BANKING
NatWest to appoint Rick Haythornthwaite as new chair
Rick Haythornthwaite has been appointed to succeed Howard Davies as chair of NatWest. The move was quickly welcomed by City minister Andrew Griffith, who said: “He is an experienced and widely respected choice to chair one of the UK’s largest banks.” Haythornthwaite, who is currently chair of Ocado and the AA, will join the bank as a non-executive director in January before taking up the new role on 15 April next year. One of Haythornthwaite’s first jobs will be to lead the search for a replacement for CEO Dame Alison Rose, who resigned after admitting to inaccurately briefing a BBC journalist about the reasons why Coutts, NatWest’s private bank, closed Nigel Farage’s accounts. Haythornthwaite was Mastercard’s global chair for 14 years until 2020 and served as chair of energy company Centrica from 2014 to 2019.
Clearbank doubles deposit base in wake of SVB collapse
Clearbank has doubled its deposit base to £5.4bn in just six months following the collapse of Silicon Valley Bank (SVB). The fintech clearing bank experienced a 20% increase in deposit in-flows immediately after SVB's collapse, taking its total deposits to £3.7bn. Clearbank has continued to accumulate deposits as institutions seek better returns than those offered by mainstream banks. Emma Hagan, Chief Risk and Compliance Officer at Clearbank, stated that the main driver has been consumers looking for competitive rates as interest rates rise. Clearbank, which launched in 2015, offers fully regulated banking infrastructure and clearing services. It does not lend customers' funds, making deposits immune from bank run risks. Bank of London, a fellow clearing bank, recently announced it had secured £300m in deposits in the first six months since it secured a banking licence.
Monzo launches tool to prevent impersonation scams
Digital bank Monzo has become the first UK bank to launch a “call status” tool to prevent its customers falling victim to impersonation scams. The in-app feature will tell customers whether the bank is calling them or if they are being targeted by fraudsters with an attempted scam. People can then report the attempted fraud immediately by tapping the call status tab. Priyesh Patel, senior staff engineer at Monzo, said: “We've built this industry-first feature as an additional layer of comfort and security to help protect our customers from falling victim to fraud.” More than £177m was lost to thousands of cases of the sophisticated scam during 2022, according to figures from UK Finance.
Financial advice rules to be relaxed
Ministers are considering relaxing financial advice rules to make it easier for customers to invest. Currently, financial guidance is not regulated, and banks and brokers can only guide consumers to investments and products if they offer financial advice and charge fees. The proposed changes would allow banks and brokers to guide customers to their own investment products without straying into financial advice. Some high street banks and large investment brokers are already preparing for the rule changes, building online and in-branch propositions to attract more consumers who cannot afford financial advice. The Treasury and the Financial Conduct Authority will outline proposals in a policy paper later this year.
Perenna to offer 30-year mortgages after regulatory approval
UK-based specialist lender Perenna will launch mortgages with fixed rates for 20 and 30 years by the end of the year after being granted full regulatory approval at the start of September.
PRIVATE EQUITY
Bridgepoint buys Energy Capital Partners
Bridgepoint has acquired US energy infrastructure fund manager Energy Capital Partners in an £835m deal. The FTSE 250 private equity group is also dissolving a controversial arrangement that combined the chairman and chief executive roles. Bridgepoint’s chairman William Jackson hand his additional role of chief executive over to managing partner Raoul Hughes.
INTERNATIONAL
Swiss bank regulator steps down citing toll from ‘permanent stress’
The head of Switzerland’s financial regulator FINMA is to step down at the end of the month. Urban Angehrn said the stress of the job was having a negative effect on his health. The regulator has come under fire for failing to halt the string of scandals at Credit Suisse in recent years and to prevent the bank’s ultimate collapse. FINMA is being sued by Credit Suisse investors who lost billions of dollars after the regulator signed off a move to wipe out $17bn of bonds as part of the takeover by UBS.
CONSTRUCTION
Barratt: Construction to slow for at least the next two years
Barratt Developments has said that it will take at least two years for the housing market to recover with high borrowing costs meaning the fall in new build construction would continue until 2025 at the earliest. David Thomas, chief executive of the housebuilder, warned: “Whilst there remains a clear need for increased house building in the UK, short-term demand has been impacted by mortgage affordability challenges.”
FINANCIAL SERVICES
SEC approves new fee rules on market data surveillance system
The Securities and Exchange Commission (SEC) is set to introduce new fees on brokers to fund a market-surveillance system called the Consolidated Audit Trail. The proposal, which faces opposition from industry trade groups and major players like Citadel Securities and Virtu Financial, would replace an earlier method of calculating fees based on market share. The fees would vary depending on the type of trade and would be based on share volumes. The Consolidated Audit Trail aims to track market activity and detect fraud.
BAE Systems’ pension scheme awards £23bn mandate to Goldman Sachs
Goldman Sachs Asset Management has been appointed by BAE Systems to oversee its £23bn of defined benefit assets, the largest mandate of this kind in the UK to date.
MEDIA & ENTERTAINMENT
Virgin Media O2 to snap up Russian oligarch-backed broadband firm
Virgin Media 02 is to buy a British broadband company owned by a Russian oligarch-backed investment company, after the Government forced its sale on national security grounds. VM02, the UK telecoms merger joint-venture between US group Liberty Global and Spain’s Telefonica, is to buy regional broadband business Upp, in an all-cash deal for an undisclosed amount that is thought to be less than £100m. Ultimately, Upp, which has 4,000 customers and a broadband network passing 175,000 premises in the east of England, will be paid for and owned by Nexfibre.
REAL ESTATE
WeWork tells landlords it will renegotiate most office leases
Just weeks after WeWork said there was doubt about its ability to continue as a going concern, the SoftBank-backed office space group is seeking to renegotiate nearly all of its leases around the world.
RETAIL
Waitrose staff warned jobs at risk in productivity push
Waitrose employees have been warned that jobs are at risk as the retailer looks to streamline its business in an effort to boost productivity. Tina Mitchell, retail director at the grocer, said some staff may need to make “sacrifices and compromises” and the overhaul “may result in some partners leaving the business.” Waitrose reportedly expects to record £50m in savings each year from changing work patterns to ensure employees are “doing the right tasks at the right time”.
WH Smith reports double-digit growth
WH Smith has reported that group revenue increased 28% in the year to the end of August, with like-for-like sales up 18%. The company’s travel division saw a 42% increase in revenue, driven by strong demand during the busy summer travel season, while high street revenue fell 1%. However, shares in WH Smith fell by 6.3% after the company's trading update failed to meet investor expectations.
Halfords reports rise in sales driven by strong demand at garages
Halfords has reported a 14.1% increase in sales in the 20 weeks to August 18, with sales at its car servicing and repair autocentres growing by 34.6%, compared with growth of 3.7% in retail. On a like-for-like basis, group sales were up by 7.8%.
ECONOMY
Bailey: UK could avoid further interest rate rises
The Governor of the Bank of England on Wednesday signalled that the UK could avoid further interest rate rises if inflation continues to fall. “Many of the indicators are now moving as we would expect them to move and are signalling that the fall in inflation will continue,” Andrew Bailey said. Inflation has fallen from a peak of 11.1% last October to 6.8% in July and Bailey expects further “quite marked” falls by the end of this year. Bailey’s comments sent sterling down to a three-month low against the dollar as currency traders pulled back their bets on higher UK borrowing costs. Although the probability of a rate increase has fallen, markets still expect two more raises ahead of a peak of 5.75% before falling gradually in 2024. The BoE’s Monetary Policy Committee will vote on September 21 whether to increase rates from their current 5.25% after 14 consecutive hikes since December 2021, when rates were at 0.1%.
OECD: ‘Wave of bankruptcies’ threatens Europe
The OECD has warned that higher interest rates risk pushing huge numbers of European companies into bankruptcy. “In some countries, both households and firms are highly indebted and thus vulnerable to increases in financing costs. High levels of [...] debt threaten a wave of bankruptcies,” said the OECD in its latest economic survey of the eurozone. The comments come after poor readings for the eurozone’s construction, manufacturing and services industries. Andrzej Szczepaniak at Nomura said “Europe is heading over the recession precipice”.