|Bid||0.0000 x 29200|
|Ask||0.0000 x 27000|
|Day's range||2.6000 - 2.6350|
|52-week range||2.3000 - 3.4700|
|Beta (3Y monthly)||1.19|
|PE ratio (TTM)||8.73|
|Forward dividend & yield||0.11 (4.16%)|
|1y target est||2.22|
Lloyds Banking Group plc (LON: LLOY) shares are down by 11% over the past year. Would these two financial stocks suit your portfolio more?
UK stocks ended Friday on a high note as optimism that a no-deal Brexit could be avoided spurred a rally in stocks with domestic exposure, overpowering losses in blue-chip exporter stocks that were hit by a stronger sterling. The FTSE 100 rose 0.3%, with homebuilder Barratt jumping nearly 6% to top the gainers. The country's big banks Lloyds, Royal Bank of Scotland and Barclays added more than 5%.
Lloyds (LYG) and Barclays (BCS) are making extra provisions to be able to compensate customers, after the surge in last-minute claims related to the PPI scandal.
At current prices, Barclays plc (LON: BARC) might appear too good to be true. Spoiler alert: it is. Royston Wild explains why he thinks you should avoid it like a tropical disease.
London's FTSE 100 overcame early losses to close higher on Tuesday as hopes of imminent interest rate cuts from major central banks buoyed sentiment, while JD Sports jumped to an all-time high on upbeat results. The blue-chip index added 0.4%, with JD Sports gaining 8.8% after its gym clothing and premium-branded fashion helped it post higher profit and offset UK retail sector gloom. The FTSE 250 rose 0.3%, helped in part by a nearly 13% surge in Cairn Energy as strong half-year results led to a production target upgrade.
Britain's new system of banker accountability has led to a "tangible" improvement in culture but modest changes are still needed, UK Finance said on Tuesday. The trade body for banks in Britain published the sector's first major appraisal of the senior managers and certification regime (SMCR) introduced in 2016 as part of reforms implemented after the 2007-09 financial crisis that left taxpayers to bail out lenders while few individual bankers faced punishment. SMCR makes it easier for regulators to pinpoint blame when things go wrong.
Some bankers may have thought that PPI products were justified, but it was a scam. What a suitably embarrassing end to Lloyds Banking Group’s misadventure in mis-selling PPI, or payment protection insurance. For the umpteenth time, the bank’s estimate of the cleanup bill has collided with reality and come up short. A rush of claims by punters, ahead of the August deadline, has forced a £1.2bn-£1.8bn increase in Lloyds’ provisions, taking the total to roughly £22bn. For the entire UK banking industry, the eventual tally now seems likely to land above £50bn, an astonishing sum. For good measure, the regulator’s odd Arnold Schwarzenegger adverts have helped to terminate the last £600m chunk of Lloyds’ £1.75bn share buy-back programme, the one the board was so proud of. It’s amazing now to recall that, back in 2011, when the chief executive, António Horta-Osório, commendably broke ranks with his industry’s defence of the indefensible, Lloyds reckoned it was looking a bill of a mere £3.2bn for PPI. By late-2014, the provisions had reached £10bn and the finance director confessed that getting a grip of the final figure was “fiendishly difficult”. You bet. One can point (and the banks do) to the role of claims management companies and, of course, it’s true that compensation will have been paid to some people who never had a PPI policy. But let’s not pretend that the entire £19bn increase from Lloyds’ original estimate (and comparable percentage increases at other banks) can be explained solely by fraudulent claims or ugly skim-off merchants. PPI was the most widely mis-sold product in UK financial history. It was fundamentally over-priced and various exclusions were designed to frustrate borrowers who might genuinely have benefited from cover against illness or unemployment. At some murky level, the bankers had convinced themselves that such products were justified because customers were also getting “free” in-credit banking, a deviously self-serving way to see life. PPI was a scam. To this day, you’ll find bankers who blame Horta-Osório for opening the compensation floodgates. That view is also deluded. The banks were losing their PPI legal fights in the courts and the then-new Lloyds boss was correct to conclude that a reckoning had to happen. The industry has only itself to blame. BA pilots go for Cruz British Airways pilots tend to be a conservative bunch. They have threatened to strike many times over the years but, in the end, have always backed down and agreed a deal. Until now. What’s changed? One factor, one suspects, is the low standing of the current BA chief executive, Álex Cruz, who doesn’t command the respect his predecessors did. On Cruz’s watch, BA suffered a huge IT collapse in 2017 and an enormous data breach in 2018, for which the airline faces a £183m fine from the Information Commissioner’s Office. Both episodes looked appalling. The computer calamities were also a negotiating gift for pilots. If BA’s management prefers to maximise short-term profits, or so it must seem, why shouldn’t the people flying the planes also get a slice of the same incentive action? Cruz, interviewed on the BBC on Monday morning, was vague about the pilots’ profit-sharing demands, presumably because he doesn’t have a good response. He was paid £1.3m last year and is in no position to try high-minded arguments. The pilots are extremely well-paid by everyday standards but also seem to be performing better in the air than Cruz has been on the ground. Despite its troubles, BA made profits of £2bn-ish last year. If the pilots feel they are owed a catch-up settlement after making sacrifices in the post-2009 lean years, this is their moment to press their claims. Cruz’s media tour was, presumably, designed to lay the blame for the grounded flights on the pilots. Good luck with that: many passengers will view a strike simply as the sort of thing that happens at BA these days. The former BA chief Willie Walsh is the chief executive of the parent International Airlines Group these days and trying not to intervene. He may yet have to. Cruz sounds unconvincing.
(Bloomberg Opinion) -- Lloyds Banking Group Plc is within touching distance of putting behind it a scandal that has cost a breathtaking 21.8 billion pounds ($27 billion). But any celebration would be premature: The lender is, in effect, one of the biggest bets on Brexit Britain.On Monday, Lloyds said it would suspend a share buyback after setting aside an additional 1.8 billion pounds to compensate customers who were sold payment protection insurance they didn’t need or want. The announcement wasn’t a huge surprise: Its rivals had already signaled a spike in last-minute claims after regulators gave consumers until the end of last month to claim redress — using a puppet Arnold Schwarzenegger to publicize the deadline.The end of the costliest scandal in the history of the British banking industry is unlikely to prove a turning point. Banks still face the most uncertain political situation in a generation, and there’s little their managers can do to prepare for what may come next: a no-deal Brexit or an election victory by Jeremy Corbyn’s Labour party.Analysts at Citigroup Inc. estimate that in the event of a no-deal Brexit, U.K. loan growth would drop in line with a likely economic contraction, cutting British bank earnings by as much as 9%. A possible decline in interest rates would also eat into profit and the big unknown — the pace at which loan losses would build up — would further erode income.Add to the uncertainty a potential election and Labour victory. In addition to policies that would affect the economy broadly — handing 10% of companies to employees, increases in corporate taxes — the opposition party also envisions changing the law to stop banks from shuttering branches. Cutting costs by closing outlets has been at the heart of Lloyds’s restructuring under Chief Executive Officer Antonio Horta-Osorio.To be sure, British Prime Minister Boris Johnson may yet clinch an agreement with the European Union on Brexit, and a Labour election victory may not materialize.Yet the risks to Lloyds appear to be near acute: U.K. consumer and commercial lending accounts for more than three quarters of its assets, and its insurance and wealth businesses are also largely domestic.Since the Brexit referendum, Lloyds’ shares have dropped about 31%, under-performing both the FTSE-100 Index — which is up 15% — and the FTSE 350 Banks Index.Without a crystal ball, quantifying the cost of Brexit to the country remains tricky at best. The Bank of England now expects the peak-to-trough hit to GDP to be about 5.5.Many see value in Lloyds — 90% of analysts recommend buying or holding the stock. At around 13% return on equity and a price to book of 0.8 times it isn’t a commanding valuation. But the threats of Brexit and a Labour government may be even more painful than the damage inflicted by a plastic strongman.To contact the author of this story: Elisa Martinuzzi at firstname.lastname@example.orgTo contact the editor responsible for this story: Edward Evans at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The bad news keeps on coming at Lloyds Banking Group plc (LON: LLOY). Royston Wild explains why it’s a share that should be avoided at all costs today.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Lloyds Banking Group Plc suspended its share buyback after a last-minute rush of compensation claims for mis-sold payment protection insurance, taking its total costs for the scandal to 21.8 billion pounds ($26.7 billion).Lloyds shares fell as much as 2.5% in London. The bank is making a further provision of between 1.2 billion pounds and 1.8 billion pounds in the third quarter after claims were as much as four times higher than expected, according to a statement Monday.The PPI scandal is the most expensive in history for U.K. banks, and while regulators had urged the public to seek redress for years through high-profile advertising campaigns, the surge before the August 29 cutoff caught lenders flat-footed. Last week, Royal Bank of Scotland Group Plc said it plans to set aside as much as 900 million pounds more for PPI, while CYBG Plc, the owner of the Virgin Money brand, plunged after adding to its provisions.“LLoyds again got its sums completely wrong,” Neil Wilson, chief market analyst at Markets.com, said in an email. British banks’ shareholders “have been consistently low-balled, fobbed off and undersold the impact of the redress.”The policies, which were intended to cover missed debt repayments, were often sold using aggressive tactics and in the worst cases, banks misled customers by telling them that PPI was mandatory for loans. Lloyds’ new provisions have pushed the total cost for the industry above 50 billion pounds, according to New City Agenda, a London-based think tank.Lloyds’ extra provision is at the top end of expectations, Bloomberg Intelligence analysts Jonathan Tyce and Georgi Gunchev wrote. The bank said it received about 600,000 to 800,000 PPI information requests per week during the deadline month, well above its previous assumption of 190,000 per week.“The board will give consideration to the distribution of surplus capital at the year end and continues to target a progressive and sustainable ordinary dividend,” Lloyds said.Lloyds, which is the most exposed British lender to PPI, had a 1.75 billion-pound buyback program for the year, and the suspension means about a third of that sum will likely be unused.Arnold SchwarzeneggerFor two years, a major television ad campaign orchestrated by the U.K. Financial Conduct Authority featured an animatronic, heavily accented likeness of Hollywood actor Arnold Schwarzenegger, urging people to “do it nooooow” and see whether they qualified for a a PPI claim.The regulator also set up a dedicated call center and said that as of June, it had received more than 44,000 calls and over 11 million views of its PPI website.Barclays Plc, the second most exposed U.K. bank, has yet to make a comment about the August PPI claim rush.“It seems Barclays will be sure to follow suit,” Markets.com’s Wilson said. “At least the end is in sight for banks and their shareholders.”(Adds analyst comment, details on advertising campaign from fourth paragraph.)\--With assistance from Harry Wilson.To contact the reporter on this story: Viren Vaghela in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Ambereen Choudhury at email@example.com, Keith CampbellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Lloyds Banking Group says it is to take a new charge of up to £1.8bn to cover compensation claims for mis-sold payment protection insurance (PPI). The lender said it took the provisional decision after receiving a flood of new requests for information in the days before 29 August - a deadline set by regulators in an attempt to draw a line under the scandal. The payment protection insurance affair has cost banks more than £36bn in compensation payouts since 2011.
Bank says in run-up to deadline it was receiving 800,000 inquiries a week. Lloyds Banking Group will incur a further charge of up to £1.8bn to cover claims relating to mis-sold payment protection insurance after being hit by a surge in claims last month. Lloyds said the last-minute rush was bigger than expected, and has prompted it to make another PPI charge of between £1.2bn and £1.8bn. At the top end, this is double the £900m charge taken last week by Royal Bank of Scotland, which also saw a last-minute surge in claims. CYBG, which owns the Clydesdale and Yorkshire banks and Virgin Money, warned last week that it faced a potential bill of £450m for new claims. The latest charge takes Lloyds’s total PPI bill to nearly £22bn – by far the largest of all the banks. In total, the five major high street banks have set aside more than £40bn to compensate people who purchased often worthless cover in what has become the UK’s largest mis-selling scandal. Since Lloyds started taking claims in 2011, it has typically received 70,000 PPI information requests a week, but this soared to 600,000 to 800,000 a week in the final weeks before the 29 August deadline. Lloyds said the number was “higher than expected, with a significant spike in the final days before the deadline expired”. In light of this, the bank has decided to suspend the remainder of its 2019 share buyback programme, leaving £600m of the £1.75bn programme unused. Lloyds expects capital growth, and its return on equity, to be below its previous guidance, with the final outcome dependent on the actual PPI charge taken. The latest provision comes on top of £550m in PPI charges taken in the second quarter, which pushed down Lloyds’s pre tax profits by 7% to £2.9bn for the six months to the end of June. About 64m PPI policies were sold in the UK, mostly between 1990 and 2010. Banks and other financial institutions pushed the insurance alongside loans, credit cards and other deals – but in many cases, exclusions meant customers could never make a claim. Analysts at Goodbody said: “The focus now turns to Barclays, with evidence from its peer group suggesting that the £360m of PPI provisions remaining in the second quarter are inadequate to cover the significant spike in activity in the lead-up to the deadline.”
Lloyds and Barclays on Monday said a surge in late claims could see them pay out around $2 billion more each to settle Britain's costliest consumer banking scandal, the mis-selling of payment protection insurance (PPI). Lloyds on Monday said it will set aside up to an extra 1.8 billion pounds ($2.2 billion) to settle PPI claims, while Barclays later said it would set aside between 1.2 billion pounds and 1.6 billion pounds. Lloyds also said it was suspending its 2019 share buyback program.
Lloyds and Barclays on Monday said a surge in late claims could see them pay out around $2 billion more each to settle Britain's costliest consumer banking scandal, the mis-selling of payment protection insurance (PPI). Lloyds on Monday said it will set aside up to an extra 1.8 billion pounds ($2.2 billion) to settle PPI claims, while Barclays later said it would set aside between 1.2 billion pounds and 1.6 billion pounds.
Britain's position as a top hub for maritime services is being eroded by competition, a loss of shipping finance business and the removal of tycoon-friendly tax breaks, a report said, deepening uncertainty for its financial sector as Brexit nears. The UK has been a pivotal global shipping centre for centuries, especially the City of London, and has dominated marine insurance, ship broking, shipping finance and other maritime services. "We estimate that if the UK had maintained its market share over the last two years, this would have resulted in an additional $700 million p.a.
(Bloomberg) -- Follow @Brexit, sign up to our Brexit Bulletin, and tell us your Brexit story. Boris Johnson’s six-week-old premiership was thrown into yet more disarray after his brother quit the government in protest at his Brexit strategy. After three days of humiliation, the beleaguered prime minister launched a fightback in a speech in northern England, appealing directly to the public for an election to resolve Britain’s political crisis. He said he would “rather be dead in a ditch” than ask the European Union to delay Brexit again.Key Developments:Minister Jo Johnson resigns, citing tension between “family loyalty and the “national interest”Johnson making appeal for election Prime Minister will try again to persuade MPs to trigger an early general election on MondayHouse of Lords debating bill to block no-deal Brexit until FridaySplits appear in cabinet over Johnson’s tacticsThe pound rose 0.6%U.K. Said to Want to Unpick Deal (6:05 p.m.)Boris Johnson wants to remove several parts of the deal that was struck between the U.K. and EU in November, according to an official briefed on Wednesday’s negotiations in Brussels.David Frost, Johnson’s envoy, told the European Commission the U.K. wants to:Remove many articles of the contentious Irish border “backstop,” leaving only provisions on citizens’ rights, the common travel area and single electricity market on the island of Ireland. He didn’t say what the U.K. wanted in its place.Take out references in the political declaration on the future relationship to the “level playing field” which would keep the U.K. aligned to many of the EU’s standards. The EU says this is necessary for an ambitious free-trade agreementChange the way the agreement would be governed to take out references to the European Court of Justice. The EU said this would affect future police and judicial cooperation.Johnson Doubles Down on Push for Oct. 15 Election (6 p.m.)Boris Johnson pledged to hold a general election on Oct. 15, or even earlier, if opposition Labour Party leader Jeremy Corbyn wants that. The prime minister was responding to a question about whether he can be trusted not to shift the date of an election in order to take the U.K. out of the EU without a deal.“We want an election on October 15 and indeed earlier if he wants: :Let’s crack on with it,” Johnson said. “If he wants to avoid a no-deal Brexit, or if he wants to avoid a hard Brexit then he should believe in himself to go to Brussels on Oct. 17 to that crucial summit and sort it out.”The premier said the current situation is unsustainable. “I really don’t see how you can have a situation in which the British ability to negotiate is absolutely torpedoed by Parliament in this way, with powers of the British people handed over to Brussels so that we can be kept incarcerated in the EU without that actually being put to the people in the form of a vote,” he said.Johnson Glosses Over Split With Brother (5:35 p.m.)Johnson was asked about his brother Jo’s decision to quit the government earlier in the day, citing a conflict between family loyalties and the national interest (see 11:30 a.m.). He glossed over questions about whether he was acting in the national interest and said “people disagree about the EU.”“Jo doesn’t agree with me about the EU because it’s an issue obviously that divides families, that divides everybody,” said Johnson, before noting that his brother supports his wider agenda for the country.The premier also said he’d spoken to his brother earlier in the day, and praised his service as a minister for science and universities.Johnson: ‘Rather be Dead’ Than Delay Brexit (5:30 p.m.)Johnson said he would “rather be dead in a ditch” than ask for a delay in Brexit beyond Oct. 31.Answering questions after a speech in northern England, Johnson said he guaranteed that he wouldn’t ask for an extension from the EU while he is prime minister. But he dodged the question when he was asked if this meant he would resign rather than sign up to another delay.Johnson Makes Plea For Election (5:18 p.m.)Johnson is making a speech at a police academy in the north of England in which he is expected to make a plea for a general election.He will also reassert his pledge to recruit 20,000 police officers and trumpet his commitment to law and order as he gets a head start in the campaign for votes.But on a stage with dozens of police officers, his surroundings may be a gift to opponents who have accused him of staging a “coup” by suspending Parliament -- and to sketch writers likely to suggest he’s taking his commitment to “taking back control” to a new level.Johnson to Meet Varadkar on Monday (4:45 p.m.)Prime Minister Boris Johnson will travel to Dublin early on Monday to meet his Irish counterpart Leo Varadkar. He’ll return to London in time to be in the House of Commons for the key vote on a general election in the evening, his spokeswoman, Alison Donnelly, told reporters.U.K. Offers Banks $1.6b to Guarantee Brexit Loans (3:45 p.m.)Business Secretary Andrea Leadsom and other senior ministers met with lenders including HSBC, Lloyds and Barclays on Thursday to encourage them to support small and medium-sized companies through Brexit.The state-backed British Business Bank has 1.3 billion pounds ($1.6 billion) available to help banks lend money to businesses that need it, the Business Department said in an emailed statement. “Lenders must empower their SME customers to seize the huge variety of opportunities that lie ahead as we leave the EU on October 3,” Leadsom said.Leadsom was joined in the meeting by Michael Gove, the cabinet minister in charge of no-deal Brexit preparations, Economic Secretary to the Treasury John Glen and Small Business Minister Kelly Tolhurst. Other lenders included Bibby Financial Services, Virgin Money, Metro Bank, RBS, Santander and TSB.Johnson Calls Corbyn ‘Chlorinated Chicken’ Again (1:15 p.m.)Boris Johnson met U.S. Vice President Mike Pence in Downing Street, and used the opportunity -- while talking about a future free-trade deal -- to make the same joke as Wednesday when he called opposition Labour leader Jeremy Corbyn a chicken because he didn’t vote for an early general election .“We will make sure we do everything we can to increase free trade,’’ Johnson told Pence. “The National Health Service is not on the table as far as our negotiations go -- we’re not too keen on that chlorinated chicken either. We have a gigantic chlorinated chicken already here on the opposition bench.”Pence said the U.S. is “ready, willing and able” to offer the U.K. a trade deal.No-Deal Bill to Get Rapid Royal Assent (1:15 p.m.)Leader of the House of Commons Jacob Rees-Mogg said that the bill passed by MPs last night blocking a no-deal Brexit will get royal assent -- come into law -- “speedily” once it is debated for the final time in the Commons on Monday. The bill is currently in the House of Lords, and is due to return to the Commons, potentially with amendments, by Friday evening.Gove Sees Johnson Resignation as Unlikely (1:05 p.m.)Michael Gove, the Cabinet minister in charge of no-deal planning, is still speaking to the House of Commons committee on Brexit. Asked whether Boris Johnson would resign rather than ask for another delay, he said: “I don’t think the prime minister has any intention of resigning.”Under legislation working its way through Parliament, Johnson would be compelled to seek a delay to Brexit if by Oct. 19 he’s failed to secure a new Brexit deal or persuade MPs to back a departure without a deal. The premier said in reaction: “I refuse to do this.” Instead, he wants a general election before then -- but MPs refused to vote for one.That means if Johnson fails to secure an election, on Oct. 19 he’d be faced with the conundrum of either writing the letter or disobeying the law.Berger: Not Clear Where She’ll Stand for Lib Dems (1 p.m.)Luciana Berger, who joined the Liberal Democrats as an MP Thursday, said it was not yet clear if she will stand in the district of Liverpool Wavertree at the next election because of the party’s localized decision-making structure. It’s “not a decision for me,’’ she told Sky News. “I’d like to remain making a contribution to public life.’’Berger quit the Labour Party in February citing anti-Semitic bullying. She has remained as an independent candidate until today. The Liverpool Wavertree district has a strong Labour history and the Liberal Democrats have already selected a candidate for the area.MPs Will Vote Again on Early Election (12:50 p.m.)Leader of the House of Commons Jacob Rees-Mogg laid out a list of motions that will be debated in the House of Commons on Monday, culminating in a “motion relating to an early parliamentary general election.”It will be a second attempt by the government to force an early general election -- the next one currently isn’t due until 2022. Late on Wednesday, Johnson tried and failed to secure the 434 votes he needs -- two thirds of the House of Commons -- to call a ballot.Opposition parties declined to approve of an election because they want a bill to pass into law that would stave off a no-deal Brexit on Oct. 31. By Monday, that bill is likely to have passed into law, and the government’s calculation is that opposition parties may then swing behind his demand for a fresh election.Rees-Mogg also said that all bills needed for the U.K. to leave the European Union are in place.Gove Says New Brexit Deal Can Be Secured (12:35 p.m.)Cabinet Office Minister Michael Gove, who’s in charge of no-deal Brexit preparations, said the changes to the Brexit agreement being sought by Johnson are “eminently achievable.’’He said that while he would support former Prime Minister Theresa May’s deal if it came back to the house of Commons for another vote, the changes Johnson is seeking would mark a “material improvement” in the deal. They are to strip out the Irish backstop, and alter the political declaration to make clear Britain would be outside the customs union and single market. He also said the U.K. wants a free-trade agreement with the bloc.Gove was giving evidence to the House of Commons Exiting the European Union Committee. He earlier said that the Operation Yellowhammer document spelling out the potential impact of a no-deal exit that was leaked to the Sunday Times last month represented a “reasonable worst-case scenario,” and not a base-case prediction. He said there was no evidence to suggest former Chancellor of the Exchequer Philip Hammond could have been behind the leak.Business Secretary to Meet With Banks (11:40 a.m.)Business Secretary Andrea Leadsom will meet later Thursday with executives from the country’s main banks to discuss their support for small and medium-sized companies through Brexit, Prime Minister Boris Johnson’s spokesman, James Slack, told reporters in London.Johnson Wants Election Before Oct. 17 EU Council (11:35 a.m.)Prime Minister Boris Johnson will say in a speech this afternoon that he wants an election before the EU council meeting on Oct. 17, his spokesman James Slack said.“The prime minister believes we should have the election before the EU council and asks MPs to reflect on the sustainability of their position,’’ Slack told reporters. “Having chosen to introduce a bill that destroys our negotiating position,’’ he said, politicians “ must take responsibility for their actions.”Johnson’s Brother Quits Over Strategy (11:30 a.m.)Boris Johnson’s own brother, Jo Johnson, said he’s quitting the government and his seat in Parliament because of differences with the prime minister.“In recent weeks I’ve been torn between family loyalty and the national interest,” Jo Johnson said on Twitter. “It’s an unresolvable tension & time for others to take on my roles as MP & Minister. overandout.”The departure is a severe blow to the prime minister at a time when he’s alienated the moderate wing of his party by expelling 21 MPs on Tuesday because they voted against the government in order to stave off the risk of a no-deal Brexit on Oct. 31.Jo Johnson is a longstanding pro-European -- and had quit as a minister under former Prime Minister Theresa May because he believed the country needed a second referendum on Brexit. It raised eyebrows when he agreed to serve in his brother’s government -- because the premier was the figurehead of the Leave campaign in the 2016 referendum.Former Labour MP Berger Joins Liberal Democrats (11 a.m.)While Johnson has been expelling MPs from his party, Parliament’s fourth party, the Liberal Democrats keep growing. Luciana Berger, who quit Labour earlier in the year, said on Thursday she’s joined the Liberal Democrats.It’s the party’s second addition of the week, after Philip Lee’s defection from the Conservatives on Tuesday deprived Johnson of his majority. They now have 16 MPs.Javid Hopes Rebels Can Return (9:30 a.m.)Chancellor of the Exchequer Sajid Javid said he wants the 21 rebels expelled from the Conservative Party on Tuesday to be reinstated, though he also added Johnson had “no choice” but to fire them.Javid’s comments follow reports of an argument in cabinet this week in which a group of senior ministers, led by no-deal Brexit minister Michael Gove, demanded that Johnson should give the rebels a way back into the party. The prime minister refused.“I would like to see those colleagues come back at some point,” Javid told LBC radio. “They are not just my colleagues; these are my friends, they are good Conservatives.”Javid said it was right for Johnson to make Tuesday’s vote -- allowing Parliament to seize the legislative timetable in order to block a no-deal Brexit -- a matter of confidence in the government. Those who voted against it knew the “consequences,” he said.Swinson Wants Extension Before Election (9 a.m.)Liberal Democrat Leader Jo Swinson said she wants a general election only after an extension to Brexit has been agreed with Brussels.She said she believes Johnson wants an election before his exit deadline of Oct. 31 so he can take the U.K. out of the EU without a deal and blame Brussels for the failure to get an agreement.“He’s frightened of being found out,” she told Sky News. “He’s got an opportunity to go and get that great deal he said he could get and get it past Parliament, but he’s frightened to do that.”Caroline Nokes, one of the MPs expelled from the Tory Party on Tuesday, also said Johnson shouldn’t rush a national vote. “It’s really cynical to try to force through an election,” she said. “The tool we need in Parliament is time.”Labour ‘Consulting’ on Election Timing (Earlier)Labour Treasury Spokesman John McDonnell said the party is consulting with its own MPs and other parties over the best timing for a general election.While some want a national vote once a law against a no-deal Brexit is enacted, others want to wait until after a further delay to Jan. 31 has been secured before going to the country. None of the opposition parties have any confidence that Johnson will keep to his word, he said in media interviews on Thursday morning.“We have to be the adults in the room,” McDonnell said, after comparing Johnson to a toddler having a tantrum. Labour wants to keep “as much control as we possibly over the date of that election,” he told Sky News.Earlier:Johnson Boxed In Over Brexit as Bill Is Pushed Through LordsPound Rally Stalls After Lawmakers Reject Johnson’s Brexit PlansBrussels Edition: No Deal for Boris\--With assistance from Justin Sink, Ian Wishart and Thomas Penny.To contact the reporters on this story: Alex Morales in London at firstname.lastname@example.org;Kitty Donaldson in London at email@example.com;Jessica Shankleman in Wakefield at firstname.lastname@example.orgTo contact the editors responsible for this story: Tim Ross at email@example.com, Stuart Biggs, Mark WilliamsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
London-listed stocks most exposed to the British economy fell as investors worried the country was heading for a chaotic no-deal exit from the European Union or an early national election, while global growth concerns also persisted. It is relatively rare for the export-heavy FTSE 100 to move in lockstep with sterling, but losses in companies more exposed to the domestic economy, such as banks and housebuilders, offset gains in big internationally focused firms. The index was down 0.2% after climbing initially on sterling's fall to a three-year low, underscoring deepening concerns about the fall-out across the economy from a no-deal Brexit and the possibility of another election.
(Bloomberg) -- Lloyds Banking Group Plc is snapping up Tesco Plc’s mortgage portfolio for about 3.8 billion pounds ($4.6 billion) as the British bank bets the U.K. economy will hold up despite the prospects of a disorderly Brexit.The country’s biggest mortgage lender is tightening its grip, acquiring over 23,000 mortgage customers as part of the deal, according to statements from both companies. Tesco, which has been cutting costs and slimming staff, said in May that it’s ending mortgage lending and exiting its home loan book, citing challenging conditions that have pushed some smaller lenders out of the market.It’s in line with Tesco Bank’s “strategy of focusing on a reduced number of products and services that serve the broad range of Tesco customers, and will reduce operating and funding costs,” the supermarket operator said in its statement on Tuesday.Tesco shares fell 0.6% in early London trade, while Lloyds slipped 1.3%.The Lloyds purchase comes amid warnings that U.K. banks could see a decline in profitability as the risk of a no-deal Brexit increases. Citigroup Inc. has estimated that such an event could cut domestic banks’ earnings by as much as 25%, while U.K. house prices have been falling over Brexit and higher property taxes.Lloyds has taken a less downbeat tone and is one of the few U.K. banks to not make a large provision for a Brexit-related downturn. Still, Chief Executive Officer Antonio Horta-Osorio has said that continued uncertainty over the U.K.’s European Union withdrawal could affect the economy.‘Target Areas’A “strong free capital build gives us flexibility to consider inorganic growth opportunities in selected target areas where we see value for shareholders,” the bank said. “The transaction is in line with this approach.”In May, Lloyds was given more breathing space on its capital requirements. It has lowered its targets for its CET1 ratio, a measure of capital strength, to around 12.5%, potentially freeing up about 1 billion pounds in excess capital. The purchase will be funded using existing “internal resources” with minimal impact on capital, Lloyds said.The deal is Tesco CEO Dave Lewis’s largest divestment since the 4 billion-pound sale of Korean assets four years ago. In his five years leading the company, Lewis has trimmed debt enough for the supermarket operator to regain its investment-grade credit rating at Moody’s Investors Service. Tesco is also reducing costs through job cuts, having announced the elimination of another 4,500 positions last month.(Updates with Tesco strategy in final paragraph.)To contact the reporter on this story: Thomas Mulier in Geneva at firstname.lastname@example.orgTo contact the editors responsible for this story: Ambereen Choudhury at email@example.com, Eric Pfanner, Marion DakersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.