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Daily News Roundup: Tuesday, 17th March 2020

Posted: 17th March 2020


Customers see £1.1bn hit from bank scams

Analysis from consumer group Which? shows bank customers lost £1.1bn in scams in the last three years, adding that £97m may have already have been lost in the first three months of this year. Which? has urged banks to introduce new measures to protect customers, estimating that £320m of losses could have been prevented if the Confirmation of Payee (CoP) system – set to be rolled out by six of the biggest banks at the end of this month - had been introduced at the start of 2017. While Lloyds Banking Group implemented CoP from 2 March for Bank of Scotland customers, before rolling it out to Halifax and Lloyds customers throughout the rest of the month, RBS Group and HSBC were unable to confirm a specific date when asked if they would be ready by Payment Systems Regulator’s March 31 deadline. Metro Bank told Which? that it has no current plans to implement CoP. Chief executive of UK Finance Stephen Jones commented: “The banking and payments industry is wholly committed to defending its customers from authorised push payment fraud and stopping stolen money going to criminals”.

Banks seek to help savers

The Times’ Kate Palmer looks at measures banks are utilising to help soften the blow customers face from the coronavirus. She notes that the biggest banks and building societies have agreed to give borrowers a holiday on mortgage payments if needed, while some are easing access to cash – including waiving credit card fees and allowing customers to access money held in fixed-term savings bonds early without penalty charges. Lloyds Bank and Halifax have increased the amount customers can deposit by cheque using online banking, while Nationwide will trial opening branches early so elderly and vulnerable people can bank before other customers arrive. RBS and NatWest will allow three-month mortgage holidays for struggling borrowers, while HSBC, First Direct and M&S Bank may give customers who had taken out personal loans "breathing space" of reduced or deferred payments. Stephen Jones, of UK Finance, said: "All providers are ready and able to support their customers. Asking for help early is key."

Coronavirus brings about working changes at digital banks

Staff at both Monzo and Revolut’s offices are now working from home, while around 50% of Starling Bank employees are doing so as the digital banks prepare for a shutdown as coronavirus spreads. Both Revolut and Starling are operating a split system trial, with half of staff asked to work from home for between one and two weeks in alternating periods. Other moves include a ban on travel between Starling’s three offices in London, Cardiff and Southampton and a ban on all business travel globally, while any Revolut employee that goes abroad on holiday must self-isolate for two weeks once they return.

Monzo launches new business accounts

Monzo has launched its business bank accounts to the wider public, introducing a free-to-use Lite account and a paid-for Pro option. They come with a business current account, mobile and web access, a debit card, categorised spending and in-account cash separation. The move follows a 12-month beta testing period for accounts with around 2,500 SMEs. Business owners will be required to have a Monzo personal account before signing up to Monzo Business.

Revolut recruits interim CFO

Revolut has hired Bill Rattray, the former CFO of Standard Life Aberdeen (SLA), as interim chief financial officer. He formerly worked alongside Revolut chairman Martin Gilbert at SLA. David McLean is stepping down as chief financial officer after just five months in the role due to personal reasons.

Glenhawk to enter UK mortgage market

JP Morgan and challenger lender Glenhawk have agreed a £200m facility to allow the latter to enter the UK homeowner mortgage market, while growing its maximum property bridging loan size from £3m to £5m.

Metro Bank faces lawsuit

Metro Bank has been hit with a lawsuit filed by a group of 17 Iranian customers who claim their accounts were suspended without notice or explanation, with the claimants said to be seeking at least £1.5m in damages.


Manchester is Europe’s fastest-growing tech city

A study by Tech Nation looking at the rate of increase in venture capital funding shows Manchester is the fastest-growing tech hub in Europe. The city saw investment jumping from £48m in 2018 to £181m in 2019. London led the European top 20 for venture capital funding, while Bristol, Oxford and Cambridge also made the rankings. London saw a record £7.3bn of investment, with this 67% increase on 2018’s total putting it ahead of Berlin (£3.5bn) and Paris (£2.4bn).


US banks facing unprecedented challenge

The Wall Street Journal reports on the challenges posed by the coronavirus epidemic to the US banking industry, noting that firms now face a repeat of the recession and widespread loan defaults, years of ultralow interest rates and slow loan growth, selloffs in the stock market and collapse in energy prices that they have endured in the last decade. It is further noted that concerns over the epidemic have nullified the gains experienced by the KBW Nasdaq Bank Index and four of the six largest banks in the country since 2016, with the KBW index falling over 10%. The FT considers the impact the Federal Reserve’s rate cut has had on US banks, noting that it “wiped more than 15%” from many of their share prices.

Canadian banks cut prime rate

Canada's biggest banks are to reduce their prime rates by 50 basis points to 2.95%, the lowest level since August 2017. Royal Bank of Canada, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and Toronto Dominion Bank said changes take effect from today while National Bank of Canada's reduction will be effective from Wednesday.

Danske Bank expects lower net income

Danske Bank expects lower net income this year and has suspended its 2020 outlook due to uncertainty linked to coronavirus, saying: “Due to a significant worsening of the macroeconomic outlook as a result of the Covid-19 situation, Danske Bank expects a negative impact on its financial results for 2020.”


Government could bail out struggling airlines

Transport Secretary Grant Shapps has said that the Government is considering bailing out airlines, averting the possible collapse of major carriers such as Virgin Atlantic and easyJet. The pair have said state aid will be needed to prevent them collapsing over coronavirus. Mr Shapps told Sky News: “We want to make sure that companies and individuals and organisations who are in a good state – not those that are going to fail anyway – are able to continue. We’ll be looking at all of these measures… and those discussions with the sector are ongoing”.


UK’s call for quick agreement on equivalence is rejected by Brussels

Chancellor Rishi Sunak's call for the City’s future access to EU markets to be settled by the end of June has been rejected by Brussels. Valdis Dombrovskis, the EU’s head of financial regulation, says that a decision will be based on the extent Britain wants to deviate from EU rules. Mr Dombrovskis observed that the political declaration section of the Brexit deal reached last year requires both sides to seek to complete their equivalence assessments by the end of June, not to make final decisions by then.

Ninety One floats on volatile stock market

Fund manager Ninety One floated on the stock market on Monday, as it faced volatile market conditions. Chief executive Hendrik du Toit said that with markets in meltdown today due to coronavirus, staff were “calm” and “deep into their work,” remarking: “The economy and markets will recover again. It’s how long they take and that’s a function of how we operate right now.”


Arthritis drug is being tested as coronavirus treatment

Drug company Sanofi and partner Regeneron have started a clinical trial of their rheumatoid arthritis drug Kevzara as a treatment for the coronavirus. Regeneron in February announced a partnership with the US government to develop a coronavirus treatment focused on infection-fighting proteins known as monoclonal antibodies. Kevzara is a monoclonal antibody.


Coronavirus poses existential threat, says hospitality industry

Trade body UK Hospitality has warned that thousands of businesses in Britain's hospitality sector could face bankruptcy following Government advice that people should avoid visiting pubs, restaurants and bars. During the first in a series of daily briefings on the crisis, Boris Johnson crucially stopped short of ordering hospitality firms to close to the public, meaning many businesses may be unable to claim for insurance and will struggle to drum up the cash to pay staff. Kate Nicholls, chief executive of UK Hospitality, said: “The Government has effectively shut the hospitality industry without any support, and this announcement will lead to thousands of businesses closing their doors for good, and hundreds of thousands of job losses.”


Manufacturers may be ordered to make ventilators

UK manufacturers could be ordered by government to make parts for ventilators to treat coronavirus patients under wartime-era legislation. One industry source said of the laws normally used to supply kit to soldiers on the battlefield: “We could see ‘Urgent Operational Requirements’ (UORs) being used, which effectively tell companies to drop everything and build what they are told in the national interest.” Companies including BAE Systems, Rolls-Royce, JCB, Unipart and GKN and in the automobile industry have been asked to develop ways of scaling up production of ventilator parts.


Regulator says Future deal doesn't raise competition concerns

The Competition and Markets Authority (CMA) has approved publisher Future’s acquisition of magazine printer TI Media, saying it “does not raise competition concerns”. However, an initial investigation has seen the competition watchdog raise concerns that the two businesses “would, together, hold a very strong position” in certain markets after a merger, “with few alternatives for customers and advertisers.”


LSL pulls out of Countrywide merger

LSL Property Services has abandoned a £500m merger with Countrywide amid market uncertainty amid the coronavirus pandemic. The deal would have created the UK’s biggest estate agent. LSL, the owner of the Your Move and Marsh & Parsons chains, did not give a definitive reason for the termination of the deal. Countrywide, meanwhile, said it had seen some “softening in recent days.”


Asda attracting interest from private equity firms

Walmart has reportedly attracted bids for Asda from several private equity firms that could value the company at more than £7bn. Apollo Global Management, TDR Capital and Lone Star Funds are said to be in the running after proceeding to the second round of bidding. TDR is bidding jointly with EG Group, Europe's largest fuel and forecourt operator.

Laura Ashley seeks £15m cash injection

Retailer Laura Ashley faces collapse unless it can secure £15m of emergency cash by the end of March. While it is in advanced talks with a possible lender, an administrator has been lined up should Laura Ashley fail to secure the necessary funds.

Debenhams asks landlords for five-month rent holiday

Debenhams has requested an immediate five-month rent holiday from landlords as the coronavirus continues to dampen trading, alongside an existing call for rent and business rates to be reduced.


Football League clubs should receive help from Premier League

With the coronavirus crisis threatening to put Football League clubs out of business, the Premier League has been urged to financially support those that may be affected. Former Football Association chief executive Mark Palios has proposed a five-point protection plan for the sport, commenting: “There needs to be a coordinated response, which definitely means cash coming down from the top end of the game, back into the bottom of the game, whether it is by way of loan or by way of grant, or whatever.”


BoE will take 'prompt action' on coronavirus

The Bank of England (BoE) will take “prompt action” when necessary to tackle the economic impact of coronavirus, says new Bank of England governor Andrew Bailey. His words raise the prospect of another interest rate cut, City AM notes. Mr Bailey, speaking for the first time as governor after replacing Mark Carney, noted the “strong coordination among central banks” around the world in dealing with the crisis. He told the BBC the BoE is “very keen” to avoid long-term damage to the UK economy. “That’s why you saw prompt action last week, that’s why you will see prompt action again when we need to take it, and the public can be assured of that,” he added.

IMF is ready to use its $1trn lending capacity

The International Monetary Fund (IMF) says it is ready to use its $1trn lending capacity to help countries fight the economic impact of the coronavirus. “As a first line of defence, the Fund can deploy its flexible and rapid-disbursing emergency response toolkit,” IMF managing director Kristalina Georgieva said, adding that the IMF’s Catastrophe Containment and Relief Trust “can help the poorest countries with immediate debt relief, which will free up vital resources for health spending, containment, and mitigation."

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