Hundreds of banking hubs expected to replace closed branches
The boss of Cash Access UK has said UK lenders will open hundreds of banking hubs over the next few years as the programme accelerates. Gareth Oakley points out that the not-for-profit company has 38 hubs in the pipeline and is preparing to open its fifth and sixth hubs in London and Scotland. The hubs are designed to provide basic banking services for communities that have lost bank and building society branches and lenders are under pressure from forthcoming legislation and the Financial Conduct Authority to ensure the public has access to cash services. Mr Oakley explained: “If banks were to continue closing branches at the current rate I would expect there to be several hundred banking hubs and maybe as many deposit solutions.” Martin McTague, national chairman of the Federation of Small Businesses, said the hubs were a positive development. “Over eight in ten small businesses say that bank branches are important to the health of their high street and over a third report that footfall dropped following branch closures.”
Metro Bank loss narrows
Metro Bank posted pre-tax losses of £70.7m for last year, down from £245.1m a year earlier. This is thanks to higher interest rates and a slight reduction in costs. Revenue increased by almost a third to £522.1m. The lender set aside £39.9m to cover expected credit losses but said it planned to open 11 more branches by the end of 2025. Daniel Frumkin, the chief executive at the bank, said: “I'm pleased with Metro Bank's performance over the past year and the successful completion of our transformation plan. We returned to profitability, resolved our legacy issues and further strengthened the foundations for future sustainable growth. While I remain confident in the underlying business, material headwinds do exist, including the macro-economic environment and increasing competition for liabilities.”
Regulators holding back fintech firms
A new report from Innovate Finance says regulatory constraints are preventing fintech firms from boosting financial inclusion and helping consumers through a cost of living crunch. The report urges regulators to swiftly expand the UK’s open banking regime and loosen rules on “robo-advice” so consumers can access free financial guidance on managing their debts. “There is more fintech companies can be doing to help people – especially with open banking, but this can only be made possible by regulatory change,” the chief of Innovate Finance, Janine Hirt, said. “We are at a critical juncture, with consumers facing increasing pressures on their personal finances, and it’s essential there is a swift change in regulatory policy.”
Crypto bank Silvergate plunges after warning on ability to survive
Shares in Silvergate Bank slumped by 58% on Thursday after the lender said it was evaluating its ability to survive as a going concern. The California-based crypto bank has been badly hit by the collapse of FTX and the recent fall in digital token prices. US-listed crypto exchange Coinbase and Galaxy Digital, a crypto financial services company, were among clients to cease accepting or initiating transfers to Silvergate. Silvergate said in an SEC filing on Wednesday that it would not be able to file its annual report on time.
N26 head of risk quits in escalating leadership crisis
Thomas Grosse has left the start-up bank N26, with his departure marking the third senior exit in less than 12 months. Grosse was chief risk officer, the most senior executive in charge of fixing N26’s anti-money laundering controls, as demanded by German regulator BaFin.
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Jack Dorsey’s Block announces investment in UK not-for-profit lender
The tech company co-founded by Jack Dorsey is putting £2m of funding into ART Business Loans, a Birmingham-based Community Development Finance Institution (CDFI). Block’s investment will be matched by UK-based Unity Trust Bank, a commercial lender which lends to charities, trade unions and not-for-profits. ART provides loans of between £10,000 and £150,000 to businesses that are unable to receive funding from traditional banks. “This deal is a real game-changer for us and a great vote of confidence from such well-established institutions as Block and Unity Trust Bank,” said Steve Walker, ART’s chief executive. “This £4m agreement puts ART on a firm financial footing at a time of considerable economic uncertainty and enables us to continue to provide key financial support to SMEs across the West Midlands, many of whom are currently facing considerable financial headwinds.”
LSE chief Schwimmer shrugs off CRH switch
The head of the London Stock Exchange Group has insisted that London has a strong future as an international financial centre despite CRH, the building products group, announcing plans to switch its primary listing from London to New York. David Schwimmer said London was “the most international financial centre in the world” and was continuing to attract companies and investors. If some London-listed companies with large US operations chose to shift their listings to America, “that is what it is”, he said. However, Peter Harrison, head of the fund manager Schroders, took a different view, arguing that Britain's failure to back "risk takers" means London is unable to compete with New York.
FCA to shake up trade data market
The Financial Conduct Authority (FCA) has recommended increased competition in the wholesale data market arguing in a new study that difficulties in accessing data and the limited choice of suppliers results in additional costs for data users, which are then likely to be passed on to UK retail investors and savers. The regulator said it would now work with the Government to develop “consolidated tapes” which collect wholesale data across the market and distribute them in single, standardised data feeds. Following on from the study, the FCA said it would now examine potential competition problems in the markets for benchmarks, credit ratings data and market data vendor services.
Beazley’s profits plummet 48%
The specialist insurer Beazley saw its shares drop nearly 9% on Thursday after the firm revealed its overall pre-tax profits fell 48% in the year ending in December 2022 to $191m. Rising interest rates and last year’s “challenging geopolitical environment” saw its $9bn investment portfolio deliver a loss of $179.7m, CEO Adrian Cox said. But he praised the insurer’s underwriting portfolio which grew by 14% to $5.27bn.
Schroders profit drops 14% in ‘challenging year for markets’
Schroders reported on Thursday that its operating profit fell 14% last year, from £841m in 2021 to £723m, reflecting “a challenging year for markets”.
US investment firm GQG invests $1.9bn in Adani companies
GQG Partners has invested $1.9bn into four Adani group companies, boosting conglomerate after it was accused of accounting fraud by short seller Hindenburg Research attack five weeks ago.
MEDIA & ENTERTAINMENT
Merger to result in job losses at Mail Newspapers
Dozens of jobs are to be cut at the Daily Mail and Mail on Sunday after publisher Mail Newspapers announced a merger of the two tiles. The move comes after the Daily Mail merged with MailOnline and marks a renewed digital push by parent company Daily Mail and General Trust..
WH Smith hit by a cyber-attack
The retailer WH Smith has been hit by a cyber-attack with hackers reportedly accessing the names, addresses, National Insurance numbers and dates of birth of the firm's current and former UK staff. However, its website, customer accounts and customer databases are not affected, WH Smith said.
Bank chief: UK economy performing better than expected
The Bank of England’s chief economist Huw Pill has admitted the economy is in a better position than previously thought. Speaking to business leaders in Wales on Thursday, Mr Pill said several recent surveys suggested “the current momentum in economic activity may be slightly stronger than anticipated.”