| CATEGORY: PRESS ROUND-UP SHORT SECTOR: BANKS |
Tuesday newspaper round-up: Lloyds TSB, HBOS, Vodafone |
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Tue 04 Nov 2008
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LONDON (SHARECAST) - Lloyds TSB is in talks with sovereign wealth funds and UK insurance groups about selling stakes in a merged Lloyds-HBOS group, with a preliminary deal expected by January.
Lloyds intends to use the cash to help to redeem £4bn of expensive and restrictive government preference shares in Lloyds and HBOS at the earliest opportunity in order to allow the bank’s board to keep its promise to restart dividend payments next year, writes the Times.
Meanwhile, hundreds of branches and up to 20,000 jobs are to be lost when Lloyds TSB takes over Halifax Bank of Scotland to create Britain's first "superbank". Unions reacted with dismay yesterday as Lloyds predicted it could save £1.5bn a year from cost-cutting "synergies" after the deal, reports the Independent.
The chief executive of Barclays has written to all 150,000 staff in an attempt to defend the bank’s decision to raise £5.8bn from Abu Dhabi and Qatari investors rather than tap the Government for funds. Amid a mounting shareholder backlash, John Varley told staff that it became clear over the weekend of October 11 and 12 that banks would pay a hefty price for accepting Government funds, reports the Telegraph.
Downing Street expressed its frustration with HSBC after a bank executive travelling with Gordon Brown on his trip to the Gulf said that it would not pass on all of an expected reduction in interest rates this week. Abbey, also provoked anger by saying that it was raising the rates on its tracker deals a day before the Bank of England was expected to cut rates by at least 0.5% and possibly more reports the Times.
Concerns that Vodafone could be the next telecommunications company to issue a profits warning increased yesterday after it emerged that the mobile phone group had contacted analysts to gauge latest forecasts. Vodafone shares fell 7% to 110p yesterday as speculation grew that the group was trying to massage down market expectations ahead of half-year results next week, says the Times.
UK unemployment is set to soar to 7.1% as Britain suffers the longest and deepest recession of the EU's big economies, according to the European Commission. The economy of the 15-nation eurozone was also heading into recession for the first time since the single currency was introduced in 1999, the Commission's autumn forecast, released yesterday, said reports the Times.
American car sales hit a 25-year-low in October as consumers stopped spending money on new vehicles – and the industry’s fortunes are predicted to only get worse. The biggest victim was General Motors, whose sales for the month slid by a staggering 45pc, the largest fall among the mass manufacturers. Only Porsche, the niche luxury marque, managed to out-slump GM, with sales off by 50% last month, reports the Telegraph.
One of Goldman Sachs‘s flagship hedge funds, run by two of the Wall Street bank’s most talented traders, has lost close to $1bn since its launch in January in further evidence of the crisis facing the industry. Goldman Sachs Investment Partners, which was hailed in January as one of the biggest hedge fund launches, raising more than $6bn, has told investors that it had lost $989m by September reports the FT.
Virgin Media cable television group has won approval from its lenders to delay large repayments on its £4.3bn debt pile. The new debt schedule delays £2bn of amortisation repayments due between now and 2012, and eases the pressure on the group amid the global economic slowdown reports the FT.
Life insurance group Skandia launched a stinging attack on its own industry yesterday, resigning its membership of the Association of British Insurers (ABI) and criticising its peers for supporting a new regulatory regime which it said would confuse consumers, reports the Independent. The ABI supported the introduction of an "assisted purchase" advice category, administered by less qualified sales staff.
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