BANKING
More banks ease mortgage restrictions
Britain’s banks are starting to relax mortgage terms for the self-employed with Santander last week increasing the maximum loan-to-value ratio it would offer them from 75% to 90%. Limits brought in because of the pandemic are being unwound elsewhere too, with HSBC removing the requirement for the self-employed to submit the past three months of bank statements and a letter from their accountants. Not all banks have let up, however. NatWest requires more proof of earnings from self-employed borrowers while Nationwide's helping hand scheme, which lends up to 5.5 times income to first-time buyers who fix for at least five years, is limited to those who are employed.
Chase gains up half a million customers in just eight months
More than half a million current account customers have signed up to JP Morgan’s digital bank Chase since it launched in Britain last September. The Mail notes that the lender has reported more sign-ups than Monzo or Starling Bank managed in either of their first full year. After eight months in the UK market, Chase now holds £8bn in customer deposits, and has processed approximately 20m card and payment transactions. A Chase spokesperson said: “This shows that there is real appetite for good value banking products from a trusted brand, with around the clock customer support all delivered via an intuitive banking app.”
Interview: NatWest CEO Alison Rose
The BBC profiles NatWest boss Alison Rose – the first female leader of the bank. Rose, who has spent years encouraging younger women to set up in business, says progress has been made over the past few years. Last year saw 156,000 new businesses set up by women, a 37% increase on 2019 levels. "Really pleasingly, there's a real impact in the 18 to 24 year old group of young women starting businesses", she said. More progress needs to made though, Rose asserts, pointing to the need to improve access to finance for women. As for NatWest, Rose says the bank has no ambitions to expand overseas to reduce its vulnerability to the UK economy but will look to deepening relationships with customers and help businesses with their transition to net zero carbon.
Nationwide boss says mutual will find a way to keep branches open
The Mail on Sunday carries an interview with outgoing Nationwide boss Joe Garner, who says the mutual is proud to be a top-ten taxpayer – handing over £650m to the Treasury last year – and considers branches not as a cost but a “place of real value.” The piece notes that Garner has been approached by Downing Street to lead an inquiry into surging bank fraud, but he is not yet sure what his next move will be. He will be succeeded by Debbie Crosbie, who will be the mutual's first female chief executive when she starts her new job later this week.
HSBC clients query bank on climate
Institutional investors are starting to question whether HSBC Asset Management should help manage their sustainability funds after Stuart Kirk, the bank’s global head of responsible investing, told a conference in London that "climate change is not a financial risk we need to worry about". A source said one major investor is speaking with consultants over whether to shift its assets elsewhere.
Revolut compliance boss quits over staff shortages
Harry Gill, Revolut's global head of regulatory compliance, has quit after bosses cut the number of staff working in the digital lender's risk division. Revolut’s head of operational risk and head of UK compliance also quit in recent months. A spokesman for Revolut denied there had been jobs cut in risk and compliance. Meanwhile, the Times reports that Revolut is searching for a head of investor relations with listed company experience, suggesting it is advancing towards an IPO.
Open banking platform buys rival
Trustly, the open banking platform, is expanding in the UK with the purchase of rival Ecospend. Trustly allows users to transfer money directly to each other. The acquisition would set it on a path to becoming a market leader in the UK, the company said.
Mortgage reform is key to unlocking UK home ownership
Ian Mulheirn asserts that if rates of home ownership are to rise, then risk associated with lending to first-time buyers needs to be differently managed, namely through insuring against rate rises and greater use of long-term fixed-rate products.
INTERNATIONAL
Central banks launch most widespread rate rises for over two decades
Policymakers around the world have announced more than 60 increases in current key interest rates in the past three months, marking the most widespread tightening of monetary policy for more than two decades.
JPMorgan collects data on borrowers’ race in push against wealth gap
JPMorgan Chase has started to collect data on race and ethnicity from some borrowers as part of efforts to better serve disadvantaged borrowers in the wake of the BLM riots of 2020.
AUTOMOTIVE
Toyota pauses production over chip shortage
Toyota has cut its global production plan for June for the second time in a week due to the shortage of microchips. The company will introduce rolling pauses on 16 production lines across ten plants in Japan. In all, Toyota has removed 150,000 vehicles from its June estimates for a total of about 800,000.
FINANCIAL SERVICES
L&G chief backs free speech after HSBC banker suspended
The Telegraph reports on comments from Legal & General chief Sir Nigel Wilson who has come out in support of people voicing their opinions on climate change policy. Sir Nigel said it is "very good to have a debate" about climate change and the part British companies should play in the transition to a low-carbon economy. His comments come after HSBC launched an internal investigation into senior banker Stuart Kirk over a conference speech about responsible investing. Kirk had criticised the doom-mongering around climate risk and the resources taken up with climate regulations. L&G is one of HSBC's ten biggest shareholders. Last week, Bill Winters, chief executive of Standard Chartered, issued a similar statement, warning it has become "increasingly difficult to speak out against anything" and that employees "should speak their mind". He said: "Do I agree with the views? No. Do I encourage free speech? Yes."
Profile: GoCardless president Paul Stoddart
GoCardless president Paul Stoddart talks to City AM about fintech, Brexit, pandemic recovery and Russia. Stoddart, who spent years at NatWest, Barclays, and was most recently the chairman of Mastercard’s VocaLink, says joining GoCardless was part of a “conscious decision to move out of the big corporate world and be more involved in establishing and growing businesses where you can see the impact more directly.” The London-based payments firm focuses on recurring and subscription payments with the view to help improve business engagement over time.
Loophole allows insurers to overcharge existing customers
The Guardian reveals that renewing car insurance customers are still paying up to double the price quoted to new ones due to a loophole in new rules that were supposed to end the practice of overcharging loyal policyholders in order to fund discounts to attract new customers. The Financial Conduct Authority (FCA), which implemented the ban, estimates that the new rules will save consumers £4.2bn over 10 years. But insurers are still allowed to discriminate between new and existing customers depending on when and how they apply for a quote.
Insurers reject unvaccinated
The Sunday Times reports that more than a fifth of travel insurance policies will not pay out for Covid-related claims if policyholders have not been vaccinated. Insurers including Barclays, Direct Travel, RAC, Sainsbury's Bank and Virgin Money have medical and cancellation exclusions on certain policies, meaning that unvaccinated policyholders who need to cancel their holidays or seek medical treatment abroad due to Covid would not be covered. Defaqto found that 18% of travel insurance policies would exclude both cancellations
FSCS wants hike in compensation limit for pension-related claims
The Financial Services Compensation Scheme (FSCS) has called for the cap on compensation for victims of pension provider collapses to be raised from £85,000 to £375,000 - the maximum amount the Financial Ombudsman Service can order a business to pay. In 2021-22 pension customers lost £137m in total as a result of the limit, more than 15 times the 2016-17 figure of £9m.
Brevan Howard moves into credit trading
Brevan Howard Asset Management is expanding into credit trading with CEO Aron Landy allocating more than $1bn to a group of credit trading specialists led by former BlueCrest Capital Management money manager Andy Silver, who joined Brevan Howard last year. Brevan Howard’s main macro hedge fund is up 13% this year.
HEALTHCARE
UK signs first post-Brexit life science agreement with Sweden
As part of moves to deepen scientific ties with other nations after Brexit, the UK has signed a co-operation agreement in life sciences with Sweden.
REAL ESTATE
UK housing market starts to slow as more sellers cut prices
An increasing number of sellers are cutting asking prices and the average time to sell a home is growing longer, according to Zoopla, indicating a slow down in the UK’s housing market. Prices rose by 8.4% in the year to April, and Zoopla believes that will slow to 3% by the end of the year.
RETAIL
Issa brothers set to walk away from Boots bid
The Issa brothers have indicated that they were not prepared to pay the asking price for Boots, leaving India’s Reliance Industries and Apollo, the private equity firm, as the frontrunners. The Issa brothers and TDR Capital, who together own EG Group and Asda, had been considering buying Boots for £5bn as part of a strategy to improve Asda’s pharmacy service. However, Bloomberg reported that that the Issas were considering pulling out of the process after being asked to raise their offer.
ECONOMY
Strategic errors point to need for Treasury and Bank to defend policies
Tory MP David Davis asks in the Sunday Telegraph whether the Bank of England should lose its independence since its money-printing and inflation forecasting failures have left the Chancellor “high and dry”. The Treasury and Office of Budget Responsibility have also failed in their forecasting for borrowing, having underestimated the tax take for last year. Davis says: “The independence [of the Bank] is to a significant extent illusionary anyway. The Chancellor has to approve the money creation and the underwriting of the bonds in any event, so perhaps it is time that Parliament required the Treasury to recognise and defend its role in this policy. That way we might get better decisions.” He goes on to say predictions that tax hikes would reduce growth have been proven correct and what the Government should be doing now is not “overtaxing us and then handing us back our cash like pocket money” but “taking every opportunity possible to cut or cancel taxes in pursuit of growth.”
Inflation set to drive up consumer borrowing
Experts predict that consumer borrowing is likely to spike as households struggle to meet the rising cost of living and surging inflation. New data being released today will show that consumer credit will have increased by £1.42bn in April, after rises of £1.3bn and £1.6bn in March and February, respectively.