British lender Nationwide pins profit fall on Brexit chill​

Nationwide posted a profit of £886 million for the nine months, which ended on December 31, down from £946 million a year earlier. (Reuters)
Updated 09 February 2018
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British lender Nationwide pins profit fall on Brexit chill​

LONDON: Nationwide Building Society , one of Britain’s three biggest providers of mortgages, said on Friday its profit fell 6 percent as consumer spending and confidence fell following the country’s vote to leave the EU.
The results represent one of the strongest indications yet from a major lender that the Brexit vote is having a significant impact on the British economy and consumer behavior.
Nationwide posted a profit of £886 million for the nine months, which ended on December 31, down from £946 million a year earlier.
While the economy remained resilient immediately after the country’s June 2016 EU vote, there were signs of a slowdown in 2017, it said.
“Household spending, a key driver of growth, lost some momentum. Retail sales and car registrations have slowed and consumer confidence has also softened,” Chief Executive Joe Garner said.
Subdued economic activity and a squeeze on household budgets will continue to pressure house prices and profits, Nationwide said.
British house prices recorded modest growth last month, with expensive properties in London particularly struggling to sell, an industry survey showed on Thursday.
Nationwide said research with partners including debt advice charity Citizens Advice and retailer Marks & Spencer into consumer behavior showed pressures on household budgets.
“We are seeing a lot of affordability pressure, not just unsecured lending but inflationary pressures coming through in a lot of ways ... including pressure on rents,” Garner said.
Garner said that with around one in three people in Britain having little or no material savings, inflation is squeezing budgets and impacting consumer confidence.
Nationwide said its net interest margin, the gap between what it pays savers and what it charges borrowers, was steady at 1.33 percent but would likely fall this financial year and next.
The lender said it had brought onto its staff around 300 contractors who had worked in its offices for infrastructure firm Carillion, which collapsed last month in Britain’s biggest corporate failure in a decade.
Nationwide reported its underlying profit, which measures management’s view of its underlying performance, rose to £883 million from £866 million a year ago.
Nationwide’s cost to income ratio rose to 59.6 percent from 57.6 percent on higher defined benefit pension costs.


Saudi energy minister compares electric vehicle ‘hype’ to peak oil misconceptions

Updated 15 October 2018
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Saudi energy minister compares electric vehicle ‘hype’ to peak oil misconceptions

  • Khalid Al-Falih on Monday questioned what he described as the “hype” of the electric vehicle market
  • Compared it to past misconceptions around the theory of peak oil

LONDON: Saudi Energy Minister Khalid Al-Falih on Monday questioned what he described as the “hype” of the electric vehicle market and compared it to past misconceptions around the theory of peak oil.
He told the CERAWeek energy gathering by IHS Markit in New Delhi that petrol and diesel engines would co-exist with emerging electric and hydrogen fuel cell technologies for much longer than widely expected.
Miscalculations around the pace of electrification could create “serious” risks around global energy security, he said.
“Conventional vehicles today, despite all the hype, represent 99.8 percent of the global vehicle fleet. That means electric vehicles with 0.2 percent of the fleet, only substitute about 30,000 barrels per day of oil equivalent of a total global oil demand of about 100 million barrels.
“Even if those numbers increase by a factor of 100 over the next couple of decades, they would still remain negligible in the global energy mix.”
He said: “History tells us that orderly energy transformations are a complex phenomenon involving generational time frames as opposed to quick switches that could lead to costly setbacks.”
In another broadside aimed at electric vehicles, the Saudi energy minister highlighted past misconceptions about global energy demand growth — and specifically the notion of “peak oil.”
“I remember thought leaders within the industry telling us that oil demand will peak at 95 million barrels per day. Had we listened to them and not invested . . . imagine the tight spot we would be in today.”
“Let’s also remember that in many parts of the world, roughly three fourths of the electricity, which would also power electric vehicles, is currently generated by coal, including here in India. So you could think of any electric vehicle running in the streets of Delhi as essentially being a coal-powered automobile.”
“When it comes to renewables, the fundamental challenge of battery storage remains unresolved — a factor that is essential to the intermittency issue impacting wind and solar power. Therefore the more realistic narrative and assessment is that electric vehicles and renewables will continue to make technological and economic progress and achieve greater market penetration — but at a relatively gradual rate and as a result, conventional energy will be with us for a long, long time to come.”