Lloyds shares pass break-even price

Lloyds Banking Group shares were trading above the Government's break-even price on Friday, fuelling speculation that taxpayers will soon start to recoup the more than £20 billion spent rescuing the lender.

Shares in the 39% state-owned bank rose above the 61.2p level at which the Government said it would break even on its 2008 bailout, and are now at their highest point for two years.%VIRTUAL-SkimlinksPromo%
The Treasury is widely expected to begin selling its stakes in Lloyds and 81% nationalised Royal Bank of Scotland before the 2015 general election. Prime Minister David Cameron recently raised the prospect of selling RBS shares at a loss.

Shares in Lloyds have more than doubled over the past year, boosted by state stimulus for the banking sector, the recovering economy and housing market, and its improving balance sheet.
Lloyds chief executive Antonio Horta-Osorio on Thursday told shareholders at its annual meeting: "We expect us to return to profitability this year and to grow our core business, to realise our full potential to deliver strong, stable and sustainable returns for you, the shareholders, and to allow UK taxpayers' investment in the group to be repaid."

Mr Horta-Osorio's £1.5 million shares bonus for 2012 is tied to the 61p break-even level. It will vest after five years if the state has sold at least a third of its stake at prices above 61p, or if a share price of 73.6p has been reached.

However, the 61p price has been described as "contrived" by banking analyst Ian Gordon at Investec Securities, who argues it "conveniently ignores its average in-price of 73.6p".

The state ploughed more than £20 billion into Lloyds at the height of the credit crunch after the then Labour government brokered its rescue of Halifax Bank of Scotland.

Lloyds remained in the red in 2012 with pre-tax losses of £570 million after setting aside £3.6 billion to compensate customers who were mis-sold payment protection insurance (PPI). But its first quarter underlying profits surged to £1.5 billion, with bad debts plunging by 40%.

Lloyds chairman Sir Win Bischoff recently announced he is standing down and hailed ''significant progress'' in the bank's recovery. UK Financial Investments, which manages the state's bank holdings, declined to comment.

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Lloyds shares pass break-even price

More than 46,000 of 106,000 the complaints received by the FOS in the second half of last year related to payment protection insurance (PPI). And the organisation is expecting to receive a record 165,000 PPI complaints in 2012/2013.

The huge numbers are due to the PPI mis-selling scandal that should now be a thing of the past, but there is no doubt that the insurance, which can add thousands to the cost of a loan, is highly unpopular!

(Pictured: Martin Lewis after the PPI payout ruling)

Complaints about mortgages jumped by 38% in the last six months of last year, the FOS figures show, compared to an increase of just 5% in investment-related complaints.

Common gripes about mortgages include the exit penalties imposed should you want to sell up or change you mortgage before a fixed or discounted deal comes to an end, and the high arrangement fees charged by many lenders.

While there is nothing in the data released by the FOS about the number of complaints relating to savings accounts, hard-pressed savers have been struggling with low interest rates for several years now.

You can get up to 3.10% with Santander's easy-access eSaver account, but many older accounts are paying 1.00% or less and even this market-leading offer includes a 12-month bonus of 2.60% - meaning that the rate will plummet to just 0.50% after the first year.

Banks are imposing the highest authorised overdraft interest rates since records began, with today's borrowers paying an average of 19.47%, according to the Bank of England.

A typical Briton with an overdraft of £1,000 is therefore forking out around £200 in interest charges alone. Coupled with meagre returns on savings, it's enough to make your blood boil!

While authorised overdrafts may seem expensive, going into the red without permission will cost you even more due to huge penalty fees.

Barclays, for example, charges £8 (up to a maximum of £40 a day) each time that there is not enough money in your account to cover a payment.

If you need to send money abroad, the likelihood is that your bank will impose transfer charges - and offer you a poor rate of exchange. Someone transferring a five-figure sum could easily lose out by £500 or more as a result.

The good news, however, is that you can often get a better deal by using a currency specialist such as Moneycorp.

Automated telephone banking systems, not to mention call centres in far-flung parts of the world, are one of our top gripes - especially as we often encounter them when we are already calling to report a problem.

In the words of one disgruntled customer: "What is it about telephone banking that turns me into Victor Meldrew? Well, maybe it's the fourteen security questions, maybe it's the range of products that they try to push or maybe it's because I'm forced to listen to jazz funk at full volume while my phone bill soars.

"Actually though, I think it's because the people I eventually speak to rarely seem able to solve the issue I'm calling about."

The days of a personal relationship with your bank manager are long gone - for the huge majority of us at least.

When ethical Triodos Bank investigated recently why around 9 million Britons would not recommend their banks to a friend or relative, it found that almost a third felt they were not treated as individuals. Another 40%, meanwhile, were simply disappointed with the customer service they received.

When you're in a rush, the last thing you want to do is wait in a long queue at your local branch.

Researchers at consumer champion Which? recently found that most people get seen within 12 minutes, but you could have a much longer wait if you go in at a busy time. Frustrating stuff!

The Triodos Bank research also indicated that the bonus culture that ensured the bank's high-flying employees received large salaries, even when it was making a loss at the taxpayer's expense, was hugely unpopular with consumers.

About a quarter of those who would not recommend their current banks said this was the main reason why. And with RBS executives sharing a £785 million bonus pool despite the bank, which is 82% publicly owned, making a loss of £2 billion last year, it's not hard to see why.

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