BANKING
High street banks hampered SME crisis lending
Peter Evans reports in the Sunday Times that high street banks, including RBS, Lloyds, HSBC and Barclays objected to plans to allow fintech lenders indirect access to funding from the Bank of England so they could sell loans to small businesses through the Government’s emergency bounce back loan scheme (BBLS). Without access to the same cheap funding, fintech must rely on private backers, meaning the soon run out of cash leaving them unable to lend to thousands of small firms applying for emergency loans. The scheme would have required the big banks to funnel cash from the Bank's term funding scheme to alternative lenders. But sources say commercial banks did not want to help their competitors.
Lenders tighten borrowing rules for self-employed
According to mortgage broker John Charcol, banks and building societies have tightened checks on self-employed workers applying for mortgages with many only accepting only 80% of self-employed income as proof of earnings. Lenders have started asking for bank statements from during the lockdown and have stopped accepting irregular forms of earnings, such as commissions, freelance work, overtime or bonuses, as income. Such constraints on lending make it harder for self-employed and first-time buyers to take advantage of the Chancellor's move last week to abolish stamp duty for properties under £500,000. The lack of mortgages available to borrowers with small deposits is also hampering the efforts of first-time buyers.
New leaders have a chance to reset banking industry
The Telegraph’s Lucy Burton talks to banking chiefs about the prospects for the financial industry with state intervention and low interest rates to contend with. A new generation of bank bosses must find ways to revive the sector, she says, with one finance expert agreeing and adding that the coronavirus pandemic provides an opportunity for banks to use the good that they've done for the economy as a springboard for revising the sector’s poor public image: "There's a real chance here for a lot of the ills of the past to be consigned to history."
Banks told to ensure availability of free cash machines
The Treasury is drawing up plans to require banks and building societies to provide access to free-to-use cash machines within a “reasonable distance” of every home in the UK. A spokesperson said: “We’re co-ordinating work across government, regulators and industry so we can protect access [to cash] for everyone who needs it, and have committed to bring forward legislation.” Network operator Link said that 12% of Britain's 60,000 ATMs were temporarily shut during the COVID-19 lockdown and more than 5,000 ATMs have not been turned back on, raising fears that many may never reopen.
Phone companies sued over bank fraud losses
Fraud victims are suing their phone companies for allowing scammers to gain control of their mobile phone accounts. The Sunday Times says phone companies in turn blame banks for sending authentication codes by text message despite the National Cyber Security Centre telling them not to rely on SMS phone messages because of the risk of Sim swapping.
Metro Bank brings in dealmaking chairman
The FT considers how things are picking up for Metro, with new chairman and confirmed dealmaker Robert Sharpe starting in November and a deal with peer-to-peer lender RateSetter in the pipeline. Metro Bank has also appointed a chief risk officer. Richard Lees will join the company early next year.
Smile customers left grim-faced
An IT glitch has meant thousands of customers of Smile bank have been unable to access its mobile app or website for two days. Smile, which is owned by the Co-operative Bank, has 100,000 customers.
PRIVATE EQUITY
Private investors can help with corporate debt explosion
The Times talks to veteran financier Sir Ronald Cohen about how the Government should offer private investors incentives to recapitalise businesses as a way to defuse a corporate debt time-bomb. Sir Ronald, who co-founded the private equity firm Apax, told the paper that instead of the Government taking an equity stake to recapitalise indebted businesses, the state should look to the capital markets to shore up company balance sheets after the coronavirus pandemic. Sir Ronald added that the pandemic represented a “historic crossroad” and was an opportunity for investors to move from the profit-oriented approach towards socially responsible investing.
UK business needs a £30bn equity injection
Schroders has recommended that the Government create a patient capital fund, worth £20bn to £30bn, to support the growth ambitions of both public and private companies.
INTERNATIONAL
Trading set to triumph in US banks’ second-quarter earnings
A surge in trading around the coronavirus crisis has boosted trading revenues and advisory fees for Goldman Sachs and Morgan Stanley, who have also had limited exposure to the widespread loan losses stemming from the pandemic.
US lenders warned against permanent branch closures
Brian Brooks, the head of one of America's banking watchdogs, has said US banks will not be able to use COVID-19 as cover to shut branches or to win permanent concessions from regulators.
Julius Baer to offer private equity to ultra-wealthy clients
A senior executive from Swiss wealth manager UBS has been poached by Julius Baer to set up a new division offering private equity and debt investments to its ultra-wealthy clients.
AUTOMOTIVE
Jaguar delays electric car launch
Jaguar's new XJ saloon, which had been due to roll off factory lines early next year, will now not be launched until October 2021 as the car maker prioritises its new Land Rover Defender and Range Rovers - its most lucrative models.
Carmakers turn to the silver screen to boost sales
German carmakers are hosting drive-in movie events in an attempt to lure potential customers into buying new cars as sales record a 35% slump in the first half of the year.
AVIATION
Virgin Atlantic poised to reveal £1bn rescue plan
Virgin Atlantic’s CEO Shai Weiss has crafted a four-year £1bn rescue plan for the airline which will see 3,150 jobs cut, the dumping of inefficient planes and an end to operating out of Gatwick. Sir Richard Branson, who raised £396m by selling a stake in Virgin Galactic, will put in £200m as will the Wall Street hedge fund Davidson Kempner. A further £400m will come from the deferral of fees owed to the Virgin Group and credit card firms and aircraft leasing companies will agree to defer payment of £200m.
Heathrow chief warns aviation industry must prepare for periodic lockdowns
John Holland-Kaye, the CEO of Heathrow airport, has warned the aviation industry needs to prepare itself for periodic lockdowns around the world as countries are hit by new coronavirus outbreaks.
FINANCIAL SERVICES
FCA moves to amend liquidity mismatch at unit trusts
The Financial Conduct Authority (FCA) is to consult on ending daily dealing in commercial property unit trusts with interim CEO Christopher Woolard telling an online meeting arranged by the Investment Association that long term investor interests may be better served if funds' liquidity promises were "better aligned with the liquidity of fund assets".
Most hedge funds to be allowed to keep equity holdings secret
The SEC has proposed that only hedge funds with assets of more than $3.5bn will have to submit reports of their equity holdings, leading critics to complain the move reduced transparency.
Insurers start to offer Covid cover as travel ban is lifted
Travel insurance experts say the market is evolving rapidly and with Britons now permitted to travel abroad, some providers have started to sell policies that include some form of cover for coronavirus.
Goldman set to reduce holding in Hastings
Shares in Hastings fell on Friday after traders reported that Goldman Sachs had put 22m shares in the FTSE 250 group up for sale overnight. If the sale is confirmed, Goldman will have trimmed its stake from 50% five years ago to about 5.3%.
Merkel’s government pressed to release conversations with former Wirecard chief
Conversations between Germany’s deputy finance minister Jörg Kukies and former Wirecard chief executive Markus Braun have been classified by the government in a move the left-wing Die Linke party described as “utterly unacceptable”.
MANUFACTURING
Output remains at 10-year low despite rise
Business output rebounded last month as service companies and factories reopened, however, activity remained drastically below normal levels. Output in manufacturing rose to 80.47 from 69.55 while the services output index reported its largest monthly increase on record, rising 11.2 points to 64.73.
REAL ESTATE
Councils risk disaster with retail spending
The Government has been accused of failing to rein in councils that have each borrowed billions to invest in commercial property. Local authorities gambling on shopping centres, retail parks and office blocks risk a repeat of the impact of their overexposure to failed Icelandic banks in 2008, the public accounts committee has said. Authorities borrowed an estimated £6bn to buy £6.6bn of commercial property over the past three years despite repeated warnings that retailing was moving online. In a report to be published today, the cross-party group of MPs say that council tax-payers faced higher bills or cuts in services as the investments turn sour.
RETAIL
Standard Life Aberdeen dumps Boohoo stock amid ethical concerns
One of Boohoo’s biggest investors has sold down its stake and labelled the retailer's response to illegal pay allegations "inadequate". Standard Life Aberdeen has now sold most of its 3% holding in the company which is embroiled in a scandal over claims its suppliers are paying staff less than the minimum wage.
ECONOMY
Investors seek safety in government bonds
Investors worldwide rushed to government bonds yesterday after the WHO warned that the coronavirus pandemic continues to accelerate. The resurgence of the disease in the US is taking its toll on the outlook for activity and jobs while investors show little concern over a future rise in borrowing costs with central banks remaining in support mode. Yields on short-dated UK government debt went deeper into negative territory with two-year and five-year gilt yields hitting all-time lows of minus 0.113% and minus 0.08%, respectively.