HMRC was branded "potty" last night after it emerged it trebled the commission on offer to a disgraced tax credits contractor when they threatened to quit.A damning report revealed the Taxman raised the bonuses available to Concentrix from 3.9 per cent of saved cash to 11 per cent because the firm moaned they were not making enough money.The National Audit Office said: "Concentrix questioned the value of continuing the contract."The decision in late 2015 came despite the firm missing half its monthly targets – and the HMRC’s savings from the deal tumbling from £1 billion to just £193 million.At one point Concentrix was only answering 4.8 per cent of calls from struggling Brits within a five minute deadline.And performance levels got WORSE after the new terms were signed with thousands wrongly losing their benefits for up to eight weeks at a time.Furious MPs yesterday accused the Government of “throwing taxpayers money down the drain”. HMRC was forced … [Read more...] about ‘Potty’ HMRC TREBLED the commission on offer to a disgraced tax credits contractor when they threatened to quit
New business loans bad credit
When it was announced in January that Agrokor was on the verge of collapsing under the weight of its huge debts, Croatian Prime Minister Andrej Plenkovic (pictured above) quickly passed a law freeing public moneys to bail out the ailing firm. Nicknamed 'Lex Agrokor,' the law - subsequently emulated in other Balkan countries where Agrokor is present - set up a form of bankruptcy protection for systemic enterprises. But it also created - or perhaps just reinforced - the sense of business as usual, that political and business insiders were - still - looking after each others' interests. “To protect the sustainability of business operations in companies of systemic significance for Croatia during financial and business restructuring, the government adopted the current law to establish new financial liquidity. All creditors are invited to report their claims by June 10,” Deputy Prime Minister and Economy Minister Martina Dalic told DW. It … [Read more...] about Croatia’s Agrokor business empire too big to fail?
DW: What do you see as the main results of the stress test ? Were there any surprises? Claudio Zara: In general terms, I think the results are good. They show the general resilience of the European banking system, and basically the results were as expected. No surprises. Italian banks have been described by many banking analysts as the likely source of Europe's next financial crisis . Five of the 51 big European banks covered in the European Banking Authority's stress tests were Italian banks . What does this stress test tell us about their financial health - and what must be done to improve it? As you know, Banca Monte dei Paschi di Siena (BMPS) was the black sheep among Italian banks. It performed very badly in the tests, the worst of any bank sampled. However, on Friday evening, just hours before the EBA stress test results were released, BMPS announced a package of major measures meant to deal with some of the bank's biggest problems. They sold off about 60 … [Read more...] about Is a new start needed for Italy’s banks?
Albert Rupprecht, parliamentarian and member of the conservative Christian Social Union, told the business daily Handelsblatt in an interview to be published Monday that such a "bad bank" could take over banks' problem assets and free up lending among them, hit hard by the financial crisis. But he added that his support depended on banks eventually assuming any losses that the "bad bank" might wind up with. "Taxpayers cannot be made to shoulder the burden," he said. Rupprecht heads the committee that oversees Germany's 480-billion euro ($670 billion) banking stabilization fund that was unveiled last October. That amount includes a financial market stabilization fund of €400 billion to guarantee loans and some €80 billion to recapitalize the banking sector through the government taking stakes in banks. Rupprecht's voice joins those of several leading bankers who have called for the creation of just such a bank as a way to ease the credit crunch. German financial institutions … [Read more...] about Financial Watchdog Chief Calls for “Bad Bank” for Toxic Assets
After a decade steering Germany's largest bank, the Swiss Josef Ackermann is stepping down. It was well known that he wanted former German Bundesbank President Axel Weber as his successor, but now, Ackermann will make way for not one but two successors - 49-year-old Indian-born Anshu Jain and Jürgen Fitschen, aged 63. Ackermann won't be staying on to chair the supervisory board as he had once hoped. Jain and Fitschen, meanwhile, will have to roll up their sleeves and deal with much more than the bank's slightly fractious leadership change. The head of Deutsche Bank doesn't have to be a German national, though he is expected to straddle the worlds of finance and politics and maintain relationships with the German government - somewhat controversially. In 2008, Chancellor Angela Merkel was criticized for organizing a dinner to celebrate Ackermann's 60th birthday. "You have to work for this kind of trust," Christoph Schalast from the Frankfurt School of Finance and Management … [Read more...] about New era begins for Deutsche Bank
Entrepreneur Eladio Munoz operates two printing plants in the south of Madrid. He was badly affected by the economic crisis and had to close two other sites, laying off half his workforce. Today he still employs around 100 people. During the crisis he restructured his company, expanding its export business. His customers now come from Portugal, France and Britain. Business is good again. For 2014, he expects sales of around 8.5 million euros ($11.6 million). But he usually needs financing for contracts - and that requires money he can't get from the banks. "The biggest problem is getting loans," Munoz said. Companies that have survived the crisis have major problems with cash flow to fund their daily business." Munoz' clients include many large companies and multinational corporations. They often pay only months later. Cash flow is a problem. "In the last five years, we were unable to invest in new projects," he said. "We missed a lot of opportunities." The credit crunch's long … [Read more...] about Spanish firms caught in a credit trap
The country’s five top commercial banks, Deutsche Bank AG, HVB Group, Commerzbank AG, Dresdner Bank AG and DZ Bank announced on Wednesday they would pool up to €50 billion ($54 billion) in loans and would transfer them to a joint venture run by the Kreditanstalt für Wiederaufbau (KfW), Germany’s development bank. The KfW will then sell bonds backed by the investment-grade loans. The process, know as securitization, is widespread in the United States and other European countries, but the market in Germany has been hampered by taxation of the vehicles used for such asset-backed securities. The banks expect the initiative will help them recover from the worst financial sector downturn since World War II. For its part, the government hopes the banks will become more inclined to lend to the country’s companies that have suffered amid a credit crunch. “We have to ensure that banks remain capable of granting new loans to small and mid-sized businesses. A … [Read more...] about German Banks to Pool Loans to Free Up Capital
Karsten von Köller does not give most people the impression of being a cowboy. Smartly dressed in a pin-striped suit, with an aristocratic air about him but still mild mannered, you would recognize him as a businessman, but you would not necessarily know that he is managing billions of dollars for Lone Star Capital, a private equity company from Dallas, Texas. Perhaps unlike one of the Lone Star State’s more high-profile cowboys of the moment, George W. Bush, Lone Star Capital likes to spend time in Germany. A lot. Or better said: Lone Star likes Germany’s bad loans, in the industry referred to as NPLs -- nonperforming loans, and there are a lot of those. German banks are dumping the NPLs onto the market in record numbers. Not individually, but in packages or portfolios whose files are so valuable that they are transported with a police escort from one German city to the next after a deal. The financial institutions are happy to purge them. “They can quickly … [Read more...] about Texans Take A Shine to Bad German Loans
After stocks and the euro took a tumble this week on the announcement that credit rating agency Standard and Poor's was downgrading Greece's credit rating to junk status, new calls have gone out for ratings agencies to act "responsibly" and for the creation of an independent European rating agency. But responsibility is not a word that has been associated with credit ratings agencies much in the wake of the global financial crisis, especially after it emerged that the business practices of the big three US ratings firms - Standard and Poor's, Moody's and Fitch - played a central role in helping bring about the economic meltdown. "We should not make the welfare of Europe dependent on ratings agencies," Peter Bofinger, a member of the German government's independent economic advisory panel, told the newspaper Die Welt. German Foreign Minister Guido Westerwelle, who called for a European credit rating agency, said rating agencies must not develop, sell and rate financial products at … [Read more...] about Credit rating agencies under a harsh spotlight again
The fifth largest bank in Greece, Attica Bank, recently made headlines for its involvement with the auction process for awarding four national TV broadcasting licences. The highest bidder was Ioannis Kalogritsas, a member of a business family, who was only allowed to take part because the Attica Bank was his financial guarantor. The construction giant is alleged to have close contacts in the governing left-wing party Syriza. After Kalogritsas got hold of a television licence for a staggering 52.6 million euros (about 59 million dollars), Greek media ran reports on the striking number of government contracts with his construction company in recent times. There also have been reports about the easy credit he obtained from Attica Bank, whose majority shareholder is the main engineer's pension fund (TSMEDE). After coming under pressure, Kalogritsas withdrew from the TV business. But questions are mounting. And Attica Bank is becoming an increasingly political issue. 'A touch of … [Read more...] about Bank transactions create difficulties for Greek government