TSB Intermediary expands buy to let range

TSB Intermediary expands buy to let range

Introduces new three year fixed rate

TSB Intermediary is expanding its Buy to Let mortgage range to include three year fixed rate mortgages, following last month’s successful Buy to Let launch.

The introduction of three year fixed rate mortgages, for landlords looking to buy a new property, is the Bank’s latest step in building an intermediary service which will challenge the established players in the broker market and follows significant broker demand for TSB’s five year fixed rate Buy to Let deals.

TSB Intermediary was born to bring competition to the market, and is doing so by providing an expert to expert service giving brokers access to the people they need, when they need them.

Roland McCormack, TSB’s Mortgage Intermediary Director, commented:  “Introducing the three year fixed rate Buy to Let range is the next step in creating an intermediary service to challenge the traditional lenders.  We are committed to doing so by providing brokers with an expert to expert service offering a competitive range of mortgages.

“TSB Intermediary has been around for six months, and we are already seeing significant broker demand for TSB mortgages.  Over the rest of the year we will continue to organically grow our business to meet that demand.”

TSB Intermediary now helps brokers provide mortgages to homebuyers, people looking to remortgage their current home as well as landlords.  It will further roll out its Buy to Let offering in the upcoming weeks and expand to more brokers later in the year.

Pay and productivity: the next phase - speech by Sir Jon Cunliffe

Pay and productivity: the next phase - speech by Sir Jon Cunliffe

Between 2000 and 2007, the average worker in the UK automotive manufacturing industry produced 7.7 vehicles a year.  Over the past seven years he/she averaged 9.8 vehicles a year.  Productivity – output per worker – in car manufacturing has increased by 30% since the onset of the great financial crisis.  Britain has become the fourth-biggest vehicle maker in the EU and is more efficient than bigger producers such as Germany and France.

It has not all been plain sailing.  In the recession, productivity in the car industry fell as firms cut back production and held on to workers.  But productivity in the industry recovered quickly.

If productivity in the UK economy as a whole had grown in the same way as in the car industry, and employment generally had grown as it did, the economy would now be 30% or £½ trillion larger than it is today.  Annual GDP per person would be about £8k higher than it is.

Unfortunately productivity in the UK has not followed the lead of the car industry.  Indeed, the opposite is true.  In 2014 labour productivity in the UK was actually slightly lower than its 2007 level.  In the seven years between 2000 and 2007 labour productivity grew at an average annual rate of about 2% a year. In the seven years that followed, our annual productivity growth averaged just below zero.

Or to look at it another way, the level of labour productivity – output per hour worked – in the UK economy is now 15% below where it would have been if pre-crisis trends had continued.

Of course, a hit to productivity is what you expect to happen in a financial crisis and deep recession.  Firms cut production but try to hold onto workers.  But even compared to the experience of others, the UK’s productivity performance has been disturbingly weak.  It is true that the average output per hour of the rest of the G7 advanced economies is only around 5% above its pre-crisis level.  But as I have noted, in the UK it has not even recovered to that level.  And in 2013 output per hour in the UK was 17 percentage points below the average for the rest of the G7 – the widest gap since 1992.

I am very conscious that in talking about the importance of productivity growth before this audience tonight I am taking coals to Newcastle – or should I say cylinder heads to Dagenham.  But, against this background of the UK’s productivity performance since the crisis, I want to review the prospects for the UK economy, the uncertainties that we on the Monetary Policy Committee (MPC) now face and the importance of productivity growth going forward.

I want to talk a little about how we have been able to grow relatively strongly over the past couple of years despite very weak productivity growth; but why that is unlikely to be possible over the coming years.  And why we expect productivity to improve – albeit moderately – in the future.
And in doing so I will also talk about why the UK’s productivity performance has been so puzzlingly weak, not just in the depths of the crisis and recession but in the recovery and expansion that has been underway since the middle of 2013; and whether the boom and bust of the financial sector can help us to understand the UK’s recent productivity performance.

The importance of productivity 

Productivity growth matters hugely.  In the end it is the key determinant of rising living standards.  For 18 centuries – from the year 1AD to 1800 when the industrial revolution started – living standards in the West were fairly stagnant.  It is because of the step change in productivity growth launched by the industrial revolution that living standards are now 20 times higher than they were then.1 Increases in population and the labour force can make the national economy bigger.  But in the end only productivity growth – producing more output relative to input – can consistently raise GDP per person.

Central banks like the Bank of England foster monetary and financial stability, which support investment and productivity growth.  But we are not the main players in driving long-term productivity growth.  We do not invent new technologies or processes.  And the necessary supporting policies such as product and labour market reform, infrastructure, education, ensuring the economy is open to competition including from abroad – these are issues for governments and elected politicians.  Looking at advanced economies, particularly with aging populations, we are all going to have to work a bit harder on productivity growth in the longer term if living standards are to continue to rise.

But the growth rate of productivity does matter to central banks.  It is a very important factor in determining the supply side of the economy; the capacity of the economy to grow without generating inflationary pressure.

And in recent years, it has become more important to us as the really hard questions about the economy have been as much if not more about understanding post crisis changes in the level of supply as about the level of demand.  We spend more time now discussing the supply side in the MPC – mentions of ‘supply’ and ‘productivity’ in the minutes of MPC meetings have doubled, relative to mentions of other terms, between 2006 and 2014.

Productivity is also a key determinant of the growth in real incomes and so affects the demand side of the economy as well.

Drivers of the economic recovery

Over the past two years, UK economic growth has averaged 2.5%; stronger than most of our G7 partners and we are forecasting that to continue.  But our productivity growth has been dismal.

How is it possible for us to have grown relatively strongly with poor productivity performance but without generating inflation pressure?  The answer is simple.  We have grown by using the spare labour supply in the economy after the great recession.

This spare labour supply was not just the post-recession stock of unemployed workers.  It was also people who were in work but wanted to work longer hours.  It was people who were not previously participating in the workforce who now wished to work.  It was people who we would have expected to retire but who decided to stay in work.  And it was workers from abroad.

It is true to say that this reservoir of labour supply available to the economy has been larger and deeper than we or others would have predicted on pre-crisis trends.  We have had what economists would call a “positive labour supply shock”.  The crisis, recession and hit to living standards have clearly changed attitudes to work; more people want to work and work more hours than before.

And the impact of those two domestic trends – higher participation in the workforce and people wanting to work more hours – are the most important elements of this positive “shock” relative to what we expected,  outweighing factors like higher net inward migration.

The numbers are striking.  In the 10 years prior to the crisis, growth in the hours worked in the UK economy, accounted for 23% of the UK’s overall economic growth.  The mainstay of our economic growth, the other 77%, came from growth in productivity.  Since 2013 only 9% of our annual economic growth has come from productivity improvement.  The remaining 91% has come from the increase in the total hours worked.

As a result, employment in the UK is now around its highest rate since comparable records began in 1971.  Over 73% of people aged 16-64 are working.  There are now over 31 million people in work in the UK.    Unemployment has fallen at among its fastest rate for 40 years and is now very close to its pre-crisis level – over the past two years over 1 million jobs have been created.

The benefits of this are clear.  Perhaps only a proponent of the ‘dismal science’, only an economist would find something here to worry about.

But the fact is that we can only go so far down this route.  Since 2013, the economy’s output has grown by some 5%.  But though we have increased by 5% the amount we have produced, we have increased even more the hours worked to produce it.  And as a result the simple arithmetic means our productivity growth has been broadly flat.

And the low of productivity that has resulted is one of the main reasons why pay growth has remained so low.

We are now getting close to the end of that reservoir of spare labour supply.  It is very difficult to say how close; measuring spare capacity in the economy with great precision – to single decimal points – is not really possible.  But for the economy to grow robustly and sustainably over the next few years’ productivity growth will need to begin to pick up.  This does not need to happen overnight.  But it does need to happen.

The MPC’s economic forecast

I am pleased to be able to say that this is the central scenario in the MPC’s latest forecast.  Our forecast is for the economy to grow robustly at around 2.5% a year over the next three years.  That is a bit slower than the average annual growth rate of nearly 3% in the seven years before the crisis.  But it’s a great deal better than the roughly 0.5% annual average over the seven years that followed.

In our forecast, growth continues to be driven by private domestic demand – essentially, household consumption and business investment, both of these have been growing strongly since the middle of 2013.

Of course, given our history any forecast of sustained robust consumption growth in the UK automatically raises eyebrows; the suspicion of a debt fuelled spending boom is never far away.  But our forecast of strong consumption growth over the next three years does not depend on an increase in household debt.

In our forecast, consumption is initially supported by the growth in real incomes that result from the very low inflation we are now seeing – from the one-off windfall from lower international energy and food prices.

But as the sharp, one-off, drop in oil and other prices washes out of the system, real incomes increase over the next three years mainly because both pay and productivity gradually recover.

In terms of inflation, we are forecasting that this growth in demand from business investment and consumption against a background of tightening supply in the economy will push inflation back to its 2% target over the next two years.  We expect interest rates to rise over the forecast period but gradually and to a level below the pre-crisis average.

As with all forecasts, there are risks.  There is of course geopolitical risk, including at present obvious risks around Greece.  But that is not my focus tonight.

Another risk that has attracted some attention is whether we see a change in people’s expectations about inflation due to the very low inflation over past months driven by the drop in oil prices.  Clearly, if very low inflation expectations became entrenched this could weaken growth.  Sustained deflation can also in more extreme cases lead to lower incomes and higher real debt burdens – so-called ‘debt deflation’.

The MPC has made clear that it is alive to this risk and would act if necessary to counteract it.  But the evidence of the past six months is that despite very low inflation, peoples’ expectations about inflation have so far remained pretty anchored.  The ratio of household debt to income is not rising.  We are certainly seeing no evidence of debt-deflation or of deflationary spirals.

But there are other risks as well.

Productivity growth might not pick up.  It has, after all, been a cause of serial disappointments over the past seven years.  And if productivity does not pick up pay growth might not be sustained.

Were that to happen, the increases in peoples’ real incomes that we are forecasting to support consumption and growth will not transpire.  Demand will be weaker. Lower productivity would mean less supply capacity in the economy.  But there would be less demand as well because of weaker pay.  In such a scenario, the prospects for inflation might therefore not be very different to our forecast.  But the impact would certainly be felt through weaker economic growth.

It is however also possible that productivity does not pick up but pay continues to grow.  There is some room for pay to grow before productivity picks up and as any remaining spare capacity in the labour market is used up.  In fact, we need to use that to boost unit labour costs and push inflation back to target.

But a sustained increase in pay over the forecast period without a commensurate pick up in productivity would mean that the supply side of the economy could not keep pace with growing demand.  That would mean upward pressure on prices.  And it would mean greater pressure on the MPC than in our forecast to act to bring supply and demand into balance so as to meet the inflation target.

The outlook for pay and productivity

So the gradual pick up first in pay and then in productivity is central to the MPC’s forecast for both growth and inflation particularly in the later years.  Given the serial disappointments on both pay and productivity in recent years, why do we now think that will happen?

On pay there do seem to be signs now of stronger, more sustained growth.  In the latest data, whole economy regular pay is growing at 2.7%.  This is the highest annual growth rate since early 2009 and over a percentage point higher than six months ago.  The latest reading on private sector pay growth was 3.2% – the highest rate since December 2008.  So the period of very cheap labour seems to be ending as expected.

What about productivity growth?  It was effectively zero in 2014.  And we forecast it to remain pretty weak in 2015.  But there are reasons to think that we will see a pickup in 2016 and 2017 as set out in the forecast.

Productivity growth can be divided into two sorts of change: the change in productivity inside individual firms and the changes between firms.  The first, the changes within firms, happens as firms increase their efficiency.  The second happens as labour and capital are reallocated between firms, from the less productive ones to the more productive.  This reallocation between firms in the economy happens through changes in market share as the more productive, higher return firms, grow and the less productive, lower return, firms shrink.  And it happens through the deaths of the low return firms and the birth of new ones.

After collapsing in the crisis, productivity began to increase again within firms two years ago.  We expect that to continue.  As the economy grows, spare capacity is used up.  The real cost of labour increases relative to the cost of investment.  Firms have a greater incentive to find efficiency gains and to switch away from more labour-intensive forms of production.  This should boost productivity.

In contrast, productivity growth due to the reallocation of resources in the economy remains weak.  We can see this in the divergence of rates of returns across firms which remain remarkably and unusually high and the change in capital across sectors which has been particularly low.  When the reallocation mechanism is working, the transfer of capital and labour from the less productive to the more productive pulls up the level of productivity in the economy and reduces the divergence between firms.  The high degree of divergence between firms at present implies that this reallocation mechanism is working significantly less powerfully now than before the crisis.  This can also be seen in the proportion of loss-making firms which stands at around 20% higher than its long-run average. 2 Company liquidations also remain low.  So there is still more than a hint of ‘zombiness’ in the corporate sector.

The damage to the banking system has certainly played a large part in this.  A well-functioning banking system is a key part of the reallocation mechanism. It allocates capital efficiently to its most productive use and matches risk to reward.  A badly damaged one, recovering slowly from a period on life support does not play that role well.  And the exceptional stance of monetary policy that has been necessary to cushion the fall of the economy and to provide the platform for recovery may also be part of the story here by reducing the pressure on poorly-performing firms.
As an aside, I want to make a brief comment in the context of the other part of my job:  financial stability.  We know that recoveries from financial crises tend to be slow; it takes on average about eight years to reach the pre-crisis level of real per capita income following financial crises.3 Distorted and damaged financial sectors don’t allocate resources effectively.  We may not pay the price for a number of years as the boom builds up.  But in the end the price we pay is large when a financial system misallocates resources in the boom and in the following bust.  Real GDP per head – the best measure of our aggregate living standard – remains 1% below its pre-crisis peak.  This high cost to the economy and to society is why we need not only robust regulation of financial institutions but also of the financial system as a whole.  Financial stability and sustainable growth are complements.  They are not alternatives.

Turning back to the reallocation mechanism, there are now some positive signs.  The financial sector is well into its recovery.  Bank lending growth to non-financial businesses was positive in 2015 Q1 for the first time since the crisis.  Beyond the banking system, the Bank’s agents are reporting private equity firms purchasing debt-laden companies and restructuring their funding.  The creation of new firms, a sign of vibrancy and reallocation in the economy, increased by 30% in 2013.  And labour market ‘churn’, the movement of workers between firms is almost back to its pre-crisis average having fallen sharply in the crisis.

In addition, we have seen a return of business investment over the past two years.  Well directed investment is a key driver of productivity.  The very sharp drop in investment in the crisis and the years immediately afterwards cast a shadow that has certainly damaged productivity growth in the recovery.  Again the damage to the banking system will have played a part here.  If business investment had continued to grow at its pre 2007 average, capital per worker would now be around 5% higher.  Firms’ investment intentions are strong at present and the MPC expects business investment to continue to grow strongly over the forecast period.  That should increase capital per worker and therefore productivity, albeit with a lag.

And lastly, productivity over the last two years is likely to have been held back by changes in the composition of the labour force towards lower-skilled and lower productivity occupations.  This has almost certainly had something to do with the very fast draining of the reservoir of labour supply that we have seen over the past few years.  The rate of decline in unemployment is slowing noticeably now and the level of participation and hours worked seems to be getting close to their trends.  So the headwind to productivity from the change in the composition of the labour force should diminish over the next few years.

I have given some of the reasons why we expect productivity growth to pick up over the next few years.  To be clear, we are not forecasting a sustained burst of high productivity growth but a rather more modest pick up.  Nor are we forecasting that we will recover any of the accumulated 15% loss in the level of productivity, relative to pre crisis trend, since 2007.  The longer term issues remain; UK productivity is now around 30%

behind the US.  And as I have explained these longer-term issues are not something central banks can do a great deal about.

Nor can we explain fully what has happened to productivity in the UK economy since the crisis.  As well as the factors I have mentioned, other factors have surely played a role.  And I don’t doubt there has been some mis-measurement of productivity growth in some sectors and of output more broadly.  The Bank, like many others, has tried very hard to explain the puzzle but we can’t explain it all.

Indeed, we may never solve the productivity puzzle.  Perhaps that is not so strange.  A very important part of productivity growth, so called Total Factor Productivity is pretty mysterious by definition.  It is the extra efficiency with which a given amount of labour and capital can be used to produce output.  It exists – but we can only estimate it by looking at the part of productivity growth our equations can’t explain.  Indeed, because of this it is sometimes referred to by economists as the ‘Magic Fairy Dust’.

And the last seven years are not the only productivity puzzle in history that we can’t explain.  Economists are still arguing over the explanation of the industrial revolution which as I said heralded the largest step-change in productivity growth ever seen.

But even if we can’t fully explain the puzzle, we can I think now point to an alignment of factors that suggest that productivity growth will start to move in the right direction over the next few years.

This is of course the MPC’s forecast.  It is not a given.  We have been disappointed by UK productivity often over the last seven years.  We seem now to be coming to the end of the reservoir of labour capacity and to the end of low cost labour.  So if productivity were to continue to disappoint over the next few years, other, lower growth outcomes are likely to follow.  I have set out why I think that is not the most likely scenario.

But I for one will continue to watch the evolution of pay and productivity very carefully as it is crucial to the prospects for growth and inflation in the UK over the next three years.  And, when it comes to productivity, I very much hope the UK economy as a whole will take its lead from the UK automotive industry.

Thank you.

Fair and Effective Markets Review Releases Final Report

Fair and Effective Markets Review Releases Final Report

The Fair and Effective Markets Review today published its Final Report, which sets out 21 recommendations to help restore trust in the wholesale Fixed Income, Currency and Commodity (FICC) markets.  The Review was established by the Chancellor of the Exchequer and Governor of the Bank of England in June 2014 to help to restore trust in those markets in the wake of a number of recent high profile abuses.

FICC markets are critical to the operation of the global economy, impacting prices for anything from basic household necessities to the rates of interest at which firms can borrow. So it is vital that they work well, and in the best interests of everybody.

However, the scale of misconduct seen in recent years has both damaged public trust and impaired the effectiveness of these important markets. The lack of firm governance and controls, acceptable standards of market practice and a culture of impunity all contributed to a process of ‘ethical drift’, leading to huge fines, reputational damage, diversion of management resources and the reining in of productive risk taking. The Review’s recommendations are aimed at restoring trust and fairness in FICC markets, while also boosting their overall effectiveness.

The Review is centred on four principles. First, individuals must be held to account for their own conduct. Second, firms must take greater collective responsibility for market practices. Third, regulators should close gaps in regulatory coverage and broaden the regime holding senior management to account.  And, fourth, given the global nature of these markets, coordinated international action should be taken wherever possible to improve fairness and effectiveness.

It is now time for individuals and firms to step forward and play a central role in improving standards in FICC markets. The Review has been greatly encouraged by firms’ commitment to the project over the past year, most notably through the Market Practitioner Panel chaired by Elizabeth Corley, CEO of Allianz Global Investors. The challenge now is to turn that into action. If firms and their staff fail to take this opportunity, more restrictive regulation is inevitable.

A full list of the Review’s recommendations is set out on pages 7-8 of the Final Report.

Recommendations to raise standards, professionalism and accountability of individuals include:

i.    Encouraging IOSCO to consider developing a set of common standards for trading practices that will apply across all FICC markets; (see section 4)

ii.    Extending UK criminal sanctions for market abuse to a wider range of FICC instruments and lengthening the maximum sentence from 7 to 10 years’ imprisonment; (see section 6)

iii.   Mandating qualification standards to improve professionalism and disclosure requirements for references to avoid misconduct going undetected when individuals change jobs (see section 2).

Recommendations to firms to improve the quality, clarity and understanding of FICC trading practices:

iv.   Creating a new FICC Market Standards Board with participation from a broad cross-section of firms and end users and, involving regular dialogue with the public authorities, to address areas of uncertainty in trading practices and promote adherence to standards. (see section 4)

Recommendations to the UK authorities to strengthen regulation of FICC markets include:

v.    Extending elements of the Senior Managers and Certification Regimes to a wider range of regulated firms active in FICC markets; (Section 5.1)

vi.   Creating a new statutory civil and criminal market abuse regime for spot foreign exchange, drawing on the international work on a global code. (see below and Section 4)

Recommendations to the international authorities to raise standards in global FICC markets include:

vii.   Agreeing a single global FX code providing a comprehensive set of principles to govern trading practices around market integrity, information handling, treatment of counterparties and standards for venue – as well as stronger mechanisms to ensure market participants adhere to that code (Section 4).

viii.   Examining ways to improve the alignment between remuneration and conduct risk at a global level (Section 5.4).

In addition, the Review identifies a set of principles to guide a more forward-looking approach to the structure, behaviour and supervision of FICC markets.  These will be an important theme at the Open Forum to be held at the Bank of England in the autumn of 2015.

In his annual Mansion House speech this evening, the Chancellor is expected to say:

“The public rightly asks why it is that after so many scandals, and such cost to the country, so few individuals have faced punishment in the courts.

“The Governor and I agree: individuals who fraudulently manipulate markets and commit financial crime should be treated like the criminals they are – and they will be.

“For let us be clear: there is no trade-off between high standards of conduct and competitiveness.

Far from it. Implementing the reforms set out in this Review will ensure trust in our markets and strengthen London’s global leadership position.”

Commenting on the publication of the Final Report at Mansion House, Mark Carney, Governor of the Bank of England, said: “With its publication today, all the main building blocks are now in place for the real markets we need. I want to pay tribute to my colleagues Charles Roxburgh, Minouche Shafik and Martin Wheatley, who so ably led the Review. And to salute Elizabeth Corley, who so expertly chaired the Review’s independent Market Practitioners Panel, canvassing and coalescing views from across industry.”

Martin Wheatley, Chief Executive of the FCA, said: “These markets are central to our economy and today’s recommendations will be important in rebuilding public trust in their integrity. Domestic regulatory reform is only one piece of the puzzle. Driving up global standards needs international cooperation between regulators, but confidence is underpinned by the behaviour of the firms and individuals active in them. We will know the review has truly succeeded when we see these changes being embraced at every level in industry.”

To ensure that momentum is maintained on those recommendations under the control of the UK authorities, the Review’s Chairs will provide a full implementation report to the Chancellor of the Exchequer and the Governor of the Bank of England by June 2016.

Reform of the legacy Credit Unions sourcebook

Reform of the legacy Credit Unions sourcebook

This joint Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) consultation sets out proposals to reform the legacy Credit Unions sourcebook (CREDS), one of the modules of the Handbook inherited by the two regulators from the Financial Services Authority (FSA).

When the FSA’s powers passed to the PRA and FCA on 1 April 2013, each of the new regulators adopted its own version of CREDS, by designating its provisions as ‘PRA-only’, ’FCA only’ or ‘shared’.  The PRA now proposes to delete CREDS in its entirety and to replace it with a new Credit Unions Part of the PRA Rulebook, while the FCA proposes to retain only those parts of CREDS that relate to its own statutory responsibilities.  The PRA’s proposals deal exclusively with matters affecting the financial safety and soundness of credit unions, and the FCA’s proposals concern the ways in which credit unions conduct business.

The review has taken into account feedback on the regulatory approach received by HM Treasury in response to its ‘Call for Evidence: British Credit Unions at 50’ and also the impact on Northern Ireland credit unions of the restrictions on investment in CREDS.  Beyond this, the PRA has drawn on its experience of supervising credit unions to revise its rules in a way that takes account of significant developments in the sector, which are leading to increased diversification in credit union business models.

The consultation is particularly relevant to credit unions, credit union trade bodies and third parties that interact regularly with the credit union sector.

Summary of proposals

The consultation paper sets out the proposed rules for the new Credit Unions Part of the PRA Rulebook. The key proposed changes are:

  • Limit on shares and deposits - the amount of money that a credit union may accept as shares (from a member) or as deposits (from a person too young to be a member) would be capped at the maximum amount of compensation that is generally available from official sources if the credit union fails.
  • Framework for additional specified activities - the historical version 1 and version 2 model for credit union activities would be replaced with a flexible framework based on a credit union’s specific business model.

A summary of the main PRA changes are set out in the ‘Key resources’ below.

The FCA’s proposed changes are to:

  • clarify the responsibilities of the FCA (as distinct from those of the PRA) within the FCA CREDS;
  • change some current guidance provisions into rules;
  • adjust credit unions’ regulatory reporting arrangements; and
  • correct oversights, omissions, inconsistencies and outdated provisions.



We’re always looking for ways to improve the products we offer and the service that we provide to our customers. So we’re changing our main customer service line to a new number – one that’s memorable and free to call: 0800 9 123 123.

We’re not stopping there, however; our ultimate goal is to reduce the amount of telephone numbers that we use and to make all of them free to call. It’s all part of what we’re doing to become more simple, personal and fair in everything we do.

From today, when customers call our old number, they’ll still be able to speak to us but they’ll be told about our new freephone number so that they can redial if they wish and avoid any charges.

Sue Willis, Managing Director, Customer Experience and Channels, said: “We see this as a natural but major step in our journey to put the customer at the heart of everything we do – making life simpler and fairer for customers, and removing any barriers that make it harder to speak to us. By committing to making all of our telephone lines freephone, we want our customers to know that we’re serious about doing the right thing, and this is just one of many steps that we’ll be taking to keep improving the service that we offer.”

Earlier this month, Moneywise(1) presented Santander with the award for ‘Most Trusted Mainstream Bank’, as voted for by UK consumers. Our purpose is to help people and businesses prosper and earning trust and loyalty is fundamental to that – so this award is high praise from our customers that we’re headed in the right direction and the steps we’re taking to embrace free calls for everyone are designed to keep building on that foundation.



Banbury-based Stewart Group (“Stewart”), the British manufacturer and distributor of gardening products, catering supplies, homewares and bespoke technical solutions, is now set for significant expansion and growth following a £11 million funding deal with Santander Corporate & Commercial. Stewart was advised throughout the deal by Leamington Spa-based law firm Wright Hassall.

Stewart’s key business channels are garden centres, DIY outlets, major retailers and trade, the latter encompassing housewares, catering and technical solutions. The firm reported a 25% growth in business in the 2014 financial year and, having secured the £11 million in funding from Santander Corporate & Commercial, plans are now in place to support the company in further strengthening its brand leader position by driving growth via additional manufacturing capacity, and launching a strong pipeline of new product introductions.

Market share gains have been achieved through the use of category management techniques, which have allowed Stewart to be present in over 1,600 outlets across the UK and Eire. These include DIY outlets such as Homebase, Wilkinson and B&Q and garden centres such as Dobbies and Klondyke/Strikes, Wyevale and over 600 independent garden centres. Stewart manufactures 95% of its products within the UK and is proud to be a strong contributor to both the local Banbury economy and playing its part in the resurgence of UK-based manufacturing companies.

Established in 1945, Stewart is now in its third year at its state-of-the art Banbury manufacturing facility which followed a £15 million investor buyout supported by ECI Partners in 2012-13. Stewart relocated from its original Croydon, South London location to the purpose-equipped, 178,000 sq. ft. production facility, and this new base has been the key to supporting the recent growth of the business. Significantly, the Banbury facility has room for further expansion, with the potential to doubling output if needed.

Andy Burns, Managing Director, Stewart Group, said: “Stewart is a true UK manufacturing success story and we have strong aspirations for the future. We have a robust growth strategy in place, and the funding and support from Santander and Wright Hassall will be instrumental in helping us implement this comprehensive plan across our core sectors.”

Steve Bateman, Relationship Director, Santander Corporate & Commercial, said: “We’re delighted to be working with such a well-known and high profile brand such as Stewart. The company’s facility in Banbury is one of the largest and most efficient plants in Europe, and it is clear that the firm’s products are winning over an increasing number of clients.”

Christopher Jones, Banking and Finance Senior Associate, Wright Hassall, said: “We’re pleased to be supporting a progressive company in Stewart in its expansion plans. Stewart has built a strong reputation as a leading player in the gardening, home and professional catering markets and is well placed to continue its expansion and growth following the completion of this deal. The deal also shows the great appetite that many banks, including Santander, have to provide financing to British companies as the economy continues to recover from the downturn of recent years.”

Western Union to Launch Direct to Bank from US to Mexico

Western Union to Launch Direct to Bank from US to Mexico

Banorte’s UniTeller banking network paves the way for Western Union direct transfers to more than 60 million individual bank accounts1

ENGLEWOOD, Colo. & MEXICO CITY–(BUSINESS WIRE)– The Western Union Company (NYSE: WU), a leader in global payment services, today announced it will launch international direct to bank money transfers to Mexico from the United States via the Grupo Financiero Banorte’s UniTeller network.

An agreement recently signed between Western Union and UniTeller, will allow Western Union customers in the US to send cash directly into qualifying bank accounts – totaling more than 60 million individual bank accounts1. The UniTeller network currently covers top banks in Mexico.

Planned for launch in the first quarter of 2015, customers will be able to send international money transfers direct-to-bank from participating retail Agent locations, www.westernunion.com and directly from Western Union smart phone mobile applications from the US.

Ricardo Velazquez, Head of International Banking, Trade Finance and Financial Institutions of Grupo Financiero Banorte, said: “UniTeller and Banorte are leaders in Mexico in the offering of financial services to the beneficiaries receiving money from their relatives abroad, continuously seeking for new ways to process international transfers. With this agreement, beneficiaries of remittances in Mexico will find it very convenient to open an account at our bank and directly receive the funds through Western Union with the benefit of value added banking services.”

“This agreement is a result of the competitiveness of our Remittance Platform and will enhance the international payment services for our customers in Mexico. As a leader of remittance processing services, UniTeller continues to support the end to end services for our customers in Mexico and abroad,” added Alberto Guerra, CEO of UniTeller Financial Services at Grupo Financiero Banorte.

Odilon Almeida, President Americas and European Union of Western Union, said: “Thanks to this international collaboration, Western Union customers in the United States can send money directly into Banorte accounts and soon to other Mexican banks giving customers new choice based on their use, need and convenience.

“We are excited to offer our customers in Mexico a new way to conveniently receive money. Although receivers in Mexico continue to have a strong preference for cash and our retail growth has been solid, we believe the direct to bank services will bring in new types of consumers who prefer to receive funds in accounts.

“Expanding into the banking channels of Mexico in collaboration with UniTeller is a significant development; we are proud to uphold our promise to continually enhance convenience and choice for our customers,” said Almeida.

Western Union’s direct-to-bank product cements the company’s advancement into the bank remittance segment. More than $528 billion was moved across the world in 2013 in remittances according to the World Bank2. Western Union offers direct-to-bank services in 50 countries including seven of the world’s top 10 remittance receiving developing countries2—India, China, Philippines, Egypt, Pakistan, Bangladesh, Vietnam and soon to be Mexico.

About Western Union

The Western Union Company (NYSE: WU) is a leader in global payment services. Together with its Vigo, Orlandi Valuta, Pago Facil and Western Union Business Solutions branded payment services, Western Union provides consumers and businesses with fast, reliable and convenient ways to send and receive money around the world, to send payments and to purchase money orders. As of September 30, 2014, the Western Union, Vigo and Orlandi Valuta branded services were offered through a combined network of over 500,000 agent locations in 200 countries and territories and over 100,000 ATMs and kiosks. In 2013, The Western Union Company completed 242 million consumer-to-consumer transactions worldwide, moving $82 billion of principal between consumers, and 459 million business payments. For more information, visit www.westernunion.com.

Western Union Offers Apple Pay™ as New Pay-In Option for Money Transfer Customers

Western Union Offers Apple Pay™ as New Pay-In Option for Money Transfer Customers

Customers at Western Union flagship and Walgreens/Duane Reade locations can now send Money Transfers using Apple Pay solution

ENGLEWOOD, Colo.–(BUSINESS WIRE)– Western Union (NYSE:WU) a leader in global payment services, today announced it will offer Apple Inc. (NASDAQ:AAPL)’s technology Apple Pay™ mobile payment solution at Western Union’s flagship locations, to provide consumers yet another way to fund global money transfers and bill payments in the United States.

Consumers making Western Union transactions at kiosks in over 7,600 Walgreens and Duane Reade locations nationwide also have the ability to utilize the Apple Pay service.

“Innovative payment options are a strategic focus for Western Union, and starting to accept Apple Pay is in keeping with the company’s blueprint for the future,” said Odilon Almeida, Western Union President, Americas and European Union. “Our customers’ needs and preferences are top of mind,” he added.

Western Union analysis shows that international money transfer senders, particularly recent immigrants, are as mobile-savvy and digitally motivated as the general population with nearly six out of 10 migrants owning a smartphone, moving it from a luxury device to an irreplaceable everyday necessity. Over two thirds of migrant international money transfer senders and more than 80 percent of non-migrant international money transfer senders own a smartphone.

“Our customers have an expectation of using mobile technology to make money transfer service and product accessibility easier. Western Union is rising to the occasion as we harness our system with modifications to link cash and digital transfers between retail locations, mobile phones, prepaid cards, online and traditional bank accounts and ATMs,” said David Thompson, Executive Vice President, Global Operations and Technology and Chief Information Officer.

Launched at Western Union’s flagship 1440 Broadway in New York City—with more participating Western Union Agent locations to follow—customers will be able to use their iPhone 6 to fund a Western Union Money Transfer® transaction or bill payment.

To use this service, customers must register their debit card on their device and ensure their bank is a participating partner of the Apple Pay service. They can then make a payment simply by holding their phone near the contactless reader with their finger on Touch ID. Consumers’ debit card numbers are not transmitted in payment, nor are they shared with the Western Union Agent.

About Western Union

The Western Union Company (NYSE: WU) is a leader in global payment services. Together with its Vigo, Orlandi Valuta, Pago Facil and Western Union Business Solutions branded payment services, Western Union provides consumers and businesses with fast, reliable and convenient ways to send and receive money around the world, to send payments and to purchase money orders. As of September 30, 2014, the Western Union, Vigo and Orlandi Valuta branded services were offered through a combined network of over 500,000 agent locations in 200 countries and territories and over 100,000 ATMs and kiosks. In 2013, The Western Union Company completed 242 million consumer-to-consumer transactions worldwide, moving $82 billion of principal between consumers, and 459 million business payments. For more information, visit www.westernunion.com.

Western Union® Live at Bank of China

Western Union® Live at Bank of China

Friends and family in China can receive remittances quickly and conveniently from Bank of China locations throughout the country now

ENGLEWOOD, Colo.–(BUSINESS WIRE)– Effective immediately, consumers in China will be able to receive remittances through the Western Union® (NYSE: WU) Money TransferSM service from abroad in minutesi at select Bank of China branches and sub-branches throughout the countryii, the two companies announced today.

Western Union’s cash-payout services to friends and families in China may be arranged at nearly 500,000 locations in 200 countries and territoriesiii, including more than 51,000 locations in the U.S. Consumers in the U.S. may also send money online, through online banking and through kiosks and ATMs.

In addition, Bank of China and Western Union will soon expand their collaboration to allow customers to direct Western Union Money Transfers into their bank accounts via online banking, or they can be received at select self-service kiosks.

Carter Hunt, Senior Vice President and General Manager for Western Union U.S., said, “Through our landmark agreement with Bank of China, consumers can enjoy unprecedented convenience when sending money to and receiving money from their friends and families. We are particularly delighted to have this new service in place for our customers in time for Chinese New Year, a time when millions of Chinese people around the world celebrate with their loved ones.”

Mr Zhu Shumin, Executive Vice President of Bank of China, added, “Cross-border financial services have always been Bank of China’s competitive edge and key focus. Western Union is one of the world’s largest and most experienced international money transfer companies, and Bank of China is the most international and diversified Chinese commercial bank. Our cooperation will allow our joint customers to enjoy an even bigger range of remittance products, more convenience and raise our service standards. Through our collaboration, I hope that we can explore new areas of cross-border business and continually develop new products to satisfy the diverse needs of cross-border customers.”

Western Union® services have been available in China since 1995. With the addition of Bank of China’s branches and sub-branches, Western Union Money Transfer service will be available at over 30,000iv locations nationwide in cooperation with 15 Agents.

About Western Union

The Western Union Company (NYSE: WU) is a leader in global payment services. Together with its Vigo, Orlandi Valuta, Pago Facil and Western Union Business Solutions branded payment services, Western Union provides consumers and businesses with fast, reliable and convenient ways to send and receive money around the world, to send payments and to purchase money orders. As of September 30, 2014, the Western Union, Vigo and Orlandi Valuta branded services were offered through a combined network of over 500,000 agent locations in 200 countries and territories and over 100,000 ATMs and kiosks. In 2013, The Western Union Company completed 242 million consumer-to-consumer transactions worldwide, moving US$82 billion of principal between consumers, and 459 million business payments. For more information, visit www.westernunion.com.

Preliminary Results for the 52 weeks to 21 March 2009

Preliminary Results for the 52 weeks to 21 March 2009

Strong sales and profit performance with significant growth potential
Financial Summary
Total sales (including VAT) up 5.7 per cent to £20,383 million (2008: £19,287 million)
Like-for-like sales (excluding fuel, including VAT) up 4.5 per cent(1)
Underlying profit before tax up 11.3 per cent at £543 million (2008: £488 million)(2)
Profit before tax of £466 million (2008: £479 million)
Underlying basic earnings per share up 12.8 per cent to 22.1 pence (2008: 19.6 pence)(3)
Basic earnings per share of 16.6 pence (2008: 19.1 pence)
Proposed final dividend of 9.6 pence per share (2008: 9.0 pence) making full year dividend of 13.2 pence (2008: 12.0 pence), up 10.0 per cent
Operating Summary
Four years of consecutive like-for-like sales growth
Increased customer numbers and basket growth: over 18 million customer transactions each week
Universal customer appeal catering for full range of needs and budgets
Significant improvement in customer price perception
Continued investment in product quality and price helping customers manage tighter budgets
Cost efficiency programme offsetting over 75 per cent of inflationary pressure
Strong balance sheet supported by property assets and with long-dated debt
120,000 colleagues share annual bonus of £60 million
Making Sainsbury’s Great Again: Recovery to Growth
Strong brand heritage underpins Sainsbury’s universal appeal
Quality and value of food offer continues to provide differentiation from major competitors
Continued development of non-food offer: TU clothing bought by over 40 per cent of customers
Sainsbury’s Bank delivering profit from good income growth and cost control
Online food sales now annualising at over £500 million: non-food online launching in H1 2009/10
Accelerated growth of convenience chain with 50 new stores planned in 2009/10 and 100 in 2010/11
Over 4 per cent gross space growth achieved in 2008/09 and on track for over 5 per cent in 2009/10
Over £750 million of gross property transactions completed
Philip Hampton, chairman, said: “This is another good set of results for Sainsbury’s with continuing growth in sales and tight cost control leading to further improvements in profit. Sainsbury’s is a robust business with a strong financial position. Underlying profit before tax for the year was up 11.3 per cent to £543 million(2) with underlying basic earnings per share up 12.8 per cent to 22.1 pence. The Board is recommending a final dividend of 9.6 pence per share, making the full year dividend 13.2 pence, an increase of 10.0 per cent over the previous year. This dividend is covered 1.67 times by earnings in line with our long-term policy of dividend cover of between 1.50 and 1.75 times.”

Justin King, chief executive, said: “Our business is growing because we have responded quickly and effectively to a rapidly changing environment. Total sales for the year were up 5.7 per cent and like-forlike sales excluding fuel were up 4.5 per cent(1). In addition we have continued to drive cost efficiencies offsetting over 75 per cent of cost inflation and delivered further profit growth.

“Fixing fundamental parts of our operation through our ‘Making Sainsbury’s Great Again’ recovery programme has placed the business in a strong position. Although consumer confidence in the UK has declined during the year, our performance improved as a result of the strength of the Sainsbury’s brand and actions we have taken to adjust our offer to changing customer trends.

“Sainsbury’s is a long-established company and celebrates its 140th anniversary this month. It has a heritage of offering customers great products at fair prices, through a variety of economic trading periods, and we have developed our offer to compete and grow in what has been a very challenging period for the UK retail industry.

“Our universal customer appeal and continued investment in price and quality have been fundamental to our growth, catering for a range of changing customer needs and trends. Over the past 12 months consumers have become increasingly ‘savvy’ and have responded to rises in the cost of living by making significant changes to the mix of products they buy. In an effort to manage their household budgets more tightly, people are eating out less and cooking at home more. They are shopping around to get the best prices and deals but also want the best quality they can afford and to stay true to their values.

“Sainsbury’s ‘good, better, best’ product range hierarchy has provided customers with the flexibility to change what they buy, rather than where they shop. Customer transactions have grown to over 18 million a week and basket size has also increased. Further improvements in service levels and product availability have been achieved and as customers increasingly compare the value offered in different supermarkets they are realising they can get both great products and fair prices at Sainsbury’s. Investment in pricing, improved promotions and a range of marketing activities have all combined to significantly improve our customers’ price perception.

“We have continued to invest in our five areas of focus, each of which has delivered over the past year, and which provide significant opportunities for future growth. The areas are to build and stretch our lead in food, accelerate the development of non-food ranges and services, extend the reach of our brand via our online and convenience offers, to grow our store estate and actively manage our property assets.

“Our progress in the last four years has made the company a stronger business with a wide customer base and universal appeal. We are performing well and have significant opportunities for further growth. We expect the current economic environment to remain challenging but our focus on doing a great job for customers means we are well positioned to continue our good progress.”

Like-for-like sales: Like-for-like sales growth has been Easter-adjusted for comparative purposes. 2008/09 included one Easter Sunday trading week. 2007/08 included one Easter Sunday trading week and two Good Friday trading weeks.
Underlying profit before tax: Profit before tax from continuing operations before any profit or loss on sale of properties, investment property fair value movements, impairment of goodwill, financing fair value movements and one-off items that are material and infrequent in nature.
Underlying basic earnings per share: Profit after tax from continuing operations attributable to ordinary shareholders before any profit or loss on sale of properties, investment property fair value movements, impairment of goodwill, financing fair value movements and one-off items that are material and infrequent in nature, divided by the weighted average number of ordinary shares in issue during the period, excluding those held by the ESOP trusts, which are treated as cancelled.
Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward-looking statements. They appear in a number of places throughout this announcement and include statements regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
Sainsbury’s will announce its 2009/10 First Quarter Trading Statement at 07:00 (BST) on 17 June 2009.
A results presentation for analysts and investors will be held at 09:45 (BST) on 13 May 2009.

To view the slides of the Results Presentation and the Webcast: We recommend that you register for this event in advance. To do so, please visit www.j-sainsbury.co.uk and follow the on-screen instructions. To participate in the live event, please go to the website from 09:30 (BST) on the day of the announcement, and further instructions will be on the website. An archive of the webcast will be available from 12:00 (BST).

To listen to the Results Presentation: You may dial in to listen to the results on +44 (0) 1296 480 100. You will be asked to give the passcode, 632 465, your name and company details. You will then be placed on hold until the presentation starts. An archive recording of this event will be available from 12:00 (BST) by calling +44 (0) 207 136 9233, pin number 80926223. The archive is available for 28 days.

To view the transcript of the presentation: Visit the J Sainsbury plc website at www.j-sainsbury.co.uk from 15 May 2009.