Economy
Lloyds Banking, Barclays down on Soc Gen news |
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| Economy | |
| Written by Roberta Murray | |
| Wednesday, 13 January 2010 | |
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FTSE 100 financial stocks stay low after news out from France's third largest lender.
Lloyds Banking Group (LON:LLOY) is lower by 0.52% in afternoon trade on the FTSE 100. Barclays (LON:BARC) is by 1.67% and HSBC Holdings (LON:HSBA) is down by an identical amount. The Financial Times sought to draw a parallel between Lloyds Banking Group and SocGen by pointing out that SocGen trades at 0.7 times tangible book value, identical to Lloyds Banking Group. SocGen has served as a timely reminder to investors that the effects of the 2008 credit crunch are still with us. Indeed there is still a way to go before RBS and Lloyds Banking Group return a profit to the British Government - as speculated by Stephen Hester today. SocGen made a fresh writedown of €1.4bn relating to underperforming assets. "The terms used to explain the bank’s underperformance – including collateralised debt obligations of residential mortgage-backed securities, changes in the marked-to-market valuation of credit default swaps and the revaluation of financial liabilities – were resonant of the darkest days of the financial crisis and unnerved sentiment towards the wider sector," reports the Financial Times. Barclays has meanwhile announced today thatit will not renew a six-year, $650 million IT outsourcing contract with Accenture when it expires in June, taking the work back in-house. However, the deal will result in only 230 of Barclays' UK employees transferring back to the bank. Roughly 900 of Barclays' UK employees were involved in system development, support and maintenance transferred to the vendor when the deal was signed in 2004.
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