Business banking news review: week ending 19 Sept 2013
It seems like that the Government will find a way to profit on the UK personal and business bank account industry come hell or high water!
First up, the Government raked in around £3.2 billion after it sold off several of its shares in Lloyds Banking Group, fresh on the heels of more than 600 Lloyds TSB branches being sold off in order to comply with a recent EU decision. Some six per cent of the banking groups total stocks were sold off at 75p a share, which wasn’t bad considering that the Government purchased their chares at 73.6p – and the profit topped some £61 million.
What can you say? At least the Government got their money’s worth on the deal. It’s a bit rare to actually see anyone turning a profit on financial services nowadays – ironic that it took the sale of shares in order to facilitate that.
Of course there are more direct ways to collect money from banks – and the Government knows how to do this as well. Why just this week it was announced that the Financial Conduct Authority will be slapping JP Morgan with one of the largest fines ever.
The London whale derivatives scandal supposedly perpetrated by the US-based banking giant saw its traders left without any sort of supervision, leaving them to run rampant. For its sins, JP Morgan will be paying the FCA more than £50 million in penalties – a princely sum to be sure – and adding insult to the injurious £3.7 billion in derivatives losses JP Morgan suffered as a result.
Now it’s not like I don’t want JP Morgan – or any bank for that matter – to get away with murder when it comes to massive financial scams such as this; for what it’s worth, I’m glad the banking giant was caught red-handed and that it’s being punished for its actions. Still, that’s a lot of money, or at least it would be for a normal bloke – I’m sure it’s just a drop in the proverbial bucket for the Government – and I just wonder if all that cash from both the JP Morgan penalty and the Lloyds Banking Group sale will actually go towards providing some relief for the British taxpayer.
I mean we’re in a pretty pickle right now, what with austerity measures cutting funding for core Government programmes. Is this new money going to go towards funding these initiatives once more or is it going to disappear into the vast gaping maw that is the Treasury?