Lloyds is offering home buyers free iPad minis, in an intensifying mortgage war between major lenders.
However, mortgage experts warned against choosing a loan purely on the basis of a freebie.
The £349 internet-connected iPads, on offer for two months, up the ante in a contest for customers.
So far, the battle has featured lower fixed rate deals, cashback offers and free legal fees.
Lenders are vying for market share as the housing market recovers.
Showing posts with label Lloyds. Show all posts
Showing posts with label Lloyds. Show all posts
Wednesday, 1 October 2014
Wednesday, 21 May 2014
How Lloyds will limit big mortgages
Lloyds, including Halifax, Bank of Scotland and Scottish Widows Bank, has said that it will restrict mortgage lending to people wanting to borrow more than £500,000.
The move is targeted directly at the spiralling London housing market and the risk that buyers might get themselves into trouble with over-risky purchases.
But why is Lloyds saying that it will limit this sort of lending to 4 times income?
After all, we were told that simple income multiples were a thing of the past, across the whole mortgage business.
From last month, they were giving way to much more detailed affordability assessments, based on detailed questions about childcare spending, haircuts, food bills and so on.
The answer is that Lloyds is bringing in a twin track approach for these soar-away London purchases.
Anyone asking for half a million pounds or more will still be subjected to the new barrage of questions about lifestyle and family budgets.
The spending power revealed by this process is then compared to the overall cost of a mortgage, factoring in future interest rate increases, according to a secret Lloyds formula.
The fact is that even after going through this mill, some people with large salaries and few commitments will find that they can borrow more than 4 times their annual income.
Some will qualify for 5 times, or even more, just like the bad old days before the credit crunch.
What Lloyds is saying is that even if its affordability checking machine spits out approvals for people asking for loans of more than 4 times income, they won't be given the money.
The move is targeted directly at the spiralling London housing market and the risk that buyers might get themselves into trouble with over-risky purchases.
But why is Lloyds saying that it will limit this sort of lending to 4 times income?
After all, we were told that simple income multiples were a thing of the past, across the whole mortgage business.
From last month, they were giving way to much more detailed affordability assessments, based on detailed questions about childcare spending, haircuts, food bills and so on.
The answer is that Lloyds is bringing in a twin track approach for these soar-away London purchases.
Anyone asking for half a million pounds or more will still be subjected to the new barrage of questions about lifestyle and family budgets.
The spending power revealed by this process is then compared to the overall cost of a mortgage, factoring in future interest rate increases, according to a secret Lloyds formula.
The fact is that even after going through this mill, some people with large salaries and few commitments will find that they can borrow more than 4 times their annual income.
Some will qualify for 5 times, or even more, just like the bad old days before the credit crunch.
What Lloyds is saying is that even if its affordability checking machine spits out approvals for people asking for loans of more than 4 times income, they won't be given the money.
Wednesday, 11 December 2013
£100m set aside by Lloyds
There's a rumour that Lloyds has set aside £100m to cover conduct issues, including the compensation payments due to customers as a result of today's record fine for unacceptable sales incentives.
What's definitely true is that it is sales to 692,000 customers to check whether or not they lost out, or if they were sold an insurance or investment product they didn't need.
Within that number 11,000 cases are being prioritised. These are the ones where the behaviour of the advisers was most questionable.
What's definitely true is that it is sales to 692,000 customers to check whether or not they lost out, or if they were sold an insurance or investment product they didn't need.
Within that number 11,000 cases are being prioritised. These are the ones where the behaviour of the advisers was most questionable.
Friday, 7 June 2013
Bank agree to axe fees
The financial watchdog, the FCA, is making banks take full account of the money customers pay into their accounts each day, even if it arrives after direct debits and standing orders have been paid out.
Previously banks made £200m a year from penalty fees on items which were unpaid because there were insufficient funds in the account.
The FCA decided this was unfair on customers because regular deductions, such as direct debits, tend to be removed first thing in the morning.
Now 7 of the biggest banks - including Barclays, HSBC and RBS -- have agreed to operate a retry system in the afternoon, probably between 3pm and 4pm, which takes accounts of new credits, salary payments and cheques which have cleared during the day.
Lloyds Banking Group has also signed up, but says as yet it's unable to retry all payments in the afternoon.
Until its systems are updated, any Lloyds customer who incurs a late payment charge because money hasn't been properly credited will be able to claim a refund.
Previously banks made £200m a year from penalty fees on items which were unpaid because there were insufficient funds in the account.
The FCA decided this was unfair on customers because regular deductions, such as direct debits, tend to be removed first thing in the morning.
Now 7 of the biggest banks - including Barclays, HSBC and RBS -- have agreed to operate a retry system in the afternoon, probably between 3pm and 4pm, which takes accounts of new credits, salary payments and cheques which have cleared during the day.
Lloyds Banking Group has also signed up, but says as yet it's unable to retry all payments in the afternoon.
Until its systems are updated, any Lloyds customer who incurs a late payment charge because money hasn't been properly credited will be able to claim a refund.
Wednesday, 24 April 2013
Shares for TSB customers?
The collapse of Co-op's purchase of 632 Lloyds TSB branches throws up an intriguing new possibility - that the 4.6m customers of these branches could now become shareholders in their own bank.
And I wonder if they'll be offered shares at a discount or even as a windfall.
Why? The reason is that the route of selling the branch business, to be re-branded as TSB, to a rival has turned out to be a blind alley.
Instead, Lloyds says it will hive off TSB as a free standing company and sell shares in it to City institutions and the public.
The share sale or Initial Public Offering (IPO) was always a backstop but now it's the favoured option. It has to be because there's nothing else very attractive on the table.
How will the shares be offered? Well, dangling some of them, on give-away terms, in front of the noses of customers could turn out to be an cunning way of rallying them behind the sale and the new bank.
The Lloyds TSB customers affected by the divestment have a right to feel disgruntled about the whole process. 3.5 million have already been sent letters telling them that their bank is changing.
No one likes being treated like baggage. Lloyds says very few have opted out of the transfer so far, but they could get disenchanted once the real changes begin over the summer.
So why not offer the 4.6m cut-price shares in their own bank?
And remember, when the original TSB was demutualised and sold off in 1986, people who bought the shares were given a loyalty bonus after 3 years of 1 extra share for every 10 held.
Lloyds says it's too early to say how the sell-off will be organised, but giving new TSB customers something to celebrate when the day comes could be a canny tactic.
And I wonder if they'll be offered shares at a discount or even as a windfall.
Why? The reason is that the route of selling the branch business, to be re-branded as TSB, to a rival has turned out to be a blind alley.
Instead, Lloyds says it will hive off TSB as a free standing company and sell shares in it to City institutions and the public.
The share sale or Initial Public Offering (IPO) was always a backstop but now it's the favoured option. It has to be because there's nothing else very attractive on the table.
How will the shares be offered? Well, dangling some of them, on give-away terms, in front of the noses of customers could turn out to be an cunning way of rallying them behind the sale and the new bank.
The Lloyds TSB customers affected by the divestment have a right to feel disgruntled about the whole process. 3.5 million have already been sent letters telling them that their bank is changing.
No one likes being treated like baggage. Lloyds says very few have opted out of the transfer so far, but they could get disenchanted once the real changes begin over the summer.
So why not offer the 4.6m cut-price shares in their own bank?
And remember, when the original TSB was demutualised and sold off in 1986, people who bought the shares were given a loyalty bonus after 3 years of 1 extra share for every 10 held.
Lloyds says it's too early to say how the sell-off will be organised, but giving new TSB customers something to celebrate when the day comes could be a canny tactic.
Tuesday, 27 November 2012
You can stay with Lloyds
The 4.6m Lloyds customers who are having their accounts moved lock, stock and barrel to the Co-op are likely to be pretty confused about their options.
They'd be hard put to work out from the letters and leaflets being sent out to most of them from this week that they can opt out if they want to - and stay with Lloyds.
All they are told about that in the letter is:
"If you’d like to speak to someone about these changes, please call us on 0800 028 0428 – lines are open from 8am to 8pm Monday to Friday and 9am to 5pm on Saturdays and Sundays – or ask in branch."
And in the accompanying leaflet:
"If you think that you could be adversely affected by this change, you can send formal written objections – known as lodging written answers – to the Court at Parliament House, Parliament Square, Edinburgh EH1 1RQ, United Kingdom. If you wish to send a formal objection, we recommend you seek independent legal advice. Any objections you have must be lodged with the Court by 22 February 2013."
In fact, as I understand it, Lloyds TSB customers who ring up or go into a branch to object will be able to put themselves on a register of people who want to opt out.
Then, some time early next year, when the sale to the Co-op is closer to being signed and sealed, they'll be told about a formal mechanism to keep their business with Lloyds, even though their branch is being sold.
So why isn't Lloyds up front about this? It seems straightforward enough. If you don't want to be shovelled into another bank, surely that ought to be your choice?
The reason is likely to be that under the rules of the sale, laid down by the European Commission, Lloyds must not encourage its customers to stay.
If a large number objected, Lloyds would keep too big a share of the market and the branches would be worth less to the buyer.
And of course, both Lloyds and the Co-op must be concerned that once customers start to think about which bank they prefer, they might decide to switch to yet another bank.
But there is a serious danger that a misunderstanding will arise. Some people may think they don't have a choice when, in truth, they do.
They'd be hard put to work out from the letters and leaflets being sent out to most of them from this week that they can opt out if they want to - and stay with Lloyds.
All they are told about that in the letter is:
"If you’d like to speak to someone about these changes, please call us on 0800 028 0428 – lines are open from 8am to 8pm Monday to Friday and 9am to 5pm on Saturdays and Sundays – or ask in branch."
And in the accompanying leaflet:
"If you think that you could be adversely affected by this change, you can send formal written objections – known as lodging written answers – to the Court at Parliament House, Parliament Square, Edinburgh EH1 1RQ, United Kingdom. If you wish to send a formal objection, we recommend you seek independent legal advice. Any objections you have must be lodged with the Court by 22 February 2013."
In fact, as I understand it, Lloyds TSB customers who ring up or go into a branch to object will be able to put themselves on a register of people who want to opt out.
Then, some time early next year, when the sale to the Co-op is closer to being signed and sealed, they'll be told about a formal mechanism to keep their business with Lloyds, even though their branch is being sold.
So why isn't Lloyds up front about this? It seems straightforward enough. If you don't want to be shovelled into another bank, surely that ought to be your choice?
The reason is likely to be that under the rules of the sale, laid down by the European Commission, Lloyds must not encourage its customers to stay.
If a large number objected, Lloyds would keep too big a share of the market and the branches would be worth less to the buyer.
And of course, both Lloyds and the Co-op must be concerned that once customers start to think about which bank they prefer, they might decide to switch to yet another bank.
But there is a serious danger that a misunderstanding will arise. Some people may think they don't have a choice when, in truth, they do.
Millions of Lloyds customers on the move
Millions of customers of Lloyds TSB will start receiving letters from the bank from tomorrow morning, telling them that their accounts will be moved to a new bank owned by the Co-op. It's the result of an order from the European Commission requiring Lloyds to hive off hundreds of branches.
Three and a half million Lloyds TSB customers will receive the letter between now and Christmas. Although the deal was announced in the summer, it's the first time they will have been told officially by their bank that their accounts are to moved.
They'll stick with the same branches in a new banking operation to be called TSB, but owned by the Co-operative Bank which will become a more more significant player in financial services. Their account numbers and interest rates will stay the same.
In the letter the customers will be told that they can register their wish to stay with Lloyds, either by phone or in the branch. However, they won't need to make a final choice until next year.
The hiving off of 632 Lloyds TSB and Cheltenham & Gloucester branches, along with a total of 4.6m customers, was required by the European Commission after Lloyds benefited from a bailout from the taxpayer during the financial crisis and emerged from the turmoil with a huge share of the market.
How Lloyds describes the timetable:
Step 1
Branches, accounts and customers that will be part of the new bank are selected.
Step 2
We are here.
Legal move to Lloyds TSB Scotland plc – the branches and accounts that are included will be brought
together under one banking licence.
Step 3
If you have debit and credit cards, another step in the preparation is to send you new ones – they will
still be Lloyds TSB cards and work in the same way.
Step 4
When everything’s together under one licence, the business will be renamed as TSB Bank plc.
Final step
By the end of 2013 TSB Bank plc will transfer to a new owner.
For more info and list of branches affected, look here.
Friday, 2 November 2012
Astonishing PPI figures
Many are saying that the mis-selling of Payment Protection Insurance or PPI has turned into the biggest financial scandal in UK history.
The figures are staggering: £12.7bn is already set aside by banks and other firms to compensate their customers, but there are predictions that this will rise to £15bn or even higher.
So what is actually happening out there?
By a rough calculation, banks are sending out 10,000 payments or cheques a day, with typical payments averaging around £2,750.
That means nearly £30m is being shelled out daily to the growing ranks of customers who lost out and have made a claim.
At that rate it would still take a further 9 months to distribute all the compensation money which has been set aside.
If the claims keep coming in and banks have to provide more money, which seems highly likely, it will take more than a year.
The number of customers who have been paid compensation has probably already risen above 2.5 million.
Who knows what impact this will have?
It's welcome news for anyone who gets a payout. Some will save it, some will spend it.
Not so brilliant from the taxpayer's point of view, though, because two of the biggest PPI offenders (Lloyds and RBS) are partly state-owned.
And potentially it's not great for people and businesses looking for loans. The less banks have in their coffers, the less they can lend out.
The figures are staggering: £12.7bn is already set aside by banks and other firms to compensate their customers, but there are predictions that this will rise to £15bn or even higher.
So what is actually happening out there?
By a rough calculation, banks are sending out 10,000 payments or cheques a day, with typical payments averaging around £2,750.
That means nearly £30m is being shelled out daily to the growing ranks of customers who lost out and have made a claim.
At that rate it would still take a further 9 months to distribute all the compensation money which has been set aside.
If the claims keep coming in and banks have to provide more money, which seems highly likely, it will take more than a year.
The number of customers who have been paid compensation has probably already risen above 2.5 million.
Who knows what impact this will have?
It's welcome news for anyone who gets a payout. Some will save it, some will spend it.
Not so brilliant from the taxpayer's point of view, though, because two of the biggest PPI offenders (Lloyds and RBS) are partly state-owned.
And potentially it's not great for people and businesses looking for loans. The less banks have in their coffers, the less they can lend out.
Friday, 20 July 2012
Ducking out of the Lloyds Co-op switch
If I was a Lloyds TSB customer and hearing for the first time about the Big Bank Switch to the Co-op, I'd be puzzled and annoyed by the statement Lloyds is putting out to customers:
"Once the transfer is complete, the customers and staff in the selected branches will stay with those branches."
It makes you feel like sheep being herded from one field to another. It's the order that you "will stay" which sticks in in the craw - and it's nonsense, anyway.
To be fair, plenty of Lloyds customers seem unfazed by the prospect of being moved lock, stock and barrel to the Co-op, or the TSB - as the ex Lloyds TSB branches will be known.
And I've had staff telling me they're looking forward to it. One branch worker told me "I can't wait!".
On the other hand, people tend to like the devil they know. Most of those I asked outside Lloyds TSB branches have said they don't want to change banks and they don't want to be forced to do anything.
Here's the official line for customers on how they'll be affected. If you scroll down to the bottom you can click on the list of branches being transferred.
But you'll notice that Lloyds never says explicitly that customers don't have to go to the Co-op.
Why not?
Well, the answer is that, as part of the sales process, Lloyds can't be seen to be trying to keep customers.
The whole point is that the Co-op is spending £750m in order to get the 632 branches and a large number of accounts, likely to be 4.8m, so trying to woo customers back would be against the spirit of the deal.
On the other hand, it's patently absurd to suggest that becoming a member of the Co-op is compulsory.
What's likely to happen is that once the two banks sign their Sale and Purchase Agreement, which is the next stage, Lloyds will write to customers explaining what the options are...
And telling them that they can opt out of the Big Bank Switch - by moving to online banking or changing to a different Lloyds branch or, of course, by switching to another bank of their choice.
"Once the transfer is complete, the customers and staff in the selected branches will stay with those branches."
It makes you feel like sheep being herded from one field to another. It's the order that you "will stay" which sticks in in the craw - and it's nonsense, anyway.
To be fair, plenty of Lloyds customers seem unfazed by the prospect of being moved lock, stock and barrel to the Co-op, or the TSB - as the ex Lloyds TSB branches will be known.
And I've had staff telling me they're looking forward to it. One branch worker told me "I can't wait!".
On the other hand, people tend to like the devil they know. Most of those I asked outside Lloyds TSB branches have said they don't want to change banks and they don't want to be forced to do anything.
Here's the official line for customers on how they'll be affected. If you scroll down to the bottom you can click on the list of branches being transferred.
But you'll notice that Lloyds never says explicitly that customers don't have to go to the Co-op.
Why not?
Well, the answer is that, as part of the sales process, Lloyds can't be seen to be trying to keep customers.
The whole point is that the Co-op is spending £750m in order to get the 632 branches and a large number of accounts, likely to be 4.8m, so trying to woo customers back would be against the spirit of the deal.
On the other hand, it's patently absurd to suggest that becoming a member of the Co-op is compulsory.
What's likely to happen is that once the two banks sign their Sale and Purchase Agreement, which is the next stage, Lloyds will write to customers explaining what the options are...
And telling them that they can opt out of the Big Bank Switch - by moving to online banking or changing to a different Lloyds branch or, of course, by switching to another bank of their choice.
Wednesday, 27 June 2012
Lloyds closer to Co-op sale
Lloyds Banking Group says it now has an "understanding" with the Co-op to sell it 632 Lloyds TSB and Cheltenham & Gloucester branches.
The sale was demanded by the European Commission after mergers and government support during the financial crisis gave Lloyd's excessive power in its market.
The Co-op had lost exclusive negotiating rights after doubts emerged about its ability to absorb the branches as part of Co-operative Bank.
Now the talks will resume on an exclusive basis as the two parties draw up a sale agreement and seek approval from regulators.
The sale, codenamed Project Verde, would hand the Co-op 5 million customers and a 7% share of UK current accounts.
Meanwhile, a rival bidder, NBNK, confirmed that it had made a revised offer for the Lloyds branches.
Look here to see how you'll be affected and here to see if your branch is to be transferred.
Lloyds branches being cut loose
There's speculation of an update soon on the sale of 630 Lloyds TSB branches. Lloyds has promised more news before the end of the month.
So it might be a good moment to check whether your bank branch is among those to be transferred to the Co-op, or whoever else takes the branches on.
Here's the list.
What can you do about it? As I understand it, if customers don't wish to be hived off but they have been earmarked to be cut loose, they'll be able to request to stay with Lloyds.
It's just that Lloyds isn't supposed to encourage them.
There will be time to react - the deal doesn't have to be finalised until November 2013.
So it might be a good moment to check whether your bank branch is among those to be transferred to the Co-op, or whoever else takes the branches on.
Here's the list.
What can you do about it? As I understand it, if customers don't wish to be hived off but they have been earmarked to be cut loose, they'll be able to request to stay with Lloyds.
It's just that Lloyds isn't supposed to encourage them.
There will be time to react - the deal doesn't have to be finalised until November 2013.
Friday, 27 April 2012
Lloyds ends exclusive talks with Coop
Lloyds Banking Group has stopped exclusive talks with the Co-op on selling 632 branches, along with 5% of the UK's current accounts.
Lloyds was told to make the disposal by the European Commission after it emerged from the financial crisis with a dominant share of UK banking.
The exclusive nature of the talks was always due to be reviewed at this stage, but in recent weeks the Co-op has faced challenges in gaining approval from the City watchdog, the FSA.
Lloyds has also received a new rival bid from NBNK, a banking venture set with the express purpose of taking over the branches.
Lloyds says that the Co-op remains the "preferred buyer", but that it will now proceed with talks with NBNK at the same time.
There has been speculation that the bank would be forced to ask the Commission for an extension of the November 2013 deadline for making the disposal.
But Lloyds maintains that even if the takeover talks fail, it will be able to sell the 632 branches as an independent business, in a public offer of shares on the stockmarket.
Tuesday, 27 March 2012
Lucky the dog gets pet payout
The Halifax has been rebuked by the Financial Ombudsman Service for making a "significant error" in promising life-long insurance to pet owners.
The bank, now part of Lloyds, could find itself having to compensate thousands of customers, after the Ombudsman, Tony Boorman, found that it had misled them into thinking that cover for ongoing illnesses would continue indefinitely.
The case centred on a complaint about a dog called "Lucky" who has a skin condition costing £500 a year to treat.
The Halifax pulled out of the pet insurance business last year but has now been told that it should provide Lucky's owner with another 3 years of cover plus £200 in compensation.
The "life-long" policy cost £6 a month initially, rising to £10 a month later on, providing cover for vets bills of up to £1,000 a year.
When it was bought in 2005, Halifax congratulated Lucky's owner, know only as Ms W, on choosing "the right cover, no matter what the future brings".
The policy was particularly valuable because once Lucky's condition worsened, Mrs W was able to make claims year after year, as long as she renewed every 12 months.
However, when the bank decided to exit the business the dog's cover came to an end, because other insurers would have excluded pre-existing conditions from a new policy.
In his provisional finding Tony Boorman said:
"The description of the policy as "life-long" seems to me to be a significant error by Halifax. The policy was not life-long...and it was clearly misleading to suggest that it was."
He decided that the Halifax should provide "top-up" cover for Lucky's skin condition, if Ms W paid for a policy with another provider.
Although Lloyds and the Halifax had 30,000 pet insurance customers between them, it is thought that only a few thousand had policies which covered them for pre-existing conditions over an indefinite number of years.
A Lloyds Banking Group spokesman suggested that it would provide further help for any pet owners affected by the problem, saying "We are committed to continuing to support our customers and are sorry for the inconvenience we may have caused."
So Lucky's compensation could open the way to generous deals for thousands of other pets once covered by the Halifax.
Full text of the Lloyds statement to the BBC:
"Lloyds Banking Group withdrew from the pet insurance market last year. We acknowledge that this decision has caused concern among some customers whose pets have pre-existing medical conditions and are having difficulty finding a new insurer.
"We are urgently working on a solution for customers with pets who have pre-existing conditions and will be contacting them in the next few weeks with our proposals.
"If any customer wants to check if they are affected, they can contact us. We are committed to continuing to support our customers and are sorry for the inconvenience we may have caused."
The bank, now part of Lloyds, could find itself having to compensate thousands of customers, after the Ombudsman, Tony Boorman, found that it had misled them into thinking that cover for ongoing illnesses would continue indefinitely.
The case centred on a complaint about a dog called "Lucky" who has a skin condition costing £500 a year to treat.
The Halifax pulled out of the pet insurance business last year but has now been told that it should provide Lucky's owner with another 3 years of cover plus £200 in compensation.
The "life-long" policy cost £6 a month initially, rising to £10 a month later on, providing cover for vets bills of up to £1,000 a year.
When it was bought in 2005, Halifax congratulated Lucky's owner, know only as Ms W, on choosing "the right cover, no matter what the future brings".
The policy was particularly valuable because once Lucky's condition worsened, Mrs W was able to make claims year after year, as long as she renewed every 12 months.
However, when the bank decided to exit the business the dog's cover came to an end, because other insurers would have excluded pre-existing conditions from a new policy.
In his provisional finding Tony Boorman said:
"The description of the policy as "life-long" seems to me to be a significant error by Halifax. The policy was not life-long...and it was clearly misleading to suggest that it was."
He decided that the Halifax should provide "top-up" cover for Lucky's skin condition, if Ms W paid for a policy with another provider.
Although Lloyds and the Halifax had 30,000 pet insurance customers between them, it is thought that only a few thousand had policies which covered them for pre-existing conditions over an indefinite number of years.
A Lloyds Banking Group spokesman suggested that it would provide further help for any pet owners affected by the problem, saying "We are committed to continuing to support our customers and are sorry for the inconvenience we may have caused."
So Lucky's compensation could open the way to generous deals for thousands of other pets once covered by the Halifax.
Full text of the Lloyds statement to the BBC:
"Lloyds Banking Group withdrew from the pet insurance market last year. We acknowledge that this decision has caused concern among some customers whose pets have pre-existing medical conditions and are having difficulty finding a new insurer.
"We are urgently working on a solution for customers with pets who have pre-existing conditions and will be contacting them in the next few weeks with our proposals.
"If any customer wants to check if they are affected, they can contact us. We are committed to continuing to support our customers and are sorry for the inconvenience we may have caused."
Monday, 19 March 2012
Cheap loans for small businesses
What difference will the government's new National Loan Guarantee Scheme make to a small business?
Quick recap: Mr Osborne guarantees £20bn of fundraising for banks over 2 years, so they can raise money at a cheaper interest rate than normal to lend on to small businesses.
The technical name for the policy is "credit easing".
Full details tomorrow, but the burning questions for the firms and traders concerned will be what's it worth, can they get it and how much is available?
1. What's it worth?
Up to 1% off the interest rate you would have been charged outside the scheme.
One big bank offers an average interest rate to small business of just under 3%, with the vast majority of loans under 6% -- so 1% off that is a decent amount.
2. Can I get it?
You have to pass the same credit checks as normal. There's no special leniency.
New and existing borrowers will qualify.
The lending is expected to be fixed rate and you're likely to have to provide security, either business property or your own home.
3. How much can I borrow?
There's no upper limit and loans will go right down to £1,000, though not all banks will go down that far.
Terms are likely to be 3 or 5 years.
4. How many loans will be available?
The scheme will only cover a minority of small business lending during the 2 year period.
So if it proves popular, it'll be...buy now while stocks last.
We know already that RBS/NatWest, Barclays, Lloyds, Santander and Aldermore will be offering the discounted loans, not HSBC.
Will it work? It seems likely that a lot of firms will be able to take advantage of the scheme, even though they would have borrowed the money anyway.
But the cut-price loans and the publicity could tempt some new borrowers who are ready to expand.
Wednesday, 14 December 2011
Is my Lloyds branch being sold?
Who's affected by the Lloyds sale of 632 branches?
All 164 Cheltenham & Gloucester branches and all 185 Lloyds TSB Scotland branches are earmarked to be sold.
In addition, a selection of 283 Lloyds TSB branches in England and Wales would be transferred to the Co-op.
Lloyds has not published an online list of the branches affected, but customers can check directly with the branch.
This list from the Guardian has most of them:
Once Lloyds and the Co-op have agreed the deal, expected in the first 3 months of next year, the bank will write to customers who will be affected and a full list is likely to be posted on the Lloyds website.
Lloyds is selling up to 19% of its mortgage book. Mortgage customers will be told next year if they have been included.
Should a customer wish to remain within Lloyds and not transfer the bank will register their request and respond to them in due course
about the options available to them, likewise if they say they really want to move.
Lloyds says customers do not need to do
anything now as changes will not be seen until the sale completes in late 2013.
Monday, 13 June 2011
How many PPI claimants are trying it on?
Banking insiders are suggesting an interesting reason that Lloyds Banking Group is not following Barclays' lead on PPI compensation.
You remember that Barclays caught other banks on the hop this morning by promising no quibble payouts to tens of thousands of complainants.
These were the ones whose cases had been on hold during the months of court wrangling over how thorough the banks would have to be in identifying cases of misselling.
Lloyds says it will be handling all complaints consistently, regardless of when they were received. In other words, everyone gets treated in the same way.
And -- here's the interesting bit -- it's been suggested to me that 20% of the complaints Lloyds receives may be from people who didn't buy Payment Protection Policies from Lloyds.
Most probably come via claims management firms and at least some of the claimants could be trying it on. That's what some bankers think, anyway.
The Lloyds line is that you have to establish how valid complaints are before paying out money willy nilly.
You remember that Barclays caught other banks on the hop this morning by promising no quibble payouts to tens of thousands of complainants.
These were the ones whose cases had been on hold during the months of court wrangling over how thorough the banks would have to be in identifying cases of misselling.
Lloyds says it will be handling all complaints consistently, regardless of when they were received. In other words, everyone gets treated in the same way.
And -- here's the interesting bit -- it's been suggested to me that 20% of the complaints Lloyds receives may be from people who didn't buy Payment Protection Policies from Lloyds.
Most probably come via claims management firms and at least some of the claimants could be trying it on. That's what some bankers think, anyway.
The Lloyds line is that you have to establish how valid complaints are before paying out money willy nilly.
Tuesday, 24 May 2011
Lloyds should offload more branches
The head of the Independent Commission on Banking, Sir John Vickers, has stuck to his view that Lloyds should be forced to sell more bank branches to improve competition.
Lloyds has been told to divest itself of 600 branches. Sir John, whose Commission has been told to come up with proposals to make the UK's banks safe in future and beef up competition, has already said that won't be enough.
Today he reiterated to MPs on the Treasury select committee that he was "clear that there should be a substantial enhancement" of the 600 figure, though it would be "inappropriate" come up with an exact number.
Selling 600 branches would reduce Lloyds Banking Group's share of personal accounts from 30% to 25%. But Sir John said it was a major issue that one institution could have a quarter of all accounts.
Lloyds has been told to divest itself of 600 branches. Sir John, whose Commission has been told to come up with proposals to make the UK's banks safe in future and beef up competition, has already said that won't be enough.
Today he reiterated to MPs on the Treasury select committee that he was "clear that there should be a substantial enhancement" of the 600 figure, though it would be "inappropriate" come up with an exact number.
Selling 600 branches would reduce Lloyds Banking Group's share of personal accounts from 30% to 25%. But Sir John said it was a major issue that one institution could have a quarter of all accounts.
Tuesday, 10 May 2011
The staggering number of dodgy PPI sales
Just to be clear about the number of Payment Protection Insurance policyholders who may be in line for compensation, this is what the Financial Services Authority is saying...
16.1m policies sold since 2005, worth £17bn
The significance of 2005 is that the FSA took over regulation of the sector at this point. It issued tighter definitions of its selling rules in 2010: the court case was about applying these back to 2005.
1.5m policyholders have already complained about misselling
Some of these have been held up by the banks during the court case, so haven't yet been resolved. Not all will be paid compensation.
2m non-complainants will be paid compensation
These will be the the result of the banks looking back through their records and contacting customers who haven't complained but were affected by systemic failures in sales. The obvious evidence of this is when lots of others in a group of customers have already complained about misselling.
750,000 future complaints
These are the number of people the FSA believes will be paid compensation after putting in complaints over the next few years.
Total: 4.25m, more than one in four!
These figures don't include pre-2005 cases, where different rules apply but banks may pay out compensation. Lloyds, for instance, says it might go back another 10 years.
Also, the number of future complaints is an uncertain figure. The banks don't have to contact all their customers to tell them they can make a claim.
But common sense suggests it may grow significantly, now that more people are aware of the issue.
16.1m policies sold since 2005, worth £17bn
The significance of 2005 is that the FSA took over regulation of the sector at this point. It issued tighter definitions of its selling rules in 2010: the court case was about applying these back to 2005.
1.5m policyholders have already complained about misselling
Some of these have been held up by the banks during the court case, so haven't yet been resolved. Not all will be paid compensation.
2m non-complainants will be paid compensation
These will be the the result of the banks looking back through their records and contacting customers who haven't complained but were affected by systemic failures in sales. The obvious evidence of this is when lots of others in a group of customers have already complained about misselling.
750,000 future complaints
These are the number of people the FSA believes will be paid compensation after putting in complaints over the next few years.
Total: 4.25m, more than one in four!
These figures don't include pre-2005 cases, where different rules apply but banks may pay out compensation. Lloyds, for instance, says it might go back another 10 years.
Also, the number of future complaints is an uncertain figure. The banks don't have to contact all their customers to tell them they can make a claim.
But common sense suggests it may grow significantly, now that more people are aware of the issue.
Thursday, 5 May 2011
Lloyds compensation -- will they contact you?
"Please read the letter that I wrote," Lloyds will be telling customers who were mis-sold Payment Protection Insurance.
Those lucky ones will learn that they can claim compensation.
But will Lloyds be writing to all of them? The answer is no.
The nub of this issue is that where Lloyds identifies a "systemic failure" in its sales process, it will write to everyone who has been affected.
But such a failure may only be deemed to have affected tightly defined groups of customers -- and others may be left out.
Lloyds says it is not obliged to contact every single PPI customer to tell them they might have been mis-sold a policy.
The FSA calls the approach "root cause analysis". Here's the section from its rulebook:
In respect of complaintss that do not relate to MiFID business, a respondent must put in place appropriate management controls and take reasonable steps to ensure that in handling complaints it identifies and remedies any recurring or systemic problems, for example, by:
(1) analysing the causes of individual complaints so as to identify root causes common to types of complaint;
(2) considering whether such root causes may also affect other processes or products, including those not directly complained of; and
(3) correcting, where reasonable to do so, such root causes.
Those lucky ones will learn that they can claim compensation.
But will Lloyds be writing to all of them? The answer is no.
The nub of this issue is that where Lloyds identifies a "systemic failure" in its sales process, it will write to everyone who has been affected.
But such a failure may only be deemed to have affected tightly defined groups of customers -- and others may be left out.
Lloyds says it is not obliged to contact every single PPI customer to tell them they might have been mis-sold a policy.
The FSA calls the approach "root cause analysis". Here's the section from its rulebook:
In respect of complaintss that do not relate to MiFID business, a respondent must put in place appropriate management controls and take reasonable steps to ensure that in handling complaints it identifies and remedies any recurring or systemic problems, for example, by:
(1) analysing the causes of individual complaints so as to identify root causes common to types of complaint;
(2) considering whether such root causes may also affect other processes or products, including those not directly complained of; and
(3) correcting, where reasonable to do so, such root causes.
Wednesday, 4 May 2011
Only 5% deposit at Nationwide
Any addition to the options for first time buyers has to be welcomed at the moment.
Nationwide has added its Save to Buy scheme, allowing first timers to obtain a 95% mortgage or, putting it the other way round, put down a deposit of just 5%.
It adds to offers from Lloyds, Barratts and Taylor Wimpey and a deal from councils.
The rules are that prospective buyers have to open a special savings account with Nationwide and deposit £50 a month for at least 6 months.
Then they qualify for a 3 year fixed rate mortgage at 6.29%, for a discounted fee of £400. Or a five year fix at 6.89%.
If I were to niggle I would say it is a shame that the savings account can't be a tax-free ISA. Nationwide says it wanted a simple account for all.
Plus, it points out that savers qualify for a bonus of up to £1,000 to help with the mortgage, if they do eventually apply for one.
How much difference will it make?
Well, Nationwide lent to 17,000 first time buyers in the 11 months to February this year, slightly more than its overall market share warranted.
But the total number of new buyers last year was 197,400, so an increase the Nationwide figure is unlikely to transform the situation.
According to the Council of Mortgage Lenders, the highest number of purchases by first-time buyers recently came in 2001, when the total was 568,200.
Hence, some would argue that you need to bring hundreds of thousands of first time buyers into the market to get things moving healthily again.
None of the schemes on the table will do that, together or separately.
Nationwide has added its Save to Buy scheme, allowing first timers to obtain a 95% mortgage or, putting it the other way round, put down a deposit of just 5%.
It adds to offers from Lloyds, Barratts and Taylor Wimpey and a deal from councils.
The rules are that prospective buyers have to open a special savings account with Nationwide and deposit £50 a month for at least 6 months.
Then they qualify for a 3 year fixed rate mortgage at 6.29%, for a discounted fee of £400. Or a five year fix at 6.89%.
If I were to niggle I would say it is a shame that the savings account can't be a tax-free ISA. Nationwide says it wanted a simple account for all.
Plus, it points out that savers qualify for a bonus of up to £1,000 to help with the mortgage, if they do eventually apply for one.
How much difference will it make?
Well, Nationwide lent to 17,000 first time buyers in the 11 months to February this year, slightly more than its overall market share warranted.
But the total number of new buyers last year was 197,400, so an increase the Nationwide figure is unlikely to transform the situation.
According to the Council of Mortgage Lenders, the highest number of purchases by first-time buyers recently came in 2001, when the total was 568,200.
Hence, some would argue that you need to bring hundreds of thousands of first time buyers into the market to get things moving healthily again.
None of the schemes on the table will do that, together or separately.
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