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Banks stop selling loan insurance
Five of the UK's largest banks have agreed to stop selling payment protection insurance (PPI) where customers buy it with a single payment.
The banks are the Alliance & Leicester, Barclays, the Co-Operative Bank, Lloyds Banking Group, and RBS Natwest.
The so-called "single premium" PPI has been ssingled out for criticism by regulators and consumer groups. |
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Both Which? and Citizens Advice welcomed the move, which applies to PPI sold with unsecured personal loans.
"These premiums are very expensive and can add substantially to the cost of a loan, often increasing people's debts instead of protecting them against hard times," said Citizens Advice.
Louise Hanson, head of campaigns at Which? said: "These firms have recognised that the party is over for single premium PPI and the rest should follow suit."
She added: "PPI has been widely mis-sold in the past so anyone with a personal loan should check if they have a single premium policy as they could claim their money back."
However the Finance and Leasing Association (FLA) defended the general principle of buying PPI, and said it would be wrong to ban it altogether.
"It is important that the Financial Services Authority (FSA) and Competition Commission recognise the need to maintain the provision of PPI, particularly when sold alongside credit offers," said the FLA's director general, Stephen Sklaroff. Read More... |
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Home loans drop 35%, lenders say
The number of new mortgages granted to home buyers slumped to just 62,000 in December 2007, according to the Council of Mortgage Lenders (CML).
The figure was 35% lower than at the same point a year ago.
With just 225,000 such mortgages lent between October and December, it meant that lending was at its lowest winter level since 1995. The CML said the decline was partly due to the increased costs of repaying a mortgage and tighter lending policies. |
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But the CML said things should become easier for home buyers this year.
"Affordability has been stretched further in 2007 but the recent base rate cuts and the expectation of future cuts will ease debt servicing burdens in 2008," said the CML's director general Michael Coogan.
"For first-time buyers, the combination of subdued house price inflation and lower mortgage rates means affordability should ease slowly as the year progresses," he added. Read More... |
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Co-op buoyed by drop in bad debts
The Co-operative's banking arm has said a fall in bad debts helped push its half year profits higher.
It added its low exposure to the credit crunch had helped it buck the wider market trend and unveil a rise in profits to £46.2m ($81m) from £45.5m.
The group said moves to tighten credit control and debt collection had helped to cut bad debts by £7.9m to £45m. Co-op chief executive David Anderson called it "a solid performance in a tough market". |
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"Whilst we aren't immune from the economic consequences of the credit crunch, we have a strong balance sheet, very strong retail funding and a clear path for the future of our business," said Mr Anderson.
Overall, Co-operative Financial Services, which also includes insurance services, said pre-tax profits before one-off costs had risen by £35.4m to £73.4m. Read More... |
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