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Daily News Roundup: Friday, 9th February 2024

Posted: 9th February 2024

BANKING

UBS executive to lead NatWest wealth business

NatWest Group has appointed UBS executive Emma Crystal to head its wealth business, including Coutts. This follows the resignation of Peter Flavel, who admitted that Coutts had not met its high standards of personal service amid the debanking scandal. Ms Crystal will be working under NatWest's interim CEO Paul Thwaite and will also be part of the Coutts board. Ms Crystal, who is currently UBS's sustainable finance group lead, has held wealth management leadership roles at Credit Suisse, which was bought by UBS last year, and started her career in investment banking at Deutsche Bank. Mr Thwaite said Ms Crystal's extensive wealth management experience makes her the “ideal person” to lead the business. Lord Remnant, chairman of Coutts, added: “Her knowledge and understanding of clients combined with her commercial experience make her the ideal person to help Coutts write the next chapter in our history.”

April to offer fixed-rate mortgages with automatic rate reduction

April Mortgages, which was authorised by the Financial Conduct Authority in October, is set to release fixed-rate mortgages in which the rates automatically reduce as borrowers repay them. The bank, which is a UK subsidiary of the Dutch asset manager DMFCO, plans to offer loans to existing homeowners and new buyers by the end of next month. It plans to fund its loans through investments from pension funds and life and insurance businesses, rather than from savers' deposits. April will offer fixed-rate deals of five, seven, ten, twelve and fifteen years, with rates starting at 4.99%. There are no early repayment charges if someone is moving house or repaying their mortgage.

HSBC partners with Google to finance climate technology firms

HSBC has partnered with Google to provide financing to fast-growing climate technology firms through the tech giant's sustainability program. The partnership will allow HSBC to finance companies selected by Google to join its Google Cloud Ready-Sustainability program. The program validates the quality and efficacy of the technology in development. HSBC aims to provide $1bn in funding to climate tech companies by 2030.

Santander logs complaint over Nationwide ad

Santander UK has made a formal complaint against Nationwide Building Society's latest TV commercial, which features actor Dominic West as an arrogant bank chief. The complaint alleges that the advert is misleading about banks closing branches and discredits and denigrates Nationwide's competitors. The Advertising Standards Authority is reviewing the complaint to determine if it warrants a formal investigation. 

INTERNATIONAL

Yellen: banking system 'well-capitalised'

US Treasury Secretary Janet Yellen says the US banking system is "well-capitalised" despite stresses from the commercial real estate sector. She did express concern about the commercial property sector and said banking supervisors are working with institutions to manage challenges. The concern arises as commercial real estate loans come due, which will have to be refinanced in an environment of higher interest charges, lower valuations, and growing vacancy rates. Ms Yellen also highlighted the risks related to nonbank mortgage lenders, stating that they lack access to stable financing and liquidity backstops.

Regulators approve new reporting requirements

US regulators have jointly approved new reporting requirements for private funds and investment advisers. The Securities and Exchange Commission and the Commodity Futures Trading Commission believe that these requirements will enhance their understanding of the private funds industry and help identify potential systemic risks. The regulators will also share information collected on firms filed by private funds.

SocGen's Q4 earnings slide

French bank Societe Generale reported a sharp drop in fourth-quarter net income but saw signs of recovery in its domestic retail business and stable investment bank trading revenue. Group net income in the final three months of 2023 tumbled nearly 60% from a year earlier to €430m, beating analyst estimates. Sales from trading in SocGen's investment bank slipped by 0.8%, as a strong showing for equities offset a decline in fixed income and currencies. For 2024, the lender targets a yearly growth in sales of at least 5% and a return on tangible equity of more than 6%. SocGen also announced a proposed dividend of €0.90 per share and a share buyback worth €280m. This year will see the execution of the bank's strategic plan, with CEO Slawomir Krupa having promised to generate €1.7bn worth of cost savings.

mBank reports Q4 loss

mBank, one of Poland's top lenders, reported a fourth-quarter loss of 20.3m zlotys ($5.04m), with this attributed to provisions for mortgage lending tied to Swiss francs. mBank made a provision of 1.48bn zlotys in Q4, bringing the total provision for 2023 to 4.9bn zlotys. The provisions covered 99.5% of the portfolio, and the bank had signed settlements with 13,321 clients. Despite the loss, mBank's net interest income increased by 19% year-on-year to 2.36bn zlotys, supported by higher interest rates. The net interest margin was at 4.31%.

AUTOMOTIVE

Ford to cut 2,700 jobs at German plant

Ford has agreed with union chiefs to cut about 2,700 jobs from a German plant as it switches electric vehicle production to Spain. The cuts will come once production of the Ford Focus stops there next year. The IG Metall Mitte union said around 1,000 jobs at the plant would be retained after 2025. Ford said the redundancies would be "socially responsible" and voluntary.

FINANCIAL SERVICES

MPs question speed of City reforms

MPs on the Treasury Select Committee have questioned the Prudential Regulation Authority (PRA) over the pace of pushing through City reforms. This comes as the banking watchdog looks to implement a slew of changes laid out by Chancellor Jeremy Hunt in the Edinburgh Reforms in December 2022. Committee chair Harriet Baldwin told PRA chief executive Sam Woods: “People in the private sector make changes faster than this,” saying it was a challenge to “understand why it takes so long to review something like this.” Mr Woods said the regulator had addressed “operational issues” holding up approvals, adding that much of the industry has raised concerns that the regulator was moving too fast. He noted a concern from industry “that the amount of time between the end of the consultation and when we’ve had to bring in the rules is too short.”

CMA launches probe into Aviva's AIG Life deal

The Competition and Markets Authority (CMA) has launched a merger inquiry into the acquisition of AIG Life by Aviva. The competition watchdog will assess whether or not this merger will affect competition in the market. Based on its findings, the CMA could opt to refer the merger for a phase two investigation. Aviva agreed to snap up AIG Life from its subsidiary Corebridge Financial for a quoted price of £460m in September 2023.

Cowley in line to chair FSCS

Lesley Cowley is the leading candidate to become the next chair of the Financial Services Compensation Scheme (FSCS), with sources saying her appointment could be announced within days. If appointed, Ms Cowley would replace Marshall Bailey, who has served two three-year terms as chair of the FSCS. Mrs Cowley, who was formerly chair of the DVLA, also chairs Companies House.

REAL ESTATE

Landlord mortgage arrears surge

The number of buy-to-let mortgages in arrears more than doubled in the final three months of 2023 compared to Q4 2022, according to figures from UK Finance. Data shows there were 13,570 buy-to-let mortgages in arrears in the final quarter of last year, with this marking a year-on-year increase of 124%. It was also shown that arrears rose by 18% compared with Q3. Meera Chindooroy, from the National Residential Landlords Association, said more than eight in 10 of buy-to-let mortgages were on interest-only repayment terms, leaving them harder hit by rising mortgage rates. UK Finance also reported that 93,680 homeowners were in arrears in Q4, with this up 7% on Q3 and 25% higher than at the same period a year earlier.

ECONOMY

Rate-setter warns of ’embedded’ inflation risk

Catherine Mann, a member of the Bank of England’s rate setting Monetary Policy Committee, says improving prospects for the economy could strengthen demand and risk “continued inflation momentum.” In a speech to the Official Monetary and Financial Institutions Forum, she warned: “Against a backdrop of sluggish supply growth and possible upside shocks, I see risks of continued inflation momentum and embedded persistence.”

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