BANKING
Which? says banks are failing to support fraud victims
Research by Which? has found that some fraud victims are being left without satisfactory support from banks. The consumer group found that while 83% of victims of fraud or fraud attempts in the past 12 months said they were satisfied overall with how their bank had managed the incident, some customers struggled to contact their bank after a scam. The research found that 15% of people who reported fraud to their bank via phone or webchat waited 30 minutes or more to speak to someone, while 32% said their bank did not offer advice or resources to help better protect themselves in the future. While more than 8 in 10 people said they were satisfied with their bank’s efforts, Which? says this left a significant number potentially “slipping through the cracks”, pointing to analysis suggesting that the number of fraud offences in the year to March stood at 4.6m. Jenny Ross of Which? said: “When banks fail to offer proper support, it can make a nightmare situation even worse, and an absence of information from firms about how people can protect themselves could even lead to ruthless scammers striking for a second time.” Which? has called for the voluntary code on scams to be replaced with a mandatory reimbursement scheme. UK Finance commented: "A total of £188.3m has been reimbursed since the voluntary code was introduced in May 2019. However, we agree more needs to be done and we firmly believe a regulated code, backed by legislation, is the most effective answer so consumer protections apply consistently across the banking industry."
HSBC to pay dividend as profits soar
Profits at HSBC have jumped in the first half of 2021, with the economic recovery and the release of money set aside to cover potentially sour loans amid the pandemic boosting the bank. It saw pre-tax profit climb to $10.8bn in H1 from $4.3bn a year earlier. HSBC released $719m in money it had set aside during the coronavirus crisis in the first six months of the year, with this offsetting a 4.5% dip in revenues, with low interest rates meaning revenue hit $25.6bn. Noel Quinn, HSBC’s chief executive, said: “We were profitable in every region in the first half of the year, supported by the release of expected credit loss provisions”. He added that he is “pleased with the momentum generated around our growth and transformation plans.” Mr Quinn also confirmed that the bank has $2.4bn of Covid provisions on its balance sheet “as protection against any further deterioration over the next six or 12 months”. Announcing the surge in profits, the bank confirmed it will pay an interim dividend. HSBC also revealed that it has boosted the scale of bonuses on offer to senior staff, increasing the bonus pool by $900m in the first half of the year, compared with a $600m increase during the same period in 2020.
Sunak resists pressure to remove cap on bankers’ bonuses
While investment banks are pushing for a cap on bankers’ bonuses to be lifted amid efforts to make the City more attractive post-Brexit, the Chancellor is said to be resisting the calls.
PRIVATE EQUITY
UKGI role for CD&R’s Banga
Vindi Banga, a partner at private equity firm Clayton Dubilier & Rice, has been appointed by the Treasury to head UK Government Investments, the body which advises the Government on corporate governance and corporate finance issues such as bank bailouts and the sale of the Treasury’s stake in NatWest.
INTERNATIONAL
Goldman Sachs raises banker pay
Goldman Sachs has increased its salaries for younger bankers, with first-year investment bank analysts globally set to get a pay rise to $110,000 from a previous $86,000, with the increase not including bonuses. Basic pay will rise to $125,000 in the second year. It is noted that earlier this year a group of first year US-based investment banking analysts at Goldman Sachs told management of concerns over working conditions in a presentation that said they were facing 95-hour working weeks. The group said conditions were "inhumane" and called on bosses to cap the week at 80 hours. It is noted that rivals Citi Group, Morgan Stanley, UBS and Deutsche Bank have increased pay for their first-year analysts over the past few weeks.
MUFG doubles quarterly profit
Mitsubishi UFJ Financial Group, Japan's largest lender by assets, has seen first-quarter net profit double year-on-year. MUFG, which owns about 20% of Morgan Stanley, reported profit of $3.49bn for the three months to June 30.
Tarda joins Credit Suisse
HSBC banker Orazio Tarda is to join Credit Suisse and will become the Swiss lender's global co-head of fintech. He will also join Credit Suisse's client advisory group in Europe, the Middle East and Africa. Mr Tarda has led HSBC's fintech franchise since 2018.
Deutsche Bank hires Chang
Deutsche Bank has hired former Orient Securities executive Albert Chang in Hong Kong, where he will head the German bank's corporate advisory group for the Asia Pacific region.
Credit Suisse may boost junior staff salaries
Credit Suisse is set to increase junior staff salaries, with sources saying it will pay first year analysts $100,000 a year, with salaries to rise to $105,000 and $110,000 over the next two years.
AVIATION
Amber watch-list idea scrapped
Ministers have scrapped plans to create an amber "watch-list" of countries at risk of moving to the red band of travel restrictions. The Government was said to have been considering a new level in the system for overseas travel, with a category between amber and red identifying countries at risk of a sudden shift from the former to the latter. Reacting to the news that officials will not push ahead with the plans, Tim Alderslade, chief executive of air travel industry body Airlines UK, said: "This is a victory for common sense.”
CONSTRUCTION
Construction industry facing supply shortages
A “perfect storm” of growing skills and materials shortages is threatening UK construction as demand for building soars, according to the Construction Products Association.
FINANCIAL SERVICES
FCA refuses to authorise Claims 4U CMC
The Financial Conduct Authority (FCA) has refused to authorise Claims 4U as a claims management company, with the watchdog saying that, among other issues, the firm failed to provide evidence of how it would meet its prudential resources requirement. The FCA said Claims4U failed to respond to six separate requests for information it deemed necessary to allow the application.
MANUFACTURING
Supply constraints slow manufacturing growth
IHS Markit/Cips’ manufacturing purchasing managers’ index stood at 60.4 in July, down from 63.9 in June and the record 65.6 reported in May but above the 50 mark that separates expansion from contraction. With output and order book growth slowing to the weakest in four months, IHS Markit/Cips noted that supply constraints had an impact, while cost and price pressures increased. Rob Dobson, a director of IHS Markit, said that while manufacturers are benefiting from reopening economies, with solid inflows of new work from both domestic and overseas markets, the recent surge in global manufacturing growth has delivered near-record supply chain delays. James Brougham, an economist at the manufacturers’ lobby group Make UK, said: “We can now see the limiting impacts of the growing supply chain and input price disruptions on UK manufacturers’ road to recovery”.
REAL ESTATE
New home registrations highest for 14 years
The number of new home registrations jumped to a 14-year high in the second quarter of 2021, according to the National House Building Council (NHBC). Across the UK, 46,452 new homes were registered in the second quarter of 2021, marking the highest quarterly total since the third quarter of 2007. The NHBC said it has seen extraordinary growth since the second quarter of 2020 when lockdown restrictions saw work on many sites halted, with registrations now up by 130%. Builders register homes with the NHBC before work starts, so the figures indicate the supply of homes in the pipeline.
North leads best places for landlords to invest
Research suggests that the north of England offers the most profitable places for landlords to invest in property. Preston in Lancashire has been ranked as the most lucrative city to buy a home, with typical purchase prices and rents pointing to an annual profit of £5,256 and a return of 2.98%. Coventry, with a return of 2.74% came second, while Glasgow ranked in third place with a return on investment of 2.67%. Of the top ten ranked areas for investors, based on annual returns, Coventry was the most southerly in England. Three were in Scotland and Swansea was Wales’ only entry.
ECONOMY
NIESR: Inflation to hit 3.9% in early 2022
The National Institute of Economic and Social Research (NIESR) says consumer price inflation will reach 3.9% early in 2022 but should fall back to 2% in 2023 if the Bank of England lifts interest rates. The think-tank also revised its growth forecast for the UK for 2021, increasing it from 5.7% to 6.8%. NIESR also warns that unemployment is likely to rise by 150,000 once the Government’s furlough scheme is wound down at the end of September, taking the jobless rate from the current 4.8% of the workforce to 5.4%. NIESR deputy director Hande Küçük said: “Supply-side factors and effects of reopening amid the recovery in consumption are likely to keep inflation well above the Bank of England’s 2% target for the most part of next year.”
OTHER
Two thirds are counting on inheriting wealth
Research for investment management firm Fidelity shows that 65% of under-45s expect to receive an inheritance of wealth to fund their financial goals and get on the property ladder. It was found that 32% who have already or expect to receive an inheritance or lifetime gift directed the funds to their savings or pension, 24% used the money to pay off a mortgage, and 22% used the funds to join the property ladder. While 18% used the money for one-off expenses or luxury items, 17% paid off debts and 9% put the money toward repaying their student loan.