BANKING
Barclays executives cleared of fraud charges
Three former top Barclays executives have been cleared of fraud charges in a case that saw the Serious Fraud Office (SFO) allege that the bank gave Qatar secret fees that helped it to survive without a UK government bailout in 2008. Roger Jenkins, Tom Kalaris, and Richard Boath were found not guilty on all charges, while former Barclays chief executive John Varley was acquitted in June 2019. The ruling marks the end of a seven-and-a-half-year SFO investigation that led to the first criminal charges in Britain against senior financiers at a major bank over conduct in the credit crisis-era. Sir Mike Rake, the former chairman of Barclays, has said there must now be a review into the effectiveness of the SFO as well as an inquiry into the case “as it's doubtful it was ever in the public interest”.
Nationwide admits delays on business banking project
Nationwide has fallen behind schedule as it looks to use a £50m banking competition grant to launch an online business account. In its latest progress report, Nationwide said progress in bringing this account to market “has been slower than expected”. The grant was handed over by the Banking Competition Remedies scheme last May. Meanwhile, Metro Bank, another recipient, was forced to hand back £50m of its £120m following an accounting scandal. Meanwhile, the FT hears from banking executives who believe the scheme has been bodged. The executives are said to be particularly concerned about BCR's perceived lack of accountability.
Banks to continue funding ‘no blame pot’
Banks are to continue paying into the fund being used to reimburse victims of fraud until the end of the year. The voluntary code designed to compensate customers duped into sending money to criminals is funded by Barclays, HSBC, Lloyds Banking Group, Metro Bank, Nationwide Building Society, Royal Bank of Scotland and Santander but there is no long-term funding in place for the “no blame pot”.
Botin backs Santander's UK arm
Santander boss Ana Botin has given the Spanish bank's UK arm a vote of confidence after mortgage chief Miguel Sard left for NatWest and chief risk officer Patricia Halliday and head of HR Vicky Wallis both resigned – with the exits prompting rumours of disquiet. She told the Mail on Sunday she had “never considered” offloading the UK bank, describing it as “a critical part of the group”. Saying that one of the strengths of Santander's model is its “geographic diversification”, Ms Botin added: “Our UK business is an important part of that diversification and is central to our long-term strategy, as well as being a hub for innovation, talent and development.”
Metro Bank chair will not see Hill’s perks
Perks previously enjoyed by Metro Bank founder Vernon Hill will not be shared by the bank’s next chairman. Mr Hill used part of his £120,000-a-year company expense allowance towards private jet trips but a source has said this arrangement “was specific to him” and the new chairman’s expenses would need to be in line with rules which do not let staff use private jets. Dan Frumkin, who took on the chief executive job permanently two weeks ago, said he thinks it is “highly, highly unlikely” that Mr Hill’s replacement will be offered expenses on such a scale.
Gupta-owned bank launches independent review after regulatory heat
Wyelands Bank is launching an independent review of its lending practices, issuing a tender to forensic accountants after the Prudential Regulation Authority reviewed lending to businesses controlled by its owner.
RBS offers £175 to switchers
The Royal Bank of Scotland (RBS) is offering a £175 bonus to people who switch bank account. To claim the bonus, savers must use the Current Account Switching Service to move direct debits, standing orders and salary commitments and transfer £1,500 to their new RBS bank account.
Barclays launches new mortgage
Barclays has launched a new 10-year fixed-rate mortgage offering a rate of 2.13% for borrowers with a 40% deposit - the joint lowest rate of its type on the market. The new product will be available both to first-time buyers and existing homeowners. The deal charges a £999 fee that can be added on to the mortgage itself.
Banks accused of ‘cashing in’ with Chaps fees
Banks have been criticised for forcing customers to use costly Chaps (Clearing House Automated Payment System) transfers when paying large sums such as deposits for a first home. Meanwhile, banks are failing to give customers the option to apply for loans and credit cards without potentially damaging their future ability to borrow.
Billionaire Chris Hohn threatens to sue coal-financing banks
British hedge fund billionaire Chris Hohn has suggested he will sue Barclays, HSBC and Standard Chartered unless they take steps to stop lending money to coal-mining companies.
PRIVATE EQUITY
Thought Machine secures funding
Thought Machine has raised $83m (£64.74m) in series B funding led by listed fund Draper Esprit. The venture capital firm, which has invested in a number of fintech businesses, contributed £26.5m to the funding for Thought Machine, a technology company that builds cloud-native technology for banks. Thought Machine's banking platform Vault counts Lloyds Banking Group, Standard Chartered, SEB and Atom Bank as clients.
INTERNATIONAL
Competition court: Banks can be fined over rate rigging
South Africa’s Competition Appeal Court has overturned a decision that a number of international banks cannot be fined if found guilty for alleged exchange rate rigging. The country's Competition Commission has been looking into the matter since 2015 but South Africa's Competition Tribunal last year said that banks without a presence in South Africa could not be fined - but could be declared anti-competitive if the commission could prove their case.
Capital Group builds 4.8% Commerzbank stake
Capital Group, which recently became one of Deutsche Bank’s largest shareholders, has built a 4.8% stake in Commerzbank, increasing its share from 2.93%.
UK regulator warns Deutsche over repeated compliance failings
Bank of England supervisors have criticised Deutsche Bank over a failure to improve anti-money laundering and compliance controls, despite previously being placed under special supervision by the Financial Conduct Authority.
Scotiabank halts all non-essential travel
Bank of Nova Scotia has suspended all non-essential business travel due to the coronavirus outbreak, with any exceptions requiring approval from an executive vice president.
Iqbal Khan receives $8.1m to join UBS
UBS has revealed that it made a “one-time replacement” payment of $8.1m to private banker Iqbal Khan for the deferred pay he gave up when joining from Credit Suisse.
FINANCIAL SERVICES
Jupiter records 16% drop in profits
Jupiter Fund Management reported statutory pre-tax profit of £151m in 2019, a 16% drop from the £179.2m earned in 2018. Underlying profit before tax totalled £162.7m, down 11% from £183m. Assets under management remained stable with very little change and totalled £42.8bn.
Schroders plans City charm offensive
Schroders is preparing to change how it reports results in an attempt to highlight individual parts of the fund manager to City analysts. The fund management group will now list the performance of five divisions separately: wealth management, investment in illiquid or private assets, retail fund management, institutional fund management and risk management. It had previously split out its performance along the lines of retail and institutional fund management.
Spotlight on employee share schemes
The Investment Association has urged the Government to set targets to boost the level of employee ownership of quoted companies, with the proportion of UK shares held by individuals having dipped from 28% in 1981 to 12%. Research by the Social Market Foundation shows that only 13,000 companies out of 1.4m run one of the four types of share scheme that offers tax breaks.
Age for cashing in pension set to climb
The Mail reports that plans being drawn up by the Treasury could see savers forced to wait another two years to dip into their pensions, with Chancellor Rishi Sunak “under pressure” from pensions firms to raise the minimum pension age from 55 to 57 amid fears many households have been cashing in their retirement funds too quickly. The Association of British Insurers has warned that more than 350,000 savers cashed in their entire pension pot last year, adding that many are in danger of falling into poverty in retirement.
Ex-Woodford fund shrinks 16% since reopening
The ASI Income Focus fund, which took over Neil Woodford’s Income Focus fund, has fallen by 16% since reopening on the back of client withdrawals and share price falls.
Salary Finance may snap up Neyber assets
Goldman Sachs backed lender Neyber will reportedly sell its assets to rival Salary Finance and is expected to appoint administrators this week.
MANUFACTURING
Rolls-Royce issues upbeat outlook for 2020 despite coronavirus
Rolls-Royce has cut its operating losses from £1.2bn to £852m before one-off charges and reported a higher than expected level of free cash.
MEDIA AND ENTERTAINMENT
Elliott pushes for big changes at Twitter after taking $1bn stake
Activist hedge fund Elliott Management has told Twitter’s board of concerns over corporate governance at the social network and questioned CEO Jack Dorsey holding the title at both Twitter and Square.
REAL ESTATE
UK house price growth at highest rate for 18 months
UK house prices rose at the fastest annual rate for 18 months in February after December’s decisive election buoyed the market, according to Nationwide. The 2.3% annual increase is the best since July 2018 and outdoes January’s 1.9% climb. Nationwide's chief economist Robert Gardner said the conclusive election result in December may have pushed buyers back into the market. However, the outlook for house prices will depend on the UK’s economic performance over the coming months, which could take a hit depending on the outcome of Brexit trade talks and the impact of the coronavirus outbreak.
BTL deals increase
Figures from UK Finance show there were 5,700 new buy-to-let mortgages completed in December 2019, marking a 3.6% year-on-year rise, while remortgages were up 2.3% to 13,300. The Sunday Telegraph says that while landlords have been hit in recent years by fewer tax breaks, rising costs and a market slowdown, the figures for December suggest “the tide could finally be starting to turn”.
RETAIL
PE players shopping for Asda
With private equity firms Apax Partners and KKR having held talks over a bid for Asda, petrol station billionaires Mohsin and Zuber Issa are reportedly considering a bid for the Walmart-owned supermarket through their TDR Capital-backed EG Group empire.
SPORT
Coronavirus could cost British sport ‘hundreds of millions'
British sport could be facing a hit of hundreds of millions of pounds, with concern increasing that coronavirus could lead to the suspension of a number of events, including Premier League football fixtures, cricket tests and the London Marathon. Meanwhile, bookmakers say there is a 60% chance that the Olympics in Tokyo could be cancelled.
Six Nations TV deal up in the air
The Six Nations Championship could disappear from free-to-air television after the organisers refused to rule out a rights bid for the whole tournament from Sky, BT Sport or other pay TV broadcasters.
ECONOMY
Coronavirus threat may require Budget plan B
Experts have suggested that Chancellor Rishi Sunak will have to rethink his Budget over concerns that the spread of the coronavirus will trigger a global economic downturn. Paul Johnson, director of the Institute for Fiscal Studies, said economic forecasts drawn up by the Office for Budget Responsibility (OBR) may not paint a true reflection of the climate, saying: “Whether the OBR has had time to include the likely impact of the virus into its forecasts or not, the Chancellor will need to say how it creates further uncertainty.” Former Treasury minister David Gauke comments: “Given the uncertainties, the OBR is likely to qualify its economic forecasts,” adding that the “health crisis … makes all short-term economic forecasts a matter of guesswork.”
OTHER
Account concern over banking app
Pockit, a company that provides financial services to vulnerable people, has been hit by complaints, with some clients saying that they cannot get to their money. Questions have also been raised as to why its accounts are five months late. Pockit said that its accounts were late because its "audit process this year has been more involved than usual”.