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Daily News Roundup: Thursday, 12th October 2023

Posted: 12th October 2023


Financial complaints climb - FOS

Complaints in the banking and insurance sectors have increased in the first half of this year, according to the Financial Ombudsman Service (FOS). The rise in banking and credit complaints has driven the increase in grievances taken to the ombudsman. Mortgage and home finance complaints have edged up compared to the previous six months, while building and motor insurance complaints have also reached a five-year high, partly due to insurers delaying claim payouts. The FOS received a total of 93,114 complaints in the first half of 2023, with banking and credit complaints making up a substantial portion of the increase. The FOS upheld 37% of complaints in consumers' favour in the first half of this year. Abby Thomas, CEO and chief ombudsman at the FOS, highlighted the importance of fair and reasonable treatment for consumers and encouraged them to seek investigation from the independent service if they feel their provider has not met expectations. 

Metro Bank bondholders back refinancing plans

More than three quarters of Metro Bank’s bondholders have backed its new refinancing plans. The refinancing package includes a £325m capital raise, split between £150m of new equity and £175m of fresh debt, and a £600m refinancing, encompassing £250m of Metro’s existing subordinated bonds and £350m of outstanding senior notes. The capital raise, which is led by existing shareholder Spaldy Investments, will shore up the bank’s capital and extend the maturity of its debt profile. The debt refinancing will mean holders of subordinated bonds will see a 40% to 45% writedown. Metro still needs the approval of its shareholders for the rescue deal to proceed.


Goldman sues Malaysia over 1MDB settlement

Goldman Sachs is suing Malaysia over a settlement related to its involvement in the 1MDB investment-fund scandal. The bank has filed for arbitration against the Government of Malaysia, accusing it of violating its obligations in the settlement agreement. The complaint was filed in the London International Court of Arbitration.


Financial services at 'nascent stage' of green transition

Rhian-Mari Thomas, chief executive of the Green Finance Institute, says the UK's financial services sector is at a "nascent stage" of the green transition, with business leaders “starting to recognise that the transition towards to a net-zero future and a nature positive future is inevitable because it’s based on science.” She added: “All the main financial institutions have signed up to net-zero targets by 2050 and so are going to have to transition and start pivoting their businesses." While mainstream financial institutions are shifting their risk appetite towards green investments, concerns have been raised about the UK's pace of net-zero initiatives and the need to attract capital to the country. Ms Thomas has warned that the UK must stay in the race for green investment as China, the US and the EU push ahead, adding that net-zero must not become a “political football.”

CFA Institute introduces diversity code

The CFA Institute, a global body for financial sector qualifications, has introduced its first diversity, equity, and inclusion code in the UK. The code, which has already been rolled out in the US and Canada, aims to promote diversity in the industry without setting targets or timelines. It is based on principles covering talent pipeline expansion, diversity-focused hiring practices, promotion and retention strategies, and progress measurement and reporting. The code complements existing initiatives, such as the Women in Finance charter, and aligns with proposed requirements from the Financial Conduct Authority (FCA) and Bank of England to improve diversity and inclusion in large banks and insurers. The code also addresses areas not currently covered by the FCA, such as equity and fairness of access and promotion for staff from less privileged backgrounds or education. Signatories will provide an annual progress report to the CFA Institute.

Lloyd's of London to resist pressure for slave trade reparations

Lloyd's of London, the world's largest insurance market, is set to resist pressure to pay reparations for its role in the slave trade. Despite apologising for its involvement, Lloyd's is not planning to compensate any descendants of enslaved people. The insurance market will publish a report next month providing further detail about its role in the trade and how it will fund diversity initiatives.


Swiss manufacturer commits to UK

Swiss manufacturer Bruderer has committed to the UK for the next half century, having started work on a new 48,000 sq ft factory and showroom in Telford, Shropshire. Chairman Andreas Fischer said the move gives the firm the foundations to grow and plan for the next 55 years in the UK. The new site will create jobs and an apprenticeship programme to cater to the demand for Bruderer's technology. Adrian Haller, managing director of Bruderer UK, said: "UK industry is bouncing back from the shackles of the pandemic... orders are up, investment is up, and industry is desperately crying out for more workers."


CMA launches probe into Vodafone and Three tie-up

The Competition and Markets Authority (CMA) is examining whether the £15bn merger between Vodafone’s UK operation and CK Hutchison’s Three UK would substantially lessen competition. The CMA is gathering information before it starts a formal Phase 1 investigation into a deal that would create the UK’s biggest mobile operator and reduce the number of networks from four to three. If the probe suggests competition will be reduced significantly, the competition watchdog will move into a more thorough investigation. In 2016, the European Commission blocked a proposed tie-up between Three UK and Telefonica’s O2, ruling that a reduction to three networks would reduce competition and likely result in higher prices.

IRS demands $29bn in unpaid taxes from Microsoft

The US Internal Revenue Service (IRS) is asking that Microsoft pay $29bn in unpaid taxes from 2004 to 2013, the company has said. Microsoft disagrees with the proposed adjustments and plans to contest the demand through the IRS's administrative appeals office and, if necessary, judicial proceedings. The issue with the IRS is related to the transferring of revenue across international jurisdictions during the period, a practice called cost-sharing. Microsoft believes it has acted in accordance with IRS rules and regulations and that its position is supported by case law.

Telegraph bidders face regulator scrutiny

Those looking to bid for the Telegraph Media Group will have to submit to scrutiny from the Department for Culture, Media and Sport as well as the Competition and Markets Authority (CMA) and Ofcom, with the competition and media watchdogs set to examine the takeover simultaneously in a “dual-track process.” The sale follows Lloyds Bank’s seizure of the company from the Barclay family in June.


Property inquiries fall in September

The majority of estate agents reported another fall in inquiries from new buyers in September, according to a survey from the Royal Institution of Chartered Surveyors (RICS). While housebuilders and estate agents had been hoping for an autumn bounce in the property market, new buyer inquiries were down in all but one UK region - North West England. The RICS poll saw a net 39% of say they agreed fewer sales in September than in August. It was also shown that most agents and surveyors expect the number of agreed sales to continue falling in the coming quarter. A net 69% of those surveyed also reported a drop in prices in September. Tarrant Parsons, senior economist at the RICS, said: “With mortgage affordability still incredibly stretched, it is unsurprising that buyer activity across the housing market remained subdued in September.”


Next to acquire FatFace in £100m deal

Next is set to acquire Fat Face in a deal worth over £100m, just three years after it was taken over by its lenders. This acquisition solidifies Next's position as the UK's most frequent acquirer of smaller retail brands, following deals for chains including, Joules, and Cath Kidston.

Sales rise at Jigsaw

Jigsaw has reported that sales increased 20% to £56.8m in the year to the end of January, while earnings before interest, tax and other deductions increased £2.8m to £3.6m. The retailer also posted a net profit of £802,000 in the year, compared with a net loss of £1.3m the year before.


Consumers expect eurozone inflation to stay above ECB target

Consumers in the eurozone expect inflation to remain above the European Central Bank's (ECB) 2% target for another three years, according to a new poll. The ECB's Consumer Expectation Survey for August suggests that inflation will be 2.5% in three years' time, with this an increase on the 2.4% median response in the previous survey. When questioned on inflation expectations for the next 12 months, consumers said they expect it to come in at 3.5% - slightly higher than the 3.4% predicted in July. The ECB last month increased the rate it pays on bank deposits to a record-high of 4.0% in a bid to bring down inflation. The central bank has forecast that prices will rise by 5.6% this year, 3.2% in 2024 and 2.1% in 2025.


Lloyd’s of London: Global economy could lose £4trn to extreme weather

Lloyd’s of London estimates that a “plausible increase” in extreme weather events linked to climate change could hit the global economy by up to £4trn. The research, conducted in collaboration with the Cambridge Centre for Risk Studies, modelled global economic losses of extreme weather events by estimating the impact of food and water shocks on global GDP over a five-year period. It found that global economic loss ranges from £2.4trn in the lowest severity scenario to £14trn in the most extreme. Researchers stressed that the “systemic risk scenario” was hypothetical but noted that the analysis would improve understanding of exposure to critical threats for businesses, insurers and policymakers.

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