News round up: Lloyds Banking Group, Barclays, TNK-BP, Comet, UK growth, Chevron.
Lloyds Banking Group plc (LON:LLOY) has made an additional PPI provision of £1 billion in the third quarter, taking the total amount set aside by the lender to meet PPI claims to £5.3 billion. This news follows the £700 million provision by Barclays plc (LON:BARC). Craig Lowther, managing director of PPI claims company, MoneyBoomerang, comments:
"This announcement by Lloyds once again shows how the banks have woefully underestimated the true scale of their exposure to mis-sold PPI. But what's bizarre, or dubious, is the fact that the banks, and this includes Lloyds, are not playing ball. Lloyds has made a huge additional provision and yet it is not releasing any offers or showing any interest in dealing with the very valid claims it is receiving.
"Why this intransigence, this decision not to play ball? Coupled with their deep-seated arrogance, the banks are stalling and hoping that smaller CMCs will go out of business, thus reducing their bill. The result is unnecessary delays to consumers and extreme pressure on the FOS. We are calling on both the FSA and the FOS to increase pressure on the lenders who are dragging their heels.
"The banks know exactly what they are liable for in terms of mis-sold PPI but they're announcing it in tranches every few months to protect their share price. To date, the banks have put aside £11bn or so for mis-sold PPI claims. There's a good chance the end amount could be double that."
Igor Sechin added to concerns about investor rights in Russia when the Rosneft chief executive said the state-controlled oil group had no obligation towards minority investors in TNK-BP. He was speaking as Rosneft moved ahead with plans to buy TNK-BP, Russia’s third-largest oil producer, in a $55bn deal.The deal will be a bonanza for TNK-BP’s owners, BP and a group of Soviet-born oligarchs known as AAR.
But concerns have been raised about the fate of minority shareholders in TNK-BP Holding, the company’s listed unit. Analysts say the way they are treated in the deal will be seen as a litmus test for Russia’s investment climate. TNK-BP Ltd controls 95 per cent of TNK-BP Holding, while the remaining 5% is freely traded. Until this October, TNK-BP Holding was one of Russia’s biggest blue-chips, The Financial Times reports.
Electrical retailer Comet could file for administration as soon as Thursday, putting another 6,000 jobs under threat on Britain's struggling high street. The retailer has been under increasing pressure from suppliers to pay upfront for stock before the critical Christmas trading period.
Those demands are understood to have intensified in the past fortnight after it emerged that OpCapita, the private equity company that owns Comet, had received approaches for the chain. Deloitte has been lined up as an administrator in what will be the 29th high street retailer to go into administration since the turn of the year, The Telegraph reports.
Britain needs to get used to a "new normal" of slower growth, with annual expansion of only 2% considered a good outcome, a leading business lobby group said yesterday. The CBI said it expected GDP to be flat this year before picking up to 1.4% next year and 2% in 2014. They would all be well below the 3% average annual growth in the eight years before the banking crash, but John Cridland, the Director-General of the CBI, said that it would still be "a good trajectory".
Britain enjoyed strong growth in the 2000s thanks to hefty borrowing, effervescent personal spending and rising asset prices. The coalition Government and the Bank of England have said that the country needs to "rebalance" towards an economy more orientated towards investment and exports. That process is likely to proceed at a muted pace, the CBI said. Investment growth will be modest at 3.8% this year and trade will be flat as the poor performance of the Eurozone depresses exports, the group predicted, The Times says.
Ecuador has asked Argentina to seize up to $19.2bn of assets from Chevron in the latest twist in a long-running lawsuit over pollution in the Amazon rainforest. The oil giant will also have its bank accounts in Argentina seized and gas sales frozen, a judge has ruled. The 2011 ruling, one of the biggest of its kind in history, stated that 30,000 residents of Ecuador's Lago Agrio region had been harmed by the operations of Texaco, which Chevron bought in 2001.
However, since Chevron has minimal assets in the country, the claimants tried to get the ruling enforced outside the OPEC-member nation - Chevron is the fourth-largest producer of oil in Argentina. The company attacked the decision, saying that the residents would have filed their lawsuit in the US, where Chevron is based, had they had confidence in their claims, The Telegraph says.