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Daily News Roundup: Thursday, 23rd September 2021

Posted: 23rd September 2021

BANKING

UK fraud branded a “national security threat”

More than £4m on average was stolen by fraudsters every day in the UK during the first half of the year as losses skyrocketed during the pandemic. Figures from  UK Finance show fraud committed when individuals are tricked into handing over money and personal details surged by 71% compared with the first six months of last year. Less than half of the money lost in these cases was refunded by banks. In total, £754m was stolen through fraud in the first half of the year, an increase of 30% compared with the same period last year. Within this total, so-called authorised push payment (APP) fraud - when victims think they are paying a genuine organisation - rose by 71% to £355m. Managing director of the economic crime unit at UK Finance, Katy Worobec called for “coordinated action and increased efforts from government and other sectors to tackle what is now a national security threat.”

Bank of England to streamline rules for small lenders

The Bank of England is looking to strip back regulations for small lenders to boost banking competition, Sam Woods, chief executive of the Prudential Regulation Authority, has said. In his annual Mansion House speech, Woods said the Bank was taking advantage of Brexit by designing a simpler set of rules for smaller banks and building societies now that it can “take back control” of financial regulation. “Pretty much everyone thinks this is a good idea,” he added.

UBS sued over stress induced mental health issues

A trader is suing UBS claiming the “toxic” work environment at the bank’s London office and “punishing workload” caused his mental health to deteriorate. Simon Rope is claiming upwards of £200,000 for negligence over an anxiety disorder which was caused by “the stress to which he was subjected in” the London office according to his lawyers. In April 2018, Rope made two trading mistakes that caused him to cry in front of colleagues, City A.M. reports. After the incident he was signed off work sick and has been considered unfit to return ever since.

HSBC staff to polish Welsh language skills

HSBC is to help branch staff in Wales learn or brush up on their Welsh language skills by drawing on the skills and knowledge of fluent Welsh speakers in the bank. Jackie Uhi, HSBC UK's head of branch network, said, “as a service provider we are excited by the opportunity to engage more in Welsh, formalising the support we are able to give our customers across Wales.”

PRIVATE EQUITY

Carlyle committed to China, CEO says

Kewsong Lee, the CEO of Carlyle Group, said on Wednesday that the private equity firm remained committed to China despite recent policy moves by authorities in Beijing. Lee said there were still opportunities available to investment firms with local expertise such as Carlyle that can navigate the country's complex regulatory environment. He went on to say that in the first half of this year nearly 60% of the board directors who joined companies that have been controlled by Carlyle for at least two years were from diverse backgrounds, putting it ahead of its 30% target.

SoftBank backs Steven Mnuchin’s $2.5bn private equity fund

SoftBank is backing a new $2.5bn private equity fund set up by former US Treasury secretary Steven Mnuchin. The move by the Japan-based fund follows in the footsteps of Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala in backing Liberty Strategic Capital, launched by Mnuchin earlier this year.

INTERNATIONAL

ECB announces new inspections and climate risks

The European Central Bank is planning new inspections at the banks it supervises to check their technology and their ability to generate profits, the ECB's top supervisor Andrea Enria said on Wednesday. Separately, an ECB study warns that banks in southern Europe are most exposed to physical risks stemming from climate change. "While European countries are similarly exposed to transition risk when looking at tail firms ... there are a few countries that show exceptional vulnerability to high physical risk," the ECB said.

BoJ opens new loan scheme

The Bank of Japan has invited financial institutions to apply for its new loan scheme targeting activities aimed at combating climate change. Successful applicants will be required to disclose targets and actual results on investment and loans, as well as what steps they are taking to meet proposed disclosure rules set by the Task Force on Climate-Related Financial Disclosures (TCFD), the BoJ said.

Wells Fargo asset cap will stay for now

Jerome Powell, the chairman of the Federal Reserve, said on Wednesday that the Fed is closely monitoring Wells Fargo & Co following the bank's sales practice scandals and that its asset cap would stay in place until the firm had improved its governance and risk controls.

FINANCIAL SERVICES

Rathi: FCA’s oversight will be less risk averse

Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), has said the regulator will step up its oversight of high risk cryptocurrency products and firms engaging in severe misconduct. In a speech delivered at the Lord Mayor’s City Banquet at Mansion House, Rathi echoed a warning from FCA chair Charles Randell that the public should not trust cryptocurrency investment advice pumped out by social media influencers. The FCA was pursuing a more agile approach to overseeing the UK’s financial services industry, Rathi said, adding: “We have often been criticised for acting slowly or with too much risk aversion. This is changing.”

EU rule change offers insurers €90bn capital boost

The European Commission has unveiled a short-term €90bn capital boost for Europe’s insurers which it hopes will boost investment in the region’s economy.

LEISURE & HOSPITALITY

Saga stems losses

Saga, the over-50s insurance and holidays group, sailed back into profit in the six months to July 31, reporting a pre-tax surplus of £700,000 after losses in the previous two years of £301m and then £61m. However, this was on  a statutory basis. On its own preferred measure of performance, the company slid from adjusted profits last time of £15.9m to a loss of £2.8m. International cruises started up again last month but Covid restrictions mean that passenger numbers remain low.

MANUFACTURING

PZ Cussons says revenue ahead of pre-pandemic levels

PZ Cussons, the maker of Imperial Leather soap and Carex hand gel, has revealed that revenues were ahead of pre-pandemic levels despite an unprecedented demand for hygiene brands easing. However, it reported a 9% slip in group sales to £131.4m for the year to the end of May as it faced tough comparisons with last year. It recorded a £16.6m pre-tax loss, while adjusted profits rose 11% to £68.8m. The company added that shipping disruptions and commodity price inflation will increase costs by £366m this year. said that it was facing a 9% to 10% increase in the cost of materials used to make soap, moisturisers and plastic packaging. In addition, the cost of shipping goods from its factories in Asia has leapt.

Shareholders support Meggitt takeover

Shareholders have backed a takeover of British defence company Meggitt by US group Parker Hannifin. However, the £6.3bn proposed takeover remains under government scrutiny. Kwasi Kwarteng, the business secretary, is reported to be looking closely at whether the deal would harm the UK’s national security.

MEDIA & ENTERTAINMENT

Roald Dahl's family net £500m from sale of literary estate

Netflix has bought the rights to Roald Dahl's classic children's books from the author's family for a reported £500m. Sources said that Mr Dahl's family had been advised by Raine Group.

PROFESSIONAL SERVICES

You & Mr Jones in $3bn US float talks

Digital marketing services group You & Mr Jones is interviewing investment banks ahead of a public listing in New York that could come as soon as the first half of next year. Founded by  David Jones in 2015, the ‘brandtech’ specialist could find itself valued at more than $3bn (£2.2bn).

RETAIL

Kingfisher shares fall

B&Q owner Kingfisher was one of the heaviest fallers on the FTSE 100 after analysts from Bank of America outlined doubts about the sustainability of home improvement products as lockdown restrictions ease. The bank also added that Screwfix, which Kingfisher owns, faced increased competition, causing it to keep its "underperform" rating. As a result shares at the company slid 1.4%. 

SPORT

Derby County enter administration

Derby County have formally entered into administration after owner Mel Morris failed to find a buyer willing to spend £50m to clear the club’s debts. Derby will be automatically deducted 12 points under EFL rules, sending them to the bottom of the table but a further points deduction is on the cards due to irregularities in the club's accounts.

ECONOMY

BoE could be swayed by public inflation fears

A Citi/YouGov survey has found Britons are becoming increasingly worried about inflation with expectations for the next 12 months rising to 4.1% from 3.1% in August. It was the biggest monthly increase since the survey began more than 15 years ago and was the highest level since 2008. Longer-term inflation expectations, for the next five to ten years, rose from 3.5% to 3.8%, the highest level since 2013. “The data, especially the movement in long-term expectations, suggest growing risks that inflation expectations could become de-anchored to the upside,” Citi said. “The sharp increase risks a hawkish response from the [Bank] this week.”

Fed prepares to raise interest rates

The Federal Reserve said yesterday that a reduction in its $120bn monthly bond buying programme “may soon be warranted”. Jerome Powell, chairman of the Fed, said officials believe a “gradual tapering process” concluding by next summer is “likely to be appropriate” providing the recovery remains on track. Rates were again held at close to zero while the Fed upgraded its forecast for inflation to 4.2% this year - twice its target rate. Powell said: “If sustained higher inflation were to become a serious concern, we would certainly respond and use our tools to assure that inflation runs at levels that are consistent with our goal.”

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