RBS Confirms £1.2bn Loss After PPI Hit

RBS has confirmed it made a loss before tax of £1.2bn in the third quarter, compared with a profit of £2bn for the same period last year.

As revealed by Sky's City Editor, the bank has set aside a further £400m for the mis-selling of payment protection insurance, meaning the scandal has cost it £1.7bn to date.

This provision took the total compensation bill for Britain's four largest lenders past the £10bn mark.

The 82% taxpayer-owned bank also said it had taken a further hit of £50m to cover costs relating to the summer's massive IT failure - which saw many RBS, NatWest and Ulster Bank customers locked out of their accounts.

It takes its bill for the meltdown to £175m.

The bank also expects to face "material fines" in relation to how Libor and other interest rates were set, it added.

RBS is under investigation by US and UK authorities over the rate-rigging scandal and is expected to be one of the next banks to settle after Barclays was fined £290m in June.

"The group expects to enter into negotiations to settle some of these investigations in the near term and believes the probable outcome is that it will incur financial penalties," RBS said.

It added that it had dismissed "a number of employees for misconduct" after investigations into rate setting.

But the group's core banking operations - if the mis-selling and IT charges are stripped out - performed well, with operating profit for the three months reaching £1bn.

A decline in charges on bad debt helped boost performance at the bank, which said its restructuring would be complete in the next 18 months.

As part of this plan, the number of employees was down by 9,900 from a year earlier, resulting in a 5% fall in staff costs compared to the previous quarter.

The bank described the collapse of the sale of 316 branches to Santander as "disappointing".

As a condition of RBS' state bailout, the European Union ordered it to offload the branches by the end of next year. RBS said it did not expect this to change and so had restarted efforts to sell them.

The group's chief executive, Stephen Hester, said it now needed to focus on improving its reputation.

"The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully," he said in a statement.

"The five year restructuring plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the bank's safety and soundness has advanced so well."

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Car Insurance Cost Fall 'Will Not Last'

Car insurance premiums are said to have gone into reverse gear by £360 (13.6%) for young drivers - but there are concerns costs could rise dramatically after next month's EU gender ruling.

Insurance comparison site Confused.com has advised 17 to 20-year-old drivers to take advantage of "today's preferential rates" but warned them to avoid 2013's predicted price hikes by "shopping around".

Average comprehensive car insurance prices now stand at £757 as of this year's third quarter, compared to £843 for last year's third quarter - a significant year-on-year fall of £87 (10.3%).

Car insurance prices actually fell for all age groups, particularly young female drivers, but predictions from the Treasury indicate that young female drivers could see rises of up to 24% after the EU gender ruling becomes law on December 12.

After this date women and men cannot be priced differently for insurance meaning women will no longer directly benefit from being statistically less risky drivers as far as insurers are concerned.

This predicted insurance price rise could affect female drivers throughout various age groups, according to the Treasury data.

Sharon Flaherty, editor of Confused.com, told Sky News: "At the moment women pay less than men and statistically this is because on average they are less of a risk on the roads than young male drivers.

"However the bad news is that on December 21 the law change will mean that men and women have to be judged as exactly the same on the roads.

"Women will effectively be charged more because statistically they will no longer be allowed to be rated as safer on the roads."

Women aged 26-30 years are forecast an 18% price hike once the gender directive takes effect. Female drivers aged 31-35 are expected to suffer a 10% price rise.

Smaller price rises are expected for women aged 36-40 who are predicted to experience a 3% rise, and 41 to 45-year-old female drivers are only expected to receive a 1% price rise for their future car insurance policies.

Women on average saw their premiums shrink by 11.7% over all in the third quarter.

For spouses of either gender the average premium cost for a joint insurance policy is a lot less than average costs for solo drivers.

Male drivers insured plus spouse are quoted on average £432, compared to £907 as insured only driver, for women it costs an average of £787 for insured only driver cover, but just £418 for women who have a spouse on their policy.

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Comet Collapse: Gift Vouchers Suspended

Gift vouchers for stricken electrical retailer Comet have been suspended, the chain's administrator has confirmed.

Deloitte, which was appointed on Friday, has launched an "urgent" search for a buyer to protect some 6,600 jobs at the 236-outlet chain.

But, as a consequence, of administration gift vouchers have been suspended even though all Comet stores remain open and the group's staff will continue to be paid.

A spokesman for Deloitte said: "We are assessing the position with regard to gift vouchers, to establish whether it is possible for the company to accept them in future.

"But in the meantime stores have been instructed not to accept payment by means other than credit card or cash.

"If ultimately it is not possible for customers to redeem gift cards at Comet, then they will have an unsecured claim against the company, and the administrators will be pleased to provide the appropriate forms for customers to make such a claim if and when that eventuality arises."

The collapse of Comet marks one of the biggest high street casualties since the demise of Woolworths in 2008 and comes a month after the failure of JJB Sports.

Neville Kahn, joint administrator and restructuring services partner at Deloitte, said on appointment: "Our immediate priorities are to stabilise the business, fully assess its financial position, and begin an urgent process to seek a suitable buyer which would also preserve jobs.

"We appreciate the co-operation and support from the management, staff, customers, landlords and suppliers at what is clearly a very difficult time."

Deloitte said Comet had been hit by weak high street trading conditions, competition from online rivals and being unable to secure the trade credit insurance needed to safeguard suppliers.

"The inability to obtain supplier credit for the peak Christmas trading period means that the company had no realistic prospect of raising further capital to build up sufficient stock to allow it to continue trading," Deloitte added.

In particular, it was knocked by the lack of first-time home buyers, which had been key customers for Comet.

Its administration comes just months after Comet was taken over by investment firm OpCapita, which bought the chain in February.

The UK's high street electrical market has come under huge pressure as cash-strapped shoppers put off purchases of big-ticket items such as TVs and large appliances, as online rivals take a bigger slice of the sector.

The spokesman said extended warranties previously purchased remain unaffected by the administration and remain valid.

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RBS Confirms £1.2bn Loss After PPI Hit

RBS has confirmed it made a loss before tax of £1.2bn in the third quarter, compared with a profit of £2bn for the same period last year.

As revealed by Sky's City Editor, the bank has set aside a further £400m for the mis-selling of payment protection insurance, meaning the scandal has cost it £1.7bn to date.

This provision took the total compensation bill for Britain's four largest lenders past the £10bn mark.

The 82% taxpayer-owned bank also said it had taken a further hit of £50m to cover costs relating to the summer's massive IT failure - which saw many RBS, NatWest and Ulster Bank customers locked out of their accounts.

It takes its bill for the meltdown to £175m.

The bank also expects to face "material fines" in relation to how Libor and other interest rates were set, it added.

RBS is under investigation by US and UK authorities over the rate-rigging scandal and is expected to be one of the next banks to settle after Barclays was fined £290m in June.

"The group expects to enter into negotiations to settle some of these investigations in the near term and believes the probable outcome is that it will incur financial penalties," RBS said.

It added that it had dismissed "a number of employees for misconduct" after investigations into rate setting.

But the group's core banking operations - if the mis-selling and IT charges are stripped out - performed well, with operating profit for the three months reaching £1bn.

A decline in charges on bad debt helped boost performance at the bank, which said its restructuring would be complete in the next 18 months.

As part of this plan, the number of employees was down by 9,900 from a year earlier, resulting in a 5% fall in staff costs compared to the previous quarter.

The bank described the collapse of the sale of 316 branches to Santander as "disappointing".

As a condition of RBS' state bailout, the European Union ordered it to offload the branches by the end of next year. RBS said it did not expect this to change and so had restarted efforts to sell them.

The group's chief executive, Stephen Hester, said it now needed to focus on improving its reputation.

"The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully," he said in a statement.

"The five year restructuring plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the bank's safety and soundness has advanced so well."

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Japan Tech Firms Need Revamp To Topple Korea

Japan's top electronic firms have been told to change their business model, amid plunging share prices and booming competition from South Korea.

Shares in Sharp fell on Friday as worries about the TV and display maker's future deepened, a day after it warned of a £3.5bn net loss for the year and said it might not be able to survive on its own.

Panasonic's shares have steadied after a slide to their lowest in more than 30 years, while in August Sony reported a £202m first quarter loss as it pinned its hopes on new TV technology.

Sharp, which makes displays used in Apple's iPads and iPhones, has lost three-quarters of its share price since the start of the year.

Meanwhile, South Korea's Samsung has cemented its place as the world's leading smartphone seller after setting a record for the most units shipped in the third quarter.

Samsung sold 56 million smartphones between July and September, representing 31.3% of the global market - more than twice as much as rival Apple's 15% share.

Japan's giants have been urged to target high value goods, such as cars

"What it is telling us is that the Japanese should be focusing on a lot more on higher value goods – automobiles are going very fine, mechatronics and machinery," Mizuho International director Seijiro Takeshita told Sky News.

"The vertical integration model that the Japanese are very strong at, at least on commoditised products such as televisions, is wearing thin as far as competitiveness is concerned."

"The Koreans are doing a very good job following that model."

The strong yen and falling prices for gadgets are only partly to blame for the ill health for some of Japan's top consumer brands.

Increasingly, Japanese companies have toyed with the idea of strategic partnerships – once anathema to the consumer powerhouse.

"I think this is an alarm bell to many of these companies, so there should be some kind of diversify move or transformational move that is needed," Mr Takeshita said.

Panasonic has said it will lose £5.9bn this business year as it writes down goodwill and assets and plans more restructuring - taking its cumulative loss over five years to nearly £15.6bn.

Sony eeked out a small quarterly operating profit for Q3, helped by the sale of a non-core chemicals business.

"A lot of Japanese companies have not reorganised or refocused. It takes time and there are a lot of political motives not to make the changes," Mr Takeshita said.

"I think it is very clear for Panasonic or Sony that they do have to make these changes."

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Car Insurance Cost Fall 'Will Not Last'

Car insurance premiums are said to have gone into reverse gear by £360 (13.6%) for young drivers - but there are concerns costs could rise dramatically after next month's EU gender ruling.

Insurance comparison site Confused.com has advised 17 to 20-year-old drivers to take advantage of "today's preferential rates" but warned them to avoid 2013's predicted price hikes by "shopping around".

Average comprehensive car insurance prices now stand at £757 as of this year's third quarter, compared to £843 for last year's third quarter - a significant year-on-year fall of £87 (10.3%).

Car insurance prices actually fell for all age groups, particularly young female drivers, but predictions from the Treasury indicate that young female drivers could see rises of up to 24% after the EU gender ruling becomes law on December 12.

After this date women and men cannot be priced differently for insurance meaning women will no longer directly benefit from being statistically less risky drivers as far as insurers are concerned.

This predicted insurance price rise could affect female drivers throughout various age groups, according to the Treasury data.

Sharon Flaherty, editor of Confused.com, told Sky News: "At the moment women pay less than men and statistically this is because on average they are less of a risk on the roads than young male drivers.

"However the bad news is that on December 21 the law change will mean that men and women have to be judged as exactly the same on the roads.

"Women will effectively be charged more because statistically they will no longer be allowed to be rated as safer on the roads."

Women aged 26-30 years are forecast an 18% price hike once the gender directive takes effect. Female drivers aged 31-35 are expected to suffer a 10% price rise.

Smaller price rises are expected for women aged 36-40 who are predicted to experience a 3% rise, and 41 to 45-year-old female drivers are only expected to receive a 1% price rise for their future car insurance policies.

Women on average saw their premiums shrink by 11.7% over all in the third quarter.

For spouses of either gender the average premium cost for a joint insurance policy is a lot less than average costs for solo drivers.

Male drivers insured plus spouse are quoted on average £432, compared to £907 as insured only driver, for women it costs an average of £787 for insured only driver cover, but just £418 for women who have a spouse on their policy.

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Comet 'Faces Threat Of Administration'

Six thousand jobs are under threat amid fears of another high profile casualty among UK retailers.

Comet, the electricals chain, is on the verge of calling in administrators after struggling to stock up for Christmas.

It has reportedly been trading without credit insurance, which protects its suppliers should the business fail.

The potential collapse raises the prospect of a pre-Christmas rush for discounted stock such as TVs and PCs if an administrator chooses to wind down supplies and raise cash for creditors.

Comet is owned by OpCapita, which bought it for just £2 less than a year ago from Kesa Electricals as it struggled to compete against strong supermarket and online competition.

This has also accounted for the troubles experienced by the likes of Clinton Cards and Game.

Sky News reported last month how OpCapita had received a number of unsolicited approaches for Comet and was exploring the option of a sale as a result.

News of the chain's cash problems come only weeks after JJB Sports called in administrators, resulting in 2,000 job losses.

The Financial Times (FT) reported OpCapita was likely to face controversy as it had received a £50m cash dowry from Kesa, now known as Darty, to take it over.

Darty also retained Comet's pension liabilities.

OpCapita also negotiated a £130m dowry before it bought furniture chain MFI in 2006 which later collapsed.

According to the Local Data Company and PwC an average of 32 stores a day closed in July and August, underlining the challenges facing the high street.

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Nationwide: House Prices Continue To Fall

House prices have fallen for eight months in a row when compared with last year as a fragile economy takes its toll, Nationwide said.

The cost of a home in Britain was 0.9% lower than in October 2011, taking average prices to £164,153.

But on the month, prices were up 0.6% in September - more than offsetting the 0.4% fall in October - as monthly prices continue to fluctuate.

It comes despite data released last week revealing the UK had emerged from its double dip recession, and Nationwide's chief economist warned the UK economy remains "extremely fragile".

"This in turn suggests that the situation is likely to remain challenging in the housing market," Robert Gardner said.

"Although the UK economy has been adding jobs in recent quarters, even in the midst of recession, conditions remain very difficult for households."

He stressed that as people focus on repairing their finances rather than spending, and wage growth fails to keep up with the cost of living, housing market activity will remain subdued.

The Bank of England's £80bn Funding for Lending Scheme - which provides banks with cheap funds if they keep lending to households and businesses - should improve mortgage lending, he said.

"Nevertheless, housing market conditions are likely to remain fairly subdued until there is a sustained improvement in the wider economic environment," he added.

The building society's regional breakdown showed that London's house prices held up the best in the three months to September - with prices up 2.1% compared to the same period last year.

While Northern Ireland continues to see largest price falls, with prices now down 53% compared with 2007 levels.

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Lloyds Sets Aside A Further £1bn For PPI

Lloyds Banking Group has set aside a further £1bn to cover costs relating to the mis-selling of payment protection insurance (PPI) - taking its total bill to £5.3bn.

The announcement came as the 40% taxpayer-owned bank said it made a pre-tax statutory loss of £583m in the nine months to the end of September.

This compares with a £3.8bn loss over the same period last year.

If the cost of PPI is stripped from the results, the group's underlying profit hit £1.9bn for the three quarters - compared with 2011's £768m.

Lloyds had already set aside £4.3bn to repay customers wrongly sold the insurance - much more than its rivals because it had the biggest share of the PPI market.

It said it had paid out 70% of its provision by the end of September, and that the volume of claims had fallen to £250m in the last three months. 

The bank's chief executive, Antonio Horta-Osorio, said the "ultimate cost" of the PPI scandal was "going to be huge" - and the bank would not know the full extent of the damage until at least March next year.

Mr Horta-Osorio, who has been charged with turning around the bank following its 2008 bailout, said it is making good progress with its cost-cutting.

Lloyds' bad debts are expected to fall to this year to around £6bn - some £1.2bn less than it expected at the start of 2012.

"We have made further significant progress this quarter, improving underlying performance in a challenging environment, while continuing to deliver returns above the cost of equity in the core business and strengthen our already robust balance sheet." Mr Horta-Osorio said.

On a conference call following the results, he insisted retail banking in the UK was competitive, and stressed that Lloyds was continuing to boost its lending to small and medium-sized businesses and provide mortgages to first buyers.

The group's share price rose 3.6% in early trading. 

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Barclays Reports Loss After PPI Charges

Barclays has reported a pre-tax quarterly loss of £47m - compared with a £2.4bn profit over the same period last year.

The statutory loss in the three months to September was driven by increasing costs relating to the mis-selling of payment protection insurance (PPI) and a one-off £1bn charge against the value of the bank's own credit.

The bank had previously said it would set aside a further £700m to cover its costs after customer complaints over PPI continue, taking its total estimated bill to £2bn.

If this charge is not included, Barclays reported underlying pre-tax profits for the third quarter of £1.7bn, compared with £1.3bn last year.

Its investment bank more than doubled its quarterly underlying pre-tax profits to £937m, but its UK retail banking fell 19% year-on-year to £400m.

Barclays, which was rocked by the Libor rate-rigging scandal, also unveiled two new US regulatory inquiries into its conduct.

The bank said the US Department of Justice and US Securities and Exchange Commission were investigating whether its relationships with third parties who help it win or retain business are compliant with the US Foreign Corrupt Practices Act.

It is also being investigated for past power trading in the west of the US.

Barclays' new chief executive, Anthony Jenkins, said the company would end 2012 in a "strong position".

"These results demonstrate that we continue to have good momentum in our businesses despite the difficulties we faced through this period," he said in a statement.

"While we have much to do to restore trust among stakeholders, our universal banking franchise remains strong and well positioned." 

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