BANKING
First Direct tops consumer bank list
Online banks First Direct, Starling Bank and Monzo have come out top in a current account satisfaction survey from Which? Their customer service, application process, communication and transparency of charges were all ranked highly by users. Monzo was criticised however for having not yet signed up to an industry code on bank transfer fraud. Ulster Bank was ranked at the bottom. Which? said two other banks on its list - Nationwide Building Society and M&S Bank - also have recommended provider status. Gareth Shaw, head of money at Which?, said: "Consumers value great customer service and easily accessible banking - and that applies whether they prefer to bank with a mobile app or a bricks-and-mortar branch."
October slowdown for mortgage market
Bank of England figures reveal that banks and building societies made 64,602 approvals for mortgages in October - 2% lower than the previous month and the weakest since March. The average rate on new mortgages is 1.96%, compared to the 2.39% average on existing home loans. Meanwhile, the pace of non-mortgage borrowing has accelerated for the first time in over a year. Britain's annual rate of consumer credit was measured at 6.1% in the year to October, up from 5.9% in the year to September. However, borrowing was still well below the 10.9% peak in November 2016.
Customers to get overdraft refunds
HSBC and Santander customers are in line for a refund after the Competition and Market Authority said the banks had failed to alert customers they had gone into unarranged overdrafts. The watchdog said the banks broke rules by not sending text alerts. HSBC said it would refund a total of £8m to 115,000 customers. Santander has not worked out the cost of the refunds yet.
TSB to close 82 branches
TSB plans to shut 82 bank branches by the end of next year, bringing its network to 454 branches in a move the bank says will save it £100m by 2022. TSB is also considering a move that would see it ditch the 3% interest rate on its free account. Other reforms the bank is planning include increasing online sales from 46% to 80% within two years and offering new types of mortgages to gig economy workers.
Banks end cheapest credit card deals
Halifax, Tesco Bank, Lloyds Bank, MBNA and Barclaycard are among Britain’s biggest credit card providers who have been withdrawing their best deals and putting up their rates as Christmas approaches. Rachel Springall from Moneyfacts said the banks are reining their offers in after having come under pressure to reduce unsustainable levels of consumer debt.
RBS searches for future growth in digital start-ups
Royal Bank of Scotland, which last week launched app-based bank Bó, has seen business lending start-up Esme exceed £100m in loans issued.
Goldman Sachs to stifle Marcus
Goldman Sachs is planning to deliberately slow down the growth of its retail bank Marcus in Britain as it looks to avoid being caught up in red tape. Goldman reportedly aims to hold less than £25bn in customer deposits, the level at which ring-fencing legislation is triggered.
Lloyds set to rethink bonuses
Lloyds Banking Group could link bonuses to governance targets, with its remuneration committee understood to be looking at how to connect payments with environmental, social and governance goals as well as financial targets. Lloyds last week announced that chief executive Antonio Horta-Osorio’s pension payment was being cut to put him in line with other staff.
Zopa looks to bank on funding
Online lender Zopa is close to agreeing £130m in funding as it looks to become a bank. The peer-to-peer lender is understood to be in advanced talks to sell a majority stake to the British arm of private investment firm IAG Capital. The cash will enable Zopa to have restrictions on the conditional banking licence it secured last December lifted.
Challenging time for new banks?
Lucy Burton considers the climate for challenger banks, saying the likes of Monzo, TSB, Metro Bank, Virgin Money and Starling face two persistent problems: They are not doing much to dent the dominance of Barclays, HSBC, Lloyds and RBS, and very few are making any money.
Monzo plans blocking tool
Monzo is planning to introduce a gambling-style blocking tool that would allow customers to stop themselves from shopping at selected retailers.
PRIVATE EQUITY
Inmarsat takeover faces legal challenge
A group of speculators who have acquired significant stakes in satellite operator Inmarsat since it agreed to a $6bn private equity takeover led by Apax Partners and Warburg Pincus in March will this week urge the High Court not to sanction the standard legal mechanism due to finalise the deal. The hedge funds, spearheaded by Oaktree Capital, claim that Inmarsat is being sold too cheaply and hope to make Apax and Warburg pay more to reflect Inmarsat’s potential income from a venture called Ligado.
INTERNATIONAL
Morgan Stanley suspends several traders over faulty pricing
Morgan Stanley has suspended several traders after the mismarking of emerging markets options contracts was uncovered. The FT says the FCA is aware of the issue, which could cost the bank $150m.
France seeks compulsory green reporting standards for EU companies
France’s finance minister Bruno Le Maire is pushing the EU to introduce compulsory environmental reporting standards for European companies and apply a common definition of “green” financial products.
NAB to set up Paris unit
National Australia Bank plans to set up a unit in Paris that would offer wholesale banking and investment services to much of Europe.
BNP Paribas to lay off 250 staff
BNP Paribas is considering laying off around 250 employees in Switzerland as part of group-wide cost cutting measures.
AUTOMOTIVE
Daimler to cut 10,000 jobs worldwide
Daimler has announced plans to cut at least 10,000 jobs worldwide in the latest sign of the disruption facing the German car industry as it makes the switch to electric cars. The move comes days after rival Audi said it would cut 9,500 of its 61,000 jobs in Germany for similar reasons. VW said in March it would cut 7,000 jobs while BMW reportedly plans to cut as many as 6,000 jobs in Germany by 2022.
FINANCIAL SERVICES
City urged to investigate Hargreaves Lansdown
Baroness Ros Altmann, the former pensions minister, has called on the Financial Conduct Authority to investigate Hargreaves Lansdown after customers were forced to wait three months to transfer Isas and pensions to other providers while it continued to charge fees. Baroness Altmann said: “What reason is there that it should take that long? It certainly isn’t the mark of a company that has good customer service. We need the regulator to step in and make sure that companies operating in the financial services industry put customers at the centre of their proposition.”
Invesco revamps UK equity leadership after outflows
Invesco has appointed senior portfolio manager Martin Walker as UK equities co-head alongside fund manager Mark Barnett as part of efforts to stem outflows and concerns over liquidity. Mr Barnett recently came under fire for the poor performance of his investments in the past three years.
Investec to sell off 10% of Ninety One
Investec has announced that it will sell about 10% of its asset management business, to be renamed Ninety One, when it is spun off as part of a demerger expected in March.
Marshall Wace partners to share £258m
Marshall Wace has declared an annual profit of £258m on turnover of £803.5m for the year to the end of February. The hedge fund’s 17 partners will share the windfall.
HEALTHCARE
UK’s largest private hospital chain to be sold to smaller rival
BMI Healthcare is set to be sold to Circle Health, owned by Toscafund and Penta Capital. The sale will create a £1bn private healthcare giant with 57 hospitals.
MANUFACTURING
Manufacturing confidence climbs
A report from manufacturing industry body Make UK shows confidence in the economy rose after the threat of a no-deal Brexit on October 31 was averted, while export orders increased in the quarter to November and output was boosted by stockpiling ahead of the October deadline. Make UK expects growth of 0.1% this year, with a 0.3% increase in output next year.
MEDIA & ENTERTAINMENT
DMGT buys i newspaper for £50m
The owner of the Daily Mail newspaper, DMGT, has bought the i newspaper and website for £49.6m from JPI Media. DMGT chairman Lord Rothermere said the paper was "highly respected” and that DMGT was “committed to preserving its distinctive, high-quality and politically independent editorial style."
RETAIL
Black Friday payments and footfall rise
Barclaycard data shows a 12.5% increase in the volume of Black Friday payment transactions in Britain, compared to last year. The week leading up to Black Friday has also seen strong levels of transactions. Meanwhile, analysis from retail consultant Springboard show that Black Friday footfall rose for the first time since 2016. The number of people visiting stores was up 3.3% overall, compared to a decline of 5.4% last year and a fall of 3.6% in 2017. Shopping centres led the way, with a 6.6% increase, while visitors numbers climbed 2.4% on the high street and 1.8% at retail parks.
Credit schemes prompt regulation call
The Times reports that a number of retailers are selling expensive credit, with some high street stores offering credit schemes that charge up to 30% interest. Research by the Financial Conduct Authority shows that one in three shoppers who take on such deals fail to repay on time, leaving them facing fees and interest charges. Baroness Altmann has called for tougher regulation of consumer credit, saying that retailers are “operating just as a bank would and therefore should be subject to the same rules as a bank.”
Banks tighten lending to SME retailers
Figures show that lending to SME retailers has fallen 6% since 2016. Lending to such retailers has fallen from £15.6bn to £14.7bn, with banks more reluctant to hand out loans amid Brexit-related uncertainty. Despite the fall in loans to smaller entities, lending to large retailers by banks rose by 20% from £31.5bn to £37.8bn.
ECONOMY
CBI expects modest growth
The latest report from the CBI suggests economic growth for the next two years will remain "modest", at 1.3% this year and 1.2% in 2020 before rising to 1.8% in 2021. The CBI says this is based on an assumption that the UK leaves the EU by 31 January and has a "clear line of sight" to a trade deal involving alignment with EU rules.
Consumer debt at record high
Bank of England figures show consumer debt levels rose to an all-time high of £225bn last month, increasing by £1.3bn between September and October.