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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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Barry Callebaut to be honored with prestigious "Sustainable Standard-Setter" award

Category : Stocks, World News

NEW YORK, NY and ZURICH, SWITZERLAND–(Marketwired – May 15, 2013) – Barry Callebaut /
Barry Callebaut to be honored with prestigious “Sustainable

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Costar Technologies, Inc. (CSTI: OTC Pink Limited) | Costar Technologies, Inc. Announces Adoption of Corporate Governance Measures

Category : World News


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Standard Chartered falls 5% after unveiling first quarter profit fall

Category : Business

Asia-focused bank hit by problems in Korea, rising bad debts and staff costs

Standard Chartered has disappointed investors with a drop in first quarter profits, making the Asia-focused bank the biggest faller in the leading index.

It said both commercial and wholesale banking operating profits were down by around 5% – “down by a mid single digit percentage” – hit by increased loan impairments after problems in Korea, an increase in bad debts, and rising costs after recruiting 560 staff in the quarter.

Its shares have dropped 91.5p to 1608.5p on the news, down 5.38%. But the bank said it had started the second quarter with April income back at the trend level and it remained comfortable with forecasts for the full year. Analysts were also positive. Ian Gordon at Investec said:

At first blush there are plenty of hooks for bears in this morning’s statement, which will likely trigger a sharp sell-off today. However, this requires implicit rejection of management’s reaffirmation of comfort with a 2013 consensus pretax profit forecast of $8.2bn (up 19% year on year). We are 1% below ($8.1bn). Weakness today should be seen as an opportunity.

Gary Greenwood at Shore Capital said:

Standard Chartered has issued a relatively downbeat first quarter trading statement in which it reports that group operating profit was “slightly down” for the period versus the prior year comparative. This was primarily owing to weak revenue performance with income only “slightly ahead” of the prior year comparative owing to margin pressure in trade finance and lower ALM (asset liability management) income. The prior year comparative was also strong, notably in principal finance. In our view, this reflects increased competition from foreign banks (notably French and Japanese) and the impact of ongoing monetary policy action, in our view, notably impacting on performance in March.

The outlook is more encouraging, with the company noting on the analysts’ conference call that growth in income and profit was back at “trend levels” in April (i.e. double-digit) and that management therefore remains comfortable with full year consensus (statutory) forecasts despite the weak first quarter performance.

We believe recent share price weakness associated with concerns around current trading should be used as an opportunity to pick up stock.

Overall the FTSE 100 has paused for breath after hitting a new five year high on Tuesday, edging up 0.60 points to 6557.90.

J Sainsbury has slipped 2.9p to 393.6p as investors decided to cash in after a 6.2% rise in full year profits.

Accountancy software specialist Sage has climbed 6.3p to 345.6p following a 6% profit increase.

A number of companies have seen their shares go ex-dividend including Antofagasta, down 50p at 939.5p.

Among the mid-caps, hedge fund group Man has fallen 4p to 121.5p after a 0.1% dip in its key AHL fund last week.

Tighter rules for mortgage lending

Category : Business

New rules will mean that borrowers across the EU will be refused a mortgage if they fail a standard affordability assessment.

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S&P reaffirms UK triple-A rating

Category : Business

Credit rating agency Standard & Poor’s reaffirms its triple-A rating for the UK, but warns of the continuing negative outlook for the economy.

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Is VAT suffering a mid-life crisis at 40?

Category : Business

Why are kangaroos liable for the 20% standard rate?

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Big five UK banks rue ‘dire year’ as £11bn of fines erase profit gains

Category : Business

PPI scandal and fines undermine improved performance at Barclays, HSBC, Lloyds, RBS and Standard and Chartered

An increase in profits at the big five UK banks was wiped out by more than £11bn of fines and compensation payments in 2012.

Despite an improved core business performance, fines from regulators and the costs of the mis-selling of payment protection insurance contributed to a 40% cumulative drop in profits from 2011 to £11.7bn, according to accountants KMPG.

Barclays, HSBC, Lloyds Banking Group, RBS and Standard Chartered posted results in a year where bleak headlines included the Libor scandal, the mis-selling furore, and slack control of money laundering.

KPMG’s bank performance benchmarking report concluded that banks had improved in their core performance due to better credit performance, or fewer bad loans, and stronger results from investment banking divisions, helped by more positive sentiment over the eurozone’s future.

Alongside the punitive costs banks incurred, profits were also written down because of a £12.8bn revaluation of the banks’ debt. Bill Michael of KPMG said: “Banks had a better performance year in 2012 but their improved core profits were eaten up by fines and other exceptional items. In terms of their reputations, 2012 was a dire year. This is why it is so important for them to address cultural and ethical perceptions and issues. Restoring customer trust is critical.”

KPMG warned that banks would need to significantly reduce costs to convince shareholders they could continue to generate strong returns, including cutting staff and wage bills.

The warning comes amid reports that Lloyds, bailed out by the taxpayer during the credit crunch, paid more than 20 of its staff more than £1m last year. Details of its high earners will be revealed in its annual report this week, but the bank said it could not comment on speculation.

StanChart chief rues statement

Category : Business

The chairman of Standard Chartered is forced to issue an apology for “inaccurate” comments relating to the bank’s breach of US trade sanctions.

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Annuity rates rise but reprieve may be short-lived

Category : Business

Potential yields from pension pots have risen, but talk of an upward trend is premature

There was a sliver of good news this week for older people: retirement incomes for new pensioners have risen for the first time in almost a year. But this rise in annuity rates should be seen as a short-term boost rather than the beginning of a long-term upturn, advisers warn.

Annuity rates determine how much pension income someone will get from the cash they have built up in a money purchase workplace scheme or personal pension plan – and these rates have been falling for years.

However, the latest figures from specialist firm the Annuity Bureau show that Aviva is paying an annual income of £5,103 to a 60-year-old with a £100,000 pension pot who opts for a conventional “level” annuity. That is an increase of just over 3%, or £154 a year, on the company’s February rate.

Inflation-linked annuities have also risen this month, with Legal & General offering £2,882 to someone aged 60 using their £100,000 pot to buy an annuity linked to the retail prices index (RPI). That is an increase of £78 on its February rate.

Annuity rates for smokers, which are normally higher than those for to non-smokers, have also risen across the board, with Just Retirement now paying out £5,937 per year to a 60-year-old with a £100,000 pot. That is almost 10% more than the company was offering at the beginning of January, and over a 20-year retirement that would add up to an extra £10,760 of income.

But these increases, while welcome, should not be taken as a sign of an upward trend. Annuity rates have been in long-term decline since the early 1990s, mainly because of increasing longevity – the longer people are expected to live, the lower the annual pension offered. Standard annuity rates have gone down by around 30% over the past four years and have halved since 1994.

But every now and again, changes to gilt yields give annuity rates a temporary boost. “This has happened in February, with most providers increasing their rates,” says Annuity Bureau director Richard Williams. “However, this could be short-lived as gilt yields are down almost 10% off their high point in the middle of last month.”

And this month’s lift is less cheering when compared with the £5,520 annual income Aviva was paying out 12 months ago to a 60-year-old with a £100,000 pot who opted for a level annuity. In other words, someone buying their annuity in March 2012 was getting 8% more than today – only a year later.

“One swallow does not make a spring,” agrees Tom McPhail, head of pensions research at independent financial adviser Hargreaves Lansdown. “While some providers have made modest rate increases, there is not sufficient evidence yet that we are seeing any long-term reversal in annuity rates.”

Annuity rates have equalised for men and women since the EU gender directive came into effect last December. This bans companies from taking gender into account when calculating the cost of insurance premiums. Where women used to get lower annuity rates than men because they have longer life expectancy, they will now receive the same pension income when purchasing equivalent annuities. This resulted in a small percentage drop in standard annuity rates for men and an equivalent rise in those for women, but the changes have had less impact on the market than expected.

The importance of shopping around for the best annuity rate is, as ever, paramount. You have the right to buy your annuity from a different provider to the one with whom you saved your pension fund. This is called the open market option. It is vital you make the right choice because once you buy an annuity, you cannot change it.

The difference between the worst and the best standard annuity rates on the open market is typically 15% to 20%. But there is an increasing trend away from one-size-fits-all standard rates and towards underwriting annuities to reflect individual health and lifestyle factors.

Where insurance companies identify factors associated with a reduction in your life expectancy such as smoking, an illness or even where you live, they will offer you a higher pension income.

People with certain medical conditions can get significantly higher incomes than healthy individuals by taking out an “enhanced” annuity. That’s because their life expectancy is shorter, so the annuity provider is likely to have to pay out for a shorter time.

“If an individual with a Prudential personal pension retired today, they would be offered an income from the Prudential of £4,531 on standard rates, but if that person smokes and they shop around, they can get an income of £5,937. This amounts to over £28,000 during a 20-year-retirement,” says Williams.

McPhail, who says he has come across cases where people can be up to 60% better off by buying an enhanced annuity, points out that it is not often worth people with pension pots of under £10,000 shopping around, because few insurers will quote annuity rates on that amount. But anyone with more than £10,000 should actively shop around for the right type of annuity and the best rate.

If you do use a broker’s comparison service, either online or by phone, to arrange an annuity, a percentage of your pension pot – typically between 1% and 3% of the purchase price – will be taken as commission. Only if you take financial advice from an intermediary will they be required to charge you a fee.