OSB reveals suspected fraud
OneSavings Bank (OSB) has delayed its results after disclosing that it has been the victim of a suspected £28.6m fraud by a corporate customer. The bank, which was created out of the Kent Reliance Building Society, has reported the matter to Action Fraud and informed the Financial Conduct Authority and Prudential Regulation Authority. It has also called in an accountancy firm which specialises in forensic investigations. The Times reports that it is not clear whether the suspected fraud was discovered internally or by the bank’s auditor. Grace Dargan, an analyst at Barclays, said the impact appeared to be relatively limited, wiping a possible 0.2% from OSB's core capital ratio, although it might raise questions about the bank's risk management. Andy Golding, OSB Group's chief executive, said: "Whilst I am disappointed at the very recent discovery of a potential fraud at one of the non-bank lenders we provide secured funding to, we believe that this is an isolated incident and are committed to expediting our investigation and publishing our full preliminary results on April 8."
New asset management head appointed at Credit Suisse
Credit Suisse has confirmed the appointment of Ulrich Korner, formerly of UBS, as chief executive of its asset management business. The bank also said it plans to suspend some senior executives’ bonuses. This comes as the lender faces growing scrutiny in the wake of its suspension of a $10bn series of Greensill-backed funds.
Junior bankers' 100-hour week
Junior bankers at Goldman Sachs have complained about working life at the investment bank during the coronavirus crisis, with a leaked internal presentation seeing first-year analysts in the US detail how they had been working 100-hour weeks and suffered abuse. The bank said it is taking the matter seriously, saying the conditions were linked to the pandemic and surging business. It added that it is listening to concerns “and taking multiple steps to address them."
Government grants for electric car customers reduced
Subsidies for buyers of electric cars are to be reduced from £3,000 to £2,500, while the price cap for cars eligible for the subsidy has fallen from £50,000 to £35,000. Transport minister Rachel Maclean cited rising costs for the move. Mike Hawes, chief executive of the Society of Motors Manufacturers and Traders, said: “Cutting the grant and eligibility moves the UK even further behind other markets, which are increasing their support.”
Lookers predicts full year profit for 2020
Car dealership Lookers has announced an expected full year profit of £10m for last year, ahead of analysts’ expectations which had predicted a small loss. The firm also stated that it would issue a trading statement for the first three months of the year next month after its stock was recently readmitted to the FTSE following a range of problems including a £19m hole in an earlier set of accounts.
IAG in bond sales announcement
IAG is to raise €1bn through a bond sale in a bid to bolster its finances. The British Airways owner announced that €500m of bonds would be due in 2025, with a further €500m due in 2029. The company announced that it currently has liquidity of €10.3bn, after raising €2.7bn and receiving loan guarantees from UK Export Finance (UKEF) worth €2bn.
FCA urged to act over Amigo rescue plan
Consumer campaigners are calling on the Government and Financial Conduct Authority (FCA) to intervene in a rescue scheme proposed by lender Amigo, saying it could benefit the firm’s directors while borrowers miss out on up to £1bn in compensation. The City regulator has been urged to block plans to limit redress payments to current and former customers who were potentially mis-sold unaffordable loans by Amigo. Sub-prime lender Amigo, the most complained about financial lender in the UK, has asked courts to approve a “scheme of arrangement” that would cap the amount it paid out to consumers, saying it will collapse into administration if the scheme is blocked. Martin Lewis, founder of MoneySavingExpert, said: “I would call on the FCA to intervene, to make sure a fair and proportionate balance of the money available from Amigo for redress is given back to customers.” Labour MP Stella Creasy warned that if they allowed the deal to go through, officials would be “setting a precedent that it is OK for a company to go bust and not repay consumers, but make sure that it looks after its shareholders and bondholders”.
Cyber-attacks multiply on wealthy investors
The pandemic has seen an increase in online fraud bids targeting family offices, with Brewin Dolphin among the firms warning of a heightened threat.
LEISURE AND HOSPITALITY
Gym Group reports results
The Gym Group has reported a £47.2m loss for last year, citing the effects of lockdown restrictions. This follows a £6.2m profit in 2019, with revenues down 47.4% in 2020 to £80m.
MEDIA AND ENTERTAINMENT
Ofcom announces free hand for fibre network charges
BT Openreach will be allowed to charge as much it likes for firms using its fast fibre network for at least 10 years, Ofcom has stated. The regulator said: “This approach improves the investment case for BT and its rivals by providing them with a margin to build the new networks.” Philip Jansen, BT’s chief executive, noted that “This is good news for all fibre providers in the UK.”
BBC announces regional focus
A major restructuring of the BBC’s news operation has been announced, with many programmes and journalists to be relocated from London to regional facilities. Salford will become the main base for the BBC’s digital and technology teams, while commercial bases in Bristol, Cardiff and Glasgow will be expanded and its Belfast headquarters upgraded.
Capital’s occupied office space expected to rise
Property agents expect firms to occupy an extra 13m square feet of office space in central London by 2026, adding to the 232m square feet already used. This comes despite some firms looking to reduce workspace after the pandemic drove a shift toward greater remote working.
Asda boss departs after takeover
Asda boss Roger Burnley has announced plans to step down, with the announcement coming just weeks after the supermarket’s £6.8bn takeover by the Issa brothers and private equity firm TDR Capital. He will stay in the role until next year while a successor is recruited, Asda said in a statement. Mr Burnley said: “Whilst I remain fully committed to leading this great business for the next year and delivering our strategy, it is right to plan for a managed succession process well in advance.”
BoE keeps rates steady
The Bank of England has held interest rates at 0.1% and its bond-buying programme at £895bn, with its Monetary Policy Committee (MPC) voting unanimously to keep rates at record-low levels. The Bank said the outlook for the economy remained unusually uncertain, adding that it depends on the evolution of the pandemic and how households, businesses and financial markets respond to developments. Noting that plans for the easing of lockdowns suggested restrictions being lifted "somewhat more rapidly" than had been assumed in its February report, the Bank said this “may be consistent with a slightly stronger outlook for consumption growth" in the April-June period than had been previously suggested. Meanwhile, the Bank’s chief economist has said a rapid economic recovery could soon be underway. Andy Haldane said he believes that it is “more likely than not” that a “rapid-fire recovery” is on the cards. “That is coming, and I think that is coming soon,” he told a Women in Business and Finance awards ceremony. Mr Haldane, however, warned that there are risks of more persistent damage to people’s job prospects as a result of the pandemic, saying: “It seems very likely, based on the evidence we have so far, that the deepest and the most damaging of those scars will be felt by those least advantaged in the job market”.
Consumer confidence climbs in March
GfK’s monthly consumer confidence index shows British consumer morale has hit a one-year high, rising to -16 in March from -23 in February. GfK client strategy director Joe Staton said: “If this improved mood translates into spending, it might help reverse some of the economic damage the UK has suffered”.