The Co-Op Gives Up On The Lloyds Branches
Buying bank branches, is a bit like going down Covent Garden Market at the close of business and buying all the fruit and vegetables that has not been sold.
So in some ways the news this morning as reported on the BBC, that the Co-Op Bank isn’t buying the branches Lloyds must divest itself of, is no surprise to me.
Let’s face it branch banking is dead and those that still need a branch, use one that is convenient to them and won’t like being transferred. So perhaps, many have already put their business elsewhere and the Co-op would be buying a few worthless empty shells.
The Co-op’s Chief Executive has said this.
After detailed and thorough consideration of all aspects of the Verde transaction, we have decided, at this time, that it is not in the best interests of our members to proceed with the transaction.
Against the backdrop of the current economic environment, the worsened outlook for economic growth and the increasing regulatory requirements on the financial services sector in general, the Verde transaction would not currently deliver a suitable return for our members within a reasonable timeframe and with an acceptable level of risk.
So although he’s saying it’s not for the Co-op and giving reasoned views, it would be interesting to see the figures underneath it all.
I also wonder with all the publicity that this proposed deal has generated, if it has sent a message to many bank customers, that the Co-op Bank is a serious alternative and people have moved their accounts accordingly.
So has the deal got the Co-op what it wanted, without any risk whatsoever?
Let’s hope the fallout from this deal, gives us a few new iconic bars and restaurants in those redundant prime locations!
So What Is M-Pesa?
In the post on the Scottish currency, I mentioned M-Pesa. So what is it? I started by reading the Wikipedia entry. Here’s the initial paragraph.
In April 2007, following a student software development project from Kenya, Safaricom launched a new mobile phone based payment and money transfer service, known as M-Pesa. The service allows users to deposit money into an account stored on their cell phones, to send balances using SMS technology to other users (including sellers of goods and services), and to redeem deposits for regular money. Users are charged a small fee for sending and withdrawing money using the service. M-Pesa has spread quickly, and has become the most successful mobile phone based financial service in the developing world. By 2012, a stock of about 17 million M-Pesa accounts had been registered in Kenya.
The initial work of developing the product was given to a product and technology development company known as Sagentia. Development and second line support responsibilities were transferred to IBM in September of 2009, to where most of the original Sagentia team transferred.
It sounds a lot more sophisticated than anything we’ve got here! Especially, as it works on the humblest of Nokia mobile phones!
It’s developments like this, that will empower individuals and kill off the unnecessary wunch, that some still call bankers.
The Scottish Currency Question
If I could have ten pence for every politician, who’s put forward his view on the question of what currency Scotland has if they vote for independence, i wouldn’t be just a rich man, but a very rich man.
Surely, the amount of energy expended by politicians, would power a reasonably-sized city like Glasgow.
All of these politicians are flying in the face of the new reality, which is starting to sweep the world. Just read this article on the web site; SmallBusiness.co.uk about the future of banking. Here’s the first paragraph.
I was recently invited onto Evan Davis’ BBC radio and TV show ‘The Bottom Line’ for a discussion on alternative finance. Alongside me was Zopa founder Giles Andrews, the founder of Zopa – a UK peer-to-peer lending platform, and Michael Joseph, the former CEO of Safaricom, which set up M-Pesa, a mobile payment system, in Kenya.
It is the last bit that is the most significant. It also says this about banking and particularly M-Pesa.
The day-to-day of banking is changing world-wide and banks are not the ones driving the innovation. For instance, by some measures, Starbucks is among the 200 largest banks by deposits in the US, having $3 billion on their in-store card in 2012. Both Google and Amazon are also talking about providing finance to users of their marketplaces. At the other end of the economic spectrum, 31 per cent of Kenyan GDP now flows through M-Pesa, which is so simple it can be operated on a very modest Nokia phone and has no physical bank branch presence.
So does it matter about whether an individual or a company has their bank account in pounds, dollars, euros, thistles or beans? It only matters to the individual concerned. As someone living in and spending most of his money in the UK, I would probably keep my account in pounds! Although switching to euros, should be just a choice on the account.
Unfortunately, this transparent and convenient system would be unacceptable to the banks, as they make so much money on currency conversion.
I do wonder, if my new-found liking for cash, may be a personal reaction to the greed of the banks. If I pay by cash in Carluccio’s, I can leave a tip easily. It also seems to get good service, as the staff in many restaurants know me and have the gluten-free menu ready immediately I walk in. It’s also faster to settle up and there is nothing worse than waiting to get away, whilst a dim waitress struggles with a credit card terminal.
So to me, in a few years time, the Scottish currency question will be irrelevant to most people and companies in Scotland. They will pay their taxes in whatever currency the Scottish government uses or is forced to use and keep their bank account in whatever is convenient for their lifestyle or business.
So let’s get going on research to capture all that hot air being spoken to generate lots of electricity.
Now It’s The Turn Of The Milcs
According to the Times, the next source of trouble for the Eurozone is the Milcs, or the small countries with overblown banking sectors.
So just when you’ve learned what Piigs means, you’ve now got to work out what Milcs does.
It’s actually Malta, Ireland, Luxembourg, Cyprus and Slovenia.
As Ireland and Cyprus have imploded, they reckon Slovenia is next!
Bitcoin
A Leader in today’s Times has alerted me to Bitcoin. this is a sort of mission statement from their web site.
Bitcoin uses peer to peer technology to operate with no central authority; managing transactions and issuing Bitcoins are carried out collectively by the network. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment systems.
As a software man, I think it could be a good idea.
But according to The Times, it has been a preferred method of payment for drug-related transactions.
They also think is could be another bubble, as does the Telegraph.
But the thought of a peer-to-peer transaction network, unencumbered by credit cards and bank charges has a certain appeal.
I shall be watching, but I don’t think I’ll be using it yet!
In the meantime, ideas like this, are just another reason to get rid of your bank shares.
I’ve Found A Use For Ed Balls
I’ve got rather fed-up with the one-sided reporting on the tax changes, that come into force today. typical is this report on the BBC. The fact that the personal allowance threshold has been raised, is very much buried in the story.
So when it was announced that Ed Balls was going to be on BBC Radio 5 Live at 8:05, I decided that this was an ideal time to walk down the road and get my paper.
The proof of the value of these tax changes will not be in headlines designed to attract readers and votes, but in the amount of tax collected. Having heard Danny Alexander this morning, I think everybody is in for a surprise.
Should We Buy Tea Shares?
The Times today makes a joke on the business pages about builders in wet February and freezing March, sitting around in huts drinking tea.
I must admit my consumption, has been very high in recent months.
So should we put our money where our mouth sups and invest in tea shares?
George Osborne Must Be Getting Paranoid
Those on the Left, blame George Osborne for all the country’s troubles.
So he is under the attack in two major stories this morning.
In the first story, it’s Osborne’s comments about convicted manslaughterer; Mick Philpott.
Mr Osborne said a debate was needed about whether the state should “subsidise lifestyles like that”.
But shadow chancellor Ed Balls condemned Mr Osborne’s comments as “a cynical act of a desperate chancellor”
I have a feeling, that most voters in the UK, except those living on benefits with umpteen children would agree with Osborne. But then those in that group, probably wouldn’t have time to vote.
He is also brought to task, by getting into a car, that was illegally parked in a disabled space. Read about it here. It does appear he wasn’t driving,
But a Treasury source said Mr Osborne had been dropped off to buy lunch.
The unmarked police Land Rover was not driven by the chancellor at any point, added the source.
I bet Osborne wished he’d taken the train. But then, those that want to get him, had a go at him when he did.
He must be getting to dread, saying anything or going anywhere!
It seems as if the job of Chancellor of the Exchequer has taken over from that of Home Secretary, as the most vilified job in Government.
But then Theresa May has a great advantage over George Osborne, in that she can be spun for her dress sense, as she was in this double-page story in the Standard last night. George Osborne never got a headline like this.
Theresa May-nia: sharp-suited, well-heeled, the Home Secretary is on fighting form
Perhaps, he should wear a dress!
The HBOS Three Should Be Banned
This story on the BBC’s web site, says that the Banking Standards Committee has recommended that three at the top of HBOS, should be banned from working in the City, after the failure of the bank in 2008.
I agree, as not only did they ruin HBOS, but they ruined Lloyds as well and not forgetting all of the small shareholders and businesses they damaged.
As with RBS, HBOS should have been allowed to go bust.
We’d all be in a much better state, if they had!
The True Cost Of My €100 Withdrawal
I withdrew €100 from a cashpoint in Bishopsgate before I went on holiday.
I got a rate of 1.157 euro to the pound, which for my € 100 worked out at £86.42. I was then charged a Non-UK commission fee of £1.72 and a Non-UK cash withdrawal fee of £1.00. The main transaction incidentally was labelled Ulster Bank.
So as I was in Bishopsgate and did a transaction with a bank in Ulster, surely I was in the UK. So why did I get slapped for an extra charge of £2.72?
On the other hand it was probably a better transaction, than I got in Morocco, when I changed a few pounds into the local dirham.
If I was in charge of this world, I’d create a universal token, that was worth about a pound, a dollar or a euro, that you could use for small transactions on public transport, pay toilets and with street vendors. After all, many machines now accept a one pound or one euro coin.
The Anonymous Widower 