In brief: Funding for Lending scheme launched, mortgage price war breaks out and fresh blow for SFO in Tchenguiz case.
bbc.co.uk
Funding for Lending bank scheme launched
Banks and other lenders can start borrowing cheap money from Wednesday under the new Funding for Lending scheme.
The Bank of England will lend money at below-market rates to banks, and monitor their progress in lending the cash out to firms and households.
Some lenders have already slashed the cost of their long-term, fixed rate deals.
The programme effectively replaces the current National Loan Guarantee Scheme.
But the lower borrowing costs are so far are only benefiting people with large deposits.
Aaron Strutt, at mortgage brokers Trinity Financial, said: "Most deals attractive to first-time buyers, such as those at 90% or 95% loan-to-value, have not changed yet."
FINANCIAL TIMES
Lenders target low-risk borrowers
By Tanya Powley
Banks and building societies are slashing the cost of mortgage rates, with several lenders launching historically low fixed-rate loans this week.
But experts warn that most of these cut-priced deals are being targeted at lower-risk borrowers with large deposits.
On Tuesday, Nationwide Building Society launched the lowest-ever four-year fixed-rate mortgage at 2.89 per cent. The deal comes with a £999 fee, reduced to £499 for first-time buyers.
The deal is only available for borrowers who have a FlexAccount current account with Nationwide as their main account, and borrowers will need to have a deposit - or equity - of at least 40 per cent.
Earlier on Tuesday, Royal Bank of Scotland/Natwest launched the cheapest five-year fixed-rate loan at 2.95 per cent.
THE TELEGRAPH
SFO to continue Tchenguiz investigation after search warrants ruled 'unlawful'
By Jonathan Russell, Assistant City Editor
The SFO said the inquiry would continue with “renewed focus and vigour”, just hours after a High Court judge found it had illegally obtained search warrants used in dawn raids against Mr Tchenguiz and his brother Vincent. The decision means the multi-million pound investigation into Mr Tchenguiz’s links with failed Icelandic bank Kaupthing could run into a fourth year. Work carried out by the SFO in relation to the Tchenguiz investigation had already been labelled incompetent by the judge presiding over the judicial review into their arrests and the searches of their properties.
The brothers were arrested in March last year on suspicion of fraudulently misrepresenting their financial position in order to obtain millions of pounds of loans from Kaupthing. The investigation into Vincent Tchenguiz was dropped in June after the SFO admitted to a string of failures and was criticised by the judicial review judge.
THE TIMES
Unfair, inadequate, unlawful: High Court’s verdict on SFO
By Deirdre Hipwell
The tattered reputation of the Serious Fraud Office received another shredding yesterday when two senior High Court judges ruled that it had acted unfairly and unlawfully by searching the premises of the property tycoons Robert and Vincent Tchenguiz.
In a damning indictment of the SFO’s ability to carry out complex financial investigations, Sir John Thomas, President of the Queen’s Bench Division, and Mr Justice Silber raised questions about whether the organisation was adequately funded. They said that the SFO had provided “wholly inadequate and unfair” information when it obtained the search warrants last year.
The judges said that there had been “grave omissions” and “misrepresentation” of information that, if “properly presented”, would have “made a real difference and he [the judge] would not have granted the warrants”.
THE INDEPENDENT
Tchenguizes set to sue for £100m after court attack on SFO
By Jim Armitage
The Serious Fraud Office was left reeling last night after undergoing a withering attack from the High Court over its bungled dawn raids on the millionaire Tchenguiz brothers last year. Detailing a series of errors and misrepresentations in the case, two of the country's most senior judges ruled that the SFO had unlawfully obtained search warrants on the millionaire property tycoons following an investigation into the collapse of Icelandic bank Kaupthing.
The ruling paves the way for more than £100m of compensation claims from the two men, who both said they would sue.
It piles huge pressure on the new SFO director, David Green, who instructed staff to drop the case into Vincent Tchenguiz within a week of his arrival in the job.
FINANCIAL TIMES
Payment scheme likely if Heathrow grows
By Andrew Parker and George Parker
BAA, Heathrow’s owner, expects that a noise compensation regime will be needed if a third runway at the airport is given the ministerial go-ahead, a policy being promoted by Tory MPs with close links to George Osborne, the chancellor.
A group of free market Conservative MPs is urging BAA to defuse opposition to an expansion of Heathrow, Europe’s busiest and nosiest airport, by proposing a compensation regime for those most affected by aircraft din. “Everyone has their price,” said one MP.
Mr Osborne is now thought to favour the expansion of Heathrow as the quickest and cheapest way to solve the UK’s hub capacity crunch, although ministers are also considering building a new airport in the Thames estuary.
DAILY EXPRESS
Euro rules to ruin pensions
By Sarah O’Grady
Meddling bureaucrats in Brussels are aiming to rush through damaging new rules which will devastate British pension plans.The proposals threaten to saddle UK funds with at least an extra £300billion in costs.
The industry would be forced to dramatically increase their capital in case of emergency. The National Association of Pension Funds said the European Commission is forcing through the regulations with a timetable of just six weeks for the impact to be assessed.
Faced with extra funding demands, many companies would have no choice other than to close their final salary pension schemes and pass on costs to those seeking an annuity.
THE SUN
Ouch...troubled BP spills £890m
By Rhodri Phillips
Oil giant BP’s profits plunged yesterday — on the back of compensation claims and legal battles.
It suffered a net loss of £890million in the second quarter, after a profit of £3.57billion a year earlier.
The Gulf of Mexico oil spill two years ago, pictured above, continues to haunt the British firm. It said yesterday that it has set aside another £538million to cover legal costs, bringing its total bill to £24.1billion.
The oil giant’s boss Bob Dudley said it had been a “testing” three months.
He added: “This was a weak earnings quarter, driven by a combination of factors affecting the sector and BP specifically. Rebuilding trust with shareholders and other stakeholders is vitally important.”
THE GUARDIAN
France and Italy add to pressure on Germany to prop up the euro
By Larry Elliott and Helena Smith in Athens
France and Italy are trying to bounce a reluctant Germany into swift action to prop up the euro as the deepening crisis sent unemployment to its highest level since the creation of the 17-nation single currency zone in 1999.
Mario Monti, the Italian prime minister, and François Hollande, the French president, made it clear after talks in Rome that they wanted measures to help euro members struggling with high borrowing costs.
The joint statement on Tuesday evening followed a day in which news of lengthening dole queues and a standoff between the Greek government and the troika group responsible for setting bailout conditions rattled financial markets.
Officials from the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Union refused to soften demands for a fresh €11.5bn (£9bn) package of cuts despite pleas from the coalition government in Athens.
DAILY MAIL
Barclays at centre of new police probe after its Italian HQ is raided as rate-rigging scandal spreads to Europe
By Nick Pisa
Barclays Bank was at the centre of fresh police investigation today after documents and emails were seized from the offices of its Italian headquarters.
The raids were ordered by prosecutors and took place just before the start of the business day as stunned employees arrived for work to find officers stationed outside the main entrance.
Officials said the raid was part of a probe into the possible manipulation of Euribor, the euro-priced counterpart of scandal-hit Libor interbank lending rates.
According to sources close to the investigation, records of emails and other documents detailing exchanges of information between Barclays in Milan and London were being looked at.
CITY A.M.
DEUTSCHE BANK PLOTS TO CUT LONDON STAFF
By Tim Wallace
Deutsche Bank is slashing jobs and pay in an effort to control costs, the bank said yesterday as it revealed profits slumped by 50 per cent in the second quarter.
Around 1,900 jobs are to go in the very near future, including 1,500 in its investment banking arm – much of which is based in London.
That represents around 15 per cent of jobs in the division and is a marked turnaround from the bank’s stance in April, when it insisted no job cuts were needed.
Most of the cuts will fall outside of Germany. More details will be revealed in September at the end of a 100-day strategic review being led by new co-chief executives Jürgen Fitschen and Anshu Jain.
THE SCOTSMAN
UBS to sue Nasdaq over handling of Facebook shares buy
By Gareth Mackie
Swiss banking giant UBS is to take legal action against the Nasdaq stock market over the botched flotation of Facebook after reporting a 58 per cent slump in second-quarter profits.The group said it incurred a SFr349 million (£228m) loss due to problems executing electronic trades on the day of Facebook’s listing on Nasdaq in May.
It meant UBS received more Facebook shares than its clients had ordered, and the bank said it would take appropriate legal action against Nasdaq to address its “gross mishandling of the offering and its substantial failures to perform its duties” over the flotation.
Facebook last week reported a 32 per cent rise in second-quarter revenues to $1.2 billion (£766m) in its first set of results since going public. Its shares have lost around 40 per cent of their value since their debut.
