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Daily News Roundup: Monday, 18th November 2019

Posted: 18th November 2019

BANKING

No local branches in 10 years if closure rate continues

Analysis by Which? suggests most of Britain’s smaller bank branches will disappear within a decade. With analysis showing an average of 50 branch closures a month, the remaining 6,500 local branches will be gone within 10 years if the rate continues. Which? says more than 3,300 branches have closed since the start of 2015, with 638 NatWest branches closed, 412 fewer RBS branches, 442 HSBC branches gone and 404 Lloyds closures. Some 100 branches have already been scheduled to close before the end of 2019, while TSB is reportedly considering closing up to 100 branches. The union Unite is today launching its Save Bank Branches campaign, with Dominic Hook, Unite national officer, commenting: “The damage done to local communities, small businesses and staff as a result of the decision of the banking sector to abandon local banking is devastating.”

Banks fail in ‘fraud levy’ bid

Seven of the UK’s biggest banks - including Barclays, HSBC, Lloyds and RBS - have failed in efforts to levy a 2.9p transaction fee to compensate victims of banking fraud due to a "lack of consensus" among banks and payment providers. Lenders pay into a fund to reimburse people who've lost money in authorised push payment fraud. The fund is due to run out on December 31, and UK Finance has scrapped proposals designed to keep it going after two thirds of banks in a consultation by Pay.UK rejected the proposed fee.

Investors defeated in Lloyds court fight

A group of 5,803 former Lloyds TSB shareholders have lost a £385m civil action against the bank over its purchase of rival HBOS in 2009. The investors – who say they suffered losses of between £200m and £650m as a result of the deal - claimed Lloyds bosses recommended the deal in 2008 without disclosing HBOS’ bad mortgage debt, adding that executives also failed to disclose that HBOS had received £25.65bn in emergency loans from the Bank of England. Mr Justice Norris in the High Court said the claims must be dismissed as he was not convinced “failures to provide sufficient information were in fact causative of any loss”.

NatWest tops web security rankings, with TSB last

An investigation into the website security of the 12 biggest banks by consumer group Which? ranks TSB last for its online defences. TSB scored just 50% in a ranking, having been criticised for not utilising two-factor authentication, with it also noted that the bank allows to pick overly simple passwords and lets multiple computers access to the same account online simultaneously. NatWest was ranked safest with an 83% score, followed by Nationwide Building Society (75%) and Lloyds Bank (74%).

Nationwide halves chief’s pension

Nationwide Building Society chief executive Joe Garner is halving his pension perks. Mr Garner, who last year received 33% - or £292,000 - of his salary as a pension contribution, will see the rate cut to 16% from 2021. The move, part of wider cuts to the Nationwide pension scheme, will mean his retirement perks are proportionate to those seen by other staff.

TSB owner does not assist IT review

TSB's owner reportedly refused to help with the inquiry into a technology meltdown that locked 2m online customers out of their accounts last April. The report, by law firm Slaughter and May says TSB owner Sabadell informed the law firm early on in the process that it would not provide documents to assist the review. The report is also set to reveal that the TSB IT chief Carlos Abarca failed to inform board members about "shortcomings" with the testing of the new IT framework days before it crashed.

Halifax enables gambling block

Halifax has announced that customers can now block their bank cards from being used to gamble in a bid to stop people betting money they cannot afford to lose and to restrict impulsive behaviour. The restriction can be lifted but it takes 48 hours for the card to be able to be used for bets. HSBC last week said customers can now self-exclude from all gambling transactions, with the restriction only able to be reversed after a 24-hour cooling-off period.

RBS opens cash-free branch

Royal Bank of Scotland is replacing a full-service branch in Central London’s financial district with a cashless one. It says the Bishopsgate branch will have a “digital focus” and customers who require cash will have to use outside ATMs or visit nearby NatWest or RBS branches.

Under-35s shaky on their Pin

New research by financial services provider Sanlam UK has found that more than a quarter of people do not know the Pin for their bank card. Sanlam found that 57% of under-35s found the number hard to recall, compared with only a fifth of over-55s. Londoners were the most likely to forget, at 51%, compared with 29% in Wales and just 18% in the North-west.

Monzo COO checking out

Monzo COO Tom Foster-Carter is to leave the digital bank to launch a grocery start-up designed to "help the incumbents" in the supermarket price war.

PRIVATE EQUITY

US VC firms target UK tech

Analysis by Pitchbook and London & Partners shows that British technology businesses received $4.4bn (£3.4bn) from US venture capital funds in the first 10 months of the year, compared to $4bn for the whole of 2018. Monzo attracted one of the largest cash injections of the year, pulling in $144m in a series F round led by Y Combinator. Innovate Finance and London & Partners research released earlier this year found that London has now overtaken New York to become the world’s number one city for investment in fintech firms.

INTERNATIONAL

FBI tried to warn BofA against ill-fated buyout

Files show the FBI and Department of Justice tried to warn Bank of America against a leveraged buyout led by former Blackstone dealmaker Chinh Chu, voicing concern over possible fraud.

Three US bank failures in a month lead to concerns of more to come

The FT looks at the climate for US banks after 3 collapsed in the past month - City National Bank, Resolute Bank and Louisa Community Bank.

CONSTRUCTION

Kier shareholders revolt over bosses' pay

Housebuilder Kier has seen 53.9% of shareholders vote against a pay policy that could see chief executive Andrew Davies earn more than £1m in bonuses despite profit warnings and a falling share price. ISS and Glass Lewis had both recommended voting against Kier's pay policy, with ISS voicing concern over share-based bonuses for COO Claudio Veritiero and new chief executive Andrew Davies, while Glass Lewis raised concerns about the salary of incoming CFO Simon Kesterton. Kier said it would "reflect carefully" on points raised by its shareholders and consult them further about their concerns.

The Daily Telegraph The Times Financial Times Daily Mail

FINANCIAL SERVICES

Report reveals wealth manager costs

Analysis shows that Investec is the UK's most expensive wealth manager. The report, which looks at the cost of investing £100,000 with 20 of Britain’s largest financial advice firms and the impact of charges over 10 years, found that Investec charges customers more than double the rate of the cheapest firm. Investec’s reduction in yield stands at 3.8%, while Rathbones’ is 3.4%. Barclays Wealth, 1825 - the advice arm of Standard Life - and Smith & Williamson are joint third, with a rate of 3.2%. The cheapest overall is HSBC at 1.7%, followed by Nationwide at 2%. St. James’s Place is the fifth cheapest on the list with a rate of 2.4%, beating the private bank Coutts at 2.5%, Hargreaves Lansdown (2.6%), Brooks Macdonald (2.7%), Quilter (2.8%) and Brewin Dolphin (3%). The Sunday Times notes that comparing the impact of charges across different wealth management firms is “notoriously difficult” as each firm will levy different fees.

EC to extend agreement to preserve clearing services

European Commission vice-president Valdis Dombrovskis has vowed to extend EU banks' rights to use London for clearing beyond March next year, a move that will protect London’s £565trn market in clearing services. With EU rules saying banks within the bloc must use a clearing house based there, it had been feared that London could be shut out of the market. The European Commission last year issued a temporary permit allowing its banks to carry on using London until 30 March 2020. This deadline will now be extended, with Mr Dombrovskis saying the extension will help “prepare for any eventuality.” Andrew Bailey, chief executive of the Financial Conduct Authority, welcomed the move, saying: “This is an important issue with real consequences if not resolved.” The International Swaps and Derivatives Association also welcomed Mr Dombrovskis’ proposal to extend the equivalence arrangements, saying it would avoid major disruption in the event of a no-deal Brexit.

REAL ESTATE

Property-related IHT refunds climb

Research from financial adviser NFU Mutual shows the rate at which people who inherited properties are claiming money back from the taxman as homes have fallen in value by the time they were sold. The analysis shows that property-related refunds granted by HMRC rose 86% from 2,177 in the 2016/17 tax year to 4,052 in 2017/18 and climbed 11% to 4,516 in the year to this April.

Brits unaware of first-time buyer help

Almost half of adults in the UK are unaware that there are schemes to help first-time buyers get onto the housing ladder – and only one in five people can name any of the three main schemes. Research from Trussle also found that fewer than one in 10 of us find the Help to Buy Equity Loan, Shared Ownership and the Lifetime ISA easy to understand - and it warns that thousands eligible are set to miss out on the benefits of the Help to Buy ISA, which closes for applications at the end of the month, simply because they didn't know it existed.

RETAIL

Carpetright rescued by £15.2m buyout

Carpetright's largest shareholder, Meditor Capital Management, has bought the retailer for £15.2m, potentially saving 3,000 jobs. The deal will ensure the troubled retailer does not fall into administration. However, the firm is paying just 5p a share for Carpetright, which was valued at 35p a share some seven months ago.

ECONOMY

Voters open to economic reform

A YouGov poll commissioned by the IPPR think-tank suggests that voters are increasingly open to a radical change in the way the economy is organised. A survey of more than 1,600 people saw 60% in favour of the next government making “moderate” or “radical” changes to the way the British economy is run, while only 2% said the government should leave the economy as it was. Of those open to change, 29% backed moderate policies and 31% supported more radical reform. Looking at respondents’ political allegiance shows that 59% of Labour voters back radical change compared to 9% of Conservative supporters, with 35% of Tory voters calling for “moderate” changes.

OTHER

Tap-and-go payments hit £223m a day

UK Finance data shows that Britons spent £223m a day on contactless cards in August, totalling £6.9bn during the month. This marks a near-16% increase on August 2018’s total. In total there were 726m contactless payments in the month, a rise of 88m. The figures also show that 82% of credit and debit cards issued in August were contactless, up on the 77% seen in the same month last year.

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