Old Mutual Bids £600m For Wealth Manager

By Mark Kleinman, City Editor

Britain's second-biggest independent wealth manager has rebuffed a £600m takeover offer from Old Mutual, the FTSE-100 financial services group.

Sky News understands that Quilter Cheviot, which manages almost £16bn in assets, was the subject of a recent bid from Old Mutual even as it considers a listing that would catapult it into the ranks of London's 350 largest listed companies.

Bridgepoint, the private equity firm which controls Quilter Cheviot, is understood to have rejected the proposal on the grounds that it undervalued the company.

Other prospective buyers, including Investec, are said to have examined a takeover of Quilter Cheviot although it was unclear on Friday whether any other formal offers have been tabled.

It remains possible that Old Mutual could return with a higher bid for the wealth management group, although Bridgepoint is focused on an initial public offering that is likely to take place by the end of the year.

In a statement, the private equity group said: "Inevitably when IPO plans are being prepared there is parallel speculation and rumours about alternatives. We never comment on such rumours."

The addition of Quilter Cheviot to Old Mutual's wealth management arm would create a more powerful platform for serving affluent clients at a time of consolidation across the sector.

Another big player, Bestinvest, was sold to Permira, another buyout firm, last year, with a follow-on deal taking the firm's assets under management to approximately £9bn.

A flurry of deals has been accelerated by regulatory reforms known as the Retail Distribution Review, which have altered the way that wealth managers are remunerated for their work, shifting from a largely commission-based system to one predicated upon the volume of assets under management.

Quilter Cheviot was formed in 2012 from the merger of Quilter & Co and Cheviot Asset Management, with Bridgepoint understood to believe that the combined group is worth at least £700m.

The company traces its roots back to 1771, making it one of the UK's oldest financial services firms.

Evercore, an investment bank, is advising Bridgepoint, which declined to comment, on the process.

Old Mutual, which also declined to comment, is interested in expanding its wealth management business at a time when it is also reshaping parts of its business.

The Anglo-South African group recently filed plans to list its US asset management business, and has hired a number of top fund managers to work in its London-based operation.

12.06 | 0 komentar | Read More

Europe Agrees On Fresh Russian Sanctions

European leaders have agreed to hit Russia with a fresh round of sanctions despite Moscow signing up to a ceasefire in Ukraine.

The sanctions include credit restrictions on Russia companies, export bans, and travel bans and asset freezes on a new set of officials, according to a European Union diplomat who spoke on the condition on anonymity.

Two branches of the world's biggest oil producer - Gazprom Bank and Gazprom Neft - are targeted by the measures, said the diplomat.

Speaking at the end of a Nato summit in Wales on Friday, David Cameron said sanctions would continue despite both sides agreeing to a 12-point peace plan.

However, the Prime Minister said they could be lifted if a lasting peace was found.

The new restrictions, which will be imposed early next week, come as Britain agreed to supply 1,000 troops to a Nato rapid response force aimed at countering Russian aggression in Ukraine and eastern Europe.

Nato Secretary General Anders Fogh Rasmussen revealed the plan for a Spearhead force after discussions with members in Newport.

Ukraine was a dominant topic on the final day of the Nato summit

"This decision sends a clear message: Nato protects all allies at all times," he said.

"And it sends a clear message to any potential aggressor: should you even think of attacking one ally, you will be facing the whole alliance."

Western leaders accuse Russia of sending thousands of troops into the east of Ukraine - prompting fears of future incursions into other eastern European countries.

Mr Rasmussen said the Spearhead force would establish a "command-and-control" presence in the east of allied territories ready to deploy air, sea and special forces in the event of aggression.

He told Sky News Tonight: "We have decided to improve our ability to act swiftly. The force could be deployed within very few days if needed.

"The intention is to strengthen the defence of our allies."

Mr Rasmussen said alliance countries would contribute troops on a rotational basis to the high-readiness force.

12.06 | 0 komentar | Read More

Eurozone Teeters As ECB's Bazooka Is Held Back

By Ian King, Business Presenter

Only in a 100 metre sprint, a Wall Street Journal correspondent joked on Twitter, does a one-tenth of a unit move normally spark such excitement.

The European Central Bank's shock interest cut today, taking its benchmark policy rate from 0.15% to 0.05%, created drama on currency markets, sending the euro down against the US dollar by almost a full percentage point – a move seldom seen – to its lowest level for 14 months.

As dramatic was the ECB's decision to raise the rate it charges commercial banks to deposit money with it from 0.1% to 0.2%.

This negative deposit rate is aimed at getting commercial banks in the Eurozone to lend money to customers rather than hoard it. It highlights how gravely the ECB now views the chronic state of the Eurozone economy.

Mario Draghi arrives at the news conference

The Eurozone, to put it bluntly, is teetering on the brink of a Japanese-style crisis.

Japan is slowly dragging itself out of two decades during which it has suffered deflation, or negative inflation, a sustained period of falling prices.

That might sound good news for shoppers but is, over time, a ghastly phenomenon that strangles confidence and economic activity.

Played out at a national level, it also increases the value of debt, something many highly-indebted Eurozone economies cannot afford.

Deflation raises the risk economies cannot meet interest payments on their debts – the factor that forced Greece, Portugal and Ireland to seek bail-outs from the ECB and the International Monetary Fund.

The ECB knows the Eurozone is not far away from such a crisis. Consumer price inflation in the Eurozone currently stands at just 0.3 per cent but in some Eurozone economies, such as Spain, deflation has already taken hold.

The problem is that today's measures are unlikely to work.

Many economists believe the Eurozone's money transmission mechanism – how interest rate changes by central banks filter through to changes in the real economy – is broken. So cutting rates, on its own, will not be enough.

Quantative easing could have made it easier for Eurozone banks to lend cash

That is why Mario Draghi, the ECB President, also announced plans to buy asset-backed securities (ABS) and covered bonds issued by Eurozone banks.

These are portfolios of loans like mortgages and credit card debt, that banks normally parcel up and sell on to buyers such as insurance companies and pension funds, and the ECB's purpose in buying them is to deliver more money to the banking sector to be lent elsewhere.

The problem here is that the ABS market in the Eurozone is relatively small and so this action is unlikely to deliver dollops of money to the banking sector in the scale that would be needed to make a difference.

But Mr Draghi did not fire his big bazooka - full-blown Quantitative Easing by the buying of Eurozone government bonds - today.

That would be fiendishly complex, not least because it will require approval from the Germans, who are not keen on the idea. Expect calls for it to increase, though, if today's measures prove unsuccessful.

12.07 | 0 komentar | Read More

ECB Cuts Eurozone Rates And Boosts Stimulus

Eurozone Teeters As ECB's Bazooka Is Held Back

Updated: 6:46pm UK, Thursday 04 September 2014

By Ian King, Business Presenter

Only in a 100 metre sprint, a Wall Street Journal correspondent joked on Twitter, does a one-tenth of a unit move normally spark such excitement.

The European Central Bank's shock interest cut today, taking its benchmark policy rate from 0.15% to 0.05%, created drama on currency markets, sending the euro down against the US dollar by almost a full percentage point – a move seldom seen – to its lowest level for 14 months.

As dramatic was the ECB's decision to raise the rate it charges commercial banks to deposit money with it from 0.1% to 0.2%.

This negative deposit rate is aimed at getting commercial banks in the Eurozone to lend money to customers rather than hoard it. It highlights how gravely the ECB now views the chronic state of the Eurozone economy.

The Eurozone, to put it bluntly, is teetering on the brink of a Japanese-style crisis.

Japan is slowly dragging itself out of two decades during which it has suffered deflation, or negative inflation, a sustained period of falling prices.

That might sound good news for shoppers but is, over time, a ghastly phenomenon that strangles confidence and economic activity.

Played out at a national level, it also increases the value of debt, something many highly-indebted Eurozone economies cannot afford.

Deflation raises the risk economies cannot meet interest payments on their debts – the factor that forced Greece, Portugal and Ireland to seek bail-outs from the ECB and the International Monetary Fund.

The ECB knows the Eurozone is not far away from such a crisis. Consumer price inflation in the Eurozone currently stands at just 0.3 per cent but in some Eurozone economies, such as Spain, deflation has already taken hold.

The problem is that today's measures are unlikely to work.

Many economists believe the Eurozone's money transmission mechanism – how interest rate changes by central banks filter through to changes in the real economy – is broken. So cutting rates, on its own, will not be enough.

That is why Mario Draghi, the ECB President, also announced plans to buy asset-backed securities (ABS) and covered bonds issued by Eurozone banks.

These are portfolios of loans like mortgages and credit card debt, that banks normally parcel up and sell on to buyers such as insurance companies and pension funds, and the ECB's purpose in buying them is to deliver more money to the banking sector to be lent elsewhere.

The problem here is that the ABS market in the Eurozone is relatively small and so this action is unlikely to deliver dollops of money to the banking sector in the scale that would be needed to make a difference.

But Mr Draghi did not fire his big bazooka - full-blown Quantitative Easing by the buying of Eurozone government bonds - today.

That would be fiendishly complex, not least because it will require approval from the Germans, who are not keen on the idea. Expect calls for it to increase, though, if today's measures prove unsuccessful.

12.06 | 0 komentar | Read More

UK Economy Boosted By Wider Contributions

Revisions and improvements to the way UK output is measured show an uptick in its historic performance.

The Office for National Statistics (ONS) said gross domestic product (GDP) shrank by as much as 6% in the depths of the recession, lower than the previous "peak-to-trough" estimate of 7.2%.

The revisions for 1997 to 2012 show the size of the economy on average 4%, or £50bn, larger than previously thought each year.

The announcement  was made after the ONS confirmed that GDP calculations would now include contributions to the economy from more 'colourful' corners of output, including prostitution and sales of illegal drugs.

The ONS sought to play down the additions in terms of their impact on the big picture, despite them contributing £10bn in 2009 alone. 

ONS chief economist Joe Grice said: "Despite the wide ranging improvements underpinning the new estimates, the broad picture of the economy has not changed much.

"Although the downturn was less deep than previously estimated and subsequent growth stronger, it remains the case that the UK experienced the deepest recession since ONS records began in 1948 and the subsequent recovery has been unusually slow.

"Over the period 1998-2012, the overall size of revisions remains small at an average of 0.1 percentage points per year."

The news was welcomed by the Chancellor George Osborne.

He told Sky News: "The British recovery is stronger than previously thought. We see that Britain is becoming more competitive - moving up the global rankings.

"We see jobs being created in our country and that is evidence our plan is working ...but I'm the first to say the risks from abroad are rising as well so we've got to go on providing economic security and that is the task ahead."

Chris Leslie, Labour's shadow Chief Secretary to the Treasury, said: "These accounting changes to the way GDP is measured - for instance to include drug dealing and prostitution - do not mean families or businesses are better off.

"GDP growth has been revised up in every year since 2008. But it's still the case that working people are substantially worse off under this government, that the recovery was choked off in 2010 and that it is the slowest on record".

The ONS confirmed its revisions as a separate study - charting activity in the economy - pointing to an improving picture for service industries though firms were watching events in Ukraine closely.

The monthly Markit/CIPS purchasing managers index (PMI) for the sector jumped at its fastest rate for almost a year in August.

The strength in services contrasts with a slight cooling in the country's factory sector, which has also been hit by concerns that the conflict in Ukraine could escalate further.

Growth in construction was held back by shortages of skilled labour and materials.

Chris Williamson, chief economist at Markit which compiles the PMI, said August's PMI surveys suggested Britain's economy would grow at a pace similar to the 0.8% quarterly rate seen in the first two quarters of this year.

12.07 | 0 komentar | Read More

Confusion Over Ukraine 'Permanent Ceasefire'

Vladimir Putin says a ceasefire deal between Ukraine and pro-Russian rebels could be reached by Friday.

The Russian President's announcement comes after conflicting reports that a permanent ceasefire agreement had been reached by the two sides this morning.

Following witness reports of loud artillery explosions near the Ukrainian city of Donetsk, the country's President Petro Poroshenko modified his statement to remove the word "permanent".

Mr Putin and Mr Poroshenko were unable to agree when they met last week

It is unclear whether his actions were in response to reports of the explosion.

Reporting from Mariupol, Ukraine, Sky's Moscow Correspondent Katie Stallard said: "It's extremely unclear at this stage what exactly this ceasefire is supposed to be.

"No one we have spoken to on the ground seems to know about it.

"The Ukrainian president issued a statement this morning claiming he agreed with Vladimir Putin to a permanent ceasefire in the region.

"He has since slightly modified that statement and removed the word 'permanent'.

"A spokesman for President Putin said no such agreement has been reached, nor can it, because Russia is not a party to the conflict."

Mr Putin's spokesman Dmitry Peskov was earlier quoted as saying the leaders' views "overlap to a considerable degree".

"The heads of state exchanged opinions about what needs to be done first in order to bring an end to the bloodletting in the southeast of the country as soon as possible," said Mr Peskov.

A statement from Kiev said an understanding had been achieved which would enable the "establishment of peace".

The conflict will be at the top of the agenda at the Nato summit in Wales

News of the development was greeted with an immediate rally on the financial markets - the main Russian stock exchange, the Micex, rising 4% and stocks in London with the FTSE 100 reached a 14-year high in morning trade.

Russia later announced it was to hold major military exercises in September of the forces responsible for its long-range nuclear capability. The drills will involve more than 4,000 servicemen and 400 technical units. 

Meanwhile, world leaders have begun arriving in the UK ahead of a two-day Nato summit in Wales where the Ukraine crisis will be top of the agenda. 

Speaking in Estonia ahead of the summit, President Obama said that Nato would not accept what he called Russia's illegal annexation of Crimea.

In a thinly-veiled warning to President Putin, the US President added that the Baltic states were bound by the Nato alliance.

"We have a solid duty to each other. Article Five is crystal clear; an attack on one is an attack on all," he said.

Mr Obama added the US was working to bolster the security of Nato allies and increase America's military presence in Europe.

"It would mean more US forces, including American boots on the ground continuously rotating through the Estonia, Latvia and Ukraine militaries."

Russia has repeatedly denied claims its soldiers were recently sent into eastern Ukraine to support Ukrainian pro-Russian rebels.

12.07 | 0 komentar | Read More

Financial Jargon Is Costing Customers Hundreds

By Poppy Trowbridge, Consumer Affairs Correspondent

Consumers are losing more than £400 a year because they do not understand financial terms and conditions.

According to research from the Money Advice Service many customers do not know what key concepts mean at all.

The study of 3,000 UK adults shows this is a particular problem for payday loan customers.

Considering that one fifth of the UK population falls within this group, the fact that 52% could not correctly identify the meaning of the word "loan" is worrying.

These "loans" carry high interest rates (another term that caused confusion) and without regular repayment, can quickly drag a customer into serious debt.

Even common abbreviations used by the financial industry led to confusion:

:: 61% could not identify what EAR stands for (Equivalent Annual Rate)

:: 30% could not identify what APR stands for (Annual Percentage Rate)

:: 22% could not identify what ISA stands for (Individual Savings Account)

:: 32% misunderstood the meaning of the terms "interest" and "budget"

But putting these rather simple, yet admittedly still quite specific concepts aside, the survey reveals three far more worrying facts that put large portions of the population at risk.

First, 84% of UK adults do not read the full terms and conditions when taking out a financial product.

Some 84% of people do not read the full terms and conditions

There will be very few people in the country that will not have a debit card, mortgage or car loan.

That means each and every one of them who does not read  the terms of their contracts is taking a chance.

Nearly 31 million people are in the workforce and many of them will be saving into a pension as a result of the government's auto-enrolment program.

Yet the term most misunderstood is this survey was "compound interest".

Quite simply, this is the most important concept for financial planning known to man.

The Money Advice Service estimates the average UK adult is out of pocket by £428 per year because of the confusions surrounding all this financial jargon.

Luckily, this year, personal finance officially joins the national curriculum alongside more traditional subjects like history and maths.

12.06 | 0 komentar | Read More

National Grid Seeks Extra Winter Electricity

National Grid has brought forward plans to tap additional power capacity over the winter after unexpected plant outages raised the risk of shortages.

It is being described as a precautionary move, supported by Government, to safeguard supply rather than any bid to prevent possible blackouts.

National Grid said it had launched a tender for its Supplemental Balancing Reserve (SBR), asking power firms how much more electricity they could provide the network to fill a potential gap from mothballed or closed generators.

The network operator cited a series of unplanned shutdowns at large power stations for its decision to begin SBR a year ahead of its original timetable, having previously warned of a looming supply crunch.

Fires at E.ON's Ironbridge and SSE's Ferrybridge power plants have reduced output while precautionary checks at EDF Energy's Heysham and Hartlepool nuclear plants have also hit production.

Hartlepool's nuclear power station has been shut down for two months

The worries over future supplies were initially sparked by ageing and most-polluting power stations being shut down at a time when new plants are struggling to make up the shortfall.

National Grid's plan to safeguard supplies at peak winter times also includes a scheme that allows it to ask contracted users, mostly factories, to reduce their electricity demand when the system is strained.

It said it had received a positive response to the programme, known as Demand Side Balancing Reserve (DSBR), which could operate between 4pm and 8pm on weekday evenings between November and February.

It planned to issue contracts later this month which would be activated only if required.

National Grid's Director of UK Market Operation, Cordi O'Hara, said of the announcement: "This is a sensible precaution to take while the picture for this winter remains uncertain.

"At this stage we don't know if these reserve services will be needed, but they could provide an additional safeguard".

12.06 | 0 komentar | Read More

UK Industry Export Orders Hit Euro Headwinds

There is increasing evidence that the UK's economic recovery is coming under pressure from outside influences.

New manufacturing order growth plunged in August, according to the keenly-awaited CIPS/Markit Purchasing Managers' Index (PMI), with overall activity at a 14-month low.

The report highlighted concerns that UK industry was not immune to the impact of the conflict between Ukraine and Russia - a stand-off that has already resulted in tit-for-tat sanctions between Russia and the West.

The sanctions have already been blamed for knocking confidence and output in the euro area - the UK's biggest trading partner - and especially in Germany which relies on Russia for much of its energy supplies.

Markit senior economist Rob Dobson said: "It is noticeable that where export orders were reported to have risen, companies mainly linked this to demand from North America, Asia and the Middle East, as opposed to our European partners."

The PMI fell to 52.5 in August - its lowest level since June last year and below forecast - from July's downwardly revised 54.8.

While still holding above the 50-point threshold denoting growth, the PMI suggested the onus will fall on consumers to keep driving Britain's economic upturn in the second half of the year.

The fall in the headline index was driven by the new orders component, which suffered its biggest one month drop in two years.

Factories also hired  staff at the slowest pace since last June.

A separate PMI for eurozone manufacturers also showed growth eased more than first thought while the UK manufacturing body the EEF also issued a warning about exports and cut its growth forecast.

Its report cited concerns over the "flagging" eurozone economy and stronger sterling exchange rate.

12.06 | 0 komentar | Read More

How Scottish 'Yes' May Impact 'Invisible Border'

By Poppy Trowbridge, Consumer Affairs Correspondent

For those that live along the invisible border that divides Scotland and England, daily life could change dramatically with a Yes vote in the September 18 referendum.

These communities, from Berwick-upon-Tweed to Coldstream to Gretna, will certainly feel the effect of any changes first.

While business and families could suddenly find themselves exporting and travelling abroad, currency is the top concern for most people.

Harry Frew, owner of Cheviot Trees - a farm based in Scotland, but so near the border it has an English postcode - says the uncertainty is damaging.

"Currency is our biggest issue," Mr Frew said.

"It would be a major impact on the business, a lot of extra admin and costs. If Scotland was to end up with euros, we would have to become used to invoicing in euros. Personally I think it is something we'd rather avoid."

Whether Scotland keeps the pound, adopts the euro or produces its own tender will determine the ease and cost of doing business on both sides.

Farm owner Harry Frew and Sky's Poppy Trowbridge

Cross-border workers may find themselves subject to two different tax regimes.

Eventually there could be two entirely different systems for borrowing, saving, buying and selling, working and retiring between the two countries.

Stephen Hay, head of tax at Baker Tilly in Edinburgh, said: "Of course people are going to be concerned about the pound in their pocket.

"A pensioner in Scotland will receive a pension, but the tax he pays on that pension could be higher or lower than a pensioner in England under independence.

"If the tax rate is higher in Scotland then clearly the less they'll have and equally if the tax rate is lower in Scotland the more they'll have, so I would imagine that will be a particular issue for a lot of people."

The Scotland referendum is just over two weeks away

The Scottish Government plans to set the state pension at £160 per week, while the UK will set the new single tier rate next year, it's likely to be slightly lower around £148.

The current Scottish Government's White Paper also suggests that in the event of independence, it would review (and possibly withdraw) the UK Government's decision to raise the retirement age to 67 - keeping it at 65.

Home Secretary Theresa May has threatened checkpoints along the boundary should an independent Scotland pursue an immigration policy more lenient than that of the UK.

That could mean commuters would require passports.

The Scottish Government proposes one major simplification though.

An independent Scotland would replace the 95 ombudsmen that deal with a range of consumer issues within the UK: from roofing, to renewable energy, to financial services, with a single Scottish Consumer and Competition authority.

12.06 | 0 komentar | Read More

Co-op Members Vote Through Big Reforms

Co-operative members have backed a shake-up of the way the crisis-hit group is run after a landmark vote on Saturday.

At a special general meeting in Manchester, 83% of votes were in favour of proposals drawn up after the mutual made record £2.5bn losses, the Co-op said.

The proposals include reform of the group's board structure, with elected directors largely replaced by professional business people.

The new structure also includes the creation of a smaller board of directors and the adoption of a one-member one-vote system.

Ursula Lidbetter, Co-op chair, said: "These reforms represent the final crucial step in delivering the change necessary to return the group to health.

"This will strengthen the society and enable us to move forward with the urgent work to rebuild the business and deliver on our renewed purpose, in the interests of all our colleagues and our millions of members and customers."

A poll in May saw unanimous support for the key principles behind the reforms.

The changes, which followed a review by former City minister Lord Myners, required the backing of a two-thirds majoriy.

The board will consist of an independent chairman, five independent non-executive directors, two executive directors and three elected directors.

Last year saw the Co-op group experience its worst crisis in its 150-year history after it discovered a £1.5bn hole in its balance sheet.

A separate report by Sir Christopher Kelly found the group had let down its members by failing to provide "proper stewardship".

Its stake in the bank has now fallen from 100% to 20% after a rescue plan that saw bondholders, including US hedge funds, take majority ownership.

Last week, the lender reported first-half losses had shrunk from £845m to £76m.

12.07 | 0 komentar | Read More

Branson Banks On £2bn Virgin Money Float

By Mark Kleinman, City Editor

Sir Richard Branson is poised to pull the trigger on a stock market listing of Virgin's banking arm that City insiders predict could value it at up to £2bn.

Sky News has learnt that directors of Virgin Money are in talks with advisers about announcing an intention to float as soon as early October, as they look to exploit strong current trading and investors' appetite to buy shares in the company.

A final decision about the timing of an initial public offering (IPO) will not be taken for several weeks and it remains a strong possibility that Virgin Money could opt to wait until next year, according to people close to the company.

If it does press the button on a listing this year, Virgin Money, which has more than four million customers, would become the third so-called challenger bank to sell shares on the London Stock Exchange this year.

OneSavings, which does not offer current accounts, listed during the spring, while TSB was spun out of Lloyds Banking Group as part of the bank's state aid settlement with Brussels triggered by its taxpayer bailout in 2008.

Aldermore, another new lender, is also planning a flotation this autumn and could announce its plans at around the same time as Virgin Money.

Sir Richard's plan to float his banking business has been well-flagged, although it was not expected to happen as soon as this year.

Sources said that Virgin Group, which owns just over 46.5% of Virgin Money, planned to retain a large a shareholding as possible after a flotation.

WL Ross, the investment vehicle of billionaire US financier Wilbur Ross, also wants to hold onto the vast majority of its 45% stake, meaning that the free float of Virgin Money shares after the sale of new equity is likely to be close to the minimum requirements under City rules.

Virgin Money has been performing strongly in recent months, according to insiders, with a new current account making strong progress in Scotland and Northern Ireland before its wider nationwide launch.

The product, branded Essential, is designed to build a substantial presence in the current account sector at a time when ministers are attempting to foment greater competition.

Last month, Virgin Money announced a deal to raise £160m in the debt markets in order to repay part of a financing package taken on when it acquired Northern Rock from the Government in 2011.

Jayne-Anne Gadhia, Virgin Money's chief executive, said in July that 200 new jobs would be created by the business this year.

"We have grown the business strongly, exceeding market growth in both our core mortgage and savings business, and returned to profitability," she said.

"We have achieved this whilst maintaining the strength and quality of our balance sheet."

The bank added that it had grown mortgage balances by over 40% to exceed £20bn, significantly ahead of market growth, while savings balances had increased by more than 30% to over £21bn.

Last year, Virgin Money made an underlying profit of £53.4m in 2013, compared to a £2.5m loss the year before.

Chaired by Sir David Clementi, the former Prudential chairman, Virgin Money is expected to add further board members ahead of a listing.

The bank declined to comment on Saturday on the potential timing of a flotation, which is being handled by Bank of America Merrill Lynch and Goldman Sachs.

12.07 | 0 komentar | Read More

Co-op Members Vote Through Big Reforms

Co-operative members have backed a shake-up of the way the crisis-hit group is run after a landmark vote on Saturday.

At a special general meeting in Manchester, 83% of votes were in favour of proposals drawn up after the mutual made record £2.5bn losses, the Co-op said.

The proposals include reform of the group's board structure, with elected directors largely replaced by professional business people.

The new structure also includes the creation of a smaller board of directors and the adoption of a one-member one-vote system.

Ursula Lidbetter, Co-op chair, said: "These reforms represent the final crucial step in delivering the change necessary to return the group to health.

"This will strengthen the society and enable us to move forward with the urgent work to rebuild the business and deliver on our renewed purpose, in the interests of all our colleagues and our millions of members and customers."

A poll in May saw unanimous support for the key principles behind the reforms.

The changes, which followed a review by former City minister Lord Myners, required the backing of a two-thirds majoriy.

The board will consist of an independent chairman, five independent non-executive directors, two executive directors and three elected directors.

Last year saw the Co-op group experience its worst crisis in its 150-year history after it discovered a £1.5bn hole in its balance sheet.

A separate report by Sir Christopher Kelly found the group had let down its members by failing to provide "proper stewardship".

Its stake in the bank has now fallen from 100% to 20% after a rescue plan that saw bondholders, including US hedge funds, take majority ownership.

Last week, the lender reported first-half losses had shrunk from £845m to £76m.

12.07 | 0 komentar | Read More

Branson Banks On £2bn Virgin Money Float

By Mark Kleinman, City Editor

Sir Richard Branson is poised to pull the trigger on a stock market listing of Virgin's banking arm that City insiders predict could value it at up to £2bn.

Sky News has learnt that directors of Virgin Money are in talks with advisers about announcing an intention to float as soon as early October, as they look to exploit strong current trading and investors' appetite to buy shares in the company.

A final decision about the timing of an initial public offering (IPO) will not be taken for several weeks and it remains a strong possibility that Virgin Money could opt to wait until next year, according to people close to the company.

If it does press the button on a listing this year, Virgin Money, which has more than four million customers, would become the third so-called challenger bank to sell shares on the London Stock Exchange this year.

OneSavings, which does not offer current accounts, listed during the spring, while TSB was spun out of Lloyds Banking Group as part of the bank's state aid settlement with Brussels triggered by its taxpayer bailout in 2008.

Aldermore, another new lender, is also planning a flotation this autumn and could announce its plans at around the same time as Virgin Money.

Sir Richard's plan to float his banking business has been well-flagged, although it was not expected to happen as soon as this year.

Sources said that Virgin Group, which owns just over 46.5% of Virgin Money, planned to retain a large a shareholding as possible after a flotation.

WL Ross, the investment vehicle of billionaire US financier Wilbur Ross, also wants to hold onto the vast majority of its 45% stake, meaning that the free float of Virgin Money shares after the sale of new equity is likely to be close to the minimum requirements under City rules.

Virgin Money has been performing strongly in recent months, according to insiders, with a new current account making strong progress in Scotland and Northern Ireland before its wider nationwide launch.

The product, branded Essential, is designed to build a substantial presence in the current account sector at a time when ministers are attempting to foment greater competition.

Last month, Virgin Money announced a deal to raise £160m in the debt markets in order to repay part of a financing package taken on when it acquired Northern Rock from the Government in 2011.

Jayne-Anne Gadhia, Virgin Money's chief executive, said in July that 200 new jobs would be created by the business this year.

"We have grown the business strongly, exceeding market growth in both our core mortgage and savings business, and returned to profitability," she said.

"We have achieved this whilst maintaining the strength and quality of our balance sheet."

The bank added that it had grown mortgage balances by over 40% to exceed £20bn, significantly ahead of market growth, while savings balances had increased by more than 30% to over £21bn.

Last year, Virgin Money made an underlying profit of £53.4m in 2013, compared to a £2.5m loss the year before.

Chaired by Sir David Clementi, the former Prudential chairman, Virgin Money is expected to add further board members ahead of a listing.

The bank declined to comment on Saturday on the potential timing of a flotation, which is being handled by Bank of America Merrill Lynch and Goldman Sachs.

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