Lord Holmes: Regional flows of finance needed
Writing in City AM, Lord Holmes of Richmond makes the case for regional mutual banks as a means of improving funding options for small businesses. “If we support SMEs by increasing the range and number of regional mutual banks then the banks will do what they do best and SMEs will thrive, as will the communities, the cities in which they are based,” Lord Homes says. “Through this single intervention, one of the fundamental planks on which levelling up will come will have been effectively laid.”
More branch closures ahead
A further 200 local bank branches will close this year, according to UK cash machine network, Link. HSBC is set to close 114 branches and NatWest will bring down the shutters on 34 branches. Lloyds Bank will shut eight outlets and Barclays will close 26. TSB is to close nine branches this year. Meanwhile, Halifax will close three branches and Santander will close five. Nationwide will close a single branch.
UK banks flush off rate rises
The UK’s largest banks are expected to rake in £36bn of profits this year after rising interest rates boosted income. Barclays will report £6.9bn of pre-tax profits next month, HSBC £17.08bn, Lloyds £6.94bn and NatWest £5.1bn, according to Jefferies analyst Joseph Dickerson. He adds:: "Interest income is the key driver of the banks' growth in profits."
Blackstone raises record amount for secondary funds
Blackstone raised a record $25bn for two funds that deal in secondaries and co-investments, the asset manager said on Wednesday. Strategic Partners IX raised $22.2bn, the world's largest secondaries fundraise ever, while Strategic Partners GP Solutions raised $2.7bn.
Regulators lag behind on shadow banks
UBS Chairman Colm Kelleher said during a panel discussion at the World Economic Forum in Davos that regulators had “taken their eyes off the ball in terms of the non-banking sector”. Traditional finance firms were "systemically safe" after years of increased regulation, he said, and had emerged largely unscathed from a slew of failures in the cryptocurrency sector. "I think we've dodged a bullet because this thing blew up very quickly but it will come back in one form or another," he said. "We are looking for the regulatory framework that will allow us to accommodate that for our clients."
Credit Suisse sees money returning
Credit Suisse CEO Ulrich Koerner revealed on Wednesday that the bank had reversed recent outflows “significantly” and the business was now seeing money come back in. Koerner also said he has "zero concerns" about conflicts of interest surrounding the Swiss bank's acquisition of former Credit Suisse board member Michael Klein's advisory firm. The bank also announced that senior bankers will get the cash component of their 2022 bonuses immediately as the Swiss bank battles to hang on to valued staff.
JP Morgan to cut bonuses
Viswas Raghavan, the EMEA boss at JP Morgan, told Bloomberg TV at the World Economic Forum in Davos that its bankers' bonuses will fall by as much as 30% after a worse performance throughout the investment bank last year. "All banks pay for performance, so if the performance isn't there, then the compensation isn't going to be there."
BNP Paribas cleared to sell US unit
BNP Paribas announced on Wednesday that it had received all the necessary regulatory approvals to complete its previously announced sale of Bank of the West to Bank of Montreal.
Nasa gives Boeing $425m to cut aviation emissions
The United States space agency has awarded Boeing $425m (£344m) to work on reducing carbon emissions from flying. Nasa administrator, Bill Nelson, said that the aim of the funding is to produce planes that are "more fuel efficient, with benefits to the environment, the commercial aviation industry, and to passengers worldwide".
Vistry in cost cutting drive as sales fall
Vistry is cutting up to 100 jobs and slowing down the rate of building after sales fell to £1bn at the end of 2022, down from £1.3bn the year before. Earl Sibley, chief operating officer at the housebuilder, said the sales were hit by the crisis in the mortgage market at the end of last year, triggered by September's mini-Budget.
Bitzlato crypto founder charged with laundering $700m
Anatoly Legkodymov, the founder of the crypto exchange Bitzlato, was arrested in Miami on Wednesday with the US Department of Justice accusing the Russian national of laundering the proceeds of illegal gambling and drug deals valued at more than $700m. "Institutions that trade in cryptocurrency are not above the law and their owners are not beyond our reach," US Attorney Breon Peace said at a press conference. "As alleged, Bitzlato sold itself to criminals as a no-questions-asked cryptocurrency exchange, and reaped hundreds of millions of dollars' worth of deposits as a result. The defendant is now paying the price for the malign role that his company played in the cryptocurrency ecosystem."
UK's financial services exports increased in 2021
Figures from the TheCityUK show that the UK's trade surplus in financial and related professional services increased in 2021 as the US cemented its position as the top customer. The UK financial services and related legal and accounting trade surplus rose to £81bn in 2021, up from £79.6bn in 2020, according to the data. For the second year running, the US was the top customer, accounting for 34.1% of the total, followed by the EU at 29%. When Britain still had full access to the EU market in 2019, it accounted for 40.5% of the sector's total exports of $82.7bn, with the United States coming in second with a 26.6% share.
Morgan Stanley veteran to become CEO of HyperJar
Morgan Stanley’s former head of technology operations, Rob Rooney, has agreed to become chief executive of British digital wallet provider HyperJar. Mr Rooney's appointment is a coup for the start-up, which was founded in 2016 and claims to have 500,000 customers.
CoinDesk up for sale
CoinDesk has hired Lazard to lead the exploration for a full or partial sale of the business. The company is wholly owned by crypto-focused venture capital firm Digital Currency Group.
MEDIA & ENTERTAINMENT
Twitter hit by 40% revenue fall as advertisers pause spending
Twitter has been hit by a 40% drop in revenue after more than 500 clients paused their spending. Advertising accounted for more than 90% of Twitter’s $5.1bn in revenue in 2021, but clients including Audi and Pfizer are among the firms that have paused ad spending since Elon Musk took over the social media company.
UK house prices show first monthly decline since October 2021
Office for National Statistics data showed on Wednesday that UK house prices fell 0.3% between October and November, their first monthly fall in more than one year. This brought the annual growth rate to 10.3% in November, down from 12.4% in the previous month. The average UK house price was £295,000, slightly down on October’s record high of £296,000. Meanwhile, the latest survey from the Royal Institution of Chartered Surveyors, covering December, reveals a net 42% of respondents reported a decline in house prices. Simon Rubinsohn, chief economist at the institution, said the survey results “highlight the emerging challenges in the housing market as new buyers grapple with more costly finance terms and uncertainty over the economy”.
UK inflation dips but remains close to 40-year high
Price rises slowed for a second month in a row in December but the cost of living remains close to a 40-year high. Inflation, which measures the rate of price rises, fell to 10.5% in the year to December, compared to 10.7% in November, figures from the ONS show. The drop was due to fuel prices falling along with clothing and footwear prices; however, this was offset by rising costs in restaurants and hotels. The cost of food also continued to rise and there was a big jump in air fares. Grant Fitzner, chief economist at the ONS, said: "It is important to point out although we've seen a second consecutive easing, it is fairly modest fall and inflation is still at a very high level with overall prices rising strongly." Several analysts expect the Bank of England to cut interest rates as soon as early next year if inflation continues to fall in 2023.