disappointing numbers from Barclays and Unilever By 0811 GMT, the FTSE 100 was 3.01 points, or 0.1 percent, lower at 5,383.15 after it ended 0.2 percent lower on Wednesday. Investors are waiting for an interest rate decision at 1100 GMT but it is a near certainty that the Bank of England will not change its monetary policy stance. Barclays shares dipped 2 percent as analysts said its investment bank performance was resilient but uninspiring, costs rose faster than expected and Spanish bad debts remain a worry. Results from c...
Italian fashion house Versace expects to post higher sales in 2010 on the back of its restructuring and China’s growing appetite for luxury goods, its chief executive said. In an interview with Reuters, Gian Giacomo Ferraris said he remained confident about a return to profitability in 2011, thanks to a more efficient distribution network and brand repositioning. “We are optimistic about 2010, we have raised our full-year revenue target to 280 million euros from 270 million euros and are on track to meet it,” the 53-year-old Ferraris said. Versace, whose evening gowns have been worn by film stars Drew Barrymore and Penelope Cruz a...
Consumer spending in Britain is likely to remain constrained for the foreseeable future, but any slowdown in demand is likely to be modest, the chief executive of fashion retailer Next told reporters. Simon Wolfson also said in a telephone interview that the group was stepping up spending on standalone homewares stores, where new shops are beating sales targets by about 20 percent. “Sales are going to be difficult for the foreseeable future,” he said, after Next reported a 1.5 percent drop in first-half underlying retail sales. “But we’re talking about a modest slowdown rather than an Armageddon scenario,” he said, adding there woul...
Romania has met IMF and EU conditions for continuing its €20bn bailout programme, offering some reassurance to investors concerned about the country’s deep and prolonged recession. IMF mission chief Jeffrey Franks has said no major policy changes were needed after the latest review of Romania, which has slashed public spending including wages and raised value added tax to comply with the terms of the deal. Romania’s economy contracted more than seven percent last year and is still mired in recession and dependent on the bailout deal, which includes aid from the IMF, EU and World Bank. “They have a bit more lenient attitude, probably s...
British outsourcer Mouchel Plc says it expects its full year results to be at the lower end of expectations as government spending cuts create a difficult trading environment. Mouchel, which provides maintenance for highways in Britain, said that over the past year it secured £650m ($1bn) of new contracts but a lack of clarity over the coalition government’s austerity measures weighed on the outlook for the coming year. “Trading remains challenging in some areas given the uncertainty that exists in many public sector markets. We expect this situation to continue until the government’s announcement of the spending review … and probabl...
Gold miner Kinross Gold Corp said it will buy the 91 percent of Red Back Mining Inc that it does not already own for around $7bn to create one of the world’s largest gold miners. The company said it will pay around $30.50 Canadian a share in stock and warrants for each Red Back share, a 17 percent premium to Red Back’s current share price of C$26.02. Kinross already owns about 9.3 percent of the smaller company. “We see this as an opportunity to acquire an absolutely world class asset at a fair price – it effectively turbo-charges our growth profile,” Kinross Chief Executive Tye Burt told reporters. Red Back owns mines in Mauritania...
The two banks showed a dip in investment banking income in the latest quarter, but more than made up for that with lower losses on personal and corporate loans as broad economic conditions improved. Half-year profits for HSBC, Europe’s biggest bank, hit $11.1bn, more than double the $5bn of a year ago and above the average forecast of $9.1bn from a poll. Its loan impairment charges and other credit risk provisions fell to $7.5bn for the half-year, down $6.4bn from the year ago level. It was the lowest level since the start of the financial crisis, and below forecasts of near $10bn. “HSBC and BNP have seen provisions cut in half year-on-ye...
A steady stream of customers were greeted with an array of gimmicks. Not only does the bank welcome dogs, it provided them with free biscuits and offered their owners free breakfast. “We’re in the business of turning customers into fans,” American billionaire and Metro Bank co-founder Vernon Hill told reporters. Metro Bank aims to have more than 200 branches across greater London over the next decade. It also hopes to end up with a business evenly split between retail and commercial banking, offering a range of services including a Metro Bank-branded credit card. Its business plan is largely inspired by a retail-focused model used by Hi...