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Daily News Roundup: Thursday, 14th May 2020

Posted: 14th May 2020


Homebuyers may find mortgage options have changed

Would-be home buyers may find they have had their mortgage options withdrawn or reviewed after sales stalled when the property market went into lockdown. As millions of workers have had their pay cut, been furloughed or made redundant, banks are poised to reassess many loans, some even after contracts had been exchanged. "Mortgage lenders are free to withdraw their mortgage offer even after you've exchanged contracts,” said Sarah Coles, of Hargreaves Lansdown. All the big banks are asking customers with a mortgage offer to get in touch if their circumstances have changed during lockdown, and they will reassess whether the loan is still affordable. The one in seven existing borrowers who have taken a mortgage holiday, during which payments are deferred, can expect their circumstances to be reassessed when the lockdown ends.

Starling and Funding Circle to provide £300m in small business loans

Starling Bank and Funding Circle have teamed up to provide £300m in loans to small firms under the coronavirus business interruption loan scheme (CBILS). In addition to providing CBILS loans, which are available to companies with a turnover of up to £5m, Starling is also participating in the bounce back loans scheme (BBLS), which provides loans of between £2,000 and £50,000 to small companies. In the week since the bounce back loan scheme (BBLS) launched, £8.4bn has been approved to 268,173 businesses – an average of 38,000 loans a day. Meanwhile lenders have provided £6.1bn through CBILS, according to figures from UK Finance.

Barclays offers loan delay compensation

Barclays has begun to offer compensation to customers who were left waiting over a week for their lifeline Bounce Back loan, with firms being offered £100 after the bank admitted it failed to handle applications for the Government-backed loans as quickly as it promised.

Businesses join forces to combat coronavirus scams

Businesses have joined forces with National Trading Standards in a bid to clamp down on coronavirus-related scams, with NatWest and the Co-operative Bank among more than 100 organisations spearheading the Businesses Against Scams initiative.


Permira offers TeamViewer shares

Permira has offered around 25m shares in German software company TeamViewer to institutional investors at a price of no less than €41 each. This could net it proceeds of over €1bn and reduce its stake to 39% from 51.5%.


ABN Amro slumps to loss as impairment charges pile up

ABN Amro has reported a first quarter loss, citing coronavirus and loans to oil trader Hin Leong, with a more than tenfold increase in impairment charges resulting from these.

Deutsche Bank to double green financing and restarts job cuts

Deutsche Bank has announced a €200bn sustainability commitment by 2025, as the lender plans to issue a “green bond” to raise funds for renewable energy investments later this year. The lender has also announced it is restarting its job cuts programme, six weeks after it suspended redundancies due to the COVID-19 pandemic.

Ukraine approves law to safeguard banking clean-up

The Ukrainian parliament has adopted new bank sector legislation as it seeks a loan from the IMF to bolster the economy in the wake of coronavirus.


Aston Martin announces Q1 loss of £119m

Aston Martin has reported a £120m first quarter loss, citing the effects of the coronavirus pandemic on its factories and dealerships. Executive chairman Lawrence Stroll said the firm’s “immediate priority is to rebalance supply and demand, reducing dealer stock”, as the company plans to postpone a planned push into electric vehicles, instead focusing on Formula 1 and its range of supercars.

Nissan announces cost-cutting moves amid restructuring

Nissan has announced a $2.8bn (£2.3bn) cost-cutting drive as it moves forward with its restructuring plan, following reports that the coronavirus pandemic could result in a loss for the firm of 45bn yen (£335m) over the year. The company is also expected to release an update on its alliance with Renault later this month.

VW pauses production of Golf and SUVs due to weak demand

Production of four key Volkswagen models is to be paused in response to weak demand for new cars in Europe, after the firm’s Wolfsburg plant reopened on April 27.


Emirates details plans to resume flying next week

Emirates is to resume its scheduled flight service to London Heathrow, Frankfurt, Paris, Milan, Madrid, Chicago, Toronto, Sydney and Melbourne, including connections in Dubai, from next week, with travellers allowed onboard only if they comply with eligibility and entry requirements of their destination countries.


Taylor Wimpey offers NHS staff discounts as business resumes

Taylor Wimpey has announced that NHS workers will receive a discount on purchases, as the building firm reopens sales offices and show homes. Chief executive Pete Redfern commented: “The new guidelines from Government show a clear desire to restart important parts of the economy, including the housing market. We have seen growing levels of customer interest in recent weeks and believe that this announcement will help rebuild housing market momentum in London and beyond.”


Tip-offs over improper conduct increase

Whistleblower activity regarding inappropriate behaviour at financial firms has increase by more than a third, data obtained by Kroll reveals, with a 3.5% increase in whistleblowing tip-offs to the FCA overall.

Standard Life Aberdeen hit by investor backlash over virtual AGMs

Nearly two-fifths of Standard Life Aberdeen investors have voted against a proposal allowing it to convene future shareholder meetings remotely, while it avoided a second consecutive revolt on executive pay.

Profits down at wealth manager Brewin Dolphin

Wealth manager Brewin Dolphin has reported that statutory profit before tax fell 5.1% to £28.2m for the six months to March, down from £29.7m in the year-earlier period, while total funds were down to £41.4bn, against £45bn in 2019.

Revenue up at TP ICAP for Q1

TP ICAP saw revenue increase by 17% to £547m in the first quarter. The firm issued a statement saying: “The group believes that it is too early to fully assess the impact of the COVID-19 pandemic on TP ICAP and its customers. We will continue to monitor the impact on the group through the remainder of the year.”

Digital first for Lloyds

Lloyd’s of London is set for its first digital syndicate as modernisation hits the insurance market. Insurer Brit is next year launching Ki, an online portal which relies on computer algorithms rather than people, with Google Cloud. Ki will use algorithms to produce an automatic quote, making the process quicker

Pension risk transfer transactions agreed between L&G and IHS Markit

Legal & General has agreed two pension risk transfer transactions with information provider IHS Markit, with the UK transaction for £37.8m covering some 150 members and the US transaction for £78.4m covering 1,200.


Tui announces plans to salvage holiday season

Travel firm Tui is to reopen selected German hotels very soon, as it seeks to welcome holidaymakers around Europe despite coronavirus restrictions. This comes amid warnings that as many as 8,000 jobs could be lost at the firm, which is seeking to reduce costs by 30%.

Festival sector trade body seeks government help

The Association of Independent Festivals (AIF) has warned that the music festival sector in the UK is in danger without Government assistance, with 98.5% of its events not covered by insurance for cancellation related to the coronavirus pandemic.


Alstom refusing to pay Hong Kong firm due to bribery fears

Tube carriage manufacturer Alstom is embroiled in a legal dispute with Hong Kong firm Alexander Brothers Limited, which is seeking over £2m from the French company. Alstom and its British subsidiary claim that Alexander Brothers’ work on securing multi-million-pound contracts in China is likely to have involved corrupting public officials, and have cited fears over being prosecuted for bribery in their refusal to pay.


House prices will drop despite surge in inquiries

Economists and housing experts are predicting up to a 13% drop in UK house prices, with “brutal” declines in some areas, as the property market struggles to rebuild during the COVID-19 crisis. However, the forecasts vary substantially between industry experts. The Centre for Economics and Business Research predicts that 2020 prices will be down by 13% “as a lack of transactions, high uncertainty and falling incomes take their toll”. At the other end of the scale, a third of valuation surveyors are predicting that price falls may be limited to 4% or less.


Chancellor in recession warning

Chancellor Rishi Sunak has warned that “a significant recession” in the UK is likely. This came after a fall in GDP of 5.8% was recorded in March, with the economy shrinking 2% in the first quarter of 2020. The Office for National Statistics said there had been "widespread" declines across the services, manufacturing and construction sectors. Mr Sunak said the Government has taken action to “support people’s jobs, their incomes, livelihoods at this time and support businesses so we can get through this period of severe disruption and emerge stronger on the other side.” Ruth Gregory, senior UK economist at Capital Economics, said the figures showed the UK economy was "already in freefall within two weeks of the lockdown going into effect", while Melanie Baker, senior economist at Royal London Asset Management, commented: “The economic damage from roughly only a week of lockdown is striking,” before predicting that activity growth in April “will be much worse.” Suren Thiru, head of economics at the British Chambers of Commerce, said: “The speed and scale at which coronavirus has hit the UK economy is unprecedented”.

Bailey: BoE can help UK avoid austerity

Bank of England governor Andrew Bailey has said the Bank can help Britain cope with the extra debt load incurred from coronavirus, suggesting it could deliver policies which avoid the need for austerity. When asked if austerity would be required, Mr Bailey said: “One of the reasons that the Bank of England [is] acquiring a much larger stock of Government debt than … would have been imagined [a decade ago], is that what we can do, providing the overall credibility of the framework remains in place – and independence is very important to that point – is that we can help to spread over time the cost of this thing to society and that to me is important. We have choices there and we need to exercise those choices.”


Self-employed grant scheme sees 110k first day claims

The first day of the Government grant scheme for self-employed people whose businesses are affected by coronavirus has seen claims worth over £340m. A total of 110,000 people submitted claims worth an average of £3,090 by midday on Wednesday under the new Self-Employment Income Support Scheme, HMRC chief executive Jim Harra said. Derek Cribb, chief executive of the Association of Independent Professionals and the Self-Employed, said the initiative provided "a much-needed lifeline to those self-employed people who are eligible for it." "We continue to urge the Government to open out support schemes to these struggling groups,” he added.

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