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The last few months have seen the differing strategies and opinions of the Bank of England and the government come to the fore at a time when the UK economy needs all parties to be pulling in the...
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Friday 1st August 2008
For those who were not sure whether the Alliance And Leicester takeover by Santander was the right move, today’s announcement that profits have been wiped out with a £209 million hit may help to explain the reasons. The board of the Alliance and Leicester has been on the receiving end of some severe criticism for their handling of the affair but today’s news backs up their case for a stronger parent company.
The £209 million hit is made up of a £66 million drop in treasury assets and a £143 million impairment charge. The resulting profit of just £2 million for the first 6 months of the year represents a 99 percent fall compared to last year. The fact that the £209 million hit is more than the £192 million forecast after just four months of the year shows how the UK economy is struggling.
Once the darling of the mortgage market the Alliance and Leicester is struggling badly to make ends meet and was in serious need of a capital injection to see it through these troubled times. The fall off in the economy will see more of the smaller UK banks suffer for certain, but whether there will be any more ‘sugar daddies’ on hand to help remains to be seen. |
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