Skeoch to deliver verdict on ring-fencing regime
Keith Skeoch, the former chief executive of Standard Life, is to deliver his verdict on the ring-fencing structure designed to shield taxpayers during future financial crises. Mr Skeoch, who was appointed by the Treasury in late 2020 to review the UK's ring-fencing and proprietary trading regimes, will unveil his preliminary findings today. Lenders including Lloyds, Barclays, HSBC, Santander and NatWest were forced to establish separate ring-fenced and non-ring-fenced entities following an inquiry in 2011, with legislation obligating banks to erect firewalls between their retail arms and riskier investment banking divisions having come into force in 2019. While Mr Skeoch and a panel of reviewers are not expected to recommend wholesale changes to the ring-fencing regime in the short term, some industry insiders believe a £25bn core deposit base threshold could be increased.
Banks hit by 343 outages and service issues in 2021
Downdetector, an online platform that provides information about the status of websites and services, has named Santander the UK's most unreliable bank, with its services seeing 64 outages last year. Lloyds saw 44, TSB recorded 38, Halifax experienced 35 and Barclays was hit by 33. Nationwide Building Society, HSBC and Co-operative Bank all saw at least 20 outages. Starling was the best performer, with just a single outage flagged, while Smile saw two, and Monzo and RBS were hit by three each. Between January and November 2021, a total of 343 problems and outages affecting UK banks were recorded.
Mortgage providers set to tighten lending criteria
Experts have warned that mortgage applicants are set to face tougher affordability checks in the coming months, with lenders concerned over inflation and a squeeze on household finances. With HSBC reportedly considering tightening its mortgage lending criteria, Katie Brain, a banking expert at Defaqto, believes the bank will not be alone in reviewing its underwriting policies, saying: “We may start to see more restrictions to how much all lenders are willing to lend.” Matt Coulson, director and principal at broker Heron Financial, also said more mortgage lenders are likely follow HSBC’s lead, adding that this “is only logical given what is happening with inflation.”
Horta-Osorio could leave Credit Suisse with £3.8m
Former Credit Suisse chairman Antonio Horta-Osorio is in line for a pay-out of up to £3.8m after his resignation. While negotiations over his departure are ongoing, his contract states he has a notice period of six months. However, he could be paid for 12 as part of a non-compete period. Mr Horta-Osorio, a former boss of Lloyds Banking Group, has stood down after it was revealed he breached UK coronavirus rules last year. He has been replaced by board member Axel Lehmann.
Axis Bank closing in on Citi India's consumer business
Axis Bank has emerged as the frontrunner to buy Citi's consumer business in India. Rival Indian lender Kotak Mahindra Bank is also in the running but has submitted a lower bid than Axis so ranks second in Citi's order of preference. Citi India is being valued at around $1.5bn.
Goldman Sachs splashes out on green London offices
Goldman Sachs is spending hundreds of millions of pounds on a new environmentally friendly office complex in central London. The US investment bank has bought a 75% stake in Edge London Bridge, a £500m project.
Construction firm collapses are building up
The latest official insolvency data shows that between August and October, 797 construction firms went bust. This is up by more than a fifth compared to the previous three months, with the sector being hit by rising costs, supply chain disruption and labour shortages.
BoE to get greater powers over clearing and settlement
The Treasury has said the Bank of England (BoE) will get more powers to set direct requirements for clearing and settlement houses, with the proposed move coming as part of a regulatory revamp due to Brexit. The Bank’s current powers to set direct regulations for clearing and settlement are limited but the plans put forward would allow the BoE to take enforcement action, waive or modify rules, and open investigations.
MPs call for automatic Pension Wise appointments
MPs on the Work and Pensions Committee have called for trials of automatic appointments with the Pension Wise service, suggesting that savers looking to access their pension pots should have appointments scheduled automatically to help them make better decisions. The committee suggests the pension freedoms introduced in 2015 have been a success but says savers need far more help than they currently get in order to navigate the changes. The MPs would like to see a target of at least 60% of people using Pension Wise - or receiving paid-for advice - when accessing their pension savings for the first time.
FCA chief operating officer to step down
Financial Conduct Authority (FCA) chief operating officer Stephanie Cohen is to step down, with an internal email sent to staff at the City watchdog saying she will be leaving the role “later this year” for personal reasons. Ms Cohen, a BlackRock veteran who joined the FCA in 2021, will be replaced by Emily Shepperd, who joined the regulator last year from Aegon and previously served as COO for EMEA at BNY Mellon. In the email revealing Ms Cohen’s exit, FCA chief executive Nikhil Rathi said he “would like to acknowledge her important contribution to the FCA’s development during a period of significant change.”
MEDIA & ENTERTAINMENT
ITV finance deal linked to ESG targets
ITV has agreed a new £500m line of credit linked to ESG targets, with the broadcaster to benefit from lower interest rates if it reduces emissions in line with previously announced goals. The revolving credit facility will run until January 2027.
Bullish outlook for Scots commercial property
Industrial and retail-warehousing sites have overtaken offices as leading investments for Scotland’s commercial property market. Retail-warehousing and industrial assets saw combined investment of £541m last year, accounting for nearly a third of 2020's overall figure. This was an increase of 45% on 2020's total and exceeds 2019's £418m. Offices were broadly consistent with 2020 at £355m, but still some way off 2019's £739m. Altogether, investors snapped up nearly £1.7bn of commercial property in Scotland last year, up on the £1.4bn registered in 2020.
Amazon to continue accepting Visa credit cards
Amazon has postponed its plan to stop customers using Visa credit cards, having previously announced that it would refuse to accept the cards as of January 19. The online retailer, which had said it would stop accepting Visa credit card payments due to “high fees Visa charges for processing credit card transactions”, has now said it is working with Visa on a “potential solution”.
Premier League contributes £7.6bn to the UK economy
Analysis shows that the Premier League generated £7.6bn for the UK economy in the 2019/20 season. The report reveals that 3.2bn global viewers watched top flight English matches, while 528,000 people travelled to the UK to watch games, despite the pandemic having an impact on the later stages of the season.
Climate change could cost economy up to £20bn a year by 2050
Climate change will cost the UK economy up to £20bn a year by 2050, according to the Government’s third five-yearly Climate Change Risk Assessment report, with it also warning that at least 1% a year will be wiped off the UK’s economy by 2045 if global temperatures are allowed to rise by 2C. The Analysis suggests “stronger or different” action is needed to reduce costs, saying that making adaptations to reduce the harmful impacts of climate change on the environment now would prove far cheaper than more “costly remedial actions” to repair damage in the future. The study adds that “early adaptation investments” can deliver up to £10 in economic benefits for every £1 spent.
Inflation could hit 30-year high, experts warn
Economists believe that the cost of living could be set to hit its highest level in thirty years, with price rises and soaring energy bills driving up inflation. Sanjay Raja, Deutsche Bank’s senior economist, expects inflation to hit 5.3%, a rate that would mark the highest reading for the consumer price index since March 1992. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, believes inflation will hit household budgets, with this driving a reduction in spending that could slow economic growth.
Flint urges bosses to stress test themselves
Former HSBC chief executive John Flint says business leaders should look to put themselves under stress as often as they can. Mr Flint, the first permanent chief executive of the UK Infrastructure Bank, said: “If you do want to aspire to significant positions of leadership you need to go through these experiences as often as possible.” He offered that in his own experience, the “moments of setback and crisis … typically represented the foundation for an upward shift in my career.” On the impact of difficult circumstances, he said: “You do learn resilience" but warned: "It is not fun.” He also encouraged ambitious leaders to “go for the thing that scares you the most. The thing where you will learn the most,” but also stressed that leaders must be mindful of their well-being and mental health, advising: “You can’t pour from an empty cup.”