BANKING
Lord Agnew attacks Starling’s pandemic loans fraud record
Starling, the online bank, has been singled out by the Government’s former counter-fraud minister Lord Agnew for its poor fraud prevention measures when dealing out Covid relief loans. Lord Agnew claimed Starling had used the scheme as a “cost-free marketing exercise” while not taking its anti-fraud responsibilities seriously enough. “They took this as a god-sent opportunity to swell their balance sheet by a factor of 50 times in barely less than a year with no risk to themselves and 100 per cent risk to the taxpayer,” Agnew claimed. Last night, Starling boss Anne Boden said she was “shocked” by the comments. “We have been one of the most active and effective banks fighting fraud,” she said.
NatWest boss says business confidence is falling
Alison Rose, the CEO of NatWest, told the BBC yesterday that business confidence is being supressed by problems with supply chains, energy bills, the war in Ukraine and skills shortages. Although the cost of living crisis is presenting challenges to many firms and customers because they have no experience of high inflation and rising lending rates, the bank is yet to see signs of mortgage arrears rising or bad debt more widely. "We're not seeing any of those early warning indicators around bad debts or insolvencies or even calls coming into our financial health and support teams,” Rose said. "But we're very acutely aware that people are worried about those challenges. We encourage customers to get in touch if they are worried."
Zopa to let staff work from oversees for 120 days a year
Zopa, the British digital bank, has told staff they can work remotely abroad for up to 120 days a year without any change to their pay. The move is an expansion of a policy Zopa introduced a year ago, when it said staff could work abroad for as many as 90 days a year. It has identified 13 countries — including Spain, Greece, Portugal, Italy, Bermuda and Barbados — where employees could base themselves without facing onerous tax, legal and right-to-work obstacles. “We recognise the world of work is changing,” Helen Beurier, Zopa’s chief people officer, said. “The concept of work-life balance is no longer relevant. There isn’t really a difference between work life and your personal life.”
Revolut customers warned bank cards will stop working
Revolut has reminded customers that their debit cards will stop working next month as part of changes to its service. All customers will need to update their current debit card to continue using Revolut services. New debit cards are free to order.
PRIVATE EQUITY
US private equity firm makes bid for FirstGroup
FirstGroup has confirmed it has received an unsolicited bid from US private equity firm Squared Capital. The Aberdeen-based bus and train operator is considering the £1.2bn offer after rebuffing a series of earlier proposals from the firm.
Intermediate Capital brings forward new business target
Intermediate Capital has brought forward its target of winning $40bn of new business by the end of 2025 after securing a record $22.5bn of new business in the year to March 31st.
INTERNATIONAL
HSBC weighs IPO of Indonesia business
HSBC is considering an IPO of its Indonesian business. The London-based bank is yet to file a formal IPO application in Jakarta but the talks for a share sale are at an advanced stage, according to Bloomberg. The news comes a month after HSBC's largest shareholder, Chinese insurance giant Ping An, called for a spin-off of the bank's Asian operations.
State Street launches ETF portal in Singapore
State Street Corporation has launched its Fund Connect online exchange traded fund portal in Singapore. The US-based financial services group has also received official approval to roll out the platform in Australia.
JPMorgan backs cryptocurrency over real estate
JPMorgan has claimed Bitcoin is massively undervalued and revealed it is replacing real estate with cryptocurrency as its preferred alternative asset.
AUTOMOTIVE
JLR threatens to shift electric car production to Europe
The production of electric vehicles under the Jaguar Land Rover badge could be shifted to Slovakia unless the UK Government provides taxpayer support for a battery plant in the UK. JLR’s Indian owner Tata Motors is understood to be in advanced negotiations about building a gigafactory either near Bristol or in Redcar. A Government insider said Tata were using the threat of taking production abroad “as a way to extract more money from the Government."
FINANCIAL SERVICES
FCA pushes for reform of London’s listing regime
The Financial Conduct Authority (FCA) has set out plans to simplify listing rules on London’s stock exchange as part of efforts to attract more fast-growing tech groups and start-ups. The proposals would see the current two-tier system - where firms decide whether to follow looser rules of a so-called standard listing, or the more rigorous standards of a premium listing - scrapped and replaced with one set of rules. Companies would then be given the choice to opt-in to stricter rules – including greater control by shareholders – that are required if companies want their shares listed on the FTSE main markets, including the blue-chip FTSE 100. “The rules for companies who want to list here have not changed since the 1980s,” said Clare Cole, director of market oversight at the FCA. “Now is a good time to have an open conversation to make sure our rules are fit for the future, so we have a more accessible, competitive and growing market that is attractive to a diverse range of companies.” Commenting on the proposals, Charles Howarth, a corporate partner with CMS, said that “for the FCA this quite a radical set of changes” but “further thought needs to go into what changes are needed to the current premium listing regime to make it more attractive to high growth technology companies and international issuers.”
Equity release deals triple in a year
Data from Key Partnerships show the number of equity release products has nearly tripled in the past year hitting a new record high of 1,557. The figure is nearly three times the 547 on offer at the end March last year. Jason Ruse, business development director at Key Group commented: “The rapid widening of choice emphasises the importance of expert independent advice for customers and the need for advisers to stay up to date with what is a growing and fast-changing market.”
Klarna shifts game plan to profits over growth
Klarna is shifting its focus from growth to short-term profits after net losses in 2021 hit approximately $689m. Klarna CEO Sebastian Siemiatkowski told Financial Times that Klarna will concentrate on “short-term profitability over long-term new, potential investments.” Overall, however, Siemiatkowski said the company won’t completely pivot from growth in favour of profits: "it’s not that the goal has changed, it’s just the path there may be affected and has to change."
MEDIA & ENTERTAINMENT
Kwarteng launches BT takeover probe
Kwasi Kwarteng, the UK Business Secretary, has ordered an investigation into the national security implications of a potential takeover of BT by the French billionaire Patrick Drahi. Mr Drahi's French telecoms group Altice holds an 18% stake which Mr Kwarteng fears could form the stepping stone towards the nation's biggest broadband provider falling into foreign hands. The decision to call-in Mr Drahi's increased stake comes shortly after Mr Kwarteng ordered a security review of the Chinese-backed takeover of Britain's biggest microchip plant, Newport Wafer Fab, whose sale to Nexperia could now be blocked.
ECONOMY
Rishi Sunak announces windfall tax to help fund support measures
The Chancellor yesterday announced a £15bn package of support for UK households as inflation hits a 40-year high and energy bills soar. Measures, including a £400 discount on energy bills for all households and a £650 one-off payment for the poorest, will be partly funded by a windfall tax on oil and gas companies. Rishi Sunak’s U-turn on a one-off levy on energy company profits was received with dismay by some Tory MPs, with Richard Drax declaring that Sunak was “throwing red meat to socialists”. The North Sea oil and gas industry was not impressed either – BP described the announcement as a multiyear proposal, not a one-off tax, which will result in the company having to re-evaluate its investment plans. Shell said Sunak’s proposed tax relief on investments was “a critical principle in the new levy” but stressed the “importance of a stable environment for long-term investment”. The Chancellor said companies that reinvested their profits in British oil and gas exploration would get back 90% of the new tax in relief. The 25% tax on "excess profits" will raise just £5bn of the total package leaving a massive borrowing black hole for Sunak. Under the Government’s plans, pensioners will receive an extra £300 winter fuel payment costing, while disabled people will get a £150 additional payment. Mr Sunak said the most vulnerable households would receive an extra £1,200. Defending the decision to introduce a windfall tax, the Chancellor insisted the Government had a responsibility to help those hardest hit by the cost-of-living crisis.
OTHER
Truss launches bid to boost female entrepreneur numbers
Liz Truss has launched a task force to increase the number of female entrepreneurs by 600,000 by 2030. In her role as minister for women and equalities, Truss said that women entrepreneurs had a “vital” role to play in the UK’s post-Covid economic recovery. “This country can only grasp its full potential by ensuring everyone, regardless of their background or where they live, has the opportunity to succeed,” she added. The group aims to improve the support available to female business owners as they scale their businesses and tackle barriers to investment, the Government’s equalities office said. The task force will be chaired by Anne Boden, the founder and chief executive of Starling Bank.