Mortgage approvals slip in October
Mortgage approvals fell to their lowest level since July 2020 last month, with the end of the stamp duty holiday prompting a decline in activity. Bank of England figures show that lenders approved 67,199 mortgages in October, down from 71,851 in September and a high of 104,547 recorded in November 2020. With October’s number close to the 66,700 12-month average in the year to February 2020, the Bank noted that the market is returning to its pre-pandemic level. The report also shows that the amount borrowed fell to a net £1.6bn, from £9.3bn in September. “October’s decrease was driven by borrowing brought forward to September to take advantage of stamp duty land tax relief, before it was completely tapered off,” the Bank said. A total of 41,642 remortgages were approved in October, compared with 32,745 in the same period last year. Reflecting on the data, Laura Suter, head of personal finance at AJ Bell, said: “The rush to get transactions through before the stamp duty deadline at the end of September means that some of this fall is likely to be temporary, as October deals were pushed through early.”
Santander hires Regnier as UK chief executive
Santander UK has announced that Mike Regnier will join the bank as chief executive, ending his tenure as chief executive at Yorkshire Building Society – a role he has held since 2017. Mr Regnier, whose career has also included roles at Lloyds, TSB and Halifax, said: “I am honoured to be joining Santander, a bank with a rich heritage in the UK, a strong track record of innovation and a commitment to helping our country prosper.” Welcoming the appointment, William Vereker, chairman of Santander UK, said: “I am delighted to be able to appoint someone of Mike's calibre as our new CEO. He brings a powerful combination of experience, knowledge and energy, twinned with a positive vision for the future of the bank." Mr Regnier replaces Nathan Bostock, who has led Santander UK since 2014 and in April announced that he would step down at the end of the year. Yorkshire Building Society has confirmed that chief operating officer Stephen White has been appointed as interim chief executive with immediate effect.
UK clearing bank set to launch with $1bn valuation
Bank of London, a new clearing bank set up to approve and process payments, has seen a fundraising round value it at more than $1bn.
Australian banking watchdog publishes capital rules
Australia's banking regulator has published a set of rules asking banks to hold more capital against investor and interest-only home loans but less for business loans, in a move expected to affect loan pricing. Following four years of consultation, the standards change the models used by banks to work out how much capital they need to hold, and will come into effect in January 2023. Australian Prudential Regulation Authority chair Wayne Byres said: “Although Australia's banking sector is already strongly capitalised by international standards, the new capital framework will help ensure it stays that way”.
India’s central bank replaces Reliance Capital board ahead of bankruptcy
The Reserve Bank of India has ousted Reliance Capital's board and will push the lender into bankruptcy proceedings, saying it had failed to pay creditors and did not address "serious governance concerns".
Jefferies poaches Deutsche Bank bankers
US investment bank Jefferies has hired Deutsche Bank's M&A head in Iberia, Andres Gutierrez, as its new investment banking boss for the region while Santiago Garcia Linares, a vice president at Deutsche Bank, will join as a director at Jefferies’ Madrid office.
Nissan announces Sunderland investment
Nissan has announced that its Sunderland plant will be at the centre of a £13.2bn investment. The facility, Britain's biggest car factory, will be used to develop 23 electric cars by 2030. Nissan chief operating officer Ashwani Gupta said Europe “will take the lead on electrification around the world for Nissan”, adding: “In Europe, Sunderland is the one which will take the lead towards electrification."
FCA urges lenders to support mortgage prisoners
The Financial Conduct Authority (FCA) has urged banks and building societies to consider changing lending criteria to help an estimated 47,000 borrowers who could benefit from a cheaper mortgage but are currently unable to move. The watchdog’s review of mortgage prisoners found that about 195,000 households have had debts sold on to inactive lenders, with it shown that a quarter of these could save money if they were allowed to switch to a new deal. The review, which looked at the position of borrowers whose loans were sold on to new lenders after the financial crisis, found that about 47% were paying an interest rate between 3% and 5%, compared to 17% of borrowers with active lenders, while 3.3% were locked into paying interest at more than 5%, compared with just 0.8% of other borrowers. The FCA said: “We encourage lenders to consider if they can amend their lending criteria to lend to mortgage prisoners who are close to their risk appetite.”
Amigo Loans on the brink amid lending ban
Sub-prime lender Amigo Loans has warned that it will go bust unless it is allowed to resume lending and raise new equity under a proposed new rescue plan. Amigo said that in the six months to the end of September it had set aside £344m for customers who complained they were mis-sold loans and accrued interest that they would never have been able to repay. Amigo was banned from lending by the Financial Conduct Authority in May after it was found to be charging interest as high as 49.9%. The company said: “The sanctioning of a new scheme is increasingly urgent. Without an approved scheme, Amigo expects to have to file for administration or other insolvency process.” While Amigo's revenue fell by 38.8% to £56.5m in the first six months of the financial year compared to a year prior, it still managed to turn a modest profit of £3.3m after tax, up from a loss of £67.9m in the previous year.
Gatemore builds DX stake and demands board seat
Activist fund Gatemore Capital Management has written to DX Group, informing the AIM-listed delivery company that it has built a substantial stake and requesting a seat on its board. In a letter to DX Group’s board members, Gatemore said it had accumulated a stake of approximately 20.5%. It said it counted itself “amongst DX’s most enthusiastic shareholders” but said it had been “deeply disappointed” by recent failures by the board, pointing to a 36% dip in the share price in the year-to-date.
AJ Bell to launch app-based D2C platform
AJ Bell is to launch an app-only investment platform in the first half of next year. Called ‘Dodl’, the app will run alongside the firm’s existing consumer platform AJ Bell Youinvest. AJ Bell said the app will allow investors to buy a range of stocks and funds on their phones as it takes on low-cost investment platforms such as Freetrade and seeks to attract first-time traders. Dodl will charge users an annual fee of 0.15% of the value of a portfolio, while there will be no commission for buying and selling investments.
LEISURE & HOSPITALITY
Staff issues the biggest challenge for hotels
A survey has seen hoteliers identify increasing labour costs and a shortage of staff as the biggest challenges to the sector over the next five years. Soaring staff costs were deemed the biggest issue for 59% of hotel bosses, while 54% pointed to a shortage of skilled labour. The study also found that London is the second most attractive European city for hotel investment in 2022, with Amsterdam the most attractive.
JD Wetherspoons signs 20-year deal with Budweiser
JD Wetherspoon has announced a 20-year deal with Budweiser Brewing Group - ending its 41-year partnership with rival brewer Heineken. The partnership will see Budweiser become the chain's largest beer supplier.
MEDIA & ENTERTAINMENT
Dorsey steps down as Twitter boss
Founder Jack Dorsey has stepped down as the chief executive of Twitter. He will remain on the company’s board of directors until May 2022 and will then leave the business altogether. He has been succeeded with immediate effect by Parag Agrawal, who has served as the social media giant’s chief technology officer for the past four years. Twitter has also confirmed that Bret Taylor, who has sat on the board since 2016, will be the company’s new chairman.
Housing market on track to be busiest since 2007
This year is expected to be the busiest in the housing market since 2007, according to Zoopla, with its House Price Index pointing to strong buyer demand. The report also shows that the average property value has risen to £240,000 from £200,000 five years ago. Over the past 12 months, average prices have risen by £15,500, with the South East and South West leading the way by recording growth of more than £22,000. The annual rate of growth for all homes is 6.9%, up from 3.5% in October 2020. This marks a slight drop from the 7% increase recorded in August and September. Zoopla's report also shows that the stock of new homes for sale is down more than 40% on the five-year average.
Asda reports dip in sales
Asda reported a 0.7% year-on-year decline in like-for-like sales in the three months to September 30. However, compared to pre-pandemic levels in 2019, like-for-like sales were up 2%. Total third quarter revenue for the group was £4.93bn. Asda has also announced it has chartered a cargo ship carrying a range of products in order to ensure shelves remain stocked and to avoid the disruption caused by the ongoing global supply chain issues. Other retailers to have chartered their own ships to protect stock include John Lewis in the UK and Costco and Walmart in the US.
Premier League vows to investigate cryptocurrency links
The Premier League has pledged to investigate the growing links between cryptocurrency companies and clubs amid fears about the lack of regulation in the industry. However, the league has also admitted that it is considering a partnership with a cryptocurrency platform that provides NFTs.
Demand for credit surges
Data from the Bank of England shows that October saw a surge in credit card borrowing. Consumers borrowed a net additional £706m last month, with new credit card borrowing accounting for £637m of this. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, commented: “Households set aside into savings accounts in October the smallest sum since the pandemic began, though the emergence of the Omicron variant likely will ensure that they remain cautious over the coming months."
Sustainable start-ups raise record £2.3bn
Analysis shows that start-ups which focus on the environment and other sustainable development have benefitted from a surge in investment, raising a record £2.3bn this year. This marks a jump on the £1.71bn recorded last year and £1.57bn raised in 2019. The analysis from data provider Dealroom and the UK’s Digital Economy Council looked at impact start-ups in areas covered by the UN’s 17 Sustainable Development Goals, including health, security, climate change and energy scarcity. The UK has hosted 164 impact finance rounds this year, compared with 58 in Sweden, 75 in France, 99 in Germany and 476 in the US. The report shows that while total investments in the UK hit £2.3bn, businesses in Sweden attracted £3.3bn. German impact start-ups raised £2.4bn, while French impact starts-up brought in £1.42bn. US impact start-ups led the way, raising £20bn in investments.