Although the credit crunch has impacted on the performance of financial organisations across the country Lloyds TSB feel they are still on course to achieve their objectives for the year.
The well known high street operator Lloyds TSB saw their results down by almost GBP390 million because of the credit crunch but still saw a Q1 pre-tax profit that was up by over 10 percent. This is a great achievement for the organisation though some observers will wonder how much customers are paying over the odds to help them achieve such results.
A representative from Lloyds TSBexplained that they operated in a prudent fashion and so were not over exposed in the American sub prime mortgage collapse like many others.
In order to try and balance their accounts Barclays are looking to raise in the region of GBP4 billion from external investors. This is to avoid using a rights issue which could seriously affect their share price.
Barclays Bank currently has one of the lowest capital reserves figures in the industry and will certainly face stiff criticism if this is not being seen to be addressed. Criticism tends to equal falling share prices and the bank do not want to see their position further weakened by such activity.
The bank has many facets to its business, with Barclays Insurance, stockbrokers and high street banking just a number of the best known. There is no question that they are operating well but in the current economic climate and with other financial institutions having suffered already it is important that Barclays can source this additional funding.
Tesco Finance is understood to be aiming for a full retail bank status, offering the full range of bank products and services to customers.
The 50 percent stake RBS hold in Tesco Finance is to be bought back by Tesco itself, at a cost of GBP950 million. The initial plan appears to be an expansion of the current product range offered, with home insurance the first to receive the extra attention. After that Tesco Finance are expected to start offering basic bank accounts, placing themselves in direct competition with the high street banks.
The position of Tesco Finance, using its core Tesco brand to win customers through supermarket retailing, is a strong one. Most people in the UK use Tesco at some time, so the chance to promote a full bank operation via the stores and online could prove an excellent opportunity.
