Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Theo, agreed, regulated industry does requires corrective response on such shock originating from systematic risk.
Premiums are down, claims and running costs up (expt. part via furlough cover by gov)
It was just to flag processes with clear evidence starting to surface, short-term cause and implications,
as Sir matlot mentioned (still MFIs = neighbors) - other questionable business decisions and impact on business sustainability is a bit different story (with all this insurance sector reinsuring each other and holding each-other's shares).
Not sure (was holding it a while ago, annual report does have this info, I'm just too lazy for it atm) what's sitting in a structure of their 400B investment portfolio (70% bonds for sure, shares are definitely below 10%) - nonetheless it's a fact: capitalization is below paper equity, (in line with goodwill write-downs, some AR and other impairments, but missing investment portfolio loses/devaluation due to market fall and cost-shock).
Yuri, could this be connected with the FCA investigation into handling of BI, have AV. reached their own conclusion, are they expecting to have to pay out 'rather a lot' now. Just a thought. JJ
P.S. the FCA can be very persuasive.
Also watching De La Rue hype/craze (company with negative equity btw, but old historic eps seemed reasonable), was surprised they can ramp it up that high on a simple contract (population of Australia is 25m, not everyone needs passport or will have to change it during contractual period).
It means they run out of reserved provision buffer and need to replenish it somehow
(premium collection doesn't really work very well atm)
I do understand we're (whole economy/ business models) in force-majeure situation because of Covid
and these corrective moves are inevitable part of adjustment process,
but these moves are still indicative leading indicators to flag some companies for risk review.
They have £400B invested into financial instruments (mostly debt market because of requirements), yet decision on publicly releasing share holding is kind of buzzer to others for keeping an eye on them despite relatively low value or perhaps totally justifiable move (new regulations of 2020 or broker rerate and company reaction, etc.).
Yuri, what assets are they dumping that they physically own ?
If they're selling shares in funds then this is tactical not structural - the money doesn't belong to them ?!
I mean yes - with insurers there are regulatory requirements on quality of asset structure and some reallocation is inevitable, but this looks to be one way move.. so go figure..
Has anyone noticed how Aviva started dumping market assets at bottom prices?
They've reduced some positions last week..
There's suspicion they are a little bit short of money to support liquidity and trying to convert assets at loss.
Morning Mister Matlot
What is next for our challenger?
ENA massive reduction is excellent news, they were as high as 3.30+% a few months ago.
Appreciate insights and hope everyone had a good weekend
Morning Smoke, good points.
Also important to highlight the fact that the first wave of bounce back loans and applications were from those who desperately needed them. Sad but true.
Hence much higher risk of default.
Metro played it safe by delaying the scheme (voluntarily or not, that is a different matter) and letting other banks take on the riskier and more urgent loans.
Metro Bank gets lender accreditation under Bounce Back Loan Scheme
https://ibsintelligence.com/ibs-journal/ibs-news/metro-bank-gets-lender-accreditation-under-bounce-back-loan-scheme/
The British Business Bank announced last week that it has approved Metro Bank as a new lender for accreditation to the Bounce Back Loan Scheme (BBLS) for SMBs across the UK. Metro Bank thus joins 17 other accredited lenders under BBLS for offering financial support to companies that are financially stressed amidst the COVID-19 outbreak. The accreditation will enable Metro Bank to begin lending under BBLS immediately.
Keith Morgan, CEO, British Business Bank, said, “The Bounce Back Loan Scheme has already helped over 608,000 businesses access loans worth £18.4 billion. As our onboarding continues at pace, accrediting Metro as a new lender will mean that more smaller businesses across the UK will be able to access the finance they need to get through the current pandemic.”
The BBLS aims to focus on small and micro businesses in all the sector and provide loans from £2k up to 25% of the business’ turnover with a maximum credit of £50k. It offers lenders with a 100% government-backed guarantee along with a standardised application form that accelerates the lending process.
...
Metro Bank, in March, announced a partnership with Lending-as-a-Service (LaaS) provider ezbob in a bid to provide the Bank’s customers with secure and competitive access to finance.