Charity regulators call out banks over account closures
Britain’s charity regulators have warned that charities are receiving a “substandard” service and are being unfairly debanked. In a letter to bank bosses, the Charity Commission for England and Wales, the Charity Commission for Northern Ireland and the Office of the Scottish Charity Regulator, said groups had seen accounts closed or suspended suddenly, with “poor customer service and administrative delays” also a concern. Charity Commission chief executive Helen Stephenson said the service charities experience is “unacceptable,” pointing to the fact that “too often, charities experience accounts being closed or suspended suddenly for long periods of time with poor customer service and administrative delays.” A spokesperson for UK Finance said: “Banks always seek to deliver the best service for all their customers and listen to feedback from customers who have experienced issues or delays in accessing services.”
Wellcome Trust warns of private equity ‘shakeout’
Nick Moakes, chief investment officer of the £38bn Wellcome Trust, says the private equity industry is facing a "shakeout" that could result in losses for those who invested without proper due diligence.
Ermotti reassures UBS shareholders over merger
UBS chief executive Sergio Ermotti has reassured shareholders that the merger with Credit Suisse is progressing well and will add value to both shareholders and clients. Mr Ermotti is set to announce a strategy for the merged banks in February. The integration could cost jobs in Switzerland and reduce competition. IT migration is the largest risk in executing the merger, with UBS planning to integrate just 300 of Credit Suisse's more than 3,000 IT applications into its infrastructure.
New trial over UBS fine
France's top court has ruled that a new trial should be held for UBS over a €1.8bn ($1.95bn) fine related to alleged illegal banking services and money laundering in the country. The court upheld the guilty verdict against the bank and stated that a new trial would determine a new fine, if any. This ruling reverses the decision of the Paris Court of Appeal from December 2021. The Swiss bank is accused of enticing wealthy French clients to hide undeclared funds in Swiss bank accounts between 2004 and 2012.
Commerzbank receives crypto custody licence
Commerzbank has received a crypto custody licence in Germany, allowing the bank to offer a range of digital asset services, with a focus on crypto assets. The services will be targeted at institutional and corporate clients, with the first product being a custody service for bitcoin and ether. This move by Commerzbank highlights the growing interest in cryptocurrencies and the need for secure storage solutions.
Insurance firms call for tax cut
Insurance firms are urging Chancellor Jeremy Hunt to reduce the rate of insurance premium tax (IPT) in order to lower costs for consumers. The Association of British Insurers (ABI) claims that the tax, which is passed on to customers, is adding up to £100 to the annual cost of policies. For motor and home insurance alone, IPT typically adds an extra £98 per year, with £60 for motor insurance and just over £37 for a combined home buildings and contents policy. The ABI also highlighted that IPT adds around £46.50 to a pet insurance policy and £13.50 to an annual travel insurance policy. A tax cut would benefit millions of households and businesses, according to the ABI.
FCA restricts advice firm
The Financial Conduct Authority has placed several restrictions on KBFS Financial, preventing the firm from carrying out any regulated activities and restricting access to its assets. This comes on the back of concerns that the firm failed to pay redress awarded to members of the British Steel Pension Scheme by the Financial Ombudsman Service (FOS). The FCA also said KBFS failed to provide information it requested about its financial position and FOS awards it was due to pay out.
SJP defends payouts for bosses
St James's Place has defended its decision not to cut share awards for top staff last year after a mini-investor revolt over its remuneration policy. Over 20% of the firm's shareholders voted against its proposed director remuneration report at its annual general meeting in May. However, SJP, which has suffered a heavy share price slump this year, has told investors that reducing the firm's long-term incentive plan "risked damaging the credibility of it." The remuneration committee said it believed it had acted in the best interests of the group and stakeholders in not applying a downward adjustment to the performance-based vesting outcome.
Fund managers buy bonds
Fund managers have built the highest level of exposure to bonds since the financial crisis, according to Bank of America analysis. The latest Global Fund Manager Survey shows that funds had their third-highest bond overweight position in two decades, with investors betting that global interest rates will move lower next year. More than three-quarter of respondents believe the US Federal Reserve’s cycle of raising rates has ended, up from 60% the previous month. Just under three quarters of investors predict either a ‘soft’ or ‘no’ landing for the global economy in the next 12 months, while just 21% expect a ‘hard’ landing, down from 30%.
LEISURE & HOSPITALITY
Firms call for rates support
A coalition of business groups representing the hospitality, retail and leisure sectors have called for a freeze on business rates and an extension of existing tax reliefs. Organisations including UKHospitality and the British Retail Consortium say the retail and hospitality sectors face a combined bill of £2bn if rates are not frozen and tax reliefs are not extended, warning that the impact would be “disastrous” for their sectors. In a letter to the Chancellor, they said an inflationary increase in the business rates multiplier and removal of relief would result in “business failures, job losses and boarded-up properties in our high streets, denying people their livelihoods and their social pleasures.” A 75% business rates discount for retail, leisure and hospitality firms is currently set to end on March 31.
Jobs at risk at train supplier
More than 1,300 workers are at risk of losing their jobs at the UK’s largest rail assembly factory, with French engineering firm Alstom consulting on potential job cuts at the facility Derby. This comes amid a slowdown in new rolling stock orders from the Government, alongside the decision to scale back the HS2 project. Around 550 permanent Alstom employees are set to face redundancy, while 780 contractors are also potentially at risk.
MEDIA & ENTERTAINMENT
ValueAct Capital builds Disney stake
Activist investor ValueAct Capital has acquired a significant stake in Walt Disney. ValueAct has previously pushed for higher prices and more bundling of subscriptions at media sector companies it has held a stake in, raising the prospect of similar moves at Disney. It is the second activist investor to take a stake in Disney after Nelson Peltz's Trian Fund Management last month signalled it would be pushing for multiple board seats, having abandoned a proxy fight earlier this year.
House prices slip in September
Office for National Statistics (ONS) data shows that UK house prices fell 0.1% in the year to September, marking the first annual decline in 11 years. The average sale value, including cash buyers, fell to £291,385, with this down from £292,882 in August. The annual drop was steepest in Wales, where house prices in September were down 2.7%, while England saw prices dip 0.5%. Scotland, however, saw prices climb 2,5% year-on-year, while prices in Northern Ireland rose 2.1%. Sarah Coles, head of personal finance at Hargreaves Lansdown, said the fall in house prices had been expected, commenting: “The market has proved incredibly resilient in the face of overwhelming headwinds, but mortgage rate hikes over the summer dealt the final blow, pushing prices into negative territory.”
Landsec shifts London portfolio
One of Britain's biggest property developers, Landsec, is shifting its London portfolio from the City of London to the West End. Landsec has sold £2.5bn of properties since 2020. The developer's portfolio now consists of 76% West End and Southwark properties, while its City assets have decreased to 24%.
Lloyd's signs long-term HQ deal
Lloyd's of London has signed a long-term deal to remain in its landmark City headquarters until 2041. The insurance marketplace has been negotiating a new lease with Chinese landlord Ping An, which bought the building in 2013. The deal allows Lloyd's to continue working in its distinctive Richard Rogers designed HQ for the next two decades.
Price growth eases to 4.6% in October
UK inflation fell to the lowest rate in two years last month, falling to 4.6% in the year to October from 6.7% in September. Grant Fitzner, chief economist at the Office for National Statistics (ONS), said price rises slowed in October as "last year's steep rise in energy costs has been followed by a small reduction in the energy price cap this year." The slowdown in price increases mean Prime Minister Rishi Sunak has achieved a target set in January of halving inflation by the end of the year from the 10.7% average in Q4 2022. While inflation has fallen from its peak of 11.1% in October 2022, it remains above the Bank of England's 2% target.
Falling inflation could accelerate rate cuts
Investors say better-than-expected inflation data could prompt the Bank of England to cut interest rates next spring. With inflation falling to 4.6% in October, money markets are pricing a rate cut in March, having previously forecast that the Bank would not deliver its first rate reduction since the pandemic until September. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “October’s consumer prices report has rightly entrenched expectations that the Monetary Policy Committee will be able to start to reduce bank rate in about six months’ time.”