BANKING
Lloyds document reveals compensation claims
The Mail on Sunday reports that Lloyds owed about £770m to 4.37m people at the end of August, with the compensation claims on top of payouts earmarked for mis-sold PPI. A document leaked from the Lloyds Group Rectification Forum identified at least 19 outstanding problems at the end of August, including: botched affordability checks on loans, wrongly rejected PPI claims, failure to execute wills correctly, and issues in linking mortgage and home insurance payments made by the same customers. Data shows Lloyds owed redress to 3.97m customers at the end of 2018 and made payments to 2.58m customers, with 3.54m new cases added by the end of August.
Monzo raises fees for customer with lower credit scores
Customers with lower credit scores will face higher overdraft fees, digital bank Monzo has announced. The move comes after the Financial Conduct Authority called for charges to be easier to compare. Monzo will dispense with its flat 50p per day charge and introduce a sliding scale, with customers going into overdraft charged annual equivalent rates of either 19%, 29%, or 39% depending on their credit rating. HSBC last week announced a new annual rate of 39.9% on overdrafts regardless of whether they were arranged or not.
Regulators criticised over bank licences
The Sunday Times says the Financial Conduct Authority and Prudential Regulation Authority have been criticised for having licensed just two new banks in the past year – Revver and Allica. This compares to 2016 when nine licences were issued. The paper cites an expert who says the licensing process has become “difficult and long” and warned of barriers to new lenders. The watchdogs have said it typically takes four years for a new bank to successfully complete the application process and open to customers.
Banks set to clear stress tests
Bank of England stress test results are to be unveiled today, with all of the lenders involved expected to get a clean bill of health. This means none of Lloyds Banking Group, HSBC, Barclays, Royal Bank of Scotland, Standard Chartered, Santander UK and Nationwide will be forced to raise more capital.
Sainsbury’s Bank executives check out
Jim Brown, CEO of Sainsbury’s Bank, has reshuffled senior staff, with a number of executives moving on as it seeks to offload its mortgage division and improve returns. David Jones, chief customer officer, and Mark Hunter, chief transformation officer, are leaving, while non-executive director Marcia Campbell left in September. Graeme Forrester, chief risk officer, remains with the bank but will no longer sit on the board.
Lloyds boss to meet HBOS victims
Lloyds Banking Group boss Antonio Horta-Osorio is to meet victims of the HBOS Reading fraud to discuss compensation. This comes after a review published by former High Court judge Sir Ross Cranston found that Lloyds had been "neither fair nor reasonable" in its attempts to redress the wrongdoing.
High LTV mortgages return
The number of mortgages approved to borrowers with deposits of less than 10% has reached its highest level since 2008, the Bank of England says. Mark Harris, the chief executive of SPF Private Clients, a mortgage broker, said there were fears that some borrowers on low-deposit mortgages could find themselves in negative equity if property prices dropped even lower.
HSBC launches bank scheme for homeless
HSBC is to offer "no fixed address" bank accounts for homeless people in 31 branches. People will be allowed to open accounts even if they do not own a passport, driving licence or proof of address. The bank was criticised however for only offering the service at a single branch in the Square Mile.
Metro offers cash drop-off service for small businesses
Metro is launching a cash-on-demand service for small firms that are struggling to bank cash takings or obtain notes. The MCash initiative will allow firms within a 30-mile radius of a Metro branch to use an app to order the amount and day they wish to have money collected or dropped off. The service launches in London today before a nationwide rollout in 2020.
OakNorth Bank sees defaults
OakNorth Bank, Britain's most highly valued fintech unicorn, has suffered its first two defaults on property backed loans and is seeking to offload a portion of its larger deals to reduce risk. The two defaults are understood to represent less than 1% of the bank's £3bn net lending and have not yet led to credit losses.
PRIVATE EQUITY
Decision due on Cobham deal
Business Secretary Andrea Leadsom is set to make a decision next week on whether to approve the takeover of UK defence firm Cobham by US private equity firm Advent International. Lady Cobham, daughter-in-law of the firm’s founder, has challenged the deal. In a submission made jointly with former Cobham chairman Gordon Page, Lady Cobham also urged the Government to investigate Blackstone’s role in the deal.
INTERNATIONAL
Deutsche Bank looks to cut bonuses
A cut of up to 20% in its bonus pool is being considered by Deutsche Bank as it looks to reduce costs by €1.3bn this year. Last year the pool shrank by 14%. The Sunday Telegraph says bonuses “dominate the agenda” for bank bosses looking to find a balance “between paying enough to keep their best bankers from jumping ship, and keeping costs down”. It looks at policy at banks including Royal Bank of Canada, Credit Suisse and HSBC.
AUTOMOTIVE
Aston Martin in talks to raise equity capital
Aston Martin is in talk with investors about an equity sale as the carmaker seeks to bolster its squeezed finances. People familiar with the matter said a rights issue was also being considered.
AVIATION
Qantas goes for Airbus
Australian airline Qantas has chosen the Airbus A350-1000 for its planned non-stop Sydney to London service dealing a blow to rival Boeing which is still dealing with the grounding of its 737 Max fleet after two deadly crashes.
FINANCIAL SERVICES
The real cost of personal fund management
Research shows that investing £1m in Hargreaves Lansdown’s discretionary portfolio service could erode clients’ returns by almost £3m in fees and lost profit over 30 years, leaving them with an investment pot of £2.8m. Meanwhile, the same service from other investment companies could save investors more than £1m over the same period, while using streamlined providers could save a further £1m. The figures, from wealth management consultancy Compeer, show that about £598bn was held by discretionary services for private clients at the end of September, up from £365bn in 2013. This figure compares with £106bn in advised portfolios, down from £117bn in 2013, and £307bn in do-it-yourself funds – up from £174bn in 2013.
Woodford savers set to lose up to 42% of their investments
The administrators for Neil Woodford’s collapsed Equity Income fund have said investors are due to receive just over half of their money back next month. Link Fund Solutions said that £1.65bn or 56% of the stricken fund’s assets had been sold by BlackRock and investors can expect to receive payments from January 20. By that measure the value of the fund has fallen by 42%.
UK regulators step up external probes of financial groups
Analysis shows that the Financial Conduct Authority and Bank of England demanded 51 skilled persons’ reports in 2018-19, a 16% increase on 2017-18 and the first rise in four years.
UK primed for flood of investment
Legal & General boss Nigel Wilson said there was a "wall of money" wanting to invest in the UK which could now be unleashed following Boris Johnson’s election victory. He add that uncertainty over a future trade deal would not deter investors from putting their money into the UK. This chimed with business leaders who said confidence was returning already and dealmakers who said private equity activity is “going bonkers” with advisers predicting a “tidal wave” of deals. Fund managers were bullish that the UK equity market was finally about to return to favour for investors, but their confidence was tempered by concern over the speed at which a trade deal with the EU and the US could be reached.
Financial Ombudsman Service slow to resolve disputes
A whistleblower at the Financial Ombudsman Service (FOS) has revealed that consumers can wait up to two years until their disputes with a bank or insurer are adjudicated. The senior staff member says the service is in “disarray” following a "disastrous" management reorganisation. However, the FOS has disputed the claims and says 80% of cases are resolved within six months.
Social media “influencers” promote high-risk trading schemes
The Financial Conduct Authority is warning about the rise of high-risk forex trading schemes promoted by "influencers" on social media which are costing victims thousands in losses.
HEALTHCARE
Sperm start-ups bet on declining male fertility
Venture capital firms including Bain Capital Ventures, TCG Capital Management and Section32 are backing male fertility testing start-ups such as Legacy, Dadi, YoSperm and ExSeed.
LEISURE & HOSPITALITY
Viagogo faces competition probe
The Competition and Markets Authority is set to investigate Viagogo’s $4bn deal to buy rival ticket reseller StubHub. The CMA will look at whether the deal will lead to “a substantial lessening of competition” in ticket selling. It is inviting “interested parties” to comment on the proposed deal.
MANUFACTURING
Buyer: Steel deal not set to collapse
Jingye Group, the Chinese company that agreed to buy British Steel, has denied reports that the rescue deal is on the brink of collapse, saying it is confident that it will secure regulatory approval for the deal in the new year.
MEDIA & ENTERTAINMENT
Altice sells network stake to US bank
Altice Europe, the telecoms and cable group, is to sell a 50% stake in its Portuguese fibre network to Morgan Stanley Infrastructure Partners for €2.3bn to help pay down its debt.
REAL ESTATE
House prices to climb 2% in 2020
Analysis by Rightmove suggests house prices will climb by 2% in 2020, with a lack of choice for potential buyers likely to drive the increase. Data from the property website shows that the number of sales agreed so far in 2019 is down by 3% on 2018, while the number of properties coming to market has fallen by 8%. The typical asking price of a UK home is currently £300,025 - 0.9% down on November’s average.
RETAIL
Arcadia secures loan from Apollo
Arcadia has secured £310m from US asset manager Apollo to remortgage its Topshop Oxford Street store. The original loan from RBS, due in June, was extended until the end of this month as part of a restructuring of Sir Philip Green's retail empire. Arcadia's auditors had warned that if the company had been unable to refinance the property, lenders could have demanded immediate repayment.
BlackRock builds stake in The Hut Group
BlackRock is increasing its stake in The Hut Group as part of a £830m financing. The asset management firm will take part in a £66m equity financing deal for The Hut Group, which is also raising a £501m term-loan, a five-year £150m credit facility with Barclays and HSBC, and a £200m package for its property assets.
ECONOMY
Stocks and Sterling bounce on Tory majority
Sterling rose above $1.35 at one point on Friday following Boris Johnson’s victory - its highest level since May last year – and hit a three-and-a-half-year high against the euro. The FTSE 100 rose 1.1% and the FTSE 250 briefly hit record highs before closing 3.4% higher. The combined value of the biggest 350 companies rose by about £33bn. UK-exposed banks were buoyed with Barclays, RBS and Lloyds up 6%, 8% and 5% respectively.
OTHER
'Surprise' successor to Carney at BoE?
While Minouche Shafik, currently head of the London School of Economics, has been heavily tipped to become the Bank of England's (BoE) first female governor, City analysts have suggested there could yet be a “surprise” successor to Mark Carney. Scotiabank analysts said: “There are many hats in the ring and conflicting reports on who the favourite may be in a process renowned for its capacity to surprise.”
Nottingham top for credit scores
Analysis by Mojo Mortgages shows that borrowers in Nottingham have the best credit scores in the country while those in Wolverhampton have the lowest.