BANKING
Zopa Bank deposits pass £2bn
Zopa’s bank deposits have now crossed the £2bn mark, just two years after the former peer-to-peer lender launched its challenger bank. The bank said that the milestone was reached due to high demand for its mobile only account – Smart Saver – and its fixed term savings accounts. The Smart Saver account targets users at the beginning of their savings journey. It has attracted £850m in deposits over the past seven months. Zopa’s fixed term savings account has a minimum deposit of £1,000 and allows savers to earn a fixed rate of interest for a term of between one and five years. It has attracted £1.15bn over the past 24 months.
Halifax and Lloyds see website and app go down
Lloyds Bank and Halifax customers reported issues with both bank's smartphone apps and online banking services yesterday. According to Downdetector there were over 300 reports of issues with Halifax and nearly 500 with Lloyds.
INTERNATIONAL
Citi bank to close Russian branches
Citigroup is to close its remaining consumer banking operations in Russia. The US bank has 15 branches in the country and expects the exit to cost it about $170m (£140m) over the next 18 months. The bank announced in April 2021 that it would close many of its retail branches, but expanded the plans to include the withdrawal of all commercial banking operations after the Ukraine war began.
Germany to strengthen fight against white-collar crime
Germany's finance ministry has set out plans to combine the country's more than 300 financial crime agencies into a new federal authority with a view to strengthening the country's responses to sanctions breaches and white-collar crime. The move comes after the G7's Financial Action Task Force (FATF) criticised Germany for failing to do enough to tackle money laundering.
CIBC posts fall in third-quarter earnings
Canadian Imperial Bank of Commerce reported a fall in third-quarter earnings on Thursday. Net income, excluding one-off items, stood at C$1.85 per share in the three months ended July 31, compared with C$1.96 per share a year earlier. Overall net profit came in at C$1.67bn ($1.29bn), or C$1.78 per share, compared to C$1.73bn, or C$1.88 per share, in the year earlier.
Hedge funds build biggest bet against Italian debt since 2008
Investors are rushing to bet against Italian government bonds as the country faces worsening economic headwinds from the surge in European natural gas prices and rising concerns over political turmoil in Rome.
FINANCIAL SERVICES
Amigo Loans optimistic of return to lending
Amigo Loans has seen its customer base halved and its revenue cut by two-thirds as the lender stays afloat despite its near two-year lending “pause”. In the three months to June 30th, customer numbers fell to 61,000, from 118,000 in the same period a year earlier. Revenue also dropped year on year from £32.5m to £10.4m in the latest quarter, which Amigo said was driven by a reduction in its loan book. The company said it has been working with the Financial Conduct Authority (FCA) to gain regulatory approval for its new lending platform, RewardRate. “This is the next step in our recovery, ahead of a proposed capital raise, and would enable a new start for the business, having taken on board the learnings from the past", said chief executive Gary Jennison.
Morses Club sinks to £43m loss
Doorstep lender Morses Club has posted a £43m loss after being flooded with claims from borrowers over “unaffordable” lending. Morses Club boss Gary Marshall said: “The last 12 months have been challenging for the company and we fully recognise the current challenges we as a group still face.” The stock is down almost 90% since the start of the year but shares rose 5% in early trading on Thursday.
PROFESSIONAL SERVICES
Hays to pay out £168m in dividends after bumper year
Recruitment firm Hays on Thursday reported group operating profits were up 128% to £210.1m for the year to June 30, against the previous year. Fees grew by 30% to £1.19bn for the year. Bosses hailed the “excellent” performance and revealed plans for an almost £170m shareholder windfall.
REAL ESTATE
Landlords face rent arrears as benefits shrink
A combination of soaring rents since the pandemic and the Government’s housing benefits freeze means that many tenants are increasingly unable to pay their rent, new research shows. Monthly rental prices have climbed by 12% since the pandemic began, yet there has been no increase in housing benefits payments, leaving many of England’s low-income renters with a shortfall more than triple what the most recent official figures suggest. Richard Donnell of Zoopla points out that the tightening supply of rental properties was compounded by the Government’s buy-to-let crackdown, which is pushing landlords to sell up.
RETAIL
UK retail sales rise in August
The CBI's retail sales balance for August increased to +37 from -4 in July, although confidence among companies about their business outlook for the next three months hit -22%, down from -13% in May and the lowest level since the first lockdown in May 2020. Prices for customers continued to rise, with 88% of retailers stating the average price at which they sold their goods had risen in the year to August and only 1% said that prices had fallen, giving a net balance of 87%. The figure in July's survey was 77%. The CBI survey also suggest that online sales fell in August compared with the same month in 2021. The net balance for internet shopping was at -7%, up from -37% in July. Martin Sartorius, principal economist at the CBI, said: "Firms need support from government to encourage investment and create sustainable growth. Business rates reform and a more flexible apprenticeship levy will help with dwindling business."
ECONOMY
Cash support for households could trigger further rate rises
Analysts at Bank of America have said handing billions of pounds to the public to help them cope with high energy costs could spur inflation and prompt the Bank of England into raising rates. “Providing stimulus mainly via transfers to households would leave in place a very high inflation peak” of 15%, Bank of America said. “A price cap has the advantages of clarity and preventing anyone from falling between the cracks of various support mechanism,” the bank added.
British households £160 worse off in July than a year ago
Research by the supermarket Asda reveals that British households were on average £160 worse off in July than a year earlier. The under-30s are among the hardest hit by sharp increases in the price of essentials including rent, groceries, transport costs and utility bills, Asda’s research found, resulting in an almost 22% slide in disposable income for this group in July compared with a year earlier. The retailer pledged to do all that it could to help people hit by the cost of living crisis.
OTHER
SEC tightens scrutiny on executive pay
A new Securities and Exchange Commission (SEC) rule will require publicly traded firms in the US to disclose more details about how senior managers are paid, including performance incentives. The regulator on Thursday voted to require companies to disclose how well top management's pay tracked with corporate performance over several years. SEC Chair Gary Gensler said the new rule will help shareholders “assess a public company's decision-making with respect to its executive compensation policies.”