HSBC blunder sees W&D shares shed 30p

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Directors at Wolverhampton & Dudley were said to be "incandescent with rage" after a City bank's blunder saw the company's share-price shed more...

Directors at Wolverhampton & Dudley were said to be "incandescent with rage" after a City bank's blunder saw the company's share-price shed more than 30p.

In post-Budget calculations conducted by HSBC, Wolves was wrongly named as the biggest loser of the one per cent increase in national insurance contributions (NICs) made by employers, in the entire FTSE350.

The increase will hit Wolves for about £600,000. HSBC global strategists, Steve Russell and Robert Parks, calculated £600,000 to represent 4.3 per cent of Wolves' profits.

But the calculation was taken using Wolves profit figure from last year, after exceptional items, of £13.4m.

The company incurred massive one-off exceptional-item costs of £54.7m and the actual pre-tax profits figure was £68.1m.

Using this correct figure, the actual rise in NICs will knock 0.8 per cent from W&D's profits, placing the company in line with its peers.

One industry observer said: "I've heard the directors are very annoyed. I think incandescent with rage would probably be more appropriate - I know I would be.

"It's quite extraordinary that a document like this could find its way into the public domain without being checked first in any way whatsoever."

At least two national newspapers published articles featuring the "research" and the Wolves' share-price dropped from 720p to 688.5p.

The bank was also millions of pounds adrift with its estimation of the impact the NICs rise would have upon retailer Marks & Spencer.

HSBC has since apologised for the error.

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