Banks have begun a desperate attempt to replace billions of pounds of revenue they expect to lose next year under a regulatory crackdown, according to the Independent .
Consumer groups warned yesterday almost all leading banks have started to increase overdraft rates and other charges before new rules come in which could cost them more than £3bn a year.
The warnings followed the decision yesterday by Lloyds TSB to raise its overdraft interest rates for the second time in three months, says the paper.
The crisis has been caused by a ruling in May from the Office of Fair Trading (OFT), which said credit card companies charging borrowers more than £12 for paying bills late or exceeding borrowing limits were breaking the law.
It has since announced an identical investigation into fees charged by the banking sector – the review is expected to conclude next year with a similar crackdown.
THE CHIEF executive of HSBC has called on the government to rethink bankruptcy legislation as he warned the bank continues to see high levels of consumer debt, says the Daily Telegraph.
Mike Geoghegan hinted he believes recent legislation, namely the 2004 Enterprise Act, has allowed rules on bankruptcies and individual voluntary arrangements (IVAs) to be relaxed.
He admitted the growth in both bankruptcies and IVAs has led the bank to adopt a "more restricted credit appetite", which has led to a slowdown in the growth in unsecured lending and lower sales from credit-related insurance as a knock-on effect.
ROYAL BANK of Scotland said this morning it expects to top City forecasts for the full year with record profits of more than £9bn, reports the Guardian.
"RBS is performing well and our results for 2006 are expected to be slightly ahead of market consensus forecasts," the group said. The consensus forecast is for £9.2bn, up from £8.25bn in 2005.
RBS said growth in bad debts "continues to moderate" and bad debts now represent a "slightly lower" proportion of total loans and advances.
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