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Daily News Roundup: Monday, 26th November 2018

Posted: 26th November 2018


FCA tells banks to check security measures

Two high street banks have reportedly been ordered by the Financial Conduct Authority (FCA) to check thousands of accounts belonging to possible fraud suspects. The as-yet-unnamed banks were also told to examine the security of their account opening procedures, to see if they pass tough anti-fraud measures introduced in recent years. Banks have also been encouraged to report any potential cases of “conduct rule breaches” among staff, as criminals are often found to have a suspicious amount of detail about fraud victims, prompting the FCA to suspect they may be getting insider help. Jonathan Davidson, FCA director of supervision, said: "We have dedicated significant resources to ensuring firms are not taking on financial crime perpetrators as customers, and have effective screening of the millions of transactions that pass through the system."

HSBC suffers online outage

Many HSBC customers experienced difficulty accessing their accounts via the mobile app on Friday, forcing the bank to apologise over IT failures for the fourth time in a month. It is unknown how many customers were affected, but the outage occurred on the busiest shopping day of the year. This came as MPs launch a formal inquiry into IT shortcomings at the UK’s financial institutions. Treasury Select Committee chair Nicky Morgan said that with a number of banks shutting branches it is essential that online services are reliable.

Banks await stress-test results

The Bank of England will publish results from its annual stress test of major lenders on Wednesday, and banks are hoping to be given the green light to return some capital to their investors. While analysts do not expect any bank to fail, there is a chance weaker banks will be requested to hold more capital. The testing put Lloyds, Barclays, Royal Bank of Scotland, HSBC, Santander, Nationwide and Standard Chartered through extreme scenarios. Last year’s annual test found all the lenders to be robust enough to withstand the worst-case situation. Recent tests carried out by the European Banking Authority found that all 48 banks analysed, including Britain’s big four, could withstand the kind of economic shock associated with Brexit.

Branches are still necessary

Figures compiled by Which? show that the number of bank branches in the UK has fallen from around 20,000 30 years ago to about 7,500 today, with some 60 branches now closing every month. A fifth of households now live over 3km away from their nearest bank. Of those surveyed, 77% said branches are needed in case of technical problems, and 83% think they should be preserved for people who cannot or will not use alternative options.

Charities face new bank charges

Barclays has told around 5,000 not-for-profit organisations that they no longer qualify for free banking services and must open a business bank account. This comes following a review of the community accounts which Barclays offers for free to charities and community groups that have an annual turnover of under £100,000, with the analysis showing that a number of organisations no longer meet the turnover threshold.

RBS to hand out bailout dowries

RBS is preparing to hand £6.6bn in customer deposits and £4.2bn in loans to rivals as a condition of its 2008 bailout. Successful applicants will be awarded dowries of £750 to £50,000 for each business banking customer they sign up. Virgin Money, Metro Bank, CYBG and Santander are among the institutions expected to apply for a share of the fund before Friday’s deadline.

Interview: Monzo’s Tom Blomfield

The Telegraph interviews Monzo chief executive Tom Blomfield, who says he wants the app-based bank to become the gateway to people's financial lives, offering services centred on savings, bills, stock portfolios and pensions.

Lloyds app gets anti-fraud location tracker

Lloyds has added a location tracker to its mobile banking app so customers will be able to see where debit card transactions have been made on Google Maps, allowing them to spot fraud more easily.


Goldman revamped risk oversight after $6.5bn 1MDB bond financing

The FT reports that Goldman Sachs tightened its oversight of risk after pressure from the New York Federal Reserve in 2013, with this occurring after a controversial bond financing for 1MDB. Meanwhile, analysis shows that Goldman board members have lost at least £100m between them as shares have dipped, with a 14% decline in the aftermath of the 1MDB corruption scandal.

Outflows from equity funds since leave vote reach $1tn

Data provider EPFR says investors have withdrawn $1.01tn from UK-focused equity funds since the EU referendum, with Brexit uncertainty said to have tarnished the appeal of UK equities.

Ex-BlueBay pair trigger quant race with raids on rivals

BlueBay Asset Management co-founder Hugh Willis and former chief executive Alex Khein have hired a number of staff from BlackRock, Citadel and Robeco for their new fixed income venture BlueCove.

SoftBank relaxed about price of India investments

Rajeev Misra, chief executive of SoftBank’s $100bn Vision Fund, says he is not concerned if it overpays when investing in tech start-ups as it expects “returns will be three to four times the investment.”

Buyout giants eye Nestlé skincare brands

CVC, TPG and Carlyle are among the rumoured suitors for Nestlé’s £5.4bn skincare division which is being sold following pressure from activist investor Dan Loeb of Third Point. An approach from rival L’Oréal is also believed to have prompted Nestlé to sell.

Investors to vote on Wagamama deal

Shareholders in the Restaurant Group will this week vote on its plans to acquire Wagamama for £559m which would be part-funded by a £357m rights issue underwritten by JP Morgan and Numis. Investors including Columbia Threadneedle have publicly opposed the deal, while Schroders and Royal London Asset Management have come out in support of it.


Banks settle in Euribor lawsuit

Citigroup and JP Morgan Chase will pay out $182.5m to settle an antitrust lawsuit brought by investors who claim the lenders conspired to rig Euribor. Combined with three previous settlements by Deutsche Bank, Barclays and HSBC, the case has reaped $491.5m. Several banks remain defendants.

Bank of France governor demands year limit for Brexit chaos emergency rules

France's central bank governor has warned that emergency rules to save the derivatives market from Brexit-related chaos must not last more than one year.

Bank of Italy raises alarm over threats from high bond yields

The Italian central bank has warned that interest payments on rising bond yields are set to cost the country billions, as investors take fright at the populist government’s spending plans.

Banks face royal commission

Australia’s financial services royal commission will this week grill National Australia Bank's CEO Andrew Thorburn and chairman Dr Ken Henry as part of a misconduct inquiry. AMP CEO Mike Wilkins, ANZ CEO Shayne Elliott, Bendigo and Adelaide Bank chairman Robert Johanson and Australian Prudential Regulation Authority chairman Wayne Byres will also appear before the royal commission, while bosses of the Commonwealth Bank of Australia, Westpac, Macquarie Group and ASIC were questioned last week.


Ghosn denies misconduct allegations

Former Nissan chairman Carlos Ghosn has denied misconduct allegations, according to media reports in Japan. Mr Ghosn was detained by police and dismissed by Nissan last week. Claims against the businessman, who led the Renault-Nissan alliance, include falsely reporting his earnings.


TUI make fewest compensation payouts

TUI Airways has been found to be the UK-based airline least likely to pay out flight delay compensation, settling just 29% of claims without the need for a court case.


FCA probes cryptocurrency firms

Figures from the Financial Conduct Authority show that the watchdog is stepping up its investigations into cryptocurrency firms. The FCA has conducted inquiries into 50 firms suspected of operating in areas of financial services without permission, up from 24 in May. The body also revealed that crypto business staff had submitted seven whistle-blowing reports this year, while none had been submitted in the previous three years.

UK not saving enough for retirement

The chief executive of wealth management group Quilter has warned that the UK has the largest savings gap in the whole of Western Europe and will face a “mounting challenge” over the coming decades as the population ages. Paul Feeney said a growing number of Britons are not saving enough for retirement despite millions of people being enrolled into workplace pension schemes.

LendingCrown hires new CMO

Fintech firm LendingCrowd has appointed Darren Cairns as its chief marketing officer, with Mr Cairns joining from Neyber.


Drug deal saves NHS £300m

The NHS is set to save a record £300m after negotiating deals with five manufacturers on cheaper versions of adalimumab, the drug on which hospitals spend the most per year. Adalimumab costs the NHS more than £400m annually – with the new deal set to trim three-quarters of this total. The new deals came after the NHS accepted bids from Amgen, Biogen, Mylan and Sandoz – and negotiated a cheaper deal with original manufacturer AbbVie.


Call for ban on Chinese broadcaster

Regulators are being urged to ban Chinese state broadcaster China Global Television Network from broadcasting in Britain, citing concern that parent network CCTV has aired prisoners' forced confessions. Peter Humphrey, a former Reuters journalist who co-founded human rights group Safeguard Defenders, has lodged a complaint with Ofcom.


Return of the supersized mortgage

First-time buyers are taking out mortgages that are, on average, 3.68 times their annual income – the highest since records began in the 1970s. Bank of England data shows that a quarter of mortgages are for 4.5 times someone's salary or higher, compared to a fifth three years ago, with some lenders offering as much as six times borrowers' salaries. A new deal from Darlington Building Society offers professionals up to six times their salary, with Barclays, Santander and Clydesdale Bank offering loans of up to 5.5 times income for some borrowers and Sainsbury's and Virgin offering up to five times people's income.


Ashley to pull businesses out of Intu

Sports Direct owner Mike Ashley has vowed to shut all of his shops in shopping centres owned by Intu Properties, after it rejected his proposed terms on four House of Fraser outlets. He has 17 stores across several brands in Intu malls, paying a combined £25m in rent to the landlord.


Brexit deal ‘would leave UK £1,000 per person worse off’

An economic analysis by the National Institute of Economic and Social Research has found that Theresa May’s Brexit deal will leave the UK’s GDP about £1,000 lower per person than if the country remained in the EU. The researchers said the fall was “largely because higher impediments to services trade make it less attractive to sell services from the UK. This discourages investment in the UK and ultimately means that UK workers are less productive than they would have been if the UK had stayed in the EU.”

Billionaires lose billions

The UK’s richest billionaires have seen their personal wealth shrink by more than £6bn after a perfect storm of market turmoil. The 16-strong British contingent in Bloomberg’s Richest 500 list have collectively seen an estimated £6.2bn wiped from their wealth as the UK property market and stocks around the world tumble.


McDonnell wants check on council loans

Shadow Chancellor John McDonnell has urged the Government to launch an investigation into the use of high-cost bank loans after a report from Research for Action found that 240 councils stand to waste up to £16bn on interest payments for lender option borrower option loans over the next 40 years.

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