The Co-operative Bank has reported half-yearly losses of £204.2 million, from £77 million a year earlier.
The group have said they do not expect to make a profit until 2017. The bank escaped a fine last week for misleading investors as the regulator believed it needed the money to get the bank back on track.
In the first half of 2015, the bank set aside £49m to cover misconduct and legal charges and lost £38.2m on sales of assets needed to reduce the bank’s overall levels of debt. It also spent £33.1m on improving “systems and processes” and making the bank more efficient.
Chief Executive Niall Booker said in a statement:
“Addressing legacy issues will continue to dominate financial performance for some time and there is considerable work ahead towards a full recovery. The transformation of the bank remains challenging.
We won’t be profitable in 2015 and we won’t be profitable in 2016 either.”
North Korea has fired a shell into South Korea, according to the South Korean state-run KBS news.
It is believed North Korea was aiming at a loudspeaker that has been playing anti-Pyongyang broadcasts.
In response, South Korea fired tens of 155mm artillery rounds at the location where the shell came from.
“Our military has stepped up monitoring and is closely watching North Korean military movements,” the ministry said in a statement.
Russian wages have suffered another drop, plummeting 9.2 percent from July 2014.
The Federal Statistics Service in Moscow issued a statement today detailing the figures. Gross domestic product shrank 4.6 percent from a year earlier in the second quarter, although inflation has slowed to 15.6 percent after a 13 year high in March.
Piotr Matys, a London-based foreign-exchange strategist at Rabobank told Bloomberg:
“Domestic demand and investment are constrained by still fairly tight monetary policy. I can’t see domestic demand and investment improving significantly in the coming months.”
Russia’s economy is becoming increasing vulnerable as the price of oil, the country’s main export, has tanked over the past few months. The Russian ruble has also dropped 25 percent over the last three months, with retail sales falling for the seventh month in a row.
453 German MPs have voted in favour of a bailout deal for Greece, meaning the agreement has successfully passed one of the last hurdles.
Another 113 MPs rejected the bailout and 18 abstained.
Finance Minister Wolfgang Schaeuble argued the country should get “a new start”, warning that it would be “irresponsible” to oppose the €86bn ($95bn; £61bn) package.
He continued: “There is no guarantee that all of this will work and there can always be doubts.
“But considering the fact that the Greek parliament already approved most of the measures, it would be irresponsible not to seize this chance for a new beginning in Greece.”
If the third bailout is completed, the total Greece has borrowed will rise to 320 billion euros.
Chinese shares had a wild Wednesday, dropping 5 percent before making steady gains in the afternoon and finishing up positive, with the Shanghai Composite closing up 1.2 percent. The sudden reversal prompted speculation that further easing was introduced to prop up the market.
The Shanghai Composite’s quick turnaround suggests optimism surrounding market intervention in general – but will the Chinese be able to effectively prop up the volatile market? Authorities have tried cutting interest rates and reducing Reserve Ratio Requirements, but there still seems to be a long way to go before we see significant stabilisation.
Analysts suggest that the markets could be panicking because of the recent surprise valuation of the yuan, which suggests that the Chinese are worried about losing control. On the other hand there is also the argument that the devaluation of the Yuan is just another step in Beijing’s plans to revive the economy.
Following the Chinese devaluation, Vietnam also devalued their currency by 1 percent last week. This could be a first sign of a currency war that will further unhinge China’s economy.
The Chinese are likely to have more up their sleeve, but for now one may be wise to treat the Chinese stock market as a spectator sport rather than a buying opportunity.
Scottish company CarGo have invented an innovative new product, combining a childrens suitcase with a portable car booster seat.
The concept came from personal experience. When on holiday, founder Gary Burns hired a car, along with two booster seats for his children, which were dirty and dented. Concerned about the safety of them – and being charged a whopping 70 euros to use them – Gary thought that he could provide a better alternative.
Recognising that he probably wasn’t alone in this situation, he set out to create a safe, child-friendly booster seat – that was easy to transport. Since then, he has designed a childrens suitcase, with 12 litre capacity, that folds neatly into a booster seat with arms that spring up and a padded, wipe-clean cushion. Although having always had an interest in art, Gary had no formal graphic design qualifications – so he sketched a prototype and with a design team created a CAD of the product.
The idea has already had plenty of support, with Gary pitching the CarGo Seat to would-be investors on the show and was shortlisted to receive seed stage funding of £2,300 and then a further investment of £25,000. His designs have been recognised by Glasgow’s Got Business talent, Intuit100up, New Start Scotland Bright Ideas and Entrepreneurial Spark (Best Creative Innovation winner 2012).
His key focus now is to get CarGo seat to market and put in the work required, and has launched a crowdfunding campaign on CrowdCube to do so.
When asked why crowdfunding was the chosen route, rather than more traditional methods of raising finance.
“We chose crowdfunding for this round of funding as we require the money but having the support of the crowd and input in say the colours, design, price point is very important to us as well. We hope they are future customers and be marketeers in promoting the product to friends, family & contacts.”
Over the past few years, crowdfunding sites have popped up left, right and centre. However, Crowdcube really stuck out for their business, feeling that their connection with Scottish firms made them the best choice.
“We had worked closely with a Scottish Legal firm at Entrepreneurial Spark in Glasgow called Harper McLeod, who have helped Scottish businesses embrace equity crowdfunding and felt this was a perfect partnership.”
For more information, visit Crowdcube.com
Equities around the world have been under pressure recently as global growth has been called into question.
The prospect of rate hikes in the US and the UK are further concerning investors in stocks as the days of low interest costs are coming to an end.
For those that have enjoyed the multi year bull run it may be worth considering their next move and getting some protection.
As the Chinese military philosopher and strategist Sun Tzu once said; ‘In times of peace, prepare for war’
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According to figures from Kantar Media, three million adults across the nation do not have a bank account. These adults are excluded from taking out loans and mortgages and do not have the opportunity to save. The World Bank Group President Jim Yong Kim has said that access to financial services is “a bridge out of poverty”; so why isn’t more being done about it?
For the CEO of high street lender Oakam, Frederic Nze, there is huge gap in the market for an ethical microfinance company to meet the needs of these people. At the moment, the problem is not being met responsibly; pay day loan companies are now well-known for taking advantage of those in need and luring them into debt. Many of the unbanked population are migrants, moving here to work but without a credit rating, they have no access to traditional financial institutions. Born in the Congo and working in the UK, France and the US, Nze has a unique insight into the migrant community, and the problems they can face from a financial perspective.
In 2001, Nze began working at Barclays, where the scale of the problem was first noticed. Barclays asked Nze to develop a 12 month trial programme to get those without bank accounts or a credit rating into mainstream banking. Whilst there was a considerable demand from customers, Barclays felt that they didn’t have the resources to deal with those who were not financially literate and unfortunately, the programme failed; ultimately, it didn’t fit their corporate image. Seeing the potential and obvious need to help those without the resources to open a bank account, Nze left Barclays to set up the venture on his own; and so, Oakam was born.
At first sight, Oakam looks remarkably like the many other payday loan companies you see advertised here, there and everywhere. However, Nze maintains that, ultimately, Oakam has a very different concept.
Firstly, the customer base is different. Rather than catering to those who have previously had a credit rating and have lost it due to poor management or the financial crisis, Oakam offers loans to those who have never had a rating, or any debt. His aim is to help people get into mainstream banking, often migrants who have recently moved here to work and want to establish themselves and their business, but are not given the opportunity to take out loans with mainstream banks.
Secondly, and most importantly, Nze’s business is built on relationships. Most pay day loans have no relationship between lender and borrower – all it takes is a simple form on the internet and the money appears in your account, as if by magic. However with Oakam, building relationships is key. The company has a prominent presence on high streets in London and the Midlands, meaning that in order to take out a loan customers have to meet with an advisor who will assess ability to repay. Oakam aim to retain their customers, offering a cheaper rate every time they borrow.
Picture: Telegraph.co.uk
The most obvious difference between Oakam and other pay day ‘loan sharks’ is the cost of their service. Lending to the unbanked is not without risk; which is reflected in Oakam’s interest rates which, at 1424% APR, are actually higher than a lot of other pay day loan companies. However, Oakam charge no fees for missing a payment – most companies will charge £20 – and no cumulative interest. The amount you borrow, plus interest, is set out at the beginning with no hidden charges or costs.
Oakam have recently recruited several people from high profile banks and institutions to drive the company into its next phase: moving online. Whilst I questioned the motive when their stores are what creates such a personal relationship with customers, Nze was adamant that it is the right move for the company.
“Firstly, it is cheaper cost of service. With fewer over heads, we can make the whole process cheaper and pass these savings onto our customers.
“Another reason is improving accessibility. The type of customers we cater to can be put off by going into a store, for fear of being declined. Not only does an online system make it more accessible for those people, but more people can benefit in a shorter time; it would take four years of opening stores to be national – however, could do it in 6 months with online.”
Like many other Fintech firms Nze saw London as the best choice for starting his company, and feels strongly about London’s reputation as a centre for Fintech innovation.
“One of the reasons why I set the company up here is that within 15 minutes you can raise money or recruit the best people. There is a real eco-system that makes business ideas possible here.”
Whilst Nze is reluctant to comment on the controversy that other pay day loans create, it is obvious he disagrees with their principle. Whilst there was a gap in the market for a those companies a few years back, he believes that people have wised up to their offers and they may not be around for much longer; and for Oakam and the unbanked population, this can only be a good thing. Three billion adults without access to savings accounts, loans and other financial help is three billion too many, and more needs to be done; and companies like Oakam, who promote responsible lending and sustainable microfinancing, could well be a good place to start.
Shares in Danish brewer Carlsberg (CPH:CARL-B) plunged more than 7 percent this morning after reporting disappointing half-yearly results.
Operating profit before special items fell 18.9 percent to 2.92 billion Danish crowns ($432 million) in April to June, below a forecast of 3.24 billion crowns in a Reuters poll.
Group beer volumes declined by 5 percent due to continued decline in Russia and Ukraine and bad weather in Western Europe.
However, the group saw strong performance of their international premium brands, including Tuborg, which was up 16 percent, and Somersby, up 26 percent.
CEO Cees ‘t Hart said in a statement: “The first half of 2015 has been challenging for the Group. For the full year, we therefore do not expect that the strong Asian performance will be enough to offset the weaker than expected results in Western Europe and the challenging market conditions in Eastern Europe.”
The group revised their earnings expectations for the year, with profits taking a 300 million crown hit.
Carlsberg are currently trading down 8.05 percent (0958GMT)
Bitcoin has long moved on from being seen as a shady currency used only for illegal purchases. There has been plenty of hype surrounding Bitcoin and other cryptocurrencies in recent months, especially with regard to start-up technology businesses and overseas transfers. However, it is becoming increasingly recognised that Bitcoin may have other, more ethical benefits.
According to the World Bank, more than two billion adults lack access to bank accounts and credit cards to save and borrow funds. McKinsey suggest 2.5 billion people have no credit score, meaning that they can’t buy a home or start a company; which is where Bitcoin comes in.
One of the biggest benefits of Bitcoin for the unbanked population is its cost – or lack of.
Bitcoin is the first Internetwide payment system where transactions either happen with no fees or very low fees. According to a research by ODI, Africa’s diaspora pays 12% to send $200 back home. And according to the same research, Western Union in Rwanda charges closer to 18–19%. With Bitcoin, currency transfer costs are far lower than banks or even companies such as Transferwise.
Similarly, the lower cost of international transfer could be a real boost to SMEs in emerging nations, where small businesses struggle to compete internationally due to costs associated with changing currencies and processing fees.
The second big benefit of Bitcoin is its independence. The system works without a central repository or single administrator, meaning it is a completely decentralised virtual currency. It is not subject to market control by one organisation.
This feature makes Bitcoin inherently useful, in that many countries with a large unbanked population are countries where corruption is high. With Bitcoin, there is no need to do not trust banks; wealth held in bitcoins can be securely stored free of transaction fees for an indefinite period, and cannot easily be expropriated by the state or limited in any meaningful way in their movement between jurisdictions by capital controls.
Similarly, for countries in economic difficulty, they cannot be devalued over time by inflationary monetary policies. With the recent trouble with Greece, Bitcoin became seen as a viable option for holding money should Greece exit the euro.
Venezuelan-born Meyer ‘Micky’ Malkais a director at the Bitcoin Foundation. He believes that what bitcoin can do is “embrace transparency in a country where there isn’t any”.
“It’s an asset for when you do not trust your government, which is a real aspect of what’s going on down there right now.”
Both its low cost and independence make Bitcoin an attractive way of storing and sending money cheaply for those with no bank account. Yes, cryptocurrencies are a relatively new phenomenon, and that comes with its own difficulties; as Malka says, “you cannot expect bitcoin at five years old to take all that responsibility and act like a grown-up. It is still a toddler.”
However, the figures cannot be ignored. With over two billion people not having access to simple financial services that allow them to save, invest or grow their businesses, there will always be a certain proportion of the population who have no hope of working their way up. The World Bank Group President Jim Yong Kim has said that access to financial services is “a bridge out of poverty”; if Bitcoin can help those developing countries get on the ladder, it is well worth investigating.
