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Daily News Roundup: Monday, 11th July 2022

Posted: 11th July 2022


Barclays has largest interest-rate gap of high street banks

Barclays has an interest-rate gap of 4.73% between its standard variable rate on mortgages of 4.74%, and the rate on its easy-access savings account of 0.01%. It is the worst easy-access rate being offered in the savings market. Santander has the second biggest interest-rate gap at 4.5% followed by NatWest and RBS with a gap of 4.39%. Rachel Springall from the data firm Moneyfacts, said: “The savings market is moving in a positive direction but this is largely due to competition by challenger banks and building societies.”

HSBC raises rates on some savings accounts

HSBC is the latest bank to increase the interest rate on some of its savings accounts. For example, its Online Bonus Saver will see its bonus rate increase by 0.85% to 1.30% (from 0.45%) on balances up to £10,000. Tom Wolfenden, HSBC UK's Head Of Retail, said: “While our savings products are not directly linked to the Bank of England Base Rate, we take this into account alongside a number of other factors when setting our interest rates. We have raised our interest rates across a number of our accounts in order to offer greater value for savers.”

Revolut executive quits amid fight for UK banking licence

Revolut’s head of global affairs, wealth and trading has quit amid the digital bank’s battle with the Financial Conduct Authority (FCA) over its bid for a UK banking licence. Deirdre Halligan, who joined in 2020, was responsible for overseeing regulatory relationships and licences. The move comes as Nikolay Storonsky, Revolut’s co-founder and chief executive, becomes increasingly frustrated that the digital lender has not been handed a licence to operate as a fully-fledged bank in Britain and is instead regulated as an e-money issuer.

First Direct offers 10-year, fixed-rate mortgage

First Direct is now offering a longer-term fixed-rate mortgage deal aimed at borrowers facing a double whammy of soaring house prices and rising interest rates. The online-only bank has unveiled a 10-year fixed-rate mortgage on home loans of up to £550,000 and over full terms of up to 40 years.

Scots face access to cash challenges

Half a million Scots could struggle to access cash due to the unprecedented rate of bank closures, MPs have warned. Some 53% of banks have closed in Scotland since 2015 and lawmakers fear lenders are rushing to close branches before access to cash legislation is put in place.

Ultra-long mortgages will make home ownership more like renting

Vicky Pratt in the i comments on proposals to introduce 50-year mortgages, arguing that although the plans could help those locked out of the housing market on to the ladder, ultimately, ultra-long mortgages lock people into debt for longer and bolster high house prices.


Private capital an opportunity for growth

Cyrus Kapadia, the chief executive at Lazard UK, says in a piece for the Telegraph that private finance is an opportunity rather than a threat to public markets. Britain's private capital market as a whole - not just London but including the likes of Manchester, Sheffield, Leeds, Oxford, not to mention Scotland and Northern Ireland - hold a golden key to our economic future, says Kapadia. She cites one FTSE boss who recently said that private capital markets can help finance companies that become "potential collaborators" with public companies, partners "turbo-boosted" by tech and a fast growth mindset.


Eurozone banks are underestimating the hit from climate change, warns ECB

The European Central Bank’s debut climate stress test has found banks in the eurozone are underestimating the losses they are likely to suffer from global warming. The central bank's test also found that most euro zone banks did not have a framework for modelling climate risk and did not typically take it into account when granting loans. "Euro area banks must urgently step up efforts to measure and manage climate risk, closing the current data gaps and adopting good practices that are already present in the sector," said the ECB's chief supervisor, Andrea Enria.

Citigroup asked by SEC to update disclosures on Russia exposure

The Securities and Exchange Commission has asked Citigroup to provide “enhanced” disclosures about its exposure the Russia-Ukraine conflict, according to a filing made by the bank on Friday. The regulator also requested a more detailed breakdown of Citi’s cash flow from investing activities and asked it to revise future filings to comply with accounting standards.

US banks set for lending earnings boost as Fed lifts rates

Analysts expect JPMorgan Chase, Bank of America and Citigroup to see growth in net interest income when they report their second-quarter earnings this week as they benefit from interest rate rises.  

Bank of Spain includes Binance in crypto registry

The Bank of Spain has registered the local unit of Binance as a virtual currency platform, provided the world's largest crypto exchange adheres to procedures in place against money laundering and financing of terrorism.

Danske cuts profit outlook

Danske Bank has revised its full-year net profit outlook as rapidly rising interest rates and unfavourable market conditions lower expectations for trading and insurance income.


Vistry stays upbeat on robust demand for new homes

Vistry Group issued an upbeat statement on Friday anticipating full-year profits for the housebuilder would be at the top end of guidance on the back of increased demand.


BoE: Solvency II reforms will not be a ‘free lunch’ for insurers

The post-Brexit shakeup of the rules that govern the UK’s insurance industry will not be a “free lunch” for the sector, the Bank of England (BoE) has said. Sam Woods, chief executive of the BoE’s Prudential Regulation Authority (PRA) said on Friday that policyholders must be protected as the Government pushes forwards with its planned Solvency II reforms. Woods explained that the BoE is calling for 10% to 15% reduction in the capital insurers should be required to hold, which frees up sums of between £45bn and £90bn. Some insurers have been arguing for capital requirements to cut by up 90%.

Canada's largest pension fund joins backing for Klarna

Klarna, the buy-now-pay-later credit provider, could reveal an $800m funding round this week, valuing the buy-now-pay-later credit provider at around $6bn - less than 15% of Klarna's $45.6bn valuation just two years ago. Existing Klarna backers including Sequoia Capital and Silver Lake are said to be planning to participate in the latest funding round but Sky News reports that the Canada Pension Plan Investment Board and the Abu Dhabi state investment fund Mubadala had been in talks with Klarna in recent weeks about participating in the capital-raising.

Lloyd’s of London set to stay in landmark City building

Lloyd's of London has decided against leaving its landmark London HQ confirming that it was in talks with its landlord, the Chinese insurer Ping An, to extend its lease beyond 2031 "if the right terms are agreed". The move is a vote of confidence in face-to-face trading, which some traders and brokers predicted would die out after the growth of work from home during the pandemic.

Amigo warns on cost of living crisis as it seeks to restart lending

Ahead of approval from the FCA to resume lending, Amigo Loans has said loan collections have remained “robust” despite rising numbers of delinquencies amid a cost of living crisis that CEO Gary Jennison believes is likely to intensify.


Sales set to fall at JD Wetherspoon

JD Wetherspoon is expected to report a 3% drop in sales in the three months to the end of June in its fourth quarter trading update on Wednesday. Analysts now predict that the company could increase prices this year to battle soaring labour, food and energy costs.


Elon Musk abandons $44bn Twitter deal

Elon Musk is terminating his $44bn deal for Twitter arguing that the social media company had failed to provide information about fake accounts on the platform. In a filing, his lawyers said Twitter was in material breach of multiple provisions of the Merger Agreement, and “appears to have made false and misleading representations upon which Mr Musk relied when entering into the Agreement.” The departure of three senior executives was also a material breach. Shares of Twitter fell 7% in late trading on Friday to $34.25. Mr Musk had agreed to buy Twitter for $54.20 per share. Since then, Twitter has said it intends to sue Musk to either complete the purchase or pay a $1bn break fee. 


Average rents hit a record £1,113 a month

The average rent in Britain reached a record level of £1,113 a month in June, up 0.9% from May. In London, average rents have reached £1,846 a month, according to HomeLet data. Rob Wishart, of HomeLet, said: “There is a shortage of housing stock in this country, and this is a phenomenon that is only getting worse as many landlords are deciding that they would prefer to leave the market altogether.”


CVC courts tennis for slice of the action

CVC Capital Partners is in talks over a potential $150m investment to take a 20% stake in a new commercial entity that would control the Women’s Tennis Association’s media, sponsorship and data rights.


UK companies braced for recession as spending slows and costs soar

The FT has been told by multiple companies that they had begun “war gaming” for a recession in recent weeks, with some adjusting medium-term plans for a period of low or no economic growth.

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