Mandatory reimbursements for APP scams on the way
Individuals who have been tricked into transferring money to a fraudster are set to be entitled to reimbursements under new plans. The UK’s biggest banks could also be required to publish their performance data in relation to authorised push payment (APP) scams, the Payment Systems Regulator (PSR) said. The PSR is consulting on proposals that would see large banks and building societies publish data on their performance in relation to APP scams, including reimbursement levels for victims. The financial institutions this would apply to include AIB Group, Bank of Scotland, Barclays, Clydesdale Bank, Co-operative Bank, HSBC, Lloyds, Metro Bank, Monzo, NatWest, Nationwide Building Society, Northern Bank, Santander, Starling, TSB, Ulster Bank and Virgin Money. The proposed measures come as analysis shows that more than £500m was lost to scammers in 2020, while in the first half of 2021, £355m was lost to APP scams, overtaking card fraud losses. John Glen, Economic Secretary to the Treasury, said push payment fraud is “posing an escalating risk to UK customers”, adding: "The Government's position is that liability and reimbursement requirements on firms need to be clear so that customers are suitably protected.”
Carlyle ends talks on Metro Bank takeover
US private equity firm Carlyle Group has drawn a line under negotiations to acquire Metro Bank, saying it had “agreed to terminate discussions”. Carlyle approached Metro over a possible deal and had had until December 2 to make a firm bid. Metro and Carlyle have yet to comment on why the talks had ended but Metro said its board “strongly believe in the standalone strategy”. Ian Gordon, an analyst at Investec, said of the terminated talks: “We see the main obstacle to a viable transaction as Metro’s high fixed-cost base, largely a function of expensive long leases on its network of 78 stores, which suggests limited strategic flexibility for Metro.”
Barclays to cut 300 account manager roles
Barclays is making around 300 of its Premier account managers redundant as it pushes ahead with cost-cutting plans. The bank said cuts were necessary since more of its customers were using online services and didn’t need as many phone calls or in-person meetings with their manager.
Spain's BBVA raises 2024 profitability target to 14%
Spain's BBVA aims to raise its return on tangible equity target for 2024 to 14% from the current 11.7% due to a solid economic outlook in its core markets. The lender also unveiled in a presentation to the Spanish stock market supervisor a new annual dividend policy distribution of between 40% and 50% of consolidated ordinary profit, compared to the previous policy of distributing between 35% and 40%.
TBC Bank revels in hefty net profits
TBC Bank has reported net profits of £49m in its third-quarter as increased operating income spread across all categories of the business. The Georgian bank’s loan book has increased by 12.6% year-on-year in constant currency terms, mainly driven by the CIB and MSME segments, which translated into a 38.4% market share as of September 30.
Clarity call over FCA’s consumer duty proposals
The Financial Conduct Authority (FCA) has been urged to offer further clarity over proposals for a new consumer duty, with Pimfa’s director of government relations and policy Tim Fassam saying there was a lack of detail around what the proposals mean. The FCA published its proposals for a new consumer duty earlier this year, with the City watchdog looking to create a higher level of consumer protection in retail financial services. Mr Fassam says Pimfa members “want a bit of certainty and a bit of clarity over what these expectations are, how we demonstrate it and how the regulator will be measuring that.” Hitachi Capital’s head of compliance, Iestyn Evans, said that while the proposals “are being introduced with the best of intentions … I don't feel the case is really being made for why the FCA can't deliver these outcomes through the various existing frameworks they've got and how their existing powers and toolkits don't already enable them to take action against firms who they see who aren't delivering better customer outcomes.”
Investec boosts guidance after profit more than doubles
Investec’s recovery continued in the first half of its new financial year, with adjusted operating profit jumping 128.6% to £325.7m - up from £142.5m in the same period a year earlier. Investec’s wealth and investment funds under management increased 8.6% to £63bn, up from £58bn six months earlier. As a result of the surplus capital from increased earnings, the firm announced it would offload 15% of its 25% stake in asset manager Ninety One in shares to shareholders.
Willis Towers Watson shakes up its board
Insurance broker Willis Towers Watson has appointed four new directors, including Inga Beale, the former chief executive of Lloyd’s of London. The firm also confirmed that chairman Victor Ganzi would not be standing for re-election at next year’s shareholder meeting. Willis Towers Watson, which has come under pressure from activist investor Elliott Management, earlier this year saw a mooted $30bn merger with Aon fail to come to fruition after a pushback from US regulators. The tie-up, if it had gone ahead, would have created the world's largest insurance broker.
One in three audits unsatisfactory, says FRC
The Financial Reporting Council (FRC) has published the latest edition of Developments in Audit, its annual assessment of UK audit. The watchdog says an “unacceptably high” number of audits still need improving, with a third requiring improvements. This marks the third consecutive year in which around three in ten audits were deemed unsatisfactory and in need of improvements. The FRC said that of the 147 audits reviewed, 33% required improvement or significant improvement, compared with 38% for 2019/20.
ECB warns of eurozone housing market crash
The European Central Bank (ECB) has warned that the eurozone housing market is at risk of a crash, with prices in some countries heavily exposed to a jump in interest rates as ultra-cheap lending drove a surge in prices. The ECB said: “Household indebtedness and residential real estate overvaluation are increasing, adding to the build-up of medium-term vulnerabilities and concerns over a debt-fuelled housing bubble.”
Inflation and tax hikes will hit the economy
City analysts have warned that tax increases, soaring inflation and an end to pandemic-related government support poses a threat to the economy, with the increased cost of living set to limit spending power. Experts at Deutsche Bank say the economy is set to grow just 3.6% next year, with this far lower than the Bank of England’s forecast of 5%, while high inflation and an increase in taxes will cost the UK economy around £13.5bn next year – with this equal to around 0.6% of GDP. Meanwhile, Barclays estimates the economy will expand 6.9% this year and then 4.1% in 2020. It is then set to fall back to pre-pandemic trend of 1.3% in 2023. With Barclays saying the global economy is likely to grow 6% this year, the bank’s head of macro research, Ajay Rajadhyaksha, said inflation has been “much stronger, for far longer” than central banks expected. Elsewhere, Credit Suisse chairman Antonio Horta-Osorio has urged caution over the suggestion from many central banks that soaring inflation is temporary. He said there is a risk that if inflation proves not to be temporary, “it could trigger a much more intense monetary adjustment than would otherwise be necessary.”
UN: Shipping crisis could drive up global inflation
A UN report has warned that the ongoing global shipping crisis could push global inflation rates up 1.5%, hindering the post-pandemic economic recovery. A UN Conference on Trade and Development report details how increased costs in container shipping have become a key issue for small suppliers, saying that if a surge in freight rates does not ease it will lead to far steeper import prices. The report forecasts that global import price levels will go up by 11% on average, while small island states could see increases of up to 24%.
SMEs optimistic, says Barclaycard
SMEs are more upbeat about Christmas trading despite issues around inflation and supply chains and pandemic-related concerns, according to Barclaycard. Analysis shows that quarterly transactions at UK SMEs are 38.1% higher than for the same period in 2019, while 29% of company owners expect this winter to be their most successful since 2015.
Britain was unprepared for pandemic, says NAO
The National Audit Office (NAO) says the Government was unprepared for a crisis like the coronavirus pandemic, failed to learn from simulation exercises and was distracted by Brexit. The report says the Civil Contingencies Secretariat allocated 56 of its 94 full-time staff to prepare for potential disruptions from a no-deal Brexit, limiting its ability to focus on other risks and contingency planning. Gareth Davies, head of the NAO, said the pandemic “has exposed the UK's vulnerability to whole-system emergencies.” Commenting on the NAO’s assessment, Labour’s Shadow Cabinet Office Minister Fleur Anderson said the Government has “failed the public”, adding that there is “a glaring system failure in the UK’s emergency planning that the Conservatives did not fix and are not willing to fix.” A Government spokesperson said: “While there were extensive arrangements in place, this is an unprecedented pandemic that has challenged health systems around the world."