BANKING
Monzo and Starling top banking rankings
A Competition and Markets Authority (CMA) survey of banking customers has found that Monzo and Starling come out on top when it comes to providing the best service to personal banking customers. The study saw 19 largest personal current account providers ranked, with the two digital challengers leading the overall service quality ranking. Monzo was the highest ranked, with 86% of customers likely to recommend it to friends and family, while Starling followed with 84%. First Direct, HSBC’s internet-based retail banking division, was close behind with 83% while Metro Bank was backed by 81% of users. Nationwide (71%) followed, while Barclays and Halifax shared sixth place with 62%. At 61%, Santander was eighth, while Lloyds Bank and Virgin Money (both 60%) rounded off the top ten. Tesco Bank came in last with 44%, just beating RBS’ 46%. For digital services, Monzo (89%) and Starling (88%) again topped the rankings, with Tesco Bank bottom here too. Metro Bank’s 84% saw it rank highest for in-branch services.
State bank extends deadline for coronavirus loan schemes
The British Business Bank has given banks extra time to grant state-backed loans to medium-sized and larger businesses. Lenders have been told that applications from medium-sized firms for the coronavirus business interruption loan scheme (CBILS) must be in by September 30 but they had until November 30 to approve claims. The deadline for approving larger CBILS has been set for December 31, while the deadline for the bounce back loan scheme for smaller businesses remains November 4. Almost £52bn has been lent under the schemes, including £35bn in bounce back loans, £13.4bn in CBILS and £3.4bn in larger CBILS.
MPs say banks are failing SMEs on repayment support
The All Party Parliamentary Group (APPG) on Fair Business Banking has voiced concern that some banks are not following Financial Conduct Authority guidance telling them to offer SMEs holidays from both the capital and interest elements of their loan repayments during the coronavirus pandemic. The APPG said: "An inability to defer interest payments is a major issue for some small businesses who still cannot trade fully due to coronavirus”. A UK Finance spokesperson said the guidance only covers certain arrangements and “was not intended to apply to general business customers as implied here and banks take a case by case and sympathetic view of needs for repayment deferral in line with the commitments in the standards of lending practice for business customers.”
Hampden sees 61% rise in lending
Edinburgh-based private bank Hampden & Co has hailed continued strong growth in lending and deposits in the first half of 2020. The bank said despite the headwinds of COVID-19, the lockdown and the reduction of UK base rates to historic lows, the bank grew its deposits by £82m, up 24% on an annual basis, while lending rose by £94m – a 61% climb on last year. Overall, this translated to income growth of 16% compared to a year ago.
PRIVATE EQUITY
Firms opt for private equity over IPOs
The number of IPOs has hit an eleven-year low in London as firms turn to private equity, analysis suggests. Data from Refinitiv show that there have been just six initial public offerings so far this year, with these raising £647m – the lowest number and value seen since during the financial crisis. Meanwhile, companies have raised £27.5bn through 80 private equity fundraisings in the UK.
INTERNATIONAL
JPMorgan appoints former Chancellor to advisory role
JPMorgan has hired Sajid Javid as a senior adviser, with the former Chancellor taking up a role on the firm’s advisory council for Europe, the Middle East and Africa. The move has been signed off by the Government’s Advisory Committee on Business Appointments. Mr Javid began his career in finance at JPMorgan, working in its currencies and emerging market businesses before moving to Deutsche Bank.
Chinese banks woo overseas asset managers
The wealth management subsidiaries of four state-owned Chinese banks are all working with a foreign partner or have expressed an interest in doing so.
AVIATION
Airlines call for coronavirus tests at airports
The chief executives of British Airways, TUI, easyJet and Virgin Atlantic have written to Prime Minister Boris Johnson, urging him to introduce COVID-19 tests at airports. They say such a move will help keep travel and trade routes open and enable passengers to bypass quarantine. Noting that countries including Germany, France, China, India, UAE and Iceland had moved quickly to introduce tests, the airline bosses said: “The UK and US should not be left behind and miss the opportunity to set the new global norms in air travel.” The CEOs added that regional air bridges allowing quarantine-free travel to the UK from low risk areas or cities within higher risk countries could also be put in place.
Ryanair capacity reduced as pandemic slows bookings
Ryanair’s flight capacity has been reduced by 20% for September and October after booking "notably weakened" over the past 10 days amid a rise in coronavirus infections and with a number of EU countries putting new travel restrictions in place. A spokesman said: “Forward bookings, especially for business travel into September and October, have been negatively affected, and it makes sense to reduce frequencies so that we tailor our capacity to demand over the next two months.”
easyJet closes three airport bases
Bosses at easyJet have confirmed plans to close its bases at Stansted, Newcastle and Southend, with CEO Johan Lundgren saying the “very difficult decision” comes as a result of the “unprecedented impact of the pandemic and related travel restrictions, compounded by quarantine restrictions in the UK.” The firm says enhanced voluntary redundancy packages will be made available to staff, as will options including part-time and seasonal contracts, base transfers and unpaid leave.
Court rules against vote on Virgin Australia rescue plan
A court in Sydney has rejected a bid from Virgin Australia shareholders seeking to have a rescue plan put to creditors, a proposal that would have offered an alternative to a takeover by Bain Capital. While the ruling did not block any alternative proposal being circulated to creditors, it threw out a specific request to force the administrator to hold a vote on two separate proposals.
FINANCIAL SERVICES
Amigo Loans lenders extend financing facility deadline
Amigo Loans’ lenders have agreed to extend a multimillion-pound financing facility deadline by four additional months, while reducing the facility’s size from £300m to £250m. Amigo said the move allows both the firm and its lenders “the opportunity to fully understand the impact of COVID-19 on the business, whilst maintaining the existing facility.” The company added that all cash generation arising from customer loans held within the facility “will continue to be used during the waiver period extension to further reduce the outstanding balance”.
Finablr founder steps down as HMRC investigation announced
BR Shetty, founder of payments firm Finablr, has resigned as co-chair as HMRC warned the registration of two subsidiaries could be suspended. The company, which has been hit by the discovery of more than $1bn of undisclosed debt, said suspension of business registration would result in “cessation of business by the relevant entities unless and until the suspension is lifted”, adding that it intends to work with HMRC to attempt to restore the registrations.
LEISURE AND HOSPITALITY
Cineworld faces legal action over rents
Retail landlord AEW is believed to be taking legal action against cinema chain Cineworld, after the tenant withheld rent citing coronavirus-related difficulties. Other UK firms that have refused to pay rent during the crisis include Sports Direct, Boots and Travelodge, after the government introduced a three-month moratorium on lease forfeiture and debt enforcement in March to help those businesses struggling to pay rent, in a move which has been extended to the end of September while still allowing firms to take legal action in some cases.
PROFESSIONAL SERVICES
Headhunting giants lack diversity
The Guardian looks at diversity in headhunting companies that are being used to fill boardroom seats at large firms under mounting pressure to diversify their leadership teams, saying analysis of the leading executive headhunters shows they are still predominantly white. Among the five leading executive headhunting firms - Spencer Stuart, Heidrick & Struggles, Russell Reynolds, Egon Zehnder and Korn Ferry - just six of the 81 global head office executive and board members are black.
REAL ESTATE
Tenants wring concessions from landlords
The average length of commercial tenant leases was shortened by 10 months between February and June to 27 months, property data group Re-Leased has revealed, citing the effects of coronavirus.
RETAIL
Retail footfall sees marginal rise
Analysis by Springboard shows that retail footfall climbed 0.8% last week, although the number of people visiting the high street fell by 0.5%. Visits to shopping centres rose by 2.4% week-on-week, but footfall was still 37% lower than a year ago. Diane Wehrle of Springboard said that overall footfall was “largely lacklustre”, noting that customer activity across retail destinations “rose marginally” from the week before but the increase was less than a third of that recorded in the previous week.
ECONOMY
Household finances weaken
Household finances fell in August, with rising levels of unemployment hitting average incomes and driving a cutback in spending. The IHS Markit UK household finance index was down following steady increases through May, June and July, dipping from 41.5 in July to 40.8 in August on a scale where a figure above 50 indicates an improvement in household finances. IHS economist Lewis Cooper said the findings point to the “continued strain” on family finances brought about by the coronavirus pandemic. He warned that the report also “hints at some worrying trends when put in the context of the significant recession facing the UK,” adding: “Although lockdown measures are looser, households are spending less, earning less and unsure about their jobs, all of which has the ability to add severe friction to the pace of the economic recovery.”