Bank referral scheme helps fewer than 800 firms
The bank referral scheme, a Treasury initiative which links small companies turned down for bank finance with alternative lenders, is helping fewer than 800 companies a year. Figures show that the programme led to 796 companies being lent £16m in the 12 months to June 30. The data shows that fewer than 1,700 businesses have been assisted - to the tune of a combined £32m - since the scheme was launched in November 2016, with around one in twenty companies referred via the scheme securing finance. The initiative sees banks including RBS, Lloyds, Barclays and HSBC obliged to pass on companies they turn down for lending to online finance portals that refer alternative lenders and independent asset finance providers.
Mortgage approvals at two-year high
Mortgage approvals for July hit a two-year high, according to the latest Bank of England data. Lenders approved 67,306 mortgages last month, up from 66,506 in June, while net mortgage lending rose by £4.6bn, or 1.2%, the largest increase since March 2016. So far this year more than 461,000 mortgages have been approved for movers. However, Hansen Lu at Capital Economics warned that transactions this year would fall by 1% if the UK struck a deal to leave the EU – and by as much as 10% in a no-deal Brexit scenario.
Lending to UK businesses drops to a two-year low
Figures from the Bank of England show that lending to UK businesses saw the biggest decline in almost two years in July, sliding by £4.2bn over the month, driven by a £2bn net repayment by businesses to banks. The annual growth rate of bank lending to UK businesses fell to 3%, down from 4.4% in June. The growth rate of borrowing by large businesses fell to 4.2% but for small businesses it was unchanged at 0.8%.
Millennials more frequently hit by bank fraud
New data from Lloyds Bank suggests that millennials are more prone to losing money in financial scams than older peers. Although more victims aged 18 to 34 are being scammed, those over 55 are handing over more money in each incident, losing £10,716 each time on average while millennials typically lose £2,630. It was also shown that there were more than three times as many people aged between 45 and 54 being scammed out of money as those over 55.
HSBC to lend extra £35bn to British home buyers
HSBC plans to lend an extra £35bn to homeowners, adding to its current £100bn mortgage book and lifting its overall share of the mortgage market from 7% to 10%.
UK government to urge banks to keep lending after no-deal Brexit
Andrea Leadsom, Michael Gove, and City minister John Glen are expected to meet senior bankers and industry group UK Finance next Thursday to co-ordinate plans to maintain credit supply to businesses.
Bank of Mum and Dad tenth biggest lender
The “Bank of Mum and Dad” is now the UK's tenth biggest lender and is involved in one in five property purchases, with research by Legal & General estimating the average amount parents loan or give to be £24,100 this year.
Santander forced to extend PPI deadline
Santander was among banks that extended their deadline for submitting PPI claims on Friday after a last-minute surge led to technical difficulties for their websites. The Financial Conduct Authority has said it expects banks to treat customers fairly and "apply a pragmatic approach" following the problems.
Revolut plans hiring spree in customer service and compliance
Revolut is to hire 400 staff at a new base in Portugal, with new roles covering customer support, complaints, investigations and compliance.
PE firm offers Cobham assurances
Advent, the US private equity fund trying to buy Cobham, says the future of the aerospace and defence company’s British operations are assured. Advent partner Shonnel Malani played down concerns that work would be moved abroad, saying that transferring work away from established sites would “be a pretty dumb business decision”.
UK investors missing out over Swiss banks scandal
Claims specialist Liti-Link has warned that British investors are running out of time to make claims in regard to a scandal in Switzerland that it describes as “PPI on steroids.” It says investors could be eligible for refunds as commission fees may have secretly been charged to them by Swiss banks and asset managers without their informed consent, a practice that was banned in 2012. The firm believes as much as £5bn is owed by Swiss banks to British investors, saying: “Tens of thousands of people are entitled to five or six-figure payouts that are currently going unclaimed.”
PBOC’s plans for cryptocurrency could spell the end for bank accounts
A report published by the world's largest cryptocurrency exchange, Binance, suggests China's plans for a state-backed cryptocurrency could eliminate the need for bank accounts. Based on details provided by sources close to the People's Bank of China, the digital currency would be backed by reserves of traditional currency and would allow people to transfer funds even if they did not have a bank account.
US Treasury imposes sanctions on Lebanese bank
The US Treasury has imposed sanctions on Jammal Trust Bank because the lender was supporting Hezbollah. Last year, JTB partnered with development agency USAID on a financial inclusion scheme.
Danish regulator reports Danske to police over mis-selling
The Danish Financial Supervisory Authority has reported Danske Bank to the police amid suspicion it broke investor protection rules in relation to an investment product it offered to savers.
Tesla cars get tax break from Beijing
Tesla's electric cars are to be exempted by China from a 10% levy on new car purchases. The move comes just days after CEO Elon Musk visited the country.
Japanese construction giant believes in UK prefab
Japan's biggest housebuilder believes that it can change the perception of prefabricated homes as it prepares to build "thousands of homes" targeting first-time buyers in Britain. Sekisui House has formed a joint venture with the government and Manchester-based developer Urban Splash to build homes using modular construction.
SIG set to hive off £200m division
SIG has appointed Lazard to run a formal auction of its Air Handling division, thought to be worth more than £200m.
Javid to tell City of no-deal opportunities
Chancellor Sajid Javid will meet some of the City’s most high-profile business leaders in a bid to persuade them of the “opportunities” presented by a no-deal Brexit. Mr Javid and City Minister John Glen will address attendees including Barclays boss Jes Staley, RBS chairman Howard Davies, Lloyds boss Antonio Horta-Osorio and Goldman Sachs’ Richard Gnodde, highlighting the “opportunities and challenges” Brexit will deliver, with the Telegraph saying the ministers are set to face a “sceptical audience” as many City institutions have warned of the risks a no-deal scenario could pose to the financial services sector.
Hargreaves Lansdown offloads Burford Capital from three funds
Hargreaves Lansdown has sold its holdings in Burford Capital following an attack on the litigation funder by US short-seller Muddy Waters earlier this month. Muddy Waters published reports critical of Burford's accounting policies, management structure and growth potential. Prior to the assessment from Muddy Waters, Canaccord Genuity, a broker, had made similar criticisms regarding how Burford accounted for future revenue and the qualifications of senior management. Fund manager Steve Clayton said HL had dropped Burford from three funds as he no longer knew whether the stock was a viable investment.
Google bans short-term loan apps
Google will remove payday loans from the Android operating system. The firm has told app developers that it is set to ban loans that require repayment in full in 60 days or less. While US consumers will be unable to access apps lending money with an APR of 30% or higher, looser laws mean those in the UK will see higher rates - provided that the rate is made explicit in the app’s metadata.
Wealth management M&A likely to continue
Emma Dunkley in the Sunday Times examines how wealth managers are shifting towards consolidation as they come under pressure from regulation and fierce competition. She notes that Tilney is in talks to merge with Smith & Williamson to create a challenger with £45bn in assets under management.
Pensioners siphoning money off into savings keeps rates low
A record £2.8bn was taken out of pensions between April and June this year, according to the Bank of England. Analysts say pensioners are not only missing out on better investment returns they could have earned but are driving down savings rates for everyone.
Fund management chiefs hit by big pay cuts in 2018
Analysis of annual reports and regulatory filings from US and European fund managers shows that 18 CEOs saw pay cuts in 2018.
Hedge fund plans to launch crypto venture
Elwood Asset Management, owned by hedge fund manager Alan Howard, is planning to launch a $1bn venture that will invest in cryptocurrency hedge funds.
Neyber raises cash for growth
Goldman Sachs-backed loans start-up Neyber has raised £25m and is eyeing further funding as it plans for sustainable growth and profitability.
Smiths Group medical arm could go private
Smiths Group is considering selling its healthcare business, Smiths Medical, to a private equity firm so it can focus on industrial technology. The company's bankers have been in contact with Cinven, Blackstone, KKR, Bain Capital, BC Partners and Permira about the spin-off plans.
Activity continues to fall stoking recession fears
Data from manufacturers' body Make UK due out this week will show slumping confidence, falling domestic orders and shrinking profit margins. Meanwhile, PMI scores due this week are expected to show the manufacturing and construction sectors shrank in August.
British Steel subsidiary sold to French firm
British Steel subsidiary TSP Projects has been sold by the government to French company Systra. The deal protects 400 jobs and is not expected to disrupt discussions on the rest of British Steel.
MEDIA & ENTERTAINMENT
eBay forced to offload ads business
eBay has reportedly hired Goldman Sachs to explore a sale of its classified ads business and the ticket reseller StubHub after Elliott Management and Starboard Value pressured the e-commerce giant to undertake a strategic review.
Investors keen on TalkTalk’s high-fibre plan
Investment firm iCon Infrastructure is considering an investment in TalkTalk's FibreNation network. The FTSE 250 broadband operator is looking to raise £1bn in funding for the full-fibre venture, with Macquarie and CityFibre also reportedly considering investing.
Nationwide: House price growth remains flat
Average house prices remained flat month on month in August, the latest Nationwide House Price Index shows, though the annual rate of property price growth nudged up to 0.6%, compared with 0.3% in July. It is the ninth month in a row that annual house price inflation has remained below 1%.
Brexit has cut UK productivity by up to 5%, says BoE
A Bank of England report says Brexit has prompted European-exposed British companies to cut capital spending by 11% on average, and it has dragged down UK productivity by between 2% and 5%.
Only 3.7% apply for Help to Save
HMRC figures show that only one in 27 of those eligible for the Help to Save scheme have so far applied in the 12 months since its launch. While 100,000 people have made a deposit into the Help to Save scheme, 32,000 who have opened an account have yet to pay any money in. Total deposits into the scheme in the six months to July were £18m.