Tuesday, September 11, 2012
Finance keeps pace despite Olympic dip
Research from technology consultancy Portal shows financial services firms constituted the highest-performing sector in London during the Olympic period.
According to the survey of 500 London based companies, carried out in August, 64% of finance businesses saw “little or no drop” in productivity while the games were on, with 86% allowing people to work from home. This is in marked contrast to other sectors, which saw productivity fall in over 40% of cases.
A major positive factor for financial services was pre-games planning, with 76% of firms saying they had dedicated time to it, and 27% having started six months early to ensure “business as usual”.
Portal reported a high incidence of IT planning , with 71% of those surveyed upgrading software and 33% upgrading hardware, allowing people to access e-mail, video conferencing and critical business systems.
Shamus Kelly, CEO of Portal, said: “At a time when the UK economy is struggling to shake off the recession, the productivity of our financial services sector is paramount and the Olympics could have been disastrous for businesses in the capital.
“Companies in this sector in particular heeded LOCOG’s advice and provided ways for employees to work remotely which has meant there has been very little impact on most businesses.”
DATED: 11.09.12
FEED: MF
Halifax sweetener for car-loan customers
Halifax, part of the Lloyds Banking Group, is offering £100 of free petrol on a pre-paid card to customers taking out a loan to buy a car.
The offer, from the banking chain and personal loan provider, will be available until 21 October to customers borrowing between £5,000 and £25,000 on terms between one and seven years in length.
Chris Phillips, head of personal loans at Halifax, said cars were one of the most common purchases with a personal loan and the company pointed out September’s new plate registration makes now a prime time to buy for motorists.
Currently, APR would be 8.8% for a loan of £8,500 over 48 months with Halifax.
DATED: 11.09.12
FEED: MF
Dealers confident after steady August sales
Registrations of new cars rose slightly in August, according to the Society of Motor Manufacturers (SMMT), ahead of September’s registration plate change.
Typically, August is the quietest month of the year for new car sales but 59,433 registrations represented a 0.1% year-on-year growth in the month, on the back of 3.3% growth, year-to-date, to 1,260,997 units and news last month the SMMT had revised upward its estimation for total year sales to 1.97 million units.
As in July, private registrations continued to grow with 27,562 unit sales accounting for a 12.2% year-on-year increase while fleet and business registrations combined dropped by 8.35% to 31,871 units.
Diesel and petrol engine registrations were virtually neck-and-neck with 29,391 and 29,387 sales respectively.
End of summer
Richard Lowe, head of retail and wholesale at Barclays, said the minimal growth in August proved “it was only a matter of time before consumer appetite for new cars eased,” claiming the end of “a positive summer of sales.”
Lowe, however, was more positive about September, which accounts for an average 17% of new registrations as, like March, consumers scramble to purchase cars with a new plate registration.
“Anecdotal evidence suggests that September’s figures will show a strong bounce,” commented Lowe. “The draw of the new plate change and attractive finance packages encourage more buyers into dealerships.”
‘Hard to predict’
Motor Finance surveyed a cross-section of UK dealers ahead of the September plate change with many enthusiastic about the extraordinary amount of business in August.
Tim Roelick of Border Cars, the seven-site dealer group based in Scotland and the North of England, said: “As this year is proving to be such a strange year in terms of car sales, it’s hard to predict. For instance, we just had our most successful August to date so it could go anywhere.”
Rob Stanley, finance manager at South Wales Vauxhall specialist FRF Motors, said the group had a “fair number of proposals more than last year, and more than in March”.
Meanwhile, Sandy Risk, business development manager at Eastern Western Motor Group, covering 18 dealer locations across Scotland, predicted business to be “roughly the same as last year, the market is still tough and trading conditions remain difficult.”
DATED: 11.09.12
FEED: MF
Regulator to target finance ‘bad practice’
The Financial Services Authority (FSA) has announced it will increase scrutiny of the incentivised selling of finance products, including car finance.
Martin Wheatley, managing director of the FSA and who will become head of the FSA replacement body the Financial Conduct Authority (FCA), told the Today programme he was acting on the “bad practice” seen in the furore over sales of payment protection insurance (PPI).
The FSA has already removed commission-based selling on investment products through the Retail Distribution Review but Wheatley said sales commissions on finance products would not be outlawed outright.
“We’re not banning it,” said Wheatley. “We’re just saying most of what we’ve seen just don’t work.”
‘The way the wind is blowing’
Peter Minter, managing director of Moneybarn and chairman of the motor finance division of the Finance & Leasing association said the announcement was “a good indicator of the way the wind is blowing” and was consistent with guidance by the Office of Fair Trading, from which some regulatory powers will be transferred to the FCA.
Regarding the effect on Moneybarn, Minter said: “We’ll have to be very sure of our incentive programmes with brokers and intermediaries.”
Likewise, David Kenmir, financial services regulatory partner at PricewaterhouseCoopers (PwC) advised a “need for firms to really get to grips with and demonstrate product suitability for customers…
“Firms will have to prove how they understand and appropriately manage customer risks as part of their day to day business, and they will need to define conduct risk appetite.”
Withdrawal and reparations
The announcement may surprise and disappoint to the industry which had recently witnessed ahigh-profile court case over PPI withdrawn and tougher action declared against claims management companies (CMCs) chasing a potential £9bn-worth of compensation payouts over PPI.
The withdrawal of an appeal to the Supreme Court in the case of Harrison v Black Horse at the end of August has appeared to put an end to a long-running claim of unfairness in the commission percentage charged by the lender in the payment of a PPI premium. Previous judgements in the case, including at the court of appeal, in favour of the lender had also sent positive signals to the industry.
Further protection of lenders, to the chagrin of CMCs, is a possibility should the Financial Ombudsman Service raise the threshold of PPI claim cases without the lender being charged a case fee from three to 25.
Meanwhile, CMCs could now face redress by the Legal Ombudsman and pay forced reparations themselves to customers over poor service as part of an independent complaints service for dealing with CMCs by the Ombudsman.
DATED: 11.09.12
FEED: MF
