In brief: HSBC sets side $2bn to cover fines & mortgage approvals slump
FINANCIAL TIMES
HSBC sets aside $2bn to cover fines
By Patrick Jenkins, Banking Editor
HSBC’s chief executive Stuart Gulliver has admitted that the bank’s failure to prevent money laundering in Mexico and the US was “shameful, embarrassing and very painful”, as the bank took a $700m charge to cover the cost of US regulatory fines over the issue.
The affair – compounded by $1.3bn of charges related to compensating customers who were mis-sold payment protection insurance and derivatives products in the UK – helped push underlying profits at Britain’s biggest bank down 3 per cent in the first six months of the year.
Mr Gulliver repeated an earlier apology. “The firm clearly lost its way,” he said. “But we have changed. It is a priority for senior management to build on steps already taken to manage risk and ensure compliance more effectively.”
THE SUN
HSBC ‘sorry’ as compo pot unveiled
By Rhodri Phillips
Banking giant HSBC yesterday revealed it has set aside $2billion (£1.28billion) to cover potential fines and compensation claims.
It came as chief executive Stuart Gulliver said he was “profoundly sorry” for the British bank’s “past mistakes”.
HSBC — one of the biggest banks in Europe — faces huge penalties over claims it missold products and left itself vulnerable to money launderers.
And it warned fines could be “significantly higher” than £1.28billion amid fears it will be dragged into the Libor-fixing scandal.
Mr Gulliver said: “We’re profoundly sorry for our mistakes and are committed to putting them right.
CITY A.M
Banks could face criminal charges over Libor fixing
By James Waterson
Criminal charges can be brought against those responsible for manipulating interbank lending rates, the UK’s fraud squad confirmed yesterday, paving the way for prosecutions of individual bankers over the Libor-rigging scandal.
The Serious Fraud Office (SFO) said that as part of an ongoing investigation into the scandal, it had now concluded that “existing criminal offences are capable of covering conduct in relation to the alleged manipulation of Libor and related interest rates”.
Although the agency would only confirm that it is investigating a “number of financial institutions”, lawyers told City A.M. that individuals, rather than banks, are more likely to face any criminal charges.
“They will be concentrating their fire on individuals. The question is how far up the food chain it would it be possible to bring a claim against an individual,” said Owen Watkins of law firm Lewis Silkin.
DAILY TELEGRAPH
Former HSBC chiefs faces bonus clawbacks
By Harry Wilson, Banking Correspondent
HSBC’s former chief executive and head of its Mexican business could have millions of pounds in bonuses clawed back as a result of the US money laundering scandal that has so far cost the bank $700m (£444m).
One-time chief executive Michael Geoghegan and Sandy Flockhart, the head of the bank’s Mexican business for much of the period covered by the US investigation, are understood to be among former senior managers who face having parts of their bonus taken back.
Douglas Flint, chairman of HSBC, disclosed today that the bank was looking at clawbacks of managers’ bonuses in light of the revelations that for several years the lender’s Mexican subsidiary was involved in handling money linked to drug cartels and even terrorist organisations.
THE GUARDIAN
Eurozone crisis: strong rally falters as euro loses ground
By Larry Elliott, Economics Editor
The strong rally in Europe's financial markets in the wake of the European Central Bank's pledge to save the euro showed signs of running out of steam on Monday as investors raised doubts about the ability of the Frankfurt-based organisation to deliver on its promises this week.
With markets anxiously awaiting the outcome of the ECB's policy-making meeting on Thursday, stock markets in Madrid and Milan continued their rallies but the euro lost ground on the foreign exchanges and interest rates on Italian bonds rose marginally.
But fears were raised about the possibility that strong German opposition to the radical steps being floated to end Europe's two-and-a-half-year-long sovereign debt crisis would lead to a disappointing outcome after the tough talking by the ECB's president Mario Draghi last week.
bbc.co.uk
Man Utd to sell shares at $16 each in New York sale
Manchester United has said it plans to raise as much as $330m (£210m) in a share listing in New York. In documents filed with the Securities and Exchange Commission, the football club said it will sell 16.7 million shares at between $16 and $20 each.
But it also revealed that revenue had fallen in the last year as they were knocked out of the Champion's League.
The club has been controlled since 2005 by billionaire US sports investors the Glazer family, who also own the Tampa Bay Buccaneers American football team.
The Glazers' Class B shares will have 10 times the voting power of the Class A shares sold to punters.
United has said it plans to use the proceeds to repay debt.
DAILY MAIL
11 million spectators… just EIGHT cash machines
By Rachel Rickard Straus
Fears are growing over payments chaos for Olympic spectators as it is revealed there are just eight ATM machines across all 2012 venues.
Around 11 million spectators are expected to attend the Olympic and Paralympic Games, with up to 800,000 on a single day. But thousands will be unable to access their cash at venues as many do not have a single ATM - and those that are available only accept Visa cards. The ExCel centre – with a capacity of 10,000 – has just one ATM machine, while Wembley, Earl’s Court, Greenwich Park, Lords cricket ground and Wimbledon have… none. Olympic spectators can only pay in venues using Visa cards or cash, as part of an exclusivity agreement with the key sponsor.
DAILY EXPRESS
Ryanair profits crash land as fuel bills soar
By David Craik
Profits at budget airline Ryanair dived yesterday – hit by growing European economic turbulence and soaring fuel prices. The airline said profits in the three months to the end of June had fallen 29 per cent to £77.5million despite an 11 per cent rise in revenues to £1billion and traffic growth up six per cent, helped by Ireland’s participation in Euro 2012. Ancillary sales such as food and baggage charges rose 15 per cent and now account for a fifth of sales.
The group, led by chief executive Michael O’Leary, said that its performance would have been better but for the continued European-wide downturn. This led to average fares rising by only four per cent over the period in contrast to the double-digit increases of recent years to keep passengers willing to fly.
THE GUARDIAN
Mortgage approvals slump to 18-month low
By Hilary Osborne
The number of mortgages approved for house purchases fell to an 18-month low in June, according to figures from the Bank of England, in a sign the housing market continues to struggle.
A total of 44,192 new loans were approved by lenders during the month, down from 50,544 in May and 10.3% lower than the 49,236 recorded in June 2011.
Poor weather and the extended bank holiday around the Jubilee may have had an impact on homebuying, but a bigger factor is likely to have been the end of the stamp duty holiday for first-time buyers in March.
THE INDEPENDENT
More dire figures hit Britain's hopes for recovery
By Russell Lynch
Britain's recovery hopes were undermined by more dire economic news yesterday as shoppers tightened belts, mortgage lending slumped and more signs of the credit squeeze on small businesses emerged.
The raft of downbeat figures follow shock estimates from the Office for National Statistics (ONS) showing a dramatic deepening of the UK's recession between April and June – dampening hopes for a strong bounce-back as the eurozone crisis rumbles on.
The high street endured difficult trading during the first half of July as the unprecedented wet weather continued to drive away shoppers, according to the CBI's latest distributive trade survey. Sales are still growing, but at a far slower pace than expected and there is little expectation of an uplift soon.
THE TIMES
Lloyds pledges £5bn for first-time buyers
By Mark Atherton
Lloyds Banking Group has pledged to lend £5 billion to first-time buyers over the course of 2012, creating more than 140 new homeowners every day. This should mean more than 50,000 of them will be able to buy their own property this year.
In the first six months of the year, the Group has already helped more than 25,000 people take their first steps onto the property ladder. It provides one in three mortgages on affordable housing schemes and new build properties in the UK and 25 per cent of the funding for the Government’s NewBuy scheme, which is targeted at first-time buyers.
Last week Lloyds cut rates by up to 0.2 percentage points on a range of loans, including some aimed at first-time buyers.
THE SCOTSMAN
JJB turnaround specialist joined by former La Senza director
By Scott Reid
A former director of La Senza, the lingerie chain that collapsed into administration earlier this year, is to tackle the turnaround of struggling retailer JJB Sports.
Beverley Williams, who takes on the chief executive’s role vacated by Keith Jones last Friday, will work alongside US retail recovery specialist and chairman-designate Bob Corliss as they look to revive the fortunes of the sporting goods group.
JJB has been struggling in the face of weak consumer confidence, supply troubles and stiff competition from Sports Direct, which – with its bustling out-of-town and high street stores – appears to have cornered the sports clothing market.
