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Daily News Roundup: Monday, 1st July 2019

Posted: 1st July 2019


Mobile banking to overtake high street within two years

Mobile banking will be more popular among Britons than visiting a high street bank branch by 2021, according to analysis by Caci. The consultancy found the proportion of customers using app banking is expected to continue to rise over the coming years, reaching 71% by 2024. Caci said mobile banking's growth is being fuelled by the increasing adoption of the technology by older generations, in particular wealthier older families and those nearing retirement. Figures by UK Finance show more than two-thirds of British adults used online banking and 48% used mobile banking in 2018, up from 41% in the previous year.

British banks boost profits by a third

British banks have increased their profits by a third, outpacing the Eurozone, according to The Banker's ranking of the top 1,000 world banks. The UK was boosted by strong profits at HSBC, which were pushed higher by its retail banking and wealth management divisions, according to the industry list.

Metro plans boardroom shake-up

Metro Bank is seeking to beef up its board by bringing in new directors, with chairman Vernon Hill amongst those who could be replaced. The search for new directors comes after Metro shored up its finances last month with a £375m capital raising. The Prudential Regulation Authority wants Metro to clarify when Mr Hill, 73, will stand down as part of an overhaul of the bank’s culture and business model. Separately, the Financial Reporting Council has revealed that the 2016 accounts of Metro Bank are amongst those it has reviewed.

Santander bidding for £3.7bn Tesco mortgages

Santander is understood to be among the early-stage bidders for Tesco Bank’s £3.7bn mortgage book, pitting it against Royal Bank of Scotland. Tesco Bank revealed last month that mounting pressure in the market had forced it to retreat, as lenders including HSBC and Barclays slash rates to lure customers.

Bank of Ireland to sell UK credit card portfolio

Bank of Ireland is selling its UK credit cards business for £530m. The portfolio, which includes cards for the Post Office and the AA, will be sold to special purpose investment vehicles advised by affiliates of Centerbridge Partners Europe and Jaja Finance.

HSBC turns to AI to tackle more 'sophisticated' crime

HSBC has started testing a new artificial intelligence (AI) system intended to tackle the more “sophisticated end” of criminal activity. The bank has reportedly commenced a “multi-year conversation with regulators” to create a new AI product that can comb through much deeper analysis of customer behaviour in an effort to spot money laundering earlier on.

NatWest steps up digital services

NatWest is expanding its digital services for small firms, with the launch of a fast credit alternative to the traditional business overdraft and a new video banking channel. Rapid Cash will offer credit based on a firm's unpaid invoices up to £300,000.

Tough task facing Crosbie at TSB

The Sunday Times examines the task facing new TSB executive Debbie Crosbie. The lender remains under the glare of regulators following the tech meltdown last year that saw tens of thousands of customers locked out of their accounts. TSB is also battling fierce competition in the mortgage market, while near-zero interest rates have hampered returns.

Banks must go green to survive

The Telegraph publishes an essay by Simon Thompson, chief executive of the Chartered Banker Institute, in which he argues that green finance principles and practice must form the foundation for the future of banking and financial services.


PE fundraisings likely to grow

The Sunday Times’ Oliver Shah predicts that the scale of fundraisings by private equity giants such as Blackstone, KKR and SoftBank is likely to keep growing, at least as long as the current economic cycle runs.


Deutsche Bank could cut 20,000 jobs

Deutsche Bank is considering cutting 20,000 jobs, including hundreds in London, in an attempt to cut costs and boost returns. Senior members of the bank’s management are looking to cut 15,000 to 20,000 roles, according to The Wall Street Journal. The cuts would represent one in six staff and could be implemented over more than a year.

Further rate cuts increasingly dangerous, BIS warns

The Bank for International Settlements has warned that further cuts to already rock-bottom interest rates and quantitative easing cannot deliver genuine growth on their own. The resultant asset booms are becoming harder to justify and risk a cascade of fire sales in the next downturn, the world’s top financial watchdog said. BIS head Agustín Carstens has also suggested global central banks could have to issue their own digital currencies sooner than expected, after Facebook unveiled plans to create its own stablecoin.

Bank stocks get a fillip from Fed stress test results

The largest US banks have promised share buybacks and dividends totalling $136bn over the next 12 months, after passing the Federal Reserve's stress tests.

Nordea chief announces retirement

Nordea chief executive Casper von Koskull is to depart by the end of next year, the Nordic region’s biggest bank has announced.

Singapore to issue up to five digital bank licences

The Monetary Authority of Singapore will issue up to five digital bank licences to “strengthen the resilience of our banking system in a new digital era in finance”.


Jaguar to build electric XJ in Britain

Jaguar Land Rover is this week expected to reveal that it will build an all-electric version of its XJ luxury saloon at its Castle Bromwich factory in Birmingham.


Persimmon shuts out critics

Housebuilder Persimmon has removed complaints about the quality of its homes from Facebook after taking over the administration rights of a group targeting its customers on the site. Members of the “Persimmon Homes Unhappy Customers” group, which had almost 14,000 members, were told on Thursday that the name had been changed to “Persimmon Homes Customer Care” and found they could no longer comment.


Indefinite ban on Woodford fund withdrawals expected

The Times reports that a ban preventing investors in Neil Woodford’s principal equity income fund from selling is set to be extended indefinitely today. Link Fund Solutions, the independent organisation charged with governing the fund, is understood to be drawing up plans to announce a continuation of the suspension because Woodford Equity Income Fund is in no shape to withstand the redemption requests expected, if and when it reopens. The Times also says there is little prospect that investors will be refunded the charges they have paid on the Woodford Equity Income fund during its suspension. Separately, the paper looks in detail at events leading up to the gating of the fund, highlighting allegations of a lack of due diligence and a bullying culture at Woodford.

FCA ramps up investigations

The Financial Conduct Authority stepped up its investigations in 2018, with the number of individuals referred to the watchdog's regulatory decisions committee (RDC) rising to 27 from 13 the year before. The number of businesses referred to the RDC increased 14% last year, rising to 543 in 2018 from 476 the previous year. Jonathan Cary, commercial disputes partner at law firm RPC, said: "Political pressure on the FCA to take a tough stance against misconduct remains intense."

LCF investors could receive compensation

Investors who lost millions of pounds in the collapse of London Capital & Finance could be entitled to some compensation after a U-turn by the Financial Services Compensation Scheme. The FSCS said it will begin considering claims of compensation from investors in “mini-bonds” issued by LCF, having initially said that it could not protect investments in the company.

"Bro-culture" in FX markets encouraged illegal activity

Andrew Hauser, executive director of markets at the Bank of England, has said a “bro-culture” encouraged financial crime in the foreign exchange markets in recent years. Speaking at an event intended to promote careers in forex to women, Mr Hauser added that it made “terrible business sense” not to have more women in senior roles in finance.

Nutmeg keeps crowd in the dark

Nutmeg has been accused of keeping crowdfunders in the dark with its latest fundraising. The online wealth manager raised £4m from more than 2,000 investors on Crowdcube last week. It promised to offer crowd investors the same terms as it did Goldman Sachs - which led a £45m investment in January - but did not disclose financial details in its pitch.

Sell-off in UK-domiciled funds slows, says Morningstar

Figures from Morningstar show less than £500m flowed out of UK-domiciled open-ended funds in May, compared with outflows of more than £5bn in the first two months of 2019.

Prudential investors poised for demerger in UK

Prudential’s UK business will present its strategy to investors this week, with speculation mounting that the insurance group is to push ahead with its demerger in the next few months.


Ivy tycoon to sell empire stake

Restaurant tycoon Richard Caring, whose interests include the Ivy chain, is closing in on a deal to sell 25% of his empire to the former prime minister of Qatar, Hamad bin Jassim bin Jaber Al Thani, for £200m.


Network Rail bids for part of British Steel

Network Rail is planning to bid for a chunk of British Steel as time runs out for offers to buy the collapsed business. It is understood to have prepared a bid for British Steel’s rail service centre business, responsible for the welding, finishing and storing of rails for the UK’s train network.


Lego builds on success with Merlin deal

The billionaire Danish family that controls Lego is expanding its empire by snapping up Legoland and Madame Tussauds owner Merlin Entertainments for £4.8bn. Kirkbi Invest says it has the money and experience to "realise the company's potential to grow".


More taking out marathon mortgages

Figures from the Financial Conduct Authority show the number of borrowers taking out "marathon" mortgages lasting 35 years or more has reached its highest level since the 2011 recession. Some 28,310 mortgages running for 35 years or more were approved in 2017 - a 27% annual rise.


Economic paralysis set to last all summer

The British Chambers of Commerce has warned that the UK economy is likely to remain “in stasis” until October as the lack of clarity over Brexit continues. The business lobby group’s latest quarterly survey found the underlying economic conditions were “stagnant” in the three months to June. Separate research by the CBI reveals Britain's private sector has experienced the sharpest fall in activity for seven years over the past three months.

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