BANKING
A fifth of people have not visited a bank branch since before pandemic
A new survey shows that 20% of people in the UK have not visited a bank branch since before the pandemic, while only 22% of those polled said they have visited a branch within the last six months. Around one in seven (13%) had visited their bank during the previous week, according to the survey. It was found that 31% of those surveyed had two bank accounts, with 23% of these savers saying they had opened an additional account for a better digital offering. Just under a quarter (24%) of those with more than one account opened an additional account for better customer service. It was also found that 58% of account holders used their other bank accounts for saving, while 30% used them to manage day-to-day spending. Three-quarters of respondents said their main source of income was still paid into a traditional high street bank. Meanwhile, more than a quarter (27%) of respondents believe an app that is simple to use is now the most important interaction they have with their lender. The survey also indicates that some people are choosing banks specifically for the customer service and digital perks they offer. On customer satisfaction, the poll shows that 75% of people surveyed are happy with their bank’s services, with 34% very happy. One in 25 (4%) were unhappy with their bank’s service.
Small firms’ loan defaults increase
A survey of lenders by the Bank of England shows that the number of small businesses falling behind on their loan repayments rose in the three months to the end of November. The analysis shows that fewer medium-sized businesses defaulted on corporate debt repayments in the period, while the number of large companies defaulting remained steady. Lenders expect defaults to increase for SMEs in Q1, while default rates for large businesses are expected to remain unchanged.
Starling tops customer experience ranking
Starling Bank has topped a list of the UK's best customer experience companies in new analysis. CEO Anne Boden said: “Our goal has always been giving our customers the bank they tell us that they want and one which puts them in control of their money and their data." She added: “We know exactly what our customers want too, because they tell us every day. We've always welcomed and encouraged the interaction.” The Customer Experience Excellence Report considered the views of 9,995 consumers across 282 organisations.
INTERNATIONAL
Switzerland tests digital currency payments with top investment banks
The Swiss central bank has successfully used digital currency to settle transactions involving five commercial banks. The pilot in wholesale markets by the Swiss National Bank, called Project Helvetia, could bring the introduction of central bank digital currencies a step nearer in Switzerland.
Nordea bank names former RBS chief Stephen Hester as next chair
Danish lender Nordea has nominated easyJet chair Stephen Hester – the former CEO of RBS – to replace Torbjörn Magnusson as chairman.
CONSTRUCTION
Countryside Properties chief steps down
Countryside Properties failed to capitalise on the UK’s booming property market., with the FTSE 250 housebuilder reporting a drop in revenues in the first quarter of this financial year to £250m, significantly lower than the £364m recorded for the equivalent period last year. Operating profit more than halved in the period, from £36.6m last year to £16.5m. The company has also announced the immediate departure of CEO Ian McPherson. He is to be replaced by chairman John Martin, who will serve as interim chief executive.
Persimmon reports bumper year
Housebuilder Persimmon has reported that revenues grew 8.4% last year to £3.61bn as the company completed the sale of 14,551 homes, up almost 1,000 on 2020, as the average price of a home increased from £230,534 to £237,050 year-on-year. “Whilst the industry continues to face the ongoing operational and economic challenges as a consequence of the pandemic ... the group continues to manage these ongoing challenges comprehensively,” said Persimmon CEO Dean Finch.
Aviva CFO makes Persimmon switch
Persimmon has poached Aviva’s finance director, with Jason Windsor to replace Mike Killoran at the housebuilder. Mr Windsor has been CFO at Aviva since 2019, having joined the business in 2010 and previously worked as Aviva’s banking adviser at Morgan Stanley. Sources say his departure is amicable, with Mr Windsor simply keen to try something new.
FINANCIAL SERVICES
Investors call for rethink of takeover rules
The Financial Conduct Authority (FCA) has been urged to change EU regulations that remain in place despite Brexit, with investment giants including Baillie Gifford, Blackrock and Aviva calling for a rethink of “confusing” EU takeover rules that continue to apply to the City. The firms have criticised Market Abuse Regulations introduced in 2016, saying they have blurred the lines of what they can and cannot do during a corporate takeover, with investors said to fear discussing their views about specific companies with each other. Andy Griffiths, executive director of the Investor Forum, said that the rules had made matters “confusing”. He has suggested that the FCA should provide greater clarity and called for changes to Market Abuse Regulations to be included in the Government’s listings reforms.
Stride: Card charges add to pressure on ‘hard-pressed’ firms
Treasury Select Committee chairman Mel Stride has warned that business face additional costs from the rapidly rising fees charged by payment card companies and has called for sufficient regulation of providers. This comes after the Payment Systems Regulator said that while companies such as Visa and Mastercard have raised fees since Brexit, it has not seen evidence that their costs have increased. Mr Stride commented: “There have been significant increases in the fees businesses have to pay to use debit and credit card facilities in recent times.” He added that these “impose an additional cost on businesses, many of whom are already hard-pressed and facing financial difficulties due to the uncertainties of the pandemic.” Mr Stride said it is “vital to ensure that there is sufficient regulation and competition in the market so that businesses are not subject to ever-increasing servicing costs.”
Consultants to assist FOS reform
The Financial Ombudsman Service (FOS) is to spend £300,000 on external advisers to help design and implement reforms to its operating model, a sum interim chief executive officer Nausicaa Delfas said the FOS is “confident represents good value for money.” Mel Stride, chair of the Treasury Committee, had asked the FOS how it would tackle a backlog of cases after a review identified "substantial casework backlogs" and that the FOS was operating at a deficit. Ms Delfas said that over the next three months, the FOS would explore the ideas and recommendations in the review and turn them into “a clear design, or operating model, for the future organisation”. The FOS last month pledged to go “further and faster” as it launched an action plan addressing the changes it will make to its operating model, setting out how it will improve its delivery for customers and resolve cases more quickly.
LEISURE & HOSPITALITY
Nero completes refinancing, dashing takeover hopes
Caffè Nero has completed a £330m debt refinancing provided by HSBC, Santander and Carlyle Group. The news will come as a blow to Mohsin and Zuber Issa, who had been seeking a takeover of the coffee chain, having acquired £160m of Nero Holdings' mezzanine debt from Partners Group last April, through their EG Group business.
MANUFACTURING
N. Ireland manufacturers make ‘significant’ post-Brexit strides
Manufacturers in Northern Ireland have made “significant” strides towards adjusting to new trading arrangements that were imposed after Brexit, according to a survey by Manufacturing NI, the region’s trade body.
REAL ESTATE
Commercial landlords struggling to find office tenants
Research from flexible workspace provider infinitSpace shows that more than three fifths of commercial landlords are struggling to attract tenants to traditional offices. The study shows that 64% have seen a “notable shift” in tenants’ demands during the pandemic. While commercial landlords currently dedicate an average of 33% of their office portfolio to some form of flexible or co-working spaces, by 2026 this is forecast to rise to 44%. Wybo Wijnbergen, CEO of infinitSpace, said: “What businesses want and need from their office has been steadily evolving over the past decade, but the pandemic has kicked the pace of change into overdrive … As hybrid working becomes commonplace and businesses look for more collaborative and engaging workspaces, many landlords are struggling to attract tenants if they don’t have flexible offerings.” He added that most office landlords are “responding to this challenge”, saying commercial landlords are “looking to transform their buildings to fit the ‘new normal’.”
Remortgage demand surges
While Bank of England data suggests demand for mortgages fell back in the three months to the end of November, lenders expect the availability of home finance to rise in Q1, with this set to be driven by a significant uplift in demand from existing homeowners wanting to remortgage. Andrew Montlake, managing director of independent mortgage broker Coreco, said: “Remortgages were definitely on fire in the closing stages of 2021 as rumours of a rate rise grew stronger and stronger,” while Ross Boyd, chief executive of mortgage switching platform Dashly, said the prospect of higher inflation in 2022 is prompting homeowners to lock into lower rates before lenders start to charge more on the back of further base rate increases from the Bank.
RETAIL
Selfridges to sell NFTs in world first
Selfridges is to become the first physical store in the world to sell a range of clothes in digital only form. The department store chain is to sell a dozen Paco Rabanne dresses as NFTs, with buyers to receive a digital certificate of ownership rather than the original product. Selfridges will also sell NFTs of artworks by Victor Vasarely.
ECONOMY
UN: Global growth to slow in 2022
The global economy is set to grow by 4% in 2022 - down from 5.5% last year - and expand 3.5% in 2023, according to a new UN report. The World Economic Situation and Prospects 2022 report said growth seen in 2021 after a contraction of 3.4% in 2020 started to slow by the end of last year as pandemic-related support measures were withdrawn and supply-chain disruptions arose. The analysis, from the UN Department of Economic and Social Affairs, said that alongside the pandemic, “rising inflationary pressures in major developed economies and a number of large developing countries present additional risks to recovery.” The report also warned of the impact of the coronavirus crisis on inequality, saying that while GDP per capita in developed economies is expected to almost fully recover by 2023, relative to pre-pandemic projections, for “the vast majority of developing countries, a full recovery of GDP per capita will remain elusive.”
OTHER
London start-ups attract record venture capital funding
Analysis by London & Partners and Dealroom shows that tech start-ups in London raised a record $25.5bn in funding last year, with the UK ranking fourth behind the US, China and India.