Barclays faces £54m NCA claim
Barclays is facing a £54m High Court claim from the National Crime Agency (NCA) after the bank discovered it was harbouring the assets of alleged criminals. Court documents show that the NCA has launched proceedings to recover money it believes was acquired through fraud or money laundering. It is understood that Barclays became concerned after receiving third party intelligence reports and carrying out an internal investigation. The bank ring-fenced the money after discovering the suspicious activity. Barclays has been listed in the case as a third party rather than a defendant, meaning it is not being accused of any illicit activity. The matter is likely to raise questions about controls and anti-money laundering checks at Barclays. The Financial Conduct Authority has been clamping down on lenders that have failed to prevent money laundering and warned that challenger banks have been failing to tackle financial crime. A review by the City watchdog found that lenders were failing to adequately check basic details such as the occupations and income of new customers, raising fears that criminals could exploit digital platforms.
Banks should tell IRHP victims of compensation deadline, campaigners say
The Transparency Task Force (TTF) campaign group has told MPs that banks should be forced to tell victims of the interest rate hedging product (IRHP) scandal of an approaching deadline to receive compensation. The IRHP scandal saw high street banks including Barclays, Lloyds, and HSBC give SMEs false and misleading information as to the risks and benefits of certain products they were selling them. In 2013, the Financial Conduct Authority (FCA) entered agreements with nine banks through which they agreed to pay £2.2bn to around 18,000 customers who had been mis-sold IRHPs. In a letter to MPs, TTF founder Andy Agathangelou notes that victims must file any complaints to the FCA by December 14 if they are to receive compensation. An FCA spokesperson said: “As is standard, complaints should normally be made within 12 months of the complainant first becoming aware of the circumstances which led to the complaint.”
Agnew questions anti-fraud measures
The Times reports on the war of words between Starling Bank and former anti-fraud minister Lord Agnew, who accused the bank of failing in its anti-fraud duties when engaging with the Government’s bounce back loan scheme. Data suggests Starling identified 5.8% of loans drawn under the scheme as suspected fraud, higher than the 2.3% average for banks in the programme. Several observers suggest that Starling took advantage of the scheme to expand, and the bank’s founder Anne Boden has hit back at Lord Agnew’s claims, arguing that its fraud detection processes are state of the art.
Loyal savers see lower rates
Research by Savings Champion reveals that three of Britain's 10 biggest banks and building societies - Nationwide, TSB and Santander - are offering loyal savers significantly lower interest rates than new customers. Out of the top 25 easy-access accounts paying the highest rates, 14 have older versions paying different rates. Seven of the banks offering these accounts have not upgraded the rate on older accounts. Anna Bowes, of Savings Champion, said: "I think some providers are hoping that customers aren't active and don't realise what they're earning."
Homeowners rush to lock in long-term mortgages
House buyers have taken out the most five-year mortgages on record as interest rates continue to soar. Five-year deals now make up 60% of all mortgages taken out, up from 45% last year, according to Nationwide. This is the highest level since records began in 2010. Concerned borrowers are jumping at the opportunity to lock in their repayments as interest rates are expected to keep rising into next year.
Why BlackRock’s climate challenge is harder than it makes out
Blackrock’s response to the pushback on its climate-based investment decisions by some US states did little to persuade observers that its net zero position aligned with its fiduciary duty to clients, says the FT’s Simon Mundy.
Working from home a risk for US bank workers
Irwin Stelzer in the Sunday Times comments on how US businesses are reacting to the call from workers to maintain the work from home policies instituted during the pandemic, noting that banks such as JPMorgan Chase and Goldman Sachs are not as sympathetic as other companies to such demands. Jamie Dimon, chief executive of JPMorgan Chase, has made it clear that he expects his top performers to be in their seats five days a week unless they are visiting clients. More flexibility will be offered to other staff, but Mr Stelzer points out that the word at the bank is: “If someone’s not there, it makes it a pretty easy decision to fire them first.”
Unistream sees fivefold year-on-year jump in remittances
Russian payment transfer specialist Unistream has seen a surge in remittances since Moscow began operations in Ukraine recording a fivefold year-on-year jump in remittances in July. Chairman Kairzhan Kudyarov says the company plans to launch instant transfers to India, Turkey and countries in Africa.
SEC restricts internal bond ‘cross trading’ between funds
New US Securities and Exchange Commission rules prevent investment firms from trading bonds internally between different funds. The crackdown on cross-trading was opposed by managers including Pimco and T. Rowe Price Group who said the changes will make it more expensive for investors to purchase bonds.
Ryanair investors urged to reject ‘excessive’ bonuses
Ryanair shareholders have been urged to vote down “excessive” bonus payouts and block eight senior bosses from re-election ahead of the airline’s annual meeting. Advisory group Pirc has flagged concerns over the independence of the board and the financial rewards for its top executives.
Builders and estate agents braced for UK housing downturn
Sentiment among housebuilders has fallen, the FT reports, as concerns over the economic backdrop and rising interest rates continue to take their toll on house sales.
BoE to resist Truss’s plan to axe City red tape
The Sunday Telegraph predicts a clash between Downing Street and the Bank of England over the easing of regulations for financial services. The paper reports that the Bank’s Prudential Regulation Authority (PRA) is set to launch a consultation on the final package of the post-crisis banking reforms, known as Basel 3.1, by the end of the year and is likely to insist on a robust implementation of the rulebook. With the EU set to ease its own Basel rulebook and diverge on certain key areas, British banks could be forced to implement more stringent standards than their Continental rivals. UK Finance has expressed concerns about the design of the latest Basel package and City bosses have urged Prime Minister Liz Truss to make promoting global competitiveness a “primary objective” of the PRA and the Financial Conduct Authority. The PRA’s move to embed tighter rules will go against attempts by Ms Truss and her Chancellor Kwasi Kwarteng to unleash a “Big Bang 2” in the City of London.
Asset management falls short on gender parity
Analysis by data provider Citywire shows that progress towards gender parity in asset management has stalled, with more than seven in eight roles in money-managing occupied by men. The study shows women are only appointed to run one in ten new funds, while the average size of the funds they manage has shrunk by 13% in the past year, compared with an 8% fall for male-managed funds. The proportion of women in money-managing roles worldwide has risen from 11.7% to 12% in the past year. This marks a modest increase on the 10.3% recorded in the first Alpha Female report in 2016. The Citywire report tracks 17,554 active fund managers worldwide, of whom 2,108 are women. Of the 27,544 funds that it monitors, 4,946 (18%) are managed by a sole woman, a team of women or a mixed team. More than 22,000 are managed by men only, either solo or in teams.
UK banking licence is key to Revolut’s break through
The Sunday Times interviews Revolut chief Nikolay Storonsky, whose company is losing key compliance staff, facing questions about its books, and still does not have a banking licence. The Bank of England would normally be expected to give an answer on licencing within twelve months, but the delays continue to frustrate Mr Storonsky, who has new products ready to go. He says applications are also outstanding in Australia, Mexico and Brazil, but Revolut has been granted one in Lithuania, which has opened the door to banking operations in the EU.
Profile: Ninety One chief Hendrik du Toit
The Times profiles Hendrik du Toit, chief executive of Ninety One, which demerged from Investec two years ago in a deal that transformed the fund manager into an independent company. Its share price has risen 49% to 201p from its debut at 135p to give the group a market value of £1.8bn.
MEDIA & ENTERTAINMENT
Cineworld buys time with $785m from lenders
Cineworld has managed to raise $785m from existing lenders after filing for bankruptcy in the United States last week. The cash will be used to fund the group's daily operations while it figures out how to reduce its debt pile and restructure its balance sheet.
The cost-of-living crisis is hitting homebuying dreams
Nearly two-thirds of would-be first-time buyers have had to cut down their regular savings due to the cost of living crisis, according to research by Aldermore Bank. As the cost-of-living crisis takes its toll on incomes and savings, 72% of prospective first-time buyers say their attempts to purchase a property have been impacted. A third (32%) of would-be homeowners have put their property purchases on hold, anticipating delays of around 20 months. On average, prospective first-time buyers plan to save £43,500 for a deposit, according to the bank's first-time buyer index. Nearly two-thirds (64%) have had to scale back their regular savings, likely increasing the time it takes them to get on the property ladder. And while savings plans are being put on hold, mortgage rates are climbing, following a string of Bank of England base rate hikes. The average five-year fixed mortgage rate on offer for a borrower with a deposit as low as 5% was 4.49% at the end of August, according to Moneyfacts. Back in early February it was 3.35%.
Liz Truss to announce tax-cutting mini-Budget even if Parliament not sitting
Prime Minister Liz Truss will reportedly go ahead with a mini-budget even if Parliament is still closed after the death of the Queen. Parliament will be shut for a total of 13 days, which includes 10 days of official mourning and extra time to allow MPs to swear a new oath of allegiance to King Charles III. A source close to the PM said: “Officials are working to adapt plans to work around the mourning period so that it can be delivered on time while maintaining respect for the late Queen.”
Nation in mourning casts gloom over economy
Analysts are downgrading their forecasts for the UK economy in the wake of the death of Queen Elizabeth II. Economists say a bank holiday for the Queen’s funeral will wipe £2bn off GDP and ensure output shrinks for a second consecutive quarter. However, Simon French, chief economist at Panmure Gordon, said: “There are few parallels for this moment and that makes forecasting particularly difficult. We may not simply be talking about an extra bank holiday. There could be a prolonged period of national mourning.”
Bank of England postpones interest rate decision
The Bank of England has delayed a meeting of its Monetary Policy Committee for a week following the death of Queen Elizabeth II. Markets had been expecting an interest rate rise of 75 basis points on September 15, after a 50-basis-point increase in August. The next meeting will take place on September 22. The Bank was also set to announce the start of the sale of £838bn of government debt that had built up during previous crises.
UK energy package will weigh on gilts and pound, analysts warn
The extra borrowing planned by the UK Government to pay for energy support, combined with Bank of England plans to offload bonds, will likely mean lower bond prices and higher borrowing costs, analysts say.
Households return to notes and coins to help with budgeting
Consumers are withdrawing cash more frequently to help with managing money during the cost of living crisis. Analysis by money app Snoop shows two in every three consumers used a cash machine this summer, with the typical shopper using a cash machine five times between May and July of this year, withdrawing £60 on average. Scott Mowbray, of Snoop, said easy access to cash was “vital” to help households manage their daily budgets. “Some of our customers only feel truly in command of their finances when they can see, touch and spend physical money,” he said. However, shoppers are struggling to access cash and spend notes and coins as free-to-use cash machines shrink in number and businesses refuse to accept notes and coins.
Paper £20 and £50 notes to expire within weeks
The Bank of England has warned people with paper £20 and £50 banknotes that they have until the end of the month to spend them in shops. Anyone who does not their money before the deadline of September 30 can deposit the cash with their bank or building society.