HSBC has stepped up the rate at which it writes off loans to poor Americans to an unprecedented $51m (£25.7m) a day as the British bank grapples with an increase in people defaulting on their mortgages, credit cards, personal loans and car finance, reports The Times.
Strong results unveiled in almost every other part of HSBC yesterday were overshadowed by the US sub-prime business, which wrote off $11.7bn in dud loans last year and said the situation was still deteriorating.
Write-offs in HSBC Finance, almost all of them because of US sub-prime business, have risen from $1.89bn in the first quarter to $2.19bn in the second, $3.48bn in the third and $4.63bn in the fourth.
The quantity of loans more than two months in arrears has also soared during the four quarters, from $7.4bn to $12.5bn.
DRAX, THE OWNER OF EUROPE’S biggest coal-fired power station, has hit out at the Government's threat to impose a windfall tax on energy companies at a time when the industry is expected to make long-term investments to help secure Britain's future energy needs, reports The Telegraph.
Dorothy Thompson, Drax chief executive, described the possible move as “unwise.”
She said: “To do something so destabilising at a time when the industry is being asked to make long-term investments would be unwise, and we have been clear to the Government on that.”
The Sunday Telegraph revealed two days ago that the chief executives of gas and electricity companies had been summoned to Downing Street over the past days and weeks and told they must contribute to a nationwide fuel poverty scheme or face a windfall tax akin to the one imposed on privatised utilities by Labour in the late 1990s.
THE EUROPEAN UNION WILL declare war today on Liechtenstein, Monaco, Andorra and Switzerland, reports The Independent. Weary of losing billions of tax euros, the EU's 27-strong high command of economics and finance ministers, Ecofin, is meeting in Brussels to agree a strategy aimed at bringing the continent's tax havens under control.
Their weapon of choice will be a strengthened version of the EU's 2005 savings tax directive, which has proved pathetically easy for armies of accountants, lawyers and specialist tax planners to outflank.
Urged on by Peer Steinbruck, the German Finance Minister, the new directive will seek to close the loopholes. Mr Steinbruck says tax evasion costs Germany about €30bn (£23bn) a year in lost revenue; the UK loses a similar sum; the EU may lose €100bn (£77bn) in all.
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