FCA contacts banks over failure to pass on rate rises to savers
The Financial Conduct Authority has had direct contact with the boards of several high street banks concerning their failure to pass on higher interest rates to savers. The chief executive of the regulator, Nikhil Rathi, told MPs on the Treasury Select Committee on Wednesday that the FCA was pushing banks to act ahead of new consumer protection rules that come into force in July. He explained that the watchdog contacted 32 institutions when it felt borrowers in financial difficulty were not treated fairly and has stepped up actions in relation to financial promotions. Mr Rathi was broadly positive about recent behaviour by finance firms, stating: “Broadly speaking, for the largest institutions we are seeing them act appropriately.” That said, the “leadership of banks realise their reputations are at stake if they don’t deal with things appropriately in the next few months,” Rathi added.
Commercial real estate revaluations manageable, say Irish banks
AIB Group and Bank of Ireland have said they should comfortably accommodate the expected fall in commercial real estate values this year. The commercial property market is facing a challenging period following the shift to home working and higher interest rates. "From our perspective, we consider what are the qualities of the underwriting and the quality of that underwriting is really, really robust with loan to value (LTV) ratios in the order of 60% at initiation of the facilities," Colin Hunt, chief executive of AIB, said after the bank reported a jump in profits and shareholder returns. Bank of Ireland CEO Myles O'Grady described commercial real estate as "an area of some concern" for the system, but that the average LTV for its office book stood at 55%.
OakNorth mulls US listing
OakNorth is considering a US listing, Reuters reports, as the UK bank looks for ways to drive growth in America. Chief executive Rishi Khosla downplayed that timeline for an IPO but said the lack of a domestic investor base focused on high-growth technology made London unappealing as a listing venue.
VC investment into women-led tech firms rises
Female-led UK’s tech firms raised £3.6bn from venture capital firms last year, up from £2.9bn the previous year, according to data from Dealroom analysed for the Department for Science, Innovation and Technology. This comes despite VC firms reining in their investments last year with funding of UK businesses falling by almost a quarter last year. Overall, fintech firms raised $12.5bn last year, down 8% on 2021 levels, figures from Innovate Finance show.
Credit Suisse gains permission for China wealth unit
China has given Credit Suisse permission to launch a full-fledged wealth management business in the country after years of waiting. "We are pleased to have received these licenses as it marks a key milestone in offering wealth management services onshore in China, which is the fastest growing wealth market in the world," Edwin Low, APAC CEO of Credit Suisse told Reuters.
BMW announces £500m upgrade for Mini plant
BMW has secured £75m of public money towards a £500m overhaul of its Mini plant in Oxford. The taxpayer contribution is coming out of the Government’s Automotive Transformation Fund (ATF), which can be tapped by companies that want to electrify or otherwise decarbonise their car building.
Britain plans looser foreign worker rules to plug labour gap
Rishi Sunak’s government is planning to allow more overseas workers to come to the UK to tackle chronic shortages, starting with looser rules for the construction sector.
Sir Nigel Wilson: Mounting regulation hampering investment
Legal & General boss Sir Nigel Wilson has called for the Government to put rules and policies in place that encourage investment, telling BBC that regulation and policy over the past 20-30 years had made investment unattractive. As a result, the UK is “a low growth, low productivity, low wage economy fraught by political infighting, Sir Nigel said, adding: “This has to change.” He also highlighted the shift by UK pension funds from equities to bonds, over a period of decades, as a driver of the drift of investment away from London. A strong performance at L&G’s retail retirement and insurance business offset a 19% fall in profit at its asset management division. Overall, operating profit was up 12% last year to £2.5bn. Shares were down slightly on Wednesday afternoon.
Lloyd’s of London chief wants traders in building to ‘get Monday back’
Lloyd’s of London CEO John Neal says he wants to see brokers and underwriters on the trading floor four days a week. Pandemic lockdowns led to a shift to fully digital trading with some predicting that face-to-face trading was all but over. But Beal says the debate is over, with face-to-face trading certain to remain as part of the mix alongside virtual dealings. “Tuesdays, Wednesdays and Thursdays are busy,” he told the FT. “We need to get Monday back.” He argues that working in the office helps to “develop…the next generation” claiming more experienced staff owe a “responsibility” to less experienced colleagues.
FCA shuts down crypto ATMs in East London
The Financial Conduct Authority (FCA) has been cracking down on cryptocurrency ATMs in east London, inspecting several sites in a joint operation with the Metropolitan Police. No crypto ATMs are currently registered with the FCA meaning they all operate illegally. Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: “Crypto ATMs operating without FCA registration are illegal and as today shows, we will take action to stop this. This operation, alongside last month's action in Leeds, sends a clear message that we will continue to identify and disrupt unregistered crypto businesses in the UK.”
Hiscox lifts profits despite hurricane losses
Specialist insurer Hiscox increased profits last year despite suffering losses caused by a hurricane in Florida and Russia's invasion of Ukraine. The company increased its underwriting profit by 25% to £227.5m in 2022, its highest since 2015, and raised its gross premiums written by 3.6%. Elsewhere, Admiral reported that full-year pre-tax profits in 2022 had fallen 39% to £469m, missing expectations. Shares closed down 4%.
Insurer Beazley cuts CEO and finance chief pay after results error
Beazley has cut the total pay of its chief executive and group finance director after the FT’s Alphaville blog identified a mistake in the number of shares used to calculate the awards.
BTG Banner - Wc 06.03.23 - PLACED IN MIDDLE OF SUMMARY
Citi warns clients about risks of Russia ‘weaponising’ metals
Citigroup has warned of a threat to commodity markets from a potential weaponisation of metals exports by Russia, leading to global supply chains disruption and problems for manufacturers and automakers.
MEDIA & ENTERTAINMENT
TikTok launches European data security framework
The video app TikTok has announced a new data security framework for its European operations. As pressure mounts in the US to ban the China-linked app, the company revealed its Project Clover plan to store user data on servers in Ireland and Norway while any data transfers outside Europe will be vetted by a third-party IT company. TikTok is owned by Beijing-based ByteDance which has repeatedly denied providing the Chinese government with data from TikTok, although it is legally required to do so if requested. Meanwhile, Christopher Wray, the head of the FBI, agreed with US senators on Wednesday that TikTok could be used by the CCP to spread poisonous and divisive messages to Western users, adding that control over TikTok’s data and software allows the Chinese government to conduct influence operations.
Mortgage repayments for first-time buyers surge by two thirds
Soaring interest rates and a rise in house prices drove up the cost of a typical first-time buyer's mortgage repayments by almost two thirds last year, according to the Office for National Statistics. In the 12 months to December 2022, the typical monthly bill rose by £481 to £1,262, an increase of 61%. The calculations were based on an average £286,000 semi-detached home and a 75% mortgage with a 25-year term. The findings will add to concerns that Britain's property crisis is becoming worse as first-time buyers find it ever harder to get on the ladder.
House prices fall across UK with estate agents gloomiest in 14 years
A survey by RICS reveals house prices are falling across the UK, with over 70% of the most expensive properties selling for below their asking price.
Markets expect rates to hit 4.25% this month
Markets are pricing in a 0.25% rise in UK interest rates – taking the level from its 15-year-high of 4% to 4.25% - following remarks by US Fed chair Jerome Powell that the US central bank will need to tighten policy harder to bring inflation under control. Expectations of another Bank of England rate rise come after Monetary Policy Committee member Catherine Mann said rates could need to go higher, warning that the relative weakness of the pound could cause more inflationary problems. But Swati Dhingra, another MPC member, warned against overtightening when there are growing signs external price pressures are easing. BoE governor Andrew Bailey will make an announcement on rates on the 23rd of March.