UK Home Prices Rise; Bank of Ireland Swings to Profit

Arthi Gupta
20 Feb, 2012
New York City

The UK indexes advanced after China eased bank reserves and trading sentiment was positive on the prospect of Greek bailout agreement today. The UK home prices rose in February and mortgage lending gained in January. The Bank of Ireland swung to profit in fiscal year 2011.

[R]2:20 PM London – The UK indexes advanced after China eased bank reserves and trading sentiment was positive on the prospect of Greek bailout agreement today. The UK home prices rose in February and mortgage lending gained in January. The Bank of Ireland swung to profit in fiscal year 2011.[/R]

The UK indexes climbed on the optimism that the euro zone ministers will approve the bailout for Greece and the European Central Bank will also participate. The second bailout was first promised in October but the release of €130 billion has been delayed after ministers demanded stricter governance.

Greece is struggling to convince ministers that it will abide by strict conditions of the bailout and will not seek to change terms after the general election as early as April.

However, the mood in Brussels is cautious before the meeting and ministers are pushing for the release of only €30 billion of the €130 billion. Greek Prime Minister Lucas Papademos is in Brussels to assist the bailout decision after weeks of tortuous and at times tense negotiations with international lenders.

China Lowers Reserve Requirement Ratio

The People's Bank of China decided to lower the banks' reserve requirement ratio by 50 basis points, effective February 24, to 20.5% for large commercial banks, according to a statement published on its Web site on February 18.

In London trading FTSE 100 Index gained 43.72 or 0.7% to 5,949.26 and the pound edged higher to $1.5862.

UK Home Prices, Household Finance Index Rise

Average asking prices for a property in the UK rose 4.1% in February, the highest monthly increase since April 2002, the latest survey by Rightmove showed today, following a 0.8% decline in January.

The average asking price increased 1.4% to £233,252 from last year.

Separately, the UK’s household finance index rose to 38.7 in January from 36.4 in December, data from a survey by Markit Economics showed.

Around 30% of households were downbeat about their finances, compared to 8% that saw an improvement.

UK Mortgage Lending Up

The number of UK mortgages rose from a year ago in January, according to data released by the Council of Mortgage Lenders.

Gross mortgage lending rose 10% to £10.5 billion in January compared to the £9.5 billion in January 2011.

Gainers & Losers

Bank of Ireland soared 7.7% to $7.56 after it reported fiscal 2011 profit attributable to stockholders of €45 million in 2011 compared to a loss of €614 million a year earlier. Net interest income declined 31% to €1.53 billion in 2011 from €2.22 billion a year earlier.

JJB Sports PLC surged 12.5% to 11.25 pence after the sports retailer said comparable sales for the five weeks ended January 29 declined 5.7%, compared with the 5% growth in the four weeks to December 26th.

The cash gross margin rose 0.3% in the second-half compared with the 37.4% fall in the first-half.

SEGRO plc climbed 3.2% to 238.20 pence after the European owner-manager and developer of industrial property sold five non-core industrial estates for £80 million to two funds managed by Ignis Asset Management.

Synchronica plc dipped 0.6% to 11.43 pence after the mobile phone messaging technology group signed a letter of intent with Canada's NewPace Technology Development Inc. to cooperate in the development, sales of new products.