HSBC offers biggest switch incentive
HSBC is offering new customers £175 to switch – with this the highest switching incentive currently on offer. Advance Account benefits include a minimum arranged overdraft offer of £1,000 and money off Costa Coffee, ASOS and Not On The High Street. The incentive from HSBC beats its last offer of £110 in cash and a £30 Uber Eats voucher. If customers also choose to link a HSBC Regular Saver account, they can save up to £3,000 at a 1.00 percent interest rate fixed for 12 months. First Direct and Royal Bank of Scotland are both currently offering £150 to switch, while Halifax and Nationwide are rewarding switchers with £125 in cash. Meanwhile, Virgin Money has launched a new savings offer for customers who switch. Those who switch to the Virgin Money M Plus Account and Virgin Money Club M Account will receive a 2.02% AER on balances up to £1,000. Switchers will get a 1% AER variable interest rate on their linked savings account on balances up to £25,000 and 0.50% AER variable on balances over £25,000.
Barclays in BoE crosshairs over ‘gaming the rules’ with pension deals
The Bank of England has warned banks over “gaming the rules” by using “deficit reduction transactions with their defined-benefit pension schemes that are structured to limit the regulatory capital impact”.
JPMorgan profits fall 42%
JPMorgan Chase’s Q1 profits were down 42% on last year, partly because it wrote down nearly $1.5bn in assets due to higher inflation and Russia's war in Ukraine. The US’ largest bank by assets saw a profit of $8.3bn, down from a profit of $14.3bn. Net revenue slipped to $30.7bn from $32.3bn. JPMorgan set aside $1.46bn to write off its assets tied to Russia as well as assets that have been negatively exposed to persistently higher inflation. CFO Jeremy Barnum said most of the Russian write downs were "name specific" Russian companies and assets, as well as some Russian-related derivatives. CEO Jamie Dimon said the bank sees "significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine."
TD Bank to offer salary boost
Canada’s TD Bank Group will offer eligible employees a 3% increase to their base pay or a one-time cash reward, with this the latest pay increase by banks looking retain workers amid a tight labour market. TD Bank said the raise would apply to all global employees between level 1 and 12, as well as associate vice presidents and district vice presidents. CEO Bharat Masrani said employees who receive commission or commission-like payments, and those who participate in the TD Securities or TD Asset Management Performance Compensation Plan, at or below director level, will receive an alternative one-time cash award.
ABN AMRO apologizes for historic links to slavery
Dutch bank ABN AMRO has apologised for historic links to the slave trade, saying that that predecessor Hope & Co. was “actively involved in the day-to-day business of plantations.” Another bank that went on to become part of ABN AMRO, Mees en Zoonen, “brokered insurance for slave ships and shipments of goods harvested by enslaved persons,” the bank said. ABN AMRO CEO Robert Swaak said the bank has a proud history, but “we must also recognize that it has a darker side as well.”
Shareholders in carmaker Stellantis reject Tavares pay plan
More than 52% of carmaker Stellantis’ shareholders have voted against a remuneration report which proposed a €19m pay package for CEO Carlos Tavares. The company said this would “be taken into account”.
Aviva sees 1,505 FOS complaints
Aviva was the subject of a total 1,505 complaints at the Financial Ombudsman Service (FOS) in the second half of last year, with these split between Aviva Insurance Limited (928 new cases), Aviva Life & Pensions (539), and Aviva Equity Release UK (38). Aviva was followed by life and pensions consolidator ReAssure, which was the subject of 419 new complaints. Of these new cases, 19% were upheld with four proactively resolved. The Financial Conduct Authority last month said it was to engage with ReAssure over adviser claims that the service it is providing is “absolutely appalling”. Scottish Widows had a total of 302 new cases between July 2021 and December 2021, with 19% upheld, while Liverpool Victoria, which was a combination of LV Financial Services Limited and LV Insurance Company, had a total of 233 new cases, with 36% upheld. Close Brothers Group had 140 new cases with 39% upheld. In the advice landscape, St James’s Place had 100 new FOS cases, with 29% upheld, and Hargreaves Lansdown Asset Management saw 21% of its 106 cases upheld.
PLSA: Regulators must offer latitude once dashboards launch
The Pensions and Lifetime Savings Association (PLSA) has appealed for “a degree of latitude” after pensions dashboards are introduced, telling regulators there is “the need for a grace period of 12 months after the public launch of dashboards”. In its response to a Financial Conduct Authority consultation on pensions dashboards, the PLSA said they should not be launched until they meet live testing thresholds over coverage, data matching accuracy, and saver understanding, suggesting that at least a year of testing will be required before these thresholds are met and that a limited offering could be possible in the first quarter of 2024. The association said: “Dashboard users’ expectations need to be managed. Initial dashboards won’t deliver many features that users might reasonably expect.”
Swiss Re chair re-elected despite diversity concerns
Swiss Re shareholders have re-elected Sergio Ermotti as chair, despite proxy adviser ISS recommending they vote against him over a lack of gender diversity. ISS recommended shareholders oppose the reappointment of Ermotti as a "signal of concern" over the lack of gender diversity on the reinsurer's board. Mr Ermotti won 79% of the vote in the election at the reinsurer's AGM, with this less than the 96% he won at last year's meeting.
GSK agrees Sierra Oncology deal
GlaxoSmithKline has agreed a £1.49bn deal to buy US cancer treatment firm Sierra Oncology. This comes as GSK looks to strengthen its drug pipeline after pressure from activist investors. GSK chief executive Dame Emma Walmsley has been facing mounting calls to shore up its drug pipeline since Elliott Management, a US-based investor, built up a significant stake in the company last year.
ONS: House prices rose 10.9% in February
UK house prices rose 10.9% year-on-year in February, Office for National Statistics (ONS) figures show. This is up from a 10.2% increase in January. February's increase exceeded forecasts, with analysts predicting a 10.1% rise. Prices were up 0.8% month-on-month, following a 1.1% monthly rise in January. The increase recorded in February took the average house price to £277,000, with this £27,000 higher compared to the same month in 2021. House prices in England grew by 10.7% to an average of £296,000 in February. Wales reported a 14.2% rise to £205,000, while prices increased by 11.7% to £181,000 in Scotland and by 7.9% to £159,000 in Northern Ireland. Hargreaves Lansdown analyst Sarah Coles said: “The property market continues to defy gravity. Despite rising rates and runaway inflation putting the squeeze on affordability, February saw another record average price.” The ONS data also shows that the private rental prices increased by 2.4% in the 12 months to March, with the increase hitting 3.3% if London is excluded.
House prices up 1.4% in March – Halifax
Average UK house prices were up 1.4% in March, with this the biggest increase since September. Halifax’s latest House Price Index report shows that the value of the average UK property has increased by £28,113 in the past 12 months and by £43,577 since the first coronavirus lockdown in March 2020. Russell Galley of Halifax commented: “The story behind such strong house price inflation remains unchanged: limited supply and strong demand, despite the prospect of increasing pressure on households’ finances.” He added: “Although there is some recent evidence of more homes coming onto the market, the fundamental issue remains that too many buyers are chasing too few properties.”
Tesco to buy back £750m of shares but cautions on outlook
Tesco has reported an annual profit in line with analysts’ forecasts and said it would buy back another £750m of its shares. The supermarket group expects a retail operating profit for the year to February 2023 of £2.4bn-£2.6bn, depending on customer shopping habits, cost inflation and the extent to which rising costs are absorbed or passed on to consumers. Tesco's results for the year to February 26 show group sales, excluding fuel, rose by 2.5% to £54.8bn, while in the UK retail sales rose by 2.3% year-on-year. Operating profit rose by 65% to £1.55bn for the full-year. Online sales dropped 6.5%, as customers returned to stores as the pandemic eased. Retail operating profit came in at £2.65bn, a 36% rise in line with guidance.
Reliance Industries among potential Boots bidders
India's Reliance Industries has joined the list of potential bidders for British high street chemist Boots. Walgreens Boots Alliance launched a strategic review of Boots earlier this year, with analysists forecasting a sale price of around £7bn. Other interested parties are understood to include TDR Capital, a consortium of CVC Capital Partners and Bain Capital, and US investment firm Apollo. TDR Capital would likely integrate Boots with Asda, which it also owns in partnership with the Issa brothers.
Inflation hits 30-year high
Office for National Statistics (ONS) data shows that inflation hit a 30-year high of 7% in the year to March. This marks the highest level of inflation since the 7.1% rate recorded in March 1992. Inflation for March was up from the 6.2% seen in February and also came in higher than the 6.7% expected by analysts. The increase does not take into account the average 54% increase in energy bills that came into effect two weeks ago, so April's figure is expected to be even higher. The Bank of England has predicted that inflation could peak at around 8% in April. A surge in fuel prices had the biggest impact on the inflation rate in March, with average petrol and diesel prices at record highs, while the cost of food, furniture, household equipment, clothes and shoes also saw increases of between 5% and 10%. ONS chief economist Grant Fitzner said: “Broad-based price rises saw annual inflation increase sharply again in March.” He added: “The price of goods leaving UK factories has continued to rise substantially with metal and transport products both at record highs and food reaching its highest rate for over a decade. Raw material costs also rose, with a notable increase in the price of crude oil.” Reflecting on the ONS data, Chancellor Rishi Sunak said: “I know this is a worrying time for many families, which is why we are taking action to ease the burdens by providing support worth around £22bn in this financial year.”