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Daily News Roundup: Friday, 22nd April 2022

Posted: 22nd April 2022


Santander to close branches at 3pm

Santander has said it will close its British branches at 3pm on weekdays, an hour and a half earlier than at present. The bank said the decision was in response to a drop in traffic at its high street sites. Santander, which has 450 branches, will close 316 of them at 12.30pm on Saturdays. Seventy-six branches were already operating “half day” hours on a Saturday, while 58 do not open over the weekend at all. Jenny Ross of the consumer group Which? said the decision “continues a concerning overall trend of banks chipping away at face-to-face services and opening hours”. But Santander said the changes would help prevent further branch closures while “providing significant additional capacity to help customers who want to talk to us by phone”. Separately, HSBC has announced plans to axe 69 more branches across the UK. The bank, which closed 82 sites last year as part of its 'transformation programme', said the move was in response to a shift towards online banking.

JP Morgan ordered to review risk management

The Bank of England’s Prudential Regulation Authority (PRA) has told JP Morgan to commission a section 166 review to analyse the accuracy of its risk management reporting. The instruction comes amid a crackdown on reporting. In the three months ending in February 2022 the PRA commissioned 11 skilled person reviews into banks and building societies, up from just one in the same period a year prior.

Barclays cuts stake in Absa

Barclays has cut its shareholding in South African bank Absa, raising £526m. However, the bank will suffer a £43m loss on the sale. Following the placing, Barclays will hold around 7.4% of the company. Absa has a majority shareholding in a network of banks in 11 countries across Africa.


UK venture capital surges ahead of Europe

Data from investment analysis firm Pitchbook show venture capital investment in the UK and Ireland boomed in the first three months of the year with funding coming in just short of £7bn between January and March. This made up over 30% of total European investment. Overall European deal value topped €27.5bn in the first quarter, with €19.7bn in investment occurring at the late stage, equivalent to 71.6% of total deals. However, analysts at Pitchbook warned that global market volatility could spark a slowdown. “Although VC is relatively insulated from public market shocks, tighter fiscal policy and poor macroeconomic performance will reduce investors’ risk appetite and hinder investment flows,” they said.

Blackstone posts bumper earnings but predicts dealmaking will slow

Blackstone Group has reported better-than-expected profit and revenue for the first quarter. However, the private equity giant expects less dealmaking this year because of high inflation, rising interest rates and geopolitical uncertainty.


Banks lagging behind sustainability goals

A new report from financial non-profit organisation Efma and IT firm Avanade has found only about half of lenders globally are prepared for rules on climate change reporting and 57% admit they will not hit net zero operations targets until 2025. “Whether it’s disclosure and reporting, having a climate risk model up and running or making hard choices about whether and where to discontinue client business, there is still plenty to do,” Avanade’s European financial services lead Nic Merriman said. “Integrating climate data with risk management frameworks is a major concern.”

Goldman Sachs sought to woo FTX at Caribbean meeting

The FT reports that Goldman Sachs chief executive David Solomon met with billionaire FTX founder Sam Bankman-Fried in March to discuss establishing links between the firms. The meeting, which took place in the Caribbean, is the latest sign of the growing influence of crypto companies in the traditional financial services sector, the paper says.

Chinese credit card processor reverses from Russian banks

China's credit card processor UnionPay is refusing to work with some Russian banks due to fears it could be targeted by secondary sanctions. Russian news outlet RBC said the decision affects Sberbank, Russia's biggest commercial bank, along with Alfa Bank, VTB, Otkrytie and Promsvyazbank.

European banks ripe for activists — and investors

Writing in the FT, Simon Samuels, a founding partner of Veritum Partners, says cheap shares and lousy returns make the European banking market ripe for interventions from activists ready to agitate for change.

Wall St banks set on Shanghai expansion despite lockdown disruption

Global investment banks are pushing ahead with investments in to Shanghai despite China’s hard-line lockdowns proving disruptive to the largely local workforces employed by the banks.


Musk to receive $23bn bonus after jump in sales

Elon Musk is set to receive three performance-related stock awards worth around $7.7bn each after Tesla announced revenues had leapt from $10.4bn to $18.8bn in the first quarter. Profits for the company shot up to $3.3bn, from just $438m a year ago. Tesla delivered a record 310,048 cars in the first three months of 2022 despite “persistent” supply chain problems.


Bank to ease insurance supervision

The Bank of England is looking at changing the way it authorises wholesale insurance ventures and other entities after conceding that businesses were shunning the UK because City watchdogs were deemed "relatively slow and inflexible". Alan Sheppard, the head of insurance policy at the Bank's Prudential Regulation Authority, said there was a "perception that it has become difficult to start new ventures in London, be they those backed by traditional capital, or more innovative insurance-linked securities".

FCA seizes £2m from QPay

The Financial Conduct Authority has seized £2m from QPay Europe after the regulator claimed the money was the proceeds of “illegal activity” connected with an alleged payment processing fraud in America. The FCA said it was not claiming that QPay was involved in this alleged conspiracy. The regulator became suspicious of money transferred to QPay by a software firm which was then “moved repeatedly to different bank accounts in several countries and none of the transactions appeared to be related to legitimate business”.


Musk secures $46.5bn in funding for Twitter bid

Elon Musk has lined up $46.5bn in debt and equity financing to fund his acquisition of Twitter. Musk has committed up to $33.5bn, which will include $21bn of equity and $12.5bn of margin loans against some of his Tesla stock while banks including Morgan Stanley have agreed to provide another $13bn in debt secured against Twitter itself. Musk is expected to use the financing package to launch a tender offer to all Twitter shareholders in the coming days, a move experts say will force the social media company’s board to negotiate. Twitter gave no formal response to the proposal other than to say its board was “committed to conducting a careful, comprehensive and deliberate review” of the offer.

Spotify declines to renew contract with the Obamas

Spotify has reportedly cut ties with Barack and Michelle Obama amid speculation that their ideas had failed to impress bosses at the streaming service. The former first family's production company, Higher Ground, is now in discussions with the likes of Amazon’s Audible and iHeartMedia.

CNN’s failed streaming service shut down

CNN’s new streaming service, CNN+, has been shut down by parent company Warner Bros Discovery after just one month. The service was used by fewer than 10,000 people at any given time and had attracted just 100,000 subscribers in total.


Consumer confidence plunges to near all-time low in April

A survey by market research firm GfK has found British consumer sentiment fell in April to its second-lowest reading since records began nearly 50 years ago. Its consumer confidence index fell to -38 from -31 in March, just above the all-time low seen in July 2008. "This is dire news for consumer confidence and with little prospect of any economic relief on the horizon we can only forecast further falls in the index for the year ahead," Joe Staton, client strategy director at GfK, said.


Bailey warns of risk of persistent inflation from strong UK labour market

Andrew Bailey, the Governor of the Bank of England, said on Thursday that the central bank was walking a “very fine line” between inflation and recession suggesting he did not think interest rates needed to rise as fast as markets are anticipating. Speaking in Washington, Mr Bailey warned that the series of upward price shocks over the past year, combined with a tight labour market, could fuel persistent inflationary pressures. Meanwhile, senior Bank of England policymaker Catherine Mann has warned that the central bank could raise rates again next month to combat the risk of high inflation persisting into 2023.

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