Impersonation frauds soar during pandemic
More than 15,000 impersonation scams were reported in the first half of 2020, according to a new report by trade body UK Finance, an 84% increase on the year prior. Criminals exploiting the increased use of technology among the public during the COVID-19 pandemic stole around £208m from fake government loan forms, phishing emails and bogus websites. Scams listed by HMRC included fake tax rebate links and text messages issuing fake £250 fines for breaking quarantine rules. Figures from the trade body also show that from January to June just 38% of losses suffered as a result of "push payment" fraud have been refunded to customers, despite many banks and building societies signing a voluntary code promising to refund all victims.
Lack of mortgages curbing prospective homeowners' ambitions
Almost half of first-time buyers are getting left behind amid the dearth of mortgage deals available, according to new research by challenger bank Aldermore. Lenders were quick to pull high loan-to-value mortgages from the shelves in the wake of lockdown, leaving just a handful of deals for borrowers without a large deposit to choose from.
Rivals likely to follow NS&I in cutting savings rates
Anna Bowes, co-founder of Savings Champion, warns that the decision by National Savings and Investments to slash rates will likely lead to banks and building societies following suit.
Private equity owners remove obstacle to M&A deals
Private equity firms are increasingly inserting portability language into loan documentation when striking deals, meaning debt transfers with the company to its new owner rather than investors being paid their money back.
Crédit Agricole insurance unit stops offering H2O funds
Crédit Agricole has stopped marketing H2O Asset Management’s funds through one of its life insurance subsidiaries, Spirica, amid concerns over the valuations of its investments in illiquid bonds.
Japanese bank says it miscounted investor votes at 1,000 companies
Sumitomo Mitsui Trust, Japan's largest shareholder services provider, has revealed that it miscounted votes at the AGMs of almost 1,000 listed firms, including Toshiba.
Westpac hit with record fine after money laundering case
Australia’s second-largest lender, Westpac, has agreed to pay a civil penalty worth A$1.3bn - the largest fine in Australian corporate history - to settle a case linked to money laundering.
EU pushes for greater market supervision with focus on crypto assets
The European Commission has proposed a regulatory system for cryptocurrencies, pledging to adapt its rules to rapid technological innovation and learn from the Wirecard scandal.
UK car output falls 44% in August as orders dry up
A steep fall in domestic orders and a slump in exports saw car manufacturing in the UK fall 44% last month compared with a year earlier. Just over 51,000 vehicles rolled off factory lines in August, according to the Society of Motor Manufacturers and Traders.
AA in private equity talks
The AA is mulling a potential all-cash offer from a consortium made up of Towerbrook Capital Partners and Warburg Pincus. Talks with Centerbridge Partners Europe and Platinum Equity Advisors have broken down.
ChargePoint to go public in $2.4bn reverse merger
Electric vehicle charging giant ChargePoint has shunned an OPI in favour of a reverse merger with blank-cheque outfit Switchback Energy, a publicly-listed special-purpose acquisition outfit.
Rolls-Royce testing world's fastest electric plane
Rolls-Royce is working on the world’s fastest electric aeroplane, its ACCEL project (Accelerating the Electrification of Flight) aims to fly at 300mph. Rolls hopes the actual aircraft, named Spirit of Innovation, will make its first flight later this year with air speed record attempts early 2021.
Pandemic drives change at financial services firms
A new report by Lloyds Bank suggests that 89% of financial services firms plan to maintain flexible working patterns for employees in the long term. Eight in ten firms plan to use digital platforms such as Microsoft Teams and Zoom to liaise with clients. The bank's fifth annual financial institutions sentiment survey also found 68% intend to use new technology to automate more work. Some 62% expect to maintain or grow revenues over the next 12 months while 68% expect UK economic growth to slow in the year ahead. This is up from 58% in 2019 and just 29% in 2018. Adrian Walkling, head of financial services at Lloyds Bank Commercial Banking, said: "Firms have spent the past decade de-risking and modifying their business models with the aim of increasing their resilience. The next 12 months will be critical as we see how effective those defences are for financial services and the wider UK economy.”
EU seeks to limit reliance on City post-Brexit
The European Commission has warned that the EU will have problems setting rules and regulations in the financial sector unless it weans itself of its dependence on the City of London for access to capital. The development of a capital markets union has become more urgent because of Brexit, Valdis Dombrovskis, an executive vice-president of the European Commission said on Thursday. In a communication to EU governments, the European Commission said: “An enhanced single rulebook and effective supervision will be crucial to prevent regulatory arbitrage, forum shopping, and a race to the supervisory bottom.” Emma Reynolds of lobby group TheCityUK said: “The UK’s capital markets have been – and will continue to be – essential for firms across the EU seeking to raise capital to fund growth and create jobs. Britain’s financial services industry has
FCA warns of downturn risk to City firms
The Financial Conduct Authority has warned that hundreds of City firms are at risk of collapse due to the economic pressures of the COVID-19 crisis. Megan Butler, the director in charge of the regulator's investment and wholesale division, said: "What we're asking firms to do, and to assess themselves against, is a plausible but severe scenario, and that is leading to hundreds of firms being considered in that first wave. We expect that number to get larger." Butler added that she was also concerned about how City firms will manage to monitor staff in highly regulated roles now that the UK government has urged employees to continue working from home for longer.
Google told to ‘step up’ and stamp out fraudulent advertising
The Financial Conduct Authority has urged Google to do more to tackle adverts for financial scams online, with the regulator’s chairman Charles Randell stating that, as more than half of the first page of results generated by a Google search for high-return investments were quite clearly scams: “Whatever Google are doing, so far it’s not working.” Mr Randell added: “Let’s face it, the big technology companies have been the big winners of this massive social crisis that we’ve lived through for the last six months and I think people would reasonably expect them to step up to the plate and give back a bit.”
Vanguard bolstered by ETF sales amid mutual fund outflows
ETF sales have been propping up Vanguard this year. According to Morningstar, while its long-term mutual funds suffered, the asset manager's ETF offering brought in $113bn in net inflows.
LEISURE & HOSPITALITY
Cineworld unveils loss
Cineworld has revealed a $1.6bn loss of the first six months of the year amid the ongoing coronavirus.
Eat Out to Help Out not enough to cheer M&B
Pub chain Mitchells & Butlers has revealed a drop in sales for September after enjoying the Government’s discount meals scheme. Despite 95% of its sites being back in action, including Nicholson’s, O’Neills and Harvester, sales slipped back to a 6.4% decline in the first three weeks of the month.
Smiths Group boosts revenues amid tough climate
Industrials conglomerate Smiths Group managed to deliver revenues 2% higher, at £2.55bn, despite a “disrupted” second half due to the coronavirus crisis. Pre-tax profit for the year to the end of July dropped from £278m to £133m however, held back by lower volumes and coronavirus-related costs.
WeWork retreats from tough China market
Private equity firm Trustbridge Partners is to pay WeWork $200m (£157m) for majority ownership of its Chinese division, as the shared workspace outfit retreats from low occupancy rates in an already highly-competitive market. While WeWork has undergone significant management change recently, it remains enmeshed in lawsuits over a $3bn tender offer to existing shareholders.
Hawkish Sunak says we must learn to live with virus “without fear”
Rishi Sunak urged the nation to live with coronavirus “without fear” yesterday when he launched his winter economy plan. Mr Sunak suggested his wage subsidy scheme could cost £300m a month, compared with £6bn a month for the furlough scheme and admitted the economy was now “likely to undergo a more permanent adjustment”, with some jobs disappearing for good. Meanwhile, analysts at ING predict 0.5% fall in GDP in October due to the latest restrictions introduced by the PM this week. The mooted two-week "circuit-breaker" could wipe 3% off GDP; including shop closures in this would see the blow increase to 5.5% while a larger lockdown affecting factories and building sites would deal a blow of 7.5% to the economy.
The next financial crisis may be coming soon
The FT’s Gillian Tett says heightened concerns over an impending financial crisis is hurting business confidence, and a rise in defaults as the coronavirus crisis moves into its insolvency stage could tighten credit conditions.