More expensive lending one way to support climate action
A survey carried out by the non-profit Climate Safe Lending Network reveals the most popular way regulators should support climate action would be to make it more expensive for banks to finance companies responsible for emitting high levels of greenhouse gases. By making it more expensive to lend to these companies, banks would lower their exposure to the risk, build up capital buffers to absorb potential losses from any loan defaults and focus investment on other parts of the economy. "Stranded assets create a credit risk that is not captured by the current framework," said Andrew Turvey, prudential risk director at Belmont Green Finance Limited. But Sarah Breeden, executive director for UK deposit takers supervision at the Bank of England, said more clarity was needed on climate policy for the option to be feasible. "We would have better sight on how risks might arise and more data to support policy change," she said.
HSBC bans customers from buying MicroStrategy shares
HSBC told its online share-trading platform customers last month that they would no longer be permitted to buy MicroStrategy stock as the bank “has no appetite for direct exposure to virtual currencies and limited appetite to facilitate products or securities that derive their value from VCs (virtual currencies)”. While HSBC will allow the holding, sale and outgoing transfer of MicroStrategy shares, it will forbid new purchases or incoming transfers, said the message dated March 29th.
Bank of England tops private investors as biggest holder of gilts
The Bank of England's holding of UK government debt has surpassed the amount held by overseas investors and pension and insurance companies, in what John Wraith at UBS describes as a “striking” build up.
Columbia Threadneedle buys European investment arm of Canada’s BMO
Columbia Threadneedle has agreed to buy the European investment arm of BMO Financial Group of Canada for $845m, increasing Columbia’s AUM to $671bn.
Credit Suisse cuts bonuses following Archegos loss
Staff at Credit Suisse have seen their bonus pool reduced by $600m as the bank nurses a $4.7bn loss from the collapse of family office Archegos Capital. The FT points out that parts of the Dodd-Frank Act which would have governed the disclosure of Archegos’s derivatives trades are still not in force.
Agreement reached between HSBC and Huawei CFO
A dispute about the publication of documents relating to US fraud allegations against Huawei Technologies' Chief Financial Officer Meng Wanzhou has seen the firm reach an agreement with HSBC. Meng is accused of misleading the bank about Huawei’s dealings in Iran, resulting in a violation of US sanctions.
Italian banks boost corporate lending
Italian banks drove their holdings of domestic government bonds to a four-month high in February and increased lending to companies around the country. Loans to non-financial companies rose by 7.6% year-on-year, accelerating from a 7.3% rise in January, the latest data show.
ECB releases NPL data
The ratio of non-performing loans at banks supervised by the European Central Bank fell to 2.63% in the last quarter of 2020. The ECB stated that with some lenders unprepared and with insufficient warning systems in place, a wave of post-pandemic NPLs could be seen.
Hyundai faces regulator probe over alleged insider trading
Hyundai is being probed by South Korean regulators over suspicions executives traded on inside information about the company’s talks with Apple on developing an autonomous electric car.
United Airlines to repay some of its US government bailout
Some $520m of taxpayer money borrowed by United Airlines at the height of the pandemic is to be paid back by the airline, but $3bn remains owed for payroll support.
US investor raises stakes for reform at Countryside
Chicago-based investment manager David Capital has disclosed a 4.6% interest in Countryside Properties, making it the fifth-largest shareholder. The move is expected to add to pressure on the company to accelerate an overhaul of the business.
Chinese authorities enforce Ant Group restructure
Chinese fintech firm Ant Group has announced plans to restructure as a financial holding company, with the People's Bank of China noting that a "comprehensive and feasible restructuring plan" would see Ant remove connections between payments service AliPay, virtual credit card business Jiebei and consumer loan unit Huabei. The firm will also be required to break its "monopoly on information and strictly comply with the requirements of credit information business regulation."
PensionBee valued at £346m ahead of IPO
PensionBee has revealed that the price range for its initial public offering has now been set at 155p to 175p per share, implying an estimated market capitalisation of between £346m and £384m. The IPO is made up of an offer to institutional investors and an offer to eligible customers of PensionBee. According to the pension technology firm, more than 12,000 customers have signed up to participate in the IPO so far.
Axa sued over business interruption policy
Axa is being sued by Inception Group which claims the insurer has U-turned on its claim on a business interruption policy after the first national lockdown last year. The hospitality group says Axa last year agreed the policy had been triggered by the lockdown only to now claim that it is not in fact covered.
‘Russia’s Amazon’ plans heavy investment and move into finance
Russian ecommerce firm Ozon has announced plans to apply for a banking licence in order to boost its fintech offerings, which could see it issue loans to merchants selling on its platform.
Regeneron’s Covid drug reduces risk of symptomatic illness, study finds
Phase 3 trial data show Regeneron’s antibody drug reduces the risk of symptomatic coronavirus cases by 81%. It is hoped the FDA will now expand its use. Additionally, Eli Lilly’s bamlanivimab and etesevimab antibody combination has been given the green light after it was shown to significantly reduce hospitalisations and deaths.
Pfizer raises cost of its Covid vaccine for EU
The price of Pfizer’s Covid jab has been hiked by 60% for future orders placed by the European Commission - from €12 a dose to €19.50.
Spending on essentials rises
Barclaycard has revealed that spending fell by 7.2% in March compared with the same month in 2019, due to continued covid restrictions. However, a new report shows that spending on essential items rose by 7.7% in the two years to March, the highest growth registered this year, driven by a 71.4% rise in spending on food and drink. Barclaycard also found that spending on non-essentials fell by 14.5%, a slight improvement on the previous two months. Online shopping helped to lift retail spending by 17.9% overall, while online retail transactions increased by 84.7% compared with 2019, accounting for 51.6% of all retail spending in March.
City to boost Square Mile’s recovery with fund for SMEs
Catherine McGuinness, Policy Chair of the City of London Corporation, details in a piece for City AM a new Covid Business Recovery Fund to help underpin the Square Mile’s economic recovery. “The scheme is designed to support SME businesses which contribute to the Square Mile’s vibrancy at street level and directly provide services to returning City workers, visitors and residents.” McGuinness adds that most workers are keen to return to the Square Mile while City leaders have stressed their commitment to central London office space. She concludes: “The vibrancy of our unique ecosystem relies on each part of the City community – multinational businesses to domestic SMEs, international workers to local residents – working in partnership. Together we can bring back the buzz of life in the Square Mile.”
Let zombie companies die – Lord King
Former Bank of England governor Lord King has said companies saddled with unmanageable debt should be allowed to collapse to help usher in a growth-boosting structural shift in Britain's post-Covid economy. Speaking at the Royal Economic Society's annual conference, Lord King warned: "It's a problem of reallocation of resources. That requires different sorts of policies and a recognition that we need to allow the zombie companies to disappear and other companies and sectors to expand."