Monday, November 1, 2010

The real problem isn't banks, it's investors

When Mark Zuckerberg announced on the Oprah Winfrey TV show that he was giving a $100m (£62m) grant to disadvantaged schools in Newark, New Jersey, he was accused of turning to charity to improve his image. His image, especially in the light of the Social Network film about his life, was the focus of attention.

There was little discussion of his meagre cash pile and how the donation would be in Facebook shares. Because while the 26-year-old internet tycoon is estimated to be worth $6.9bn, he is a paper billionaire.

The phenomenon that is Facebook is expected to float in 2012. Until that time Newark schools will need to sell the company's shares on the fast-growing market in private shares.

Some estimates put the buying and selling of unlisted privately held shares in the US at the same level as trading in listed shares. In other words, the highly regulated and taxed public markets on the New York Stock Exchange and Nasdaq are being superceded by largely unregulated and lightly taxed private markets.

It is a trend that makes some regulators nervous.

Charles Bean, the Bank of England deputy governor, is aware the next crisis could be triggered by these little understood but highly influential markets. Like a Met Office weather watcher staring at the Gulf of Mexico, he is keen to spot the next hurricane and measure its speed, direction and the potential damage it might cause.

In a speech last week to the Royal Statistical Society, he said there were clues. Instead of a weatherman, he likened himself and his colleagues in the government's new super financial regulator to seismologists. Not for them the easy business of staring at satellite images and tracking storms. Instead, when they take over from the Financial Services Authority in 2012, their job will be more akin to listening for tremors in the financial system. Listening for friction and potential quakes as tectonic plates moved and created explosions. Ultimately they might offer a view on the possible location and severity of a quake. They might even hint at the timing. However, it would all be rather vague. If there was one thing certain, or at least probable, it is the next crisis will come from an area previously unknown to the bank, or one considered a low potential risk, he said.


More commentary here

Sunday, October 31, 2010

Finland's accessible education in University World News

Finland has both the most affordable and accessible system of higher education, according to a study of 17 countries undertaken by Canadian research group Higher Education Strategy Associates (HESA). Norway is a close runner-up.

The country rankings were derived from a composite of six different measures of affordability and four measures of accessibility, in the study by Alex Usher and Jon Medow titled Global Higher Education Rankings 2010: Affordability and accessibility in comparative perspective.

The countries surveyed were Australia, Canada, Denmark, England and Wales, Estonia, Finland, France, Germany, Japan, Latvia, Mexico, Netherlands, New Zealand, Norway, Portugal, Sweden and the United States.

The most 'affordable' higher education was to be found exclusively in Europe: Finland was the most affordable, followed by Norway, Germany, Denmark and Sweden.
English-speaking countries fared less well: Canada, New Zealand, England and Wales, the United States and Australia were ranked 9th to 13th, respectively.

The nations with the most 'accessible' higher education were Finland, the Netherlands, Norway, the US and Australia.

HESA's Alex Usher described Finland's results as "very good" across the board. "They have reasonable education costs, a strong and generous system of both loans and grants, high participation rates and an egalitarian student intake. From a student perspective, there is a lot to like there," he said.

Finland and Norway performed well in both affordability and accessibility, but results for the countries demonstrate that 'affordability' and 'accessibility' are not always related concepts.

Usher said: "Germany fared very well in terms of measures of affordability, but very badly on measures of accessibility. The United States does very poorly on measures of affordability, but does reasonably well in terms of accessibility. That suggests there is considerably more to the issue of accessibility than simple costs."

Even if Finnish higher education is both 'affordable' and 'accessible', it is not exactly 'efficient'. Finland is one of the nations to espouse free and universal higher education, and compared with most countries its student welfare is extraordinarily generous.

However, as previously reported in University World News, its students are also among the world's slowest (and therefore oldest) by the time they complete their studies and enter the labour market.

Leaving the family home to enrol in higher education is a cultural 'rite of passage' in Finland, but the grants and subsidised loans and other services available to students have not kept pace with inflation, particularly rental costs in the capital Helsinki. The result is that students work to support themselves, rather than devoting themselves to their studies. Earning 'too much' leads to cuts in student welfare payments. And so the cycle goes on.

As it stands, there is little incentive for Finnish students to complete their studies in minimum time. Any incentive scheme to improve throughput could depend on the introduction of a fee-free threshold. This might necessitate a fully-indexed student welfare and loan package that actually allows students to cover their living costs (including Helsinki rents) without having to work excessive hours during their studies.

Here are the results: Finland (1st in affordability, 1st in accessibility), Norway (2nd and 3rd), Germany (3rd and 11th), Denmark (4th and not rated), Sweden (5th and 9th), Netherlands (6th and 2nd), France (7th and 10th), Latvia (8th and not ranked), Canada (9th and 7th), New Zealand (10th and 6th), UK-England and Wales (11th and 8th), the United States (12th and 4th), Australia (13th and 5th), Japan (14th and not ranked), Mexico (15th and 14th), Portugal (not ranked and 12th), Estonia (not ranked and 13th).

* Dr Ian R Dobson is an Australian scholar living in Finland. He is editor of the Australian Universities' Review.

Thursday, October 28, 2010

Billionaire Emir buying Britain brick-by-brick

"Thank you for reminding me about Christie's," one of the world's richest monarchs, the Emir of Qatar, said casually on the eve of his state visit to Britain, which began yesterday with a spectacular horse-drawn carriage procession to Windsor Castle.

It is easy to forget about something as trivial as buying one of the world's top auction houses when you have an investment portfolio as big as that of Sheikh Hamad bin Khalifa al-Thani. The Qatari monarch, who owns one third of the world's natural gas reserves, is five times richer than the Queen. In recent times he has been using considerable quantities of that wealth to buy up trophy assets in London. Christie's – if he does decide to buy it – will be added to Harrods, the US embassy building in Grosvenor Square and the capital's most expensive property development, One Hyde Park in Knightsbridge. The Emir acquired the Chelsea Barracks site for a record-breaking price and also owns considerable chunks of Barclays, Sainsburys and Canary Wharf.

But if Sheikh Hamad is the most aggressive and adventurous buyer of British property, he is far from alone. Arabs, primarily from the Gulf states, have tripled their share of investment in UK commercial property in the past five years. Last year they spent £1.48 bn – representing 16 per cent of all foreign investment in the sector.

Event to strengthen ties between lebanon and UK banking communities

In recent years, Lebanon has enjoyed positive transformation in its banking industry, coming through the recession relatively unscathed and now focused on reclaiming its position as the key Middle Eastern banking hub. A tighter regulatory regime together with a growing number of banks has led to the Lebanese banking industry leading the fast growth Lebanese economy. With 66 independent banks and a population of just over 4 million people, the Banking sector in Lebanon currently employs 20,000 individuals in 780 branches and manages the equivalent of $90bn in assets nationwide1.

To mark this fast growth transformation, the Arab Bankers Association is hosting an event in on November 10th to showcase the Lebanese banking community and its strategic expansion into Europe, MENA and beyond. Eminent speakers from both Lebanon and the UK will discuss how Lebanon's financial strength and future expansion goals highlight the investment potential available in Lebanon's national banking industry, and present an opportunity to UK banks for reciprocal investment and strengthened ties.

Speakers include:


· Riad Salame, Governor of the Central Bank of Lebanon

· Dr. Joseph Torbey, chairman of the Association of Banks in Lebanon

· Ussama Mikdashi, President of the Lebanons Banking Control Commission

· Angela Knight CBE, Chief Executive, British Bankers' Association

· The Rt. Hon. Lord David Howell of Guildford, Minister of State (Foreign & Commonwealth Office)

· Lady Olga Maitland, CEO, Money Transfer International

George Kanaan, CEO of the Arab Bankers Association, commented:

"The Lebanese banking sector has created a blueprint showing how sound regulation, strong leadership and structure can withstand global financial instability. In our position, as a mouth piece for Middle East banking sector, we are eager to highlight this and offer the Lebanese banking sector an opportunity to engage with London, the financial centre of the world. With so many high profile and influential speakers, the day promises to be of great interest and an ideal platform for the UK and Lebanese banking sectors to create closer ties. We are extremely excited about the event and firmly believe it is a strong platform for the Lebanese Banking sector to showcase its financial strength and future expansion goals, whilst highlighting the investment potential available in Lebanon's national banking industry."

Tuesday, October 26, 2010

Penalty for graduates who pay off student loans early


Graduates who wish to avoid being burdened with decades of debt could be hit with mortgage-style redemption penalties if they pay off their student loan early.

The fees, likely to run to thousands of pounds, would also be levied on parents who opted to pay upfront for the cost of putting their child through university to save them from being saddled with long-term debt.

In last week's spending review, George Osborne, the Chancellor, confirmed that university fees would rise from their current rate of £3,290 from start of the 2012 academic year. Any new upper limit has yet to be set, but Nick Clegg, the Deputy Prime Minister, confirmed the Government would reject the recommendation of the recent review of university financing that the cap on university fees be lifted altogether.

Ministers are understood to be looking at a new cap of about £7,000-a-year. This would be funded by loans with tiered rates of interest depending on how much the graduate earns in future.

A redemption penalty would stop the better-off avoiding higher interest rates by paying off a loan early – and would be seen as a sop to Liberal Democrats who have been criticised over the tuition fees rise after signing a pre-election pledge to scrap them altogether.

Lord Browne, the former head of BP who led the review, had suggested that no redemption penalty be imposed.

But Vince Cable, the Business Secretary, confirmed that ministers were examining ways to make the new system more "progressive".

He said: "High-earning graduates will be paying more later in their life, but in a progressive way relating to their ability to pay.

"There is an issue about people who go on to very high-earning jobs and who therefore pay off relatively quickly and we do have to think about how to find a way by which they make some sort of contribution towards low-earning graduates.

"It's a tricky technical problem but we're working on it.

Mr Cable confirmed that ministers had already decided not to proceed with Lord Browne's suggestion that universities be permitted to charge unlimited amounts, with a levy on any fee above £6,000 to be paid to the Government to spend on bursaries and grants.

"I don't think there's any prospect of having unlimited fees – that simply isn't going to arise," he told Sky News.

"We're looking at this very carefully, what Browne had to say – but I think that particular approach was one we're not going to pursue."

His words echoed those of fellow Liberal Democrat Mr Clegg, who told The Andrew Marr Show: "I am uneasy about the idea that you, in theory, have unlimited fees. So we are looking at something which would be more restrained."

The Lib Dem leadership is braced for a sizeable rebellion by the party's backbenchers when the plans come before Parliament.

Simon Hughes, the deputy Lib Dem leader, suggested that he would be prepared to back a rebellion if the Government applied the penalty to less wealthy students.

He told Channel 4 News: "The internal debate in the party has not finished and the debate within Government has not finished

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Monday, October 25, 2010

Families need savings to ease pain of spending cuts

As the Chancellor swings his axe, households must assess their spending to cope with the squeeze on their finances, writes Jeremy Gates

IT’S TIME to start saving again. That was the message this week when the Chancellor ushered in a “sober decade” ahead with £81bn of spending cuts outlined in his Comprehensive Spending Review (CSR).

Millions of households face a steep drop in income – and savings painstakingly collected by older people are already being rescued.

While the bank of mum and dad gives sons and daughters a deposit for their first home, the Financial Times says some grandparents are offering to pay the child benefit which better-off families will lose from 2013 – worth £88 per month for the first child, and £57 for each subsequent child.

As the FT explains: “Up to £3,000 per year can be passed on to grandchildren without becoming liable to inheritance tax, although larger regular payments are permitted if they are made from income.”

With vouchers for Child Trust Funds set to end in January, older people are also investing in monthly investment plans, savings accounts and pension schemes for grandchildren.

By so doing, they may cut the potential inheritance tax payable on their estates when they die.

But how will the great majority of households, who can’t rely on money handed down the generations, cope with the squeeze?

Households on £50,000 a year could lose about £10,000 in the next four years.

Kevin Mountford, head of banking at finance website moneysupermarket.com, says: “The CSR will have a huge impact on consumers’ finances; purse strings across the country will inevitably have to be tightened.

“The threat of unemployment will weigh heavily on the minds of many families, working in both public and private sectors.

“While it might be too late to take out specific insurance to cover unemployment, consumers can plan to reduce the impact of a sudden loss of earnings. If you have any debts, look at ways you can pay them off or at least reduce your outgoings by consolidating existing debts.

“Consumers should also build a rainy day fund – ideally three months’ worth of earnings, but anyone worried about job security should consider increasing this amount to six months to tide them over.”

However, with the Bank base rate probably stuck at 0.5% for months to come, too much money is left in low-paying accounts.

Always check the return your money earns and know when bonus interest on new accounts is taken off.

Next, look closely at mortgages, a major outlay for most families.

As lenders chase new borrowers in a shrinking market, fixed rate and tracker mortgages are getting cheaper and fixing for five years could head off rate rises which must come eventually.

Chelsea BS has cut its three-year fix to just 3.49% and applicants with a 25% deposit get free valuation, with assisted legal fees for remortgagers. The product fee is only £495.

Ray Boulger, senior technical manager at broker John Charcol, says: “If you hold at least 25% of the equity in a home, and you are paying more than 3% on your existing mortgage, consider remortgaging.

“With many lenders willing to pay valuation and legal costs, the only stumbling block in switching is the arrangement fee, ranging from nothing to nearly £2,000.

“If you have 40% equity in your home, a tracker costs 1.99% (for two years) at NatWest and 2.19% (for life) at HSBC. With 30% equity, Woolwich’s lifetime tracker costs 2.58%.

“If you are remortgaging, and might at some stage need to move for a new job, avoid a mortgage which imposes a heavy early repayment charge.”

“Some lenders allow these mortgages to be portable, subject to meeting the lender’s criteria which might be more onerous than when you first took the mortgage out. It is generally better not to have this penalty lurking over your head.”

Next, pensions: Mr Osborne’s confirmation of the rise in the state retirement age for men and women to 66 by 2020 makes it more important than ever to build a private pension, not least to cover that gap for many workers between retirement and when their state pension kicks in.

Tom McPhail, head of pension research at financial advisor Hargreaves Lansdown, says: “We knew retirement ages needed to rise, but this still won’t be a popular move. To retire earlier, you’ll need to boost private savings.”

McPhail reckons a 55-year-old worker needs to save another £40 to £45 per month for 10 years to have an extra £6,600 at age 65.

Younger workers, in their mid-forties, might need to save an extra £20 to £30 per month in their pension pot to make up the loss.

Private pension savings, however, are fairly inflexible, because they can only be accessed at age 55. People unlucky enough to lose their jobs might want to get their money earlier than that.

Catherine Penney, vice president at Barclays Stockbrokers, says: “The rise in retirement age reinforces the need for each of us to make provisions for retirement.

“By making regular contributions to personal pensions, including self-invested ones, and ISAs which offer a tax-free wrapper and are usually easily accessible, confident investors can build up savings to supplement their core pensions and provide them with increased flexibility to move to part-time working in the run-up to retirement or possibly to stop work altogether before they reach 66.”

Andy Gadd, head of research at Lighthouse Group, a national network of financial advisors, says: “In simple terms this means individuals in their late 50s have only eight or 10 years to prepare for a delay in receiving their state pension.

“Meanwhile, younger individuals should prepare for the likelihood of getting a state pension even later than 66 in future government proposals.”

In the next few weeks, of course, consumers ought to carry out their own household CSR with websites available to keep prices of standard products as low as possible.

Areas of obvious potential saving, says moneysupermarket.com, include: credit cards (saving £258); car insurance (£237); home insurance (£127); energy bills (£300-plus); and personal loans (possibly £600 if all loans are rolled into one with Nationwide BS at 7.6% APR).

INFORMATION: Chelsea BS (0800 341 341 and www.thechelsea.co.uk/mortgages); Hargreaves Lansdown (0117 980 9926 and www.h-l.co.uk); John Charcol (0845 034 2100

Wednesday, September 22, 2010

London 2012- a shattered dream?

A footbridge being built for the main stadium collapsed, injuring 27 people and highlighting the raft of problems that have so far blighted the event, meant to showcase the emerging global power.

And after world triple jump champion Philipps Idowu, Olympic 400m gold medallist Christine Ohuruogu and Commonwealth 1500m champion Lisa Dobriskey pulled out of the competition, the head of England's team has demanded guarantees for competitor security.

Idowu's withdrawal was based on security concerns while Ohuruogu, plagued by injury problems this year, suffered cramp in a training session over the weekend and decided to pull out as a precaution from the event starting in New Delhi on October 3. Dobriskey said she had run out of time after struggling with injury earlier in the season.

Preparations for next month's Commonwealth Games, intended to be the coming out party for India the way the Olympics were for China, are down to the wire and the event risks descending into farce.

The shooting of two foreign visitors by suspected militants in Delhi on Sunday has combined with a dengue fever epidemic, heavy monsoon rains, delayed construction, graft scandals and traffic chaos to give the Games that sinking feeling.

Police said the collapsed bridge was just outside the main stadium, putting India's sometimes lax construction standards again in the spotlight.

Head of the England team Craig Hunter said the team remains "committed to participating", but added: "It's hard to cancel an event of this magnitude but we are close to the wire, and teams may start to take things into their own hands. Athletes will start getting on planes soon and decisions will have to be made. We need new levels of reassurance."

Concerns over security and health forced discus world champion Dani Samuels of Australia to pull out of the Games, another blow to organisers at pains to assure participants of complete safety.

Commonwealth Games Federation president Michael Fennell said the two-week event, starting October 3, was seriously compromised by conditions at the Games village that have "shocked the majority."

But officials remained upbeat.

"I am as confident and as cool as ever about our organising. These are all minor hiccups," Urban Development Minister S. Jaipal Reddy said.

Dismal preparations have, for many, underscored the out-of-touch, slow-paced leadership of Prime Minister Manmohan Singh and his Congress government, raising questions how a graft-ridden, inefficient state can hope to compete with China.

The government's pro-poor voter image may suffer from tales of billions of wasted dollars. A perception of India's entrepreneurial prowess threatening Western jobs may slip if roofs leak and journalists wonder where the Wi-Fi is.

"Fingers crossed, India may pull off a miracle," said Boria Majumdar, a sports historian who has written the book 'Sellotape Legacy: Delhi and the Commonwealth Games'.

"But it will have to be a miracle. No doubt about that".

The Games village and security - construction delays mean venues have been locked down by police only two weeks before the Games - are the two major weakness of the Games, Majumdar said.

Some four or five accommodation towers at the Games village are still unfinished, lacking facilities such as wireless Internet, fitted toilets and plumbing. Rubble, unused masonry and discarded bricks litter the unfinished gardens.

A crude cement slope appeared to be an unplanned fix for disabled athletes requiring access to one apartment block.

The athletes' training centre was still to be fitted out.

The water in the training and recreational swimming pools was dirty, with insect larvae breeding on the surface.

"There have had some delegations staying there and they have been reporting constantly about the filth in the village," Fennell told CNN-IBN TV.

Organisers say there is no question the Games will be put off, but the nightmare is that one delegation exits and that leads to an avalanche. And the problems are not receding.

With the $6 billion Games way behind schedule, there have been worries stagnant puddles in construction sites have proved breeding grounds for mosquitoes. Hundreds of Delhi residents are hospitalised in one of the worst dengue epidemics in years.

With costs running 17 times more than original estimates, the government's anti-corruption watchdog identified 16 projects with suspect financing.

The insistence to hold the Games in October has led to some athletes pulling out due to conflicts with Olympic qualifiers.

October also means the opening ceremony may be ruined by rains.

Triple Olympic sprint champion Usain Bolt of Jamaica is the most high profile of a bunch of top athletes who have decided to skip the event.

But many venues, including the main Jawaharlal Nehru stadium have been praised as world class.

Other events like the 2004 Athens Olympics were dogged by problems but turned out fine. Beijing was hit by worries over the torch relay and Tibet protests but ended in media glory.

Some officials say foreigners do not understand how India works. Sport Minister Manohar Singh Gill said it is like an Indian wedding where chaos ends in a well-planned ceremony.

But scandals have sent shivers down the government that since the summer has effectively replaced many organisers with top civil servants, giving the Games access to more funds.

However, the Congress government was late getting involved, highlighting its slow pace in dealing with issues ranging from economic reforms to separatist violence in Kashmir.

"It's just one of so many goof-ups," said Paranjoy Guha Thakurta, a political economist. "This will not do the government any good. When you have a big bash and benefits are minimal it sharpens and widens the inequalities in India. People notice."
Reuters

Oil Deepens Losses After Fed Announcement


(RTTNews) - Oil prices slumped Tuesday, with losses accelerating after the Federal Reserve's monetary-policy announcement.

The US central bank kept interest rates unchanged at a record low, and hinted at further quantitative easing measures to support the economy. However, no concrete steps were unveiled.

November crude oil, the most active contract, dropped $1.22 to $74.97 a barrel on the New York Mercantile Exchange. The front-month October contract settled down $1.34 at $73.52 a barrel.

Earlier today, the Commerce Department said US housing starts rose 10.5% to an annual rate of 598,000 in August from 541,000 in the previous month, exceeding economists' expectations for a more modest increase to 550,000. The report also said building permits grew 1.8% to an annual rate of 569,000 in August, higher than consensus forecasts of an increase to 560,000.

Meanwhile, the dollar extended losses after the Fed announcement and fell to a six-week low versus the euro. Successful bond auctions in Ireland, Greece and Spain underpinned the European single currency.

Speculation making UK government Bonds sell like hot cakes

U.K. Government Bonds Soar on Speculation Central Bank May Ease With Fed


U.K. government bonds jumped on speculation that the Bank of England will ease monetary policy after the Federal Reserve said yesterday it is prepared to do more to support the economy.

Ten-year gilt yields fell the most in more than a year after the Fed signaled it may restart purchases of government debt with new money, a policy known as quantitative easing. Central bank policy makers voted 8-1 to keep rates on hold this month, and some officials said the probability the economy will need more stimulus has risen, minutes of the Sept. 9 meeting showed today. The economy will grow slower than previously forecast next year and the central bank won’t raise rates until the second quarter, the Confederation of British Industry said.

“The Bank of England and the Fed have been closely related in their policy response, so the market is now speculating as to whether they will do further quantitative easing,” said Mohit Kumar, a fixed-income strategist at Deutsche Bank AG in London. “That is not my central scenario.”

The yield on the 10-year gilt fell 16 basis points to 2.96 percent as of 10:23 a.m. in London, The 4.75 percent security due March 2020 rose 1.425, or 14.25 pounds per 1,000-pound face amount, to 114.705. Two-year yields slipped 8 basis points to 0.63 percent.

The Monetary Policy Committee, led by Governor Mervyn King, overruled Andrew Sentance to keep the benchmark interest rate at 0.5 percent and the bond-purchase plan at 200 billion pounds ($313 billion). Sentance pushed for an increase in the rate to 0.75 percent, reiterating that it should be raised “gradually.”

‘Further Action’

“Most members thought that the current level of bank rate and stock of asset purchases financed by the issuance of central bank reserves remained appropriate to balance the risks,” minutes of the Sept. 9 meeting released by the central bank today in London said. “For some of those members, the probability that further action would become necessary to stimulate the economy and keep inflation on track to hit the target in the medium term had increased.”

The pound rose 0.3 percent to $1.5676 and 0.4 percent to 85.25 pence per euro.

The Fed said yesterday after its policy meeting that it’s “prepared to provide additional accommodation if needed to support the economic recovery.”

U.S. 10-year Treasury yields fell 4 basis points to 2.54 percent after plunging 14 basis points yesterday. German 10-year yields were 10 basis points lower at 2.35 percent.

Sunday, August 22, 2010

NBNK Invest Starts Trading As It Eyes UK Bank Assets

By Patricia Kowsmann Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--A new vehicle set up by two London financial-sector heavyweights to buy U.K. banking assets has raised GBP50 million from an initial public offering, marking yet another new entrant in the country's changing bank sector.

NBNK Investments PLC (NBNK.LN) issued 50 million shares at 100 pence a share, and is now trading on London's AIM, the company said Friday. The shares were around 105 pence in early trading.

Peter Levene, chairman of Lloyd's of London, the insurance market, will be chairman of the company while City guru David Walker, who recently led a corporate governance review of the banking sector, will hold a non-executive role.

Levene and Walker weren't available for comment Friday.

In a statement, Levene said NBNK "will now establish a dialogue with a number of sellers of assets which would fit our acquisition profile."

NBNK said it will initially focus on the retail banking and small-and-medium enterprise sectors. Over time, it intends to expand into retail wealth management, it added.

The two assets the new group is initially eyeing are 600 branches Lloyds Banking Group PLC (LYG) is putting up for sale in coming years, and 75 branches from nationalized bank Northern Rock. Combined, they represent a 7% market share of the U.K. retail banking market.

NBNK is expected, however, to face fierce competition from other new entrants, including Richard Branson's Virgin Money, U.S. entrepreneur Vernon Hill's Metro Bank PLC and retailers like Tesco PLC (TSCO.LN).

The U.K. banking sector is restructuring after its near collapse during the financial crisis, which forced two of the country's largest banks to seek government help.

Lloyds is now 41%-state owned, while Royal Bank of Scotland Group PLC (RBS) is 83%-state owned.

The two banks have been forced to sell assets by the European Union following their state bailouts. Lloyds has until 2013 to sell the 600 branches. The sale process hasn't begun.

Once it does, NBNK is expected to do a secondary fund raising and list on the larger London Stock Exchange.

In the filing, NBNK Investments said it wants to establish a network of 400 to 600 branches across the U.K., which would operate under a traditional service-based banking model.

The company won't operate in wholesale, international or investment banking, it added.

Its listing comes a few weeks after another new entrant, Metro Bank, opened the doors of its first London branch. Like NBNK, Metro bank has also advocated back-to-basics banking, offering services including long opening hours, speedy account set-ups, and water bowls and biscuits for dogs that customers bring into branches.

Analysts, however, said new entrants will face tough competition from established heavyweights, including RBS, Lloyds and HSBC Holdings PLC (HBC), which are better equipped to deal with regulatory changes and funding hurdles.

NBNK has received the backing of well-known investors, who are expected to help the company raise more capital for acquisitions.

Invesco Asset Management owns 29.5% of the vehicle's shares, followed by Aviva Investors, with 11.5%. BlackRock Investment Managers and JP Morgan Asset Management are also shareholders, owning a combined 13% of the stock.

Hedge funds Moore Europe Capital Management LLP and Och-Ziff Capital Management hold 9.4% of the vehicle each.

Saturday, June 5, 2010

Lehman Brothers $10m art sale to include early Damien Hirst




Art collectors will get another chance to snap up remnants from the office walls of the world's most notorious failed bank in an auction by Sotheby's in September of over 400 items from Lehman Brothers' once renowned hoard, including work by Damien Hirst, Gerhard Richter and Félix González-Torres, following a smaller sale from the company's collection last October.

Liquidators to the defunct Wall Street firm announced today that a large slice of Lehman's collection will go under the hammer in September in an auction expected to raise $10m (£6.89m). The proceeds will go to creditors who are still owed billions of dollars following the bank's spectacular collapse in September 2008.

Kelly Wright, an adviser to Lehman's estate, described the lots as a "visionary" collection: "Many of the works were acquired from cutting-edge and emergent artists who have since evolved into the vanguards of the contemporary art world."

Lehman inherited a significant chunk of the collection when it bought a US asset management firm, Neuberger Berman, in 2003. Neuberger's founder, Roy Neuberger, had been an enthusiastic corporate acquirer of art and Lehman subsequently built on his stockpile.

Following Lehman's bankruptcy, employees bought out Neuberger Berman, which survives with 1,600 employees and $180bn of assets under management. Neuberger exercised an option to purchase several hundred works from Lehman but the items left behind are to go on the block.

An early Damien Hirst wall piece called We've Got Style (The Vessel Collection – Blue) ( is set to be the biggest seller with an estimated price tag of $800,000 to $1.2m. A cabinet full of ceramic objects, the piece was produced before Hirst's art hit the headlines when work such as his shark preserved in formaldehyde attracted record multimillion-pound prices.

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