Banks accused of charging thousands extra on mortgage payments
Analysis suggests that homeowners are paying extra on their mortgages as Britain's biggest lenders are charging rates that are "far too high." NatWest, Barclays, Lloyds Banking Group and HSBC are offering fixed rate deals that are around 50% more expensive than three months ago, even though wholesale borrowing costs have fallen dramatically since the highs seen in the wake of the mini-Budget. The report shows that fixed rate deals are currently priced well above current Bank of England interest rate predictions, pushing up the gap between what lenders and consumers pay for credit. Peter Richardson, an analyst at Berenberg, said that even the best deals on the market do not reflect current funding costs, noting that a five-year fix at 5% is 1.2 percentage points higher than the interest rate swap level. Normally, he added, the difference would be between 0.8 and 1 points. Rachel Springall, a finance expert at Moneyfacts, said: "Borrowers may well breathe a sigh of relief to see that fixed mortgage rates are starting to fall, but there may be much more room for improvement."
Atom Bank to tap private equity for final £50m funding round next year
Atom Bank is planning to raise £50m next year after being forced to delay its stock exchange debut due to tough market conditions. The move comes after Atom announced a £30m funding round from existing investors to support growth on Friday. Mark Mullen, chief executive of Atom Bank, said: “In recent weeks we surpassed £4.5bn in retail deposits having made waves with the pricing of our fixed and instant savers, opening up a void between banks such as Atom that pay a fair return on savings and those that are simply unresponsive to the market.”
PBOC cuts reserve requirement ratio to spur lending
The People's Bank of China (PBOC) said on Friday that it would cut the reserve requirement ratio for banks by 25 basis points, releasing about 500bn yuan ($69.8bn) in long-term liquidity into the country’s faltering economy. "The reduction ... will help banks follow through on a directive to defer loan repayments from firms struggling with widening lockdown restrictions," Mark Williams, chief Asia economist at Capital Economics, said. "But few firms or households are willing to commit to new borrowing in this uncertain environment."
Few Credit Suisse clients have closed accounts
Andre Helfenstein, head of Credit Suisse's Swiss unit, said that while some customers have withdrawn some of their money, “very few have actually closed their accounts." He told Swiss newspaper SonntagsZeitung: “In our Swiss Bank division, client assets have stabilised, and we have lost a total of 1% of our asset base.”
IFAs: FSCS has significant impact on vulnerability
A poll by Panacea Adviser shows that 87% of independent financial advisers (IFAs) say the Financial Services Compensation Scheme has a huge or significant impact on their financial vulnerability and chances of survival. The survey also saw just 6% of advisers say current company morale was positive, with 35% seeing morale as negative or very negative. Derek Bradley, founder and chief executive of Panacea Adviser, said the Financial Conduct Authority (FCA) “should be very worried for the wellbeing of smaller IFA firms.” With the poll showing that respondents believe FCA fee consultations are a box ticking exercise to lead to a pre-determined outcome, Mr Bradley commented: “There are some excellent people at the FCA but it seems that at the top the leadership is very out of touch with reality.”
Binance chief unveils plan for cryptocurrency recovery fund
The founder of the world’s largest cryptocurrency trading platform has unveiled plans for a $1bn-plus recovery fund to help to keep companies afloat after the collapse of FTX. Changpeng Zhao, chief executive of Binance, said several other crypto firms had committed money to his Industry Recovery Initiative and claimed that the total size of the fund could swell to $2bn. Companies and entrepreneurs would be able to draw on the funds amid signs of a liquidity squeeze as traditional investors from venture capital and private equity have second thoughts about the crypto industry. Binance said it had already had 150 applications from firms seeking support.
Regulator warns pension schemes on deadline for dashboards
The Pensions Regulator (TPR) has warned retirement scheme providers that it will take a “dim view of wilful or reckless non-compliance” with their duty to have savers’ data fed into the new pension dashboards in a timely fashion. The online tool will enable savers to see all their pension pots in a single hub, bringing together state, private and company pensions. Providers will begin to be compelled to connect to platforms from April, with a high level of coverage required by 2024. The TPR is able to impose fines of up to £50,000 for non-compliance.
H2O faces record €75m fine and investment ban for chief
The Autorité des Marchés Financiers, France’s financial regulator, has recommended fining H2O Asset Management €75m over the firm’s allegedly unauthorised investments in securities linked to German financier Lars Windhorst. The AMF is also seeking to fine CEO Bruno Crastes €15m and ban him from the industry for a decade, as well as impose a €3m penalty for CIO Vincent Chailley.
Catastrophe reinsurance set to soar after year of extreme weather, industry warns
Property catastrophe reinsurance could be 50% more expensive next year, underwriter Beazley says, as supply reduces due to rising costs and inflation drives up demand from insurer clients.
NHS breaks up £400m data contract in response to privacy concerns
The NHS has split the contract for its Federated Data Platform programme into several parts with suppliers barred from bidding for all of them. The move comes amid concerns within the NHS about the role of US data analytics giant Palantir in the UK’s health service.
MEDIA & ENTERTAINMENT
BT to purge costs by merging two struggling divisions
BT chief executive Philip Jansen is escalating his cost-cutting programme with the merger of the group’s Global Services division, which provides security and cloud computing services around the world, with its Enterprise unit, which serves business and government customers in the UK. Revenues at the two units fell in the first half of the year with profits also down. A senior industry source said a merger could take £10m to £20m of costs out of the business, but it is not clear how many job cuts will be required. Earlier this month BT lifted its target for cost savings by £500m to £3bn.
Nearly 90,000 homes destined for negative equity
New figures show that over 89,000 homeowners who bought properties in 2020 and 2021 with small deposits are at risk of not being able to afford to remortgage when their fixed-rate deals end over the next two years. Many of those at risk bought homes using the stamp duty holiday that ran from July 2020 to September 2021. Analysis by Capital Economics, commissioned by The Daily Telegraph shows that next year an estimated 55,634 homeowners who bought with deposits of 10% or less will come to the end of two-year fixed-rate mortgages. In 2024 the number will be 33,755. Neal Hudson of BuiltPlace, an analyst, said: "The risk is massive. We could see an explosion in the number of mortgage prisoners. We could definitely see a lot of people stuck on higher-rate mortgages."
Shoppers turn to debt-fuelled consumption
Reports from Britain’s banks and building societies indicate consumers were spending more on credit than usual to pay for Black Friday bargains. Shoppers are turning to credit cards and buy now, pay later schemes as household budgets come under pressure from the cost of living crisis. Barclays said it had seen a 4.9% increase in credit card transactions compared to Black Friday 2019, while Nationwide said a third of purchases this year were made using a credit card or a “buy now, pay later” company. Last year this figure was 8%. Klarna, the buy now, pay later firm, said purchases had soared by 30% this week. Despite the increase in consumer spending this year, bricks-and-mortar retail saw footfall down 5% on last year and 15% on pre-pandemic levels, according to data company Springboard.
Black Friday purchases up 10% on last year
Figures from Nationwide show Black Friday purchases were up 10% compared with last year as Britons made the most of lower prices amid the cost of living crisis. The rate of spending has risen more than a third since pre-pandemic times, data show. “This year’s Black Friday was our busiest day on record as people started their Christmas shopping earlier and spent the evening watching the World Cup,” Nationwide’s director of payment strategy, Mark Nalder, explained. “While cost of living pressures will have inevitably meant some people have cut back on luxury purchases, others will have used the day to buy essential items at a lower cost.”
Bridgepoint makes £400m bid for The Hundred
Bridgepoint Group has approached the England and Wales Cricket Board with an offer to acquire a 75% stake in the 100-ball format competition called The Hundred. The UK private equity firm’s interest in taking control of The Hundred would be designed to "turbocharge investment" into English cricket, and especially into developing the women's game, according to one person familiar with its offer. Each of the 18 counties which make up the sport would receive a fresh injection of cash and sources say the offer is likely to win widespread support from county chairs.
Hedge fund Rokos warns that sterling is ‘vulnerable’ to further falls
Rokos Capital Management has warned investors that the recession required to tame inflation in the UK has potentially serious societal implications and leaves sterling vulnerable to further shocks.
Qatar reviews investments in London after ad ban on buses and Tube
The move by Transport for London to ban the Gulf state’s advertisements on the UK capital’s buses, taxis and underground train system has led Qatar to review its investments in London.