NatWest closing 43 branches
NatWest has confirmed that it is closing 43 branches as customers increasingly transition toward online services. The UK's second biggest lender said the vast majority of its retail banking services can be done online, with this a quicker and easier way to bank. The branches will close between January and March next year and NatWest will contact its vulnerable customers to provide support. A NatWest spokesman said: “We understand and recognise that digital solutions aren't right for everyone or every situation, and that when we close branches we have to make sure that no one is left behind.” “We take our responsibility seriously to support the people who face challenges in moving online, so we are investing to provide them with support and alternatives that work for them,” they added. NatWest said average counter transactions declined by nearly two-thirds between January 2019 and January this year, while the proportion of customers using mobile apps rose by 38% in the period. NatWest’s announcement comes just two days after the Financial Conduct Authority said it was toughening up guidance on branch closures, saying lenders had to make sure an alternative was in place beforehand.
Fraud a ‘persistent threat to businesses, consumers and economic growth’
Banking trade association UK Finance has warned that fraud remains a persistent threat to businesses, consumers and the growth of the economy. It said criminal gangs are bypassing banks’ advanced security systems to directly target customers and voiced concern that fraud levels in the UK should be considered a national security threat. UK Finance analysis shows that 56% of authorised push payment (APP) cases in the first half of this year were purchase scams. The report reveals that there were 95,219 incidents of APP scams in the period, with gross losses of £249.1m. Of this, £140.1m was returned to customers. Katy Worobec, managing director of economic crime at UK Finance, said: “As we have warned previously, the level of fraud in the UK is such that it must be considered a national security threat.” She added that criminals “simply bypass the advanced security measures banks have in place and instead directly target the customer, usually outside the confines of the banking system,” arguing that it is “key that other sectors work with us to fight fraud.”
Loan defaults expected to increase
The Bank of England’s Credit Conditions Survey suggests more households and businesses will default on loans in the coming months, with lenders expecting the availability of mortgages and consumer and corporate credit to decline. This is likely to see default rates on mortgages, credit cards and other household loans and business loans increase. The poll asked banks and building societies to forecast changes they expect to see between September and November, compared with the three months between June and August. Lenders said mortgage availability had already decreased and is expected to fall further, with the availability of non-mortgage credit to households down slightly and set to continue to fall. While the overall availability of credit to businesses has remained unchanged, it is predicted to decrease slightly in the months ahead. Lenders expect demand for mortgages from home-buyers to fall in the next few months, while demand for re-mortgaging is predicted to increase.
Santander chief set to lead banking lobby group
Ana Botin, executive chairman of Spain's Santander, is set to be the first woman to take the role as head of trade body the Institute of International Finance. Ms Botin, a member of the Institute’s board since 2014, will succeed Axel Weber, a board member at UBS, who concludes his term as chair at the end of the year. She said: “There has never been a more important time for a vibrant and innovative financial services industry.”
Italian bank to raise €2.5bn
Italy’s Monte dei Paschi di Siena will look to raise up to €2.5bn in a share sale after securing support from a group of lenders. The bank needs more cash to lay off staff through a costly early retirement scheme and to bolster capital, with this coming five years after a €8.2bn bailout handed majority control to the state. The bank is betting on rising interest rates and savings from the job cuts to boost profits.
FCA whistleblowing reports fall 12%
Financial Conduct Authority (FCA) data shows that the City watchdog has seen a 12% quarter-on-quarter decline in whistleblowing reports. Between April and June it received 243 new whistleblowing reports, with these containing 474 allegations. This marks a dip on Q1, when it saw 276 new reports containing 540 allegations. Whistleblowers can submit information to the FCA by telephone, email, online reporting form and post, with it found that most of the new reports in Q2 were via the online reporting form. In 2021, the FCA received a total of 2,754 separate allegations of misconduct, including fraud, money laundering and compliance complaints, with these allegations coming from 1,046 whistleblowers. The FCA said that protecting the identities of whistleblowers is “vital,” adding that while it understands they may be hesitant to share their personal information when making a disclosure, offering contact information can be helpful as the watchdog can discuss the concerns further.
Regulator: Pensions not at risk of collapse
Charles Counsell, chief executive of The Pensions Regulator, says UK defined benefit pension schemes were not – and are not - at risk of collapse due to recent sharp moves in the Government bond market. He told the Pension and Lifetime Savings Association's annual conference: “We remain vigilant to the risks and expect trustees to do the same and plan accordingly.” Mr Counsell added that trustees and their advisers should review the resilience and liquidity of their investments, risk management and funding arrangements.
City wants better regulation not deregulation
The FT’s Daniel Thomas says the financial services sector needs “faster and more flexible regulators,” saying firms want stability and better regulation “that reflects the need to maintain international competitiveness.”
BlackRock hit by falling profits and lower fees
Blackrock has suffered a slump in profits and assets under management amid market turmoil and rising interest rates. The money manager saw assets under management slump by 16% between July and September to $7.9trn (£7.1trn) - the lowest since 2020.
Housing market set for slowdown
The Royal Institute of Chartered Surveyors (RICS) has warned that the housing market could be set to see a slowdown, with house sales hitting their lowest levels since the height of the pandemic in September. New house buyer inquiries fell last month, marking the fifth month in a row they had fallen. RICS chief economist Simon Rubinsohn said although house prices were still rising, "storm clouds" were gathering over both pricing and sales. He commented: “It is difficult not to envisage further pressure on the housing sector as the economy adjusts to higher interest rates and the tight labour market begins to reverse.” He added that while mortgage arrears and possessions remain at historic lows, “they are inevitably going to move upwards over the next year, as pressure on homeowners grows.”
Boots sales surpass pre-Covid levels
Retail sales at Boots have exceeded pre-Covid levels for the fourth quarter, as footfall continues to rebound in city centres. Retail sales were up 15.2% on a like-for-like basis, with stores near transport hubs seeing a particular resurgence. Warm weather and a return of travel abroad also buoyed sales, with store transactions up more than 20% in Q4.
IMF criticises Government for 'undermining' BoE
International Monetary Fund (IMF) managing director Kristalina Georgieva has criticised the Government’s mini-Budget, saying that fiscal policy “should not undermine monetary policy.” She added that if it does, “the task of monetary policy becomes only harder and it translates into the necessity for an even further increase of rates and tightening of financial conditions.” Ms Georgieva added: “Don't prolong the pain. Make sure that actions are coherent and consistent." She also revealed that she has spoken with Chancellor Kwasi Kwarteng and Bank of England (BoE) governor Andrew Bailey, stressing the need for "policy coherence and communicating clearly ... so in this jittery environment there would be no reasons for more jitters." Meanwhile, the IMF's chief economist, Olivier Gourinchas, said the mini-Budget “complicated matters" for the Bank of England as it battled to bring down inflation. He warned that tax cuts announced by Mr Kwarteng threatened to cause "problems" for the UK economy, with the cuts coming at a time when the BoE was attempting to raise interest rates.