BANKING
Buyers face fewer deals and higher rates
Analysis by Moneyfacts shows that there are now just 56 fixed and variable rate mortgages at 90% available, down from 779 in March. The report also reveals that the average two-year fixed rate 90% mortgage now charges an interest rate of 3.76%, up from the 2.57% available before the first coronavirus lockdown was put in place in March. The analysis shows that the average customer seeking a 90% mortgage on a £200,000 property over a 25-year term will now pay around £927 a month but would have only paid £814 a month if applying for the same mortgage in March. For buyers with a deposit of 15%, average interest rates on two-year fixed deals are now at 3.12%, compared to 2.11% in July. The number of 85% mortgages available currently stands at 344, marking a decline on the 664 seen prior to the pandemic. While buyers with smaller deposits face a market with fewer deals and higher rates, homeowners able to remortgage or buy with 40% equity or deposit are being offered lower rates than they were before the pandemic.
FCA plan for minimum rates scrapped
Plans to protect savers with a minimum interest rate have been shelved by the Financial Conduct Authority after interest rates plunged amid the coronavirus crisis. The regulator said that because interest rates were so low, enforcing a minimum rate would make little difference. Sarah Coles, personal finance analyst at Hargreaves Lansdown, said the FCA had taken the view that the single rate would be “using a sledgehammer to crack a nut that has already fallen open”.
Barclays allows Airbnb rentals
Barclays mortgage borrowers can now rent out their spare room or whole property on Airbnb, as the bank has become the only high street lender that will not require mortgage customers to ask permission before starting an Airbnb let. Barclays has introduced the changes for all residential mortgage holders, but they do not include buy-to-let borrowers. Customers must not arrange holiday lets informally themselves or use
Savers may need to turn to unknown providers for best rates
With the average instant access savings account at high street banks paying interest of 0.01% - compared to 0.79% a decade ago - Katie Brain of financial research company Defaqto says savers “will need to consider moving their money to providers they may not previously have heard of to get the best rates”. These, Laura Shannon in the Mail on Sunday notes, include Sharia and digital banks.
Lender recognises need for SME loans
Start-up lender Recognise aims to lend up to £40m to SMEs within its first quarter. Deputy chief executive Bryce Glover says it will look to lend between £25m and £40m in its first four months and £250m by the end of its first year. He added that the bank’s target market is established businesses looking to borrow £100,000 to £5m. Initially, the lender, which secured its banking licence last week, will offer SMEs short-term working capital, bridging loans and commercial property loans. It will then look to offer asset finance in Q2 2021.
Sainsbury’s Bank eyed by lenders
The Times reports that NatWest, Lloyds and Metro Bank are interested in buying Sainsbury's Bank. John Cronin, a banking analyst at Goodbody, expects to see more deals among banks, saying: “Larger players are likely to be stimulated to do sensible deals where they can to help to address the significant revenue challenge".
Lloyds £1bn fraud report delayed
Dame Linda Dobbs, who is leading an investigation into Lloyds Banking Group's handling of the HBOS Reading fraud that was initially expected to be published in 2018, says her report will not be finished until next year, more than four years after it was commissioned. Dame Linda is leading a team of barristers reviewing fraud which involved bankers and business consultants exploiting credit policies to steal from HBOS while wrecking a number of SMEs.
Homeowners manage to overpay mortgage
Some homeowners have been able to pay off more of their mortgage each month because they have been spending less since March. Two out of five overpaid their mortgage by £370 a month, increasing average payments from £1,384 to £1,754, according to research by the broker First Mortgage. Around one in three said they found it easier to save money during lockdown.
PRIVATE EQUITY
Taxing of private equity needs a rethink
The FT looks at tax and private equity, saying reform of capital gains tax proposed in a government-commissioned review could help address concerns centred on taxation of the industry. The paper’s Jonathan Ford says that with buyout groups’ executives paying a lower rate of CGT, it is a “fiscal perk” that has helped create many billionaires in the private equity sphere.
INTERNATIONAL
BNP Paribas faces anti-corruption questions over Deutsche prime brokerage deal
France’s anti-corruption regulator has questioned BNP Paribas over its use of a former Goldman Sachs dealmaker as an introducer as it readied a deal to buy Deutsche Bank’s prime brokerage business.
Santander plans to cut jobs and branches in Spain
Santander is reportedly planning to cut 4,000 jobs, or around 14% of its total workforce, in Spain. Sources say it will also close up to 1,000 branches in the country – with this representing around 32% of sites in its home market.
UBS not looking for partners, says Weber
UBS chairman Axel Weber has told Swiss newspaper NZZ am Sonntag that while the bank is “not categorically ruling out any takeovers which make sense for our global business model”, it is not looking for partners as “we are strong enough to shape our own future”. Earlier this year it was reported that a merger between UBS and Credit Suisse had been discussed by the banks’ chairmen.
AVIATION
Qantas set to break even, emerge from pandemic stronger says chief executive
Qantas CEO Alan Joyce says the airline is well placed to come out of the pandemic ahead of rivals as Australia reopens state borders, noting a “massive surge in pent up demand”.
CONSTRUCTION
Galliford Try forecasts profits for H1
Galliford Try expects the company to get back into the black in the first half of its financial year, after its construction sites reopened following the first lockdown. All the firm’s projects have been fully operational since the financial year started on July 1, and productivity is nearly back to normal levels, the company said. Galliford expects to make a profit in the six months to December. It also expects to announce an interim dividend at its half-year results in March.
FCA: Carillion and bosses misled investors
The Financial Conduct Authority has found that Carillion and some of its top executives misled markets as the outsourcer’s finances deteriorated before it eventually collapsed into liquidation in 2018. The FCA found that a series of the construction firm’s announcements in 2016 and 2017 were misleading and did not accurately or fully reflect the firm’s financial performance. It has issued warning notices to the company and “certain previous executive directors” over breaches of financial rules.
FINANCIAL SERVICES
Clone alerts increase 260% in 5 years
Analysis shows that the clone alerts issued by the Financial Conduct Authority have increased 34% year-on-year, with 401 so far in 2020. The research from Quilter shows that the number of clone alerts has risen by 261% since 2015. The report also details that 1,031 general scam warnings have been issued in 2020 to date, an 80% increase on 2019’s total and 301% more than in 2015. Highlighting that there is no legislation to force search engines and social media platforms to remove fake websites and adverts which clone financial services firms, Quilter has urged ministers to including financial scams within its forthcoming legislation on online harms.
Watchdog stops platform exit fee work
The Financial Conduct Authority has stopped its work on exit fees charged by platforms after some platforms stopped charging customers for leaving of their own accord. The City watchdog said it “welcomes the direction of travel by the investment platforms sector in phasing out the use of exit fees.”
FCA pressed for details of pension transfers probe
The Financial Conduct Authority is facing calls to disclose more details about its investigation into the pension transfer market, after it emerged it had opened fewer than 70 mis-selling cases in three years.
Bird outlines SLA ambitions
Stephen Bird, the new boss of Standard Life Aberdeen, has outlined plans to rebrand and grow the business, telling the Mail on Sunday of his vision of turning SLA into the UK’s answer to BlackRock. Mr Bird, who says SLA will look to launch robot funds next year, notes that he is planning a cost-cutting drive.
HEALTHCARE
Oxford vaccine could be ready before year end
Professor Andrew Pollard, who has led trials of Oxford University and AstraZeneca’s coronavirus vaccine, said they are on track and “optimistic” of securing approval by Christmas. Prof Pollard, who has described work on the vaccine as a “miracle” done at “record speed”, noted that the drug is easier to deliver and ten times cheaper than the vaccine developed by Pfizer and BioNTech.
MEDIA AND ENTERTAINMENT
Comcast to make its venture capital firm part of corporate business division
Comcast’s corporate venture capital firm, Comcast Ventures, will become a part of its strategic business development team at its cable segment. The firm said: “We are aligning our approach to venture investing more closely with our business units and repositioning Comcast Ventures and its fund under the strategic business development team at Comcast Cable”.
REAL ESTATE
Missing stamp duty holiday may save some buyers money
While a number of homebuyers are looking to push through purchases before the stamp duty holiday concludes at the end of March 2021, Melissa Lawford in the Telegraph says some are waiting to buy in the hope that the end of the tax break will see prices dip. She notes that the stamp duty holiday has helped drive a post-lockdown property surge but with values climbing, some buyers have found that what they gain from the tax holiday is outweighed by price inflation.
RETAIL
Government warned of extended lockdown risks
The Government has been warned by over 60 retail bosses that many stores may never reopen if the lockdown is extended into the crucial Christmas trading period. A letter signed by executives from chains including Marks & Spencer, Dixons Carphone, River Island and JD Sports says that closures have deprived retailers of £2bn a week. The letter insists: "Retailers of all shapes and sizes must be allowed to reopen by the start of December. Without this, there will be little festive cheer left on our high streets."
ECONOMY
Analysts: Toxic loans could hit eurozone economy
Analysts at UBS have warned that the eurozone economy risks being stifled by a surge in toxic loans, with corporate debt levels pointing to an increase in defaults next year. While stimulus measures from policymakers amid the coronavirus crisis have delayed possible bankruptcies, UBS analysts say defaults could almost quadruple in Italy, rise 180% in Spain and double in Germany and France.
Pandemic widens wealth gap
Research from the Centre for Enterprise, Markets and Ethics (CEME) shows that the coronavirus crisis has widened the wealth gap between rich and poor people in the UK. The think-tank says that a third of people now have less than £1,500 in the bank, with many lower-paid employees’ finances taking a hit as they have been furloughed or made redundant. The CEME report says households have been able to save an average of 29.1% of their disposable income since March, while savings ratios in 2019 stood at around 5%. CEME has suggested an increase in tax relief on savings would encourage more investment by the less well-off, with the think-tank also calling for higher interest rates on savings.
OTHER
Fraudsters target Christmas shoppers
Research by UK Finance suggests fraudsters are targeting Christmas shoppers who have switched to online shopping due to coronavirus-related restrictions. Figures show that more than £27m was lost to purchase scams in the first half of the year, with these incidents seeing a customer pay in advance for goods or services that do not exist and are never received. Katy Worobec, managing director of economic crime at UK Finance, said: “With Black Friday and Christmas approaching, fraudsters are again stepping up their efforts to take advantage of consumers searching for bargains.”