Lenders censured for fresh PPI blunder
The Competition and Markets Authority said yesterday that Lloyds, Nationwide and Cardif Pinnacle, an insurance subsidiary of BNP Paribas, had failed in their obligation to send annual reminders to customers with PPI policies. These reminders contain information about customers’ cover and reminds them of their right to cancel their policies. Adam Land, of the CMA, said: “If providers fail to send important information on PPI policies, people could end up paying for insurance they no longer need.” Cardif Pinnacle and Nationwide both apologised for the failings and a Lloyds spokeswoman said: “We are very sorry that a small number of customers did not historically receive the correct information in their annual PPI statements.”
E-money institutions pose real risk
The Times reports on concerns that “e-money” platforms have become the weak link in the international payments system following the Wirecard scandal. A new investigation by the political website Open Democracy, shared exclusively with the Times, has highlighted concerns that other e-money institutions, including British ones licensed by the Financial Conduct Authority, could be targets for money channelled in and out of the former Soviet Union. Mary Fitzgerald, editor-in-chief of Open Democracy, said: “The UK government and regulators need to wake up to a very real risk that Britain or British-based firms could prove a soft touch for money launderers.”
Funding Circle boosted by business interruption loans
Shares in Funding Circle rose 5% yesterday after the online lender announced that it had approved £460m of emergency loans to small companies. The platform was cleared to offer the Government's coronavirus business interruption loans in April. It has arranged £8.5bn of loans to 80,000 businesses since it was founded in 2010. CEO and co-founder Samir Desai said that demand for the scheme showed how many companies had struggled to secure the credit from a traditional bank.
Metro Bank names Robert Sharpe as new chairman
Metro Bank has appointed Robert Sharpe, at present chairman of Bank of Ireland UK and private equity-owned lender Hampshire Trust Bank, as its new chairman. He will join the lender in November. Sir Michael Snyder will remain interim chairman until then. Metro co-founder Vernon Hill resigned in the wake of a reporting scandal last year.
KKR to buy life insurer Global Atlantic for $4.4bn
KKR has agreed to buy Global Atlantic in a $4.4bn deal that will boost the private equity firm’s assets under management by a third to $279bn. The FT says the deal underscores how private equity firms are taking over the role of traditional financial institutions as lenders to millions of ordinary households and businesses. Global Atlantic was set up by Goldman Sachs in 2004, and spun out of the investment bank nine years later.
Lagarde puts green targets top of ECB agenda in bond buying
In an interview with the FT, Christine Lagarde, the president of the European Central Bank, confesses that she will consider using the central bank’s €2.8tn asset purchase scheme to pursue green objectives. "I want to explore every avenue available in order to combat climate change," she told the paper in a video interview. "This is something that I hold very strongly."
Banks need to prepare now for COVID-19 losses later
Simon Samuels at Veritum Partners says in the FT that European lenders should not be tempted to delay booking provisions for soured loans as they did after the 2008 crisis.
Spain’s BBVA breaks ground by issuing risky ‘green’ debt
BBVA has become the first lender to sell a “green” version of additional tier 1 bonds, leading to questions from investors about how the money will fund sustainable projects.
Axa IM to implement tough gender diversity targets
Axa Investment Managers has said that from 2021 it will punish companies in developed markets where women do not account for at least a third of board members. Companies in emerging market countries and Japan will also need to have at least one female director. Larger boards with less than 10% female representation will also be targeted. Yo Takatsuki, head of ESG research and active ownership at Axa IM, said the interests of shareholders were best served when there was “appropriate diversity of skills, knowledge and experience amongst the directors on the board.”
Brussels 'ready to grant' City of London access to EU markets
EU chief negotiator Michel Barnier says the bloc is prepared to grant the City of London access to European markets post-Brexit. New documents released by the House of Lords EU committee indicate that Mr Barnier recently told the group that Brussels was “ready to grant equivalence.” However, a decision on this would be taken “in the global context of our negotiations on many subjects with the UK,” Barnier added. City AM says his comments will allay fears that the City could be cut off from Europe after the transition period ends on December 31st.
PPE for NHS costs £15bn so far
The Chancellor yesterday revealed that over £15bn had been spent on PPE during the coronavirus crisis. Paul Johnson, head of the Institute for Fiscal Studies, said that it was an "astonishing" figure, adding: "Another £10bn has been allocated for the Test and Trace scheme. It was quite surprising that those large sums of money were skated over so quickly because clearly anyone manufacturing PPE will be doing very well out of that."
LEISURE & HOSPITALITY
Tourism and hospitality firms welcome VAT boost
The hospitality industry has welcomed Rishi Sunak’s announcement that tourism and hospitality VAT will be cut from 20% to 5% for the next six months. Plans to give people a 50% discount, up to £10 per head, to eat out in restaurants in August were also well received. However, the CBI and lobby group UKHospitality point out that capacity has been slashed dramatically due to social distancing rules, leaving firms keen to make up the shortfall.
Stamp duty cut welcomed
Rishi Sunak has confirmed that the threshold for paying stamp duty will be raised from £125,000 to £500,000 immediately in a bid to help the UK housing market out of the coronavirus lockdown. The Chancellor said the stamp duty holiday, which will run to March 31 next year, will result in an average saving of £4,500 and will benefit nine in 10 house buyers. John Tonkiss, chief executive of housebuilder McCarthy and Stone, said the move is a “no brainer to reinvigorate the economy.”
Property giant collects majority of rent payments
Segro said that it had successfully collected the vast majority of the rent it was due at the end of June, even as many of its fellow landlords struggle to get tenants to meet their bills. The property giant had gathered 93% of the £37m it is due for the third quarter of the year.
UK public borrowing to exceed £350bn with Sunak’s stimulus plan
The Chancellor’s £30bn stimulus plan to heave Britain out of recession brings the Government’s crisis spending to £188bn and public borrowing to over £350bn this financial year. The FTSE 100 fell 11.50 points following Rishi Sunak’s statement and closed 29 points, or 0.5% down at 6,160.