Tieto to axe 350 jobs

26 February 2009

Scandinavian IT services vendor Tieto has begun the process of axing around 350 staff in Northern Europe in a bid to weather the global economic storm.

Tieto, which currently employs 16,600, will cut 170 jobs in Sweden with a further 180 going from Denmark, Norway, Germany, the UK, Latvia and India.

Hannu Syrjälä, CEO, Tieto, says: "The downturn of the overall economy has continued and this has lead to cautiousness in IT investments among our customers in certain industry sectors. We are taking actions to address this change in demand and to reduce overall costs."

In its full year results, released earlier this month, Tieto warned of a tough 2009 and said that demand from the financial services industry would be hit particularly hard.

Tieto has endured a stormy few months, fighting off an unsolicited takeover bid from private equity firm Nordic Capital last year.

In January 2008 the firm embarked on a restructuring and cost cutting programme designed to generate annual savings of more than EUR100 million by the end of 2009.

The programme, followed an 18-month run of volatile earnings which had mainly been been caused by project over-runs in the company's banking and insurance and healthcare and welfare units.

www.finextra.com

Skipton slams FSCS levy

The Skipton Group reported a £22.5 million pre tax profit in 2008 but said that this was almost half what it would have been, had it not had to provide £16.3 million for its share towards the next three years' FSCS levy imposed in relation to the rescue of savers in Bradford & Bingley and other banks. "Whilst we acknowledge the importance of a national safety net for savers and the part it plays in giving them confidence in the UK's financial stability, we believe it unjust that the building society sector, which has an inherently safer business model, is bearing a disproportionate cost for the troubles of some banks which had far riskier models," said David Cutter, Skipton chief executive.

www.emoneyfacts.co.uk

Single premium PPI deadline set

The Financial Services Authority (FSA) has told all firms still selling single premium payment protection insurance (PPI) with unsecured personal loans to withdraw such products by 29 May. The move comes after an inquiry by the Competition Commission recommended the sale of single premium PPI be prohibited after 1 October 2010. A number of major banks have already decided to stop selling the product, with some firm's opting to offer regular premium PPI instead. "We believe that PPI can play an important and legitimate role to cover repayments on specific credit agreements for consumers facing job loss, or other issues at this difficult time," wrote Jon Pain, the FSA's managing director of retail markets, in a letter to firm's chief executives. "However, our focus remains on how this product has been, and continues to be, sold and whether consumers have been treated fairly during the sales process."

Email Mortgages urges UK banks to copy Irish innovation

Email Mortgages is urging UK lenders to launch more innovative products to aid potential homeowners similar to those offered in the Republic of Ireland.

Email Mortgages points to a particular product, the ‘Secure Step Mortgage’ offered by RBS’ Ulster Bank but only to Irish customers. The product is available to both first-time and second-time buyers and allows borrowing up to 95 per cent loan to value.

The product, provided in conjunction with a number of property developers, is unique in that it protects the customer should the value of the house fall by up to 15 per cent after five years. If the property does decrease in value by this amount, the developer will refund the amount of the fall, up to 15 per cent of the original purchase price, with any refund due will be used to reduce the mortgage.

Email Mortgages chief executive Michael White says: “First-time buyers in particular would see great benefit in a product such as Ulster Bank’s ‘Secure Step Mortgage’ however it is not available to British customers at all. It seems particularly rich given the huge amount of State Support its parent company RBS has received from the British taxpayer that only Republic of Ireland customers are benefiting from this type of product.

“It is now obvious that many institutions are not willing to throw their more innovative products into the marketplace.

“Government calls for increased lending to individuals and businesses seem to have gone unheeded and the dearth of new mortgage products which are specifically aimed at the first-time buyer is proof that many lenders have no intention of increasing their levels of lending.

“This situation needs to be rectified and we believe those banks who have taken taxpayers’ money should be leading the charge in delivering greater access to mortgage finance.”

www.moneymarketing.co.uk

Self cert mortgages face extinction

30 January 09

Self cert mortgages face extinction after BM Solutions and Bank of Scotland became the latest lenders to pull out of the sector.

The HBOS lenders, now part of Lloyds Banking Group, will no longer accept any self cert business. Both in recent years have been large players in the self cert sector.

This comes after both GE Money Home Lending brands iGroup and First National revealed they were to stop accepting new self cert business last week, and Bristol & West pulled out of new mortgage lending completely. Nationwide’s The Mortgage Works and Britannia’s Platform remain the only lenders who offer any kind of self cert mortgage.

John Charcol senior technical manager Ray Boulger says the future is grim for the sector: “I would expect we will be receiving an email from Platform and TMW announcing that they have either pulled out of self cert or at least changed their criteria.

“It’s a shame because self cert is a key sector of the mortgage industry, if it is done properly. I doubt anyone will have the appetite to lend self cert now and I would think the sector will go the way 100 per cent mortgages went last year.”

www.moneymarketing.co.uk