Lloyds to move 700 staff to full-time homeworking
Lloyds Banking Group is redeploying 700 staff into full-time homeworking roles from 2021. The lender, which has 50,000 of its 65,000 employees working from home due to the coronavirus outbreak, temporarily shifted about 1,000 workers from Halifax, Lloyds and Bank of Scotland branches to customer service teams to deal with a surge in demand for telephone banking and video chats. It now plans to make the shift permanent for around 700 of these workers. Union Accord welcomed the move, saying it would help preserve jobs. The Guardian highlights that NatWest has told employees that 50,000 of its roughly 60,000 staff will continue working from home until at least April, while Standard Chartered is shifting to flexible working on a permanent basis.
Lenders ban business accounts over fraud fears
HSBC, NatWest and Lloyds Banking Group have temporarily halted opening new accounts for small businesses after industry data showed up to 55% of applications were potentially fraudulent. Smaller banks including Virgin Money and Metro Bank have also put a block on new small business accounts. One source told the Mail that just 15% of those applying ended up opening a current account after identity and fraud checks, meaning vast resources were being wasted. Kevin Hollinrake, Tory MP and chairman of the All Party Parliamentary Group on Fair Business Banking, commented: “You have people made redundant who want to open businesses, yet we're closing the door to them. The banks doing this are excluding our most important sector that drives economic activity.”
Lenders urge savers to move cash to investment products
High street banks including Lloyds, Barclays and NatWest have all started offering their current account customers the option to move cash to investment products. According to the Sunday Times, lenders are seeking ways “to boost their squeezed margins and cash in on beleaguered savers who are seeking a better return than they can get from cash.” The Financial Conduct Authority expects all retail banks to offer an automated advice service soon, noting in a report last week: “Consumers may be more inclined to trust an established brand and the entry of retail banks into the market may attract more first-time investors.”
Challengers eye TSB
Virgin Money and OneSavings Bank are among challenger banks expected to show interest in TSB ahead of an auction process expected to start next year, with residential mortgage lender Kensington Group and credit card provider NewDay also likely to join the race. TSB's Spanish owner Sabadell has hired Goldman Sachs to put the business up for sale following the collapse of merger talks with BBVA.
Sir Howard Davies: Negative rates a desperate measure
NatWest chairman Sir Howard Davies has described negative interest rates as a "desperate measure at a time when the economy is flat on its back" and points out that: "Quite often banks have contractual arrangements with customers that don't envisage them paying a negative rate and that's quite a complication."
Foreign homebuyers face Santander mortgage ban
Santander has said all new residential and buy-to-let mortgage applicants will have to be a UK resident, becoming the first major lender to adjust rules ahead of the end of the Brexit transition period.
Average cost of 90% mortgages at 7-year high
The average cost of a 90% mortgage has hit a high not seen since January 2013, with the average five-year deal for people with a 10% deposit now 3.92%, up from 2.94% in December 2019, according to the financial data company Moneyfacts.
Tandem confident of profitability next year
Tandem boss Ricky Knox has said the challenger bank remains on course to hit profitability next year. Loan volumes have recovered since flagging in March and in October it had lent £10m to homebuyers and consumers.
Banks mull end to refunds for scam victims
Britain's largest banks have discussed banning all refunds for payment scams as well as capping their liability to a soaring number of investment scams, according to minutes of talks between lenders and UK Finance seen by the Sunday Times.
Government shakes up export finance support for small businesses
The UK Government is to provide extra financial help so exporters can apply for larger loans from the UK’s five high street banks after Brexit.
BC Partners seeks to sell Springer Nature stake to itself
BC Partners is in talks to sell its stake in academic publisher Springer Nature to a fund it would itself control, investing alongside new external investors.
Investor caution an existential threat to early-stage companies
The Enterprise Investment Scheme Association is warning that a lack of equity investment poses an existential threat to many early-stage companies, with six in ten EIS or SEIS-eligible businesses saying they will not be able to operate longer than 12 months if "current circumstances persist".
Permira to buy stake in high-end auction site
Permira is taking a £150m stake in Catawiki, a loss-making curated online auction site which specialises in selling high-value collectors’ items.
Credit Suisse chairman hints at lower bonuses
Credit Suisse chairman Urs Rohner said the bank will take into account the coronavirus pandemic when setting bonuses, telling Schweiz am Wochenende: “It is obvious that after such a year you will not see record bonuses." Mr Rohner, who is leaving the bank next year after a 12-year term on the board, said the company would have to wait for the 2020 business results before making final decisions.
Brussels urged to heed climate science in sustainable finance rules
The European Commission is at risk of jeopardising the bloc’s pledge to reduce emissions to net zero by 2050 if Brussels fails to stick to climate science when drawing up rules on sustainable finance, experts have said.
Brexit and Covid harden the case for a proper EU financial market
The FT’s Martin Sandbu asserts that Brexit and the coronavirus pandemic have heightened the need to unify banking and capital markets in the EU and boost the bloc’s growth potential.
Lockdown drives down car registrations
The Society of Motor Manufacturers and Traders (SMMT) said 113,781 new registrations were recorded in the UK last month, nearly 43,000 fewer than during November 2019. The 27.4% decline was driven by the closure of showrooms amid the four week lockdown rolled out across England. SMMT chief executive Mike Hawes said: "Compared to the spring lockdown, manufacturers, dealers and consumers were all better prepared to adjust to constrained trading conditions.”
Construction builds momentum
The construction sector saw growth in November as housebuilding expanded and new orders increased, with the IHS Markit/CIPS construction purchasing managers index (PMI) recording a score of 54.7, up from 53.1 in October. Strength in the property market helped to lift business confidence as the new orders index rose from 56.1 to 58.1.
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Berkeley Group sees profit slip
Berkeley Group reported a 16.6% drop in profit for the first half of the year to £230.8m, below expectations of £240m. This was in large part because the number of homes sold during the period fell to 1,104 from 1,389 from a year earlier. Meanwhile, CEO Rob Perrins has called on Chancellor Rishi Sunak to permanently scrap stamp duty for houses worth under £500,000 and halve the rate for those above that cut off.
Investors shocked by adviser fees
The Financial Conduct Authority (FCA) says people have been left “visibly shocked” when confronted with how much they pay for financial advice. The City watchdog’s study into the financial advice market shows that most advisers have an average initial advice charge of 2.4%, with an ongoing charge of 0.8% a year. This, it found, does not include underlying product and portfolio charges, which typically add a further 1.1%. The report said that while investors tend to accept the percentage fees and deem them reasonable, they became “visibly shocked and started to question whether they were getting value for money" when charges were broken down into pounds and pence. The FCA plans to couple its findings with input on consumer investments taken from a consultation running until December 15 before announcing any changes to regulation.
FCA alerted after Funding Circle sells personal guarantees to hedge fund
The Financial Conduct Authority is coming under pressure to review a sale by Funding Circle of hundreds of small business owners' personal guarantees to Azzurro Associates, a debt buyer which is ultimately owned by New York investment fund Elliott Management. Kevin Hollinrake, co-chairman of the all-party parliamentary group on fair business banking, described the disposal as "very worrying". But Andrew Birkwood, chief executive of Azzurro Associates, said the firm was “authorised and regulated by the FCA and upholds the highest standards when interacting with its customers in order to reach affordable solutions with them”.
Britain’s fintech industry will continue to boom post-Brexit
John Collison, the billionaire co-founder of payments titan Stripe, has said that the City’s fintech firms will continue to flourish post-Brexit as the industry raises its sights beyond the EU. The London market outstrips the US in terms of sophistication, Collison adds, and with London also home to the centres of the banking, political and technology sectors, start-ups are easily able to lobby for better regulations while also raising capital.
PayPal accused of letting down fraud victims
An investigation by Which? has found PayPal customers are struggling to get their money back when they become victims of fraud. The consumer group is calling for the company to join the voluntary code for authorised push payments, which commits banks to reimbursing customers who have been tricked into parting with their money.
M&G urged to waive fees on suspended property fund
Property funds run by Aegon Asset Management, Janus Henderson and Aviva Investors remain closed as they seek to build cash to meet potential redemption requests.
Financial institutions urged to terminate investments into pharma firm
Financial institutions have been urged to terminate their investments into China Beijing Tong Ren Tang, a Chinese pharmaceutical company licensed to use pangolin parts. According to Bloomberg, firms that hold investments in the Chinese company include Vanguard, Morgan Stanley, BlackRock, Deutsche Bank, St. James’ Place and Standard Life Aberdeen.
LEISURE AND HOSPITALITY
Nando’s in talks with lenders
An additional £20m bill to make its restaurants Covid secure has pushed Nando’s into crisis talks with Barclays as bosses look to secure potential waivers to the covenants on £300m of loans.
MEDIA & ENTERTAINMENT
Roxi targets £200m flotation
British music streaming start-up Roxi, which is backed by Kylie Minogue and Robbie Williams, has secured £13m from investors including the former EMI owner Guy Hands and the private equity firm Sun Capital.
Home loan demand climbs amid stamp duty holiday
UK Finance data show that home purchase lending recovered strongly in the third quarter, coming close to levels seen in Q3 2019 after the nationwide lockdown earlier in the year paused much of the market. The trade association’s Household Finance Review says that while activity is likely to be strong through the first three months of 2021 as the stamp duty holiday remains in place, demand is likely to come under pressure once the relief measure concludes at the end of March.
More stores pledge rates relief return
Lidl, Pets at Home and WholeFoods have said they will hand back business rates relief, following moves by a number of fellow retailers that were granted a rates holiday despite remaining open throughout coronavirus lockdowns.
Goldman Sachs optimistic on rebound
Goldman Sachs analysts predict a rebound for the UK economy next year, with the bank forecasting that GDP will expand 7% in 2021, exceeding economists’ consensus. Goldman Sachs says the economy is likely to regain its pre-pandemic size by early 2022, climbing 6.2% that year, with economist Sven Jari Stehn saying: “We see substantial room for bounceback”. He adds that the UK is “well placed” to benefit from a COVID-19 vaccine, given the quantity it has pre-ordered and the speed with which regulators have approved the first jab. However, other analysts have urged caution, with Peter Dixon, an economist at Commerzbank, expecting the UK to “pick up more slowly than the rest of the EU.” He added that with “the complexities of Brexit to deal with … I don’t think the UK is in a very good place.” The median private sector forecast for GDP growth next year is 5.7%, according to forecasts compiled by the Treasury.
Aegon survey reveals financial literacy rates
Just 24% of Britons have received full marks in a financial literacy survey carried out by Aegon. The test, which was conducted across 15 countries, showed that UK savers underperformed the average of 28%.