Fintechs keep £10m awards despite dropping commitments
Currencycloud and Modulr Finance have failed to meet commitments given to secure cash from the Banking Competition Remedies (BCR). However, neither of them will have to pay back the £10m they each received. Modulr said that it had delayed the rollout of a service enabling small companies to process payments through their accounting firms while Currencycloud has dropped a commitment to integrate its platform into three big accounting software systems. Aidene Walsh, a director at BCR, said: “The last quarter has been difficult for a number of awardees. BCR is keeping a close focus on awardees’ delivery and is reassured that they are adapting to deliver on their commitments to support UK SMEs that need access to business banking products.”
Banks push ahead with graduate schemes
Banks including Barclays, UBS, Deutsche Bank, HSBC, JPMorgan, Citigroup, Credit Suisse, Santander, Nomura and Goldman Sachs will take on graduates, despite uncertainty brought about by the coronavirus crisis. NatWest will bring in 250 graduate trainees, more than it had in 2018 and 2019, while 450 university leavers have already started at Barclays. Bank graduate schemes are going ahead after bosses earlier in the year decided not to cancel summer internships despite the coronavirus outbreak.
Pressure mounts on HSBC to axe ‘discriminatory’ staff pension cuts
The Guardian’s Rupert Jones reports that HSBC is coming under pressure to axe staff pension cuts which have been labelled as discriminatory against women. The practice, known as clawback, involves cutting a former employee’s company pension on the grounds that they also receive the state pension. It allows employers to deduct some, or all, of the basic state pension from company pension payments. It is estimated that about 52,000 former HSBC employees are affected.
Unions fear hundreds of branches will close
Unions believe that up to one in ten bank branches could close, with Lloyds, HSBC, Barclays and NatWest reportedly discussing plans to shut up to 400 of their remaining 3,923 branches after profits were hit by the COVID-19 pandemic.
TSB: Rates not important for savers
Andrew Davis, customer director at TSB, says it is a “great fallacy” that interest rates are important for savers. He said in an internal communication: “What matters is that customers are saving. The interest rate is simply a little bit of icing on top of the cake - the savings are the cake”. Mark Brown, general secretary of TSB workers' union BTU, said: “To say that the core interest rate on savings is not important is a slap in the face of the TSB customers with high savings balances.”
Banks plan to convert branches into offices
Banks including Virgin Money, Metro Bank and Lloyds are planning to turn parts of local branches into hubs for workers looking to avoid commuting into city-centres.
OakNorth adds Salesforce veteran
Challenger bank OakNorth has hired former Salesforce executive Peter Grant to lead its expansion into the US. He will serve as chief operating officer.
Marshall Wace makes record bet against Lloyds
European hedge fund Marshall Wace has built up a 0.51% short position against Lloyds Banking Group – the largest on record – indicating confidence that UK bank stocks have further to fall.
Friendly boost for Metro
Metro Bank has launched a refer-a-friend switching offer, with savers to get £50 for every friend that switches to the bank, up to a maximum of £250.
KKR sells software group Epicor to CD&R in $4.7bn deal
KKR is to sell software company Epicor to Clayton, Dubilier & Rice in a $4.7bn deal. The sale marks the fourth-largest deal involving a software company this year.
PE firms eye office developers
American private equity giants are circling Britain's largest office developers after the coronavirus crisis saw share prices slip by almost 50%. Blackstone is rumoured to be monitoring companies including Land Securities and could seek cut-price deals such as joint ventures, stake purchases and takeovers. Canada’s Brookfield has already made a move into the market, snapping up a 7% stake in British Land for £264m.
Buffett invests $6bn in Japan's five biggest trading houses
Warren Buffett has invested $6bn in Japan’s five biggest trading houses, with his Berkshire Hathaway taking a 5% stake in each of Mitsubishi Corp, Mitsui & Co, Itochu Corp, Sumitomo Corp and Marubeni Corp. In total, the stakes, which have been bought through subsidiary National Indemnity, are worth more than $6.3bn.
Credit Suisse applies for Spanish banking licence
Credit Suisse has applied for a licence to set up an investment bank hub in Madrid after Britain has left the EU.
UK car finance applications rise by quarter in July and August
Car finance applications processed by Experian rose to 597,000 between July 1 to August 24, a 24% increase on the 481,000 recorded in the same period during 2019.
Heathrow trials high-speed COVID-19 tests
Heathrow airport is working with Oxford and Manchester universities on three cutting-edge COVID-19 tests to screen people on arrival and departure, one of which provides results in as little as 20 seconds. John Holland-Kaye, Heathrow’s chief executive, said: “Testing is the lifeline that the UK’s aviation sector needs to get back on its feet.”
FSCS faces £36m C&IS compensation bill
The Financial Services Compensation Scheme may pay out as much as £36m in compensation over collapsed pensions transfer adviser Capital & Income Solutions. The financial lifeboat scheme has paid out £1.2m in relation to 20 claims, with 580 claims yet to be processed. On average, payouts have been £60,000. If this average carries across all claims, total compensation will reach £36m. The Sunday Telegraph notes that the Financial Conduct Authority has stepped up its investigation into pension advisers, having found that 69% of all advice resulted in a recommendation to transfer although transfers are generally suitable in only half of cases.
Insurers told to justify renewal charges
Car insurers have been asked to justify why some customers looking to renew policies are being charged to do so, with analysis by Which? showing that while many firms do not charge for renewals, some add “renewal set-up fees” of as much as £50. The report found that Budget charges £50, the RAC £40, AA Insurance £28, Swinton £25 and Ageas £20. A Which? spokesman said that renewal fees are relatively rare and more likely to be charged by online brokers. The Association of British Insurers commented: “All firms must follow regulations from the Financial Conduct Authority, that any charges are reasonable and clearly set out.”
Former Saga CEO to return
Saga has announced plans to raise £150m in new capital and says it will bring back former CEO Roger De Haan as non-executive chairman. He will join the board and take over from Patrick O'Sullivan as non-executive chairman upon completion of the planned equity raising. Euan Sutherland will remain in place as chief executive. Sir Roger sold Saga to private equity group Charterhouse for £1.35bn in 2004 after 20 years at its helm.
FCA begins review of fund manager value assessments
The Financial Conduct Authority is assessing fund management groups’ compliance with new governance rules that require investment managers to evaluate the value of funds, with fines or sanctions possible.
Amigo Loans suffers huge slide in earnings
Amigo Loans made a £3m pre-tax profit in the three months to June 30, an 83% drop from its £18.1m profit this time last year. Separately, founder James Benamor has withdrawn his call for an investor vote to install himself as the chief executive.
Nestlé agrees $2.6bn deal for Aimmune Therapeutics
Nestlé’s health arm, Nestlé Health Science, is to buy biopharmaceutical company Aimmune Therapeutics in a $2.6bn deal. It already holds a 25% stake worth about $473m.
MEDIA & ENTERTAINMENT
BT lands on KKR’s radar after share price tumble
US private equity giant KKR is said to be monitoring developments at BT which has seen its share price fall by almost half this year. The telecoms company recently hired Goldman Sachs to draw up a strategy to defend against takeover attempts.
ITV set to drop out of FTSE 100
A steep fall in advertising revenues in the second quarter and a halt to filming due to the coronavirus lockdown looks set to tip ITV out of the FTSE 100. The broadcaster’s value has fallen by more than half this year to £2.5bn.
Archant bought by Rcapital
Publisher Archant is to be bought by private equity group Rcapital.
HMRC: Duty cut yet to impact buying data
Provisional HMRC data shows that more than 70,000 properties were sold throughout July, marking a 14.5% increase on June – but data on prices has yet to show clearly whether there has been an increase. Rightmove’s property index, which is based on asking price rather than sold price, reported a 0.2% drop in prices in August, while Nationwide’s July index, which is based on mortgage lending, reported a 1.7% month-on-month increase and Halifax reported a 1.6% increase. While the Chancellor has introduced temporary cuts to stamp duty, HMRC says the move is unlikely to impact on buying figures until late August or early September.
1 in 4 buyers turn to bank of mum and dad
Analysis by Legal & General and economics consultancy CEBR shows that 23% of home purchases this year will be backed by the bank of mum and dad - up from 19% in 2019. It is predicted that family and friends will lend about £3.5bn to loved ones this year - down substantially from the £6.3bn they lent in 2019.
Waitrose signs deal with Deliveroo
Waitrose customers could see groceries delivered in 30 minutes after the supermarket chain signed a deal with Deliveroo. A trial will involve 500 products being made available to shoppers in certain areas for the 12-week trial period, which would be extended if the trial is successful.
£500bn hit from home-working
Analysis suggests £480bn could be wiped off the economy over the next four years if workers fail to return to offices, with Douglas McWilliams, deputy chairman of the Centre for Economics and Business Research and a former chief economic adviser to the Confederation of British Industry, saying the economy will not return to its pre-pandemic size until 2025 if home-working continues in its current form. With a number of firms saying some staff may never return to the office full-time, Mr McWilliams has warned that a broad shift to remote working could hit the economy as it would leave a hole in economic activity generated by commuting and socialising, with large numbers of small businesses in town and city centres relying on income from staff and professionals. The British Chambers of Commerce says Britain is in the “eye of a storm” that will strike this autumn unless ministers take action that enables the economy to function more normally again.
Bailey: BoE ‘still has firepower’ to help economy through pandemic
Andrew Bailey insists the Bank of England, along with other central banks, still has tools available to it with which it can tackle a recession. The Bank’s Governor told the Jackson Hole symposium, an annual gathering of central bank luminaries: “We are not out of firepower by any means, and to be honest it looks from today’s vantage point that we were too cautious about our remaining firepower pre-Covid.”
1 in 6 do not check pay
A poll shows that one in six people do not check their bank account on payday, while 22% assume their employer will not make a mistake and one in 20 do not know how to access their payslip.