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Daily News Roundup: Tuesday, 11th August 2020

Posted: 11th August 2020


Banks accused of unfairly blaming customers for fraud loss

A study by Which? has found that banks are refusing to reimburse fraud victims by having "unreasonable expectations" of what customers should have done to protect themselves. Gareth Shaw, from Which?, said: "Our analysis has found clear issues with how banks are meeting [the voluntary code of conduct’s] core objective of reimbursing blameless people who have lost money through bank transfer scams.” The Payment Systems Regulator says just 41% of fraud victims are getting their money back. But Katy Worobec, managing director of economic crime at UK Finance, said the code has more than doubled the amount being repaid to victims and the banking and payments industry “continues to take action on all fronts to stop these crimes from occurring in the first place.”

Shift to digital puts nearly 1,000 TSB jobs at risk

Over 920 frontline staff at TSB will have their jobs phased out next year with the lender telling cashiers they must retrain, change roles or take voluntary redundancy. The bank blames a steep decline in branch visits because of the coronavirus lockdown. "The way customers use their banks is changing and COVID-19 has significantly accelerated the use of digital services," a spokesman for TSB said. "When customers visit our branches, their needs tend to be more complex and we need a fully multiskilled and flexible workforce to meet them. This is why we are offering some branch colleagues the opportunity to upskill to take on broader customer service roles or take voluntary redundancy."

Fresh PPI crisis unlikely, experts say

Banking analysts have dismissed fears of a second wave of PPI claims arguing that a series of court cases, which found the huge commission fees related to the product meant customers were unfairly treated, are simply part of “an existing bank of claims either being settled through the individual banks' claims process or litigation within existing provisions." Ian Gordon at Investec said: "We are not yet aware that costs in relation to these cases will be materially different to banks' existing assumptions and we're not talking about a new wave of claims, just the tail costs of settling existing claims. There's no new claims process.”

Bank prepared to do more QE

The Bank of England will step up the pace of debt purchases in the event of market instability, the deputy governor for markets and banking has said. Sir Dave Ramsden said the Bank had "significant headroom to do more QE" if economic risks crystallised. Although he was confident the recovery is going to continue, Sir Dave warned that the central forecasts hid a wide range of outcomes that could result in a painfully slow recovery.

Lloyds suspends Bank of Mum and Dad mortgage

Lloyds has temporarily withdrawn its 100% Lend a Hand home loan amid concerns about economic uncertainty. The ‘Bank of Mum and Dad’ mortgage deal was available to first-time buyers whose parents were willing to tie up their savings for three years.


Advent to buy UK parcel delivery group Hermes in €1bn deal

Advent International has agreed a €1bn deal to buy parcel delivery group Hermes' UK operations as it seeks to capitalise on the coronavirus-driven online shopping boom.


Fed denies Goldman’s appeal against stress test results

A request from Goldman Sachs for its capital requirements to be revised down has been refused by the Federal Reserve. The Fed has published capital requirements for the largest banks it supervises, which now also incorporates a so-called stress capital buffer. Goldman Sachs will have to comply with a common equity Tier 1 requirement of 13.7% - the highest of all the 34 banks. Pleas from BMO, Capital One Financial, Citizens, and Regions were also rejected.


Covid-related deaths cost Royal London millions

Royal London has paid out £8.5m in life insurance claims to the families of 1,200 customers who have died of COVID-19. The UK’s largest mutual insurer has set aside £10m for future COVID-19 claims. Royal London fell to a £181m loss in the first half, hit by lower returns and a drop in sales during lockdown.

Fines for anti-money laundering failures rise as companies repeat mistakes

Anti-money laundering failures are being punished more harshly of late, according to new report, with fines levied in the first half of this year hitting $706m, up from 2019's $444m.


Cineworld shares lifted by film studio ruling

Shares in Cineworld jumped by almost a fifth after a US federal judge overturned a longstanding law prohibiting movie studios from owning cinemas. However, Morgan Stanley said with the pandemic driving a shift to online streaming the case for studios buying exhibitors had been further weakened. Cineworld closed up 6.2p at 41.1p.


Number of prospective buyers surges

The number of house hunters has soared in the month since the Rishi Sunak announced a stamp duty holiday, according to Hamptons International, with the biggest uptick in properties costing between £500,000 and £750,000. Between July 8th and August 8th, the number of people registering to buy across the country was up by 38% on the same period last year, Hamptons said.


Superdry shores up finances with £70m facility

Superdry has agreed an additional £70m in funding to help shore up its financial position and help it through the coronavirus crisis. The asset-backed lending facility, agreed with HSBC and BNP Paribas, will be extended until January 2023 and replaces one that was due to expire a year earlier. The news came alongside a first-quarter trading update; in the 13 weeks to July 25th, group revenue fell 24.1%, while wholesale revenue was down 31%. Online sales rose 93.2%.


UK retail sales remain robust in July

Data compiled by the British Retail Consortium show UK retail sales by value increased 3.2% in July compared with the same month a year ago - the second consecutive month of growth following three months of falling sales. Online purchases accounted for 42% of all sales down from 50.5% in June, indicating consumers were returning to the high street. Separate data from Barclaycard found overall UK consumer spending was down by 2.6% in July, compared with 2019 – the smallest fall in spending since lockdown restrictions were first imposed.


Former Citi trader wins unfair dismissal case

Former forex trader Rohan Ramchandani has won an unfair dismissal case against Citigroup, but only on procedural grounds after a judge ruled his behaviour warranted his sacking.

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