Hohn wants central banks to increase climate pressure on lenders
Speaking on the sidelines of the COP26 climate talks in Scotland, billionaire hedge fund investor Chris Hohn said central bankers must force the world's banks to set short-term targets to cut carbon emissions from their loan books or the sector's net-zero pledges will simply be "greenwashing". Hohn said Bank of England governor Andrew Bailey should be pushing banks to demand data on emissions and climate action plans from their corporate clients. "How is he going to get the banking system to do their part to get the UK compliant with the Paris Agreement? What targets does he expect the banks to put out?" Hohn said that central banks "don't seem to think it's their job at all - and it's absolutely ridiculous".
Bank branch network shrinks further
The number of bank branches in Britain shrank by another 5% in the spring after more than 250 were axed as the pandemic accelerated closures, new figures from the Financial Conduct Authority have revealed. The closures mean just 60.1% are now within 2km of a bank branch, down from 61.8% in the first quarter of 2021. In the meantime, Barclays has announced that is branches in Daventry and Towcester, in Northamptonshire, will shut because customers are "increasingly using alternatives to branches to do their banking "
Barclays to name insider Paul Compton as head of investment bank
Barclays is set to appoint Paul Compton as the sole head of its investment banking business, according to a report in the FT. It marks the first move by new CEO CS Venkatakrishnan to stabilise the UK lender since taking over from Jes Staley this month. It is also reported that Venkat, as the new CEO is known internally, is also shrinking the 13-strong executive committee of the bank to streamline decision-making.
Regulators and politicians concerned over PE banking moves
The Times’ Katherine Griffiths reports on how private equity firms are keen to invest in Britain’s challenger banks and drive competition in the sector, but regulators are concerned at their level of commitment to the wider economy. The sentiment is reflected elsewhere with high profile politicians coming out against the takeover of insurer LV by Bain Capital. Lord Heseltine is calling for the Government to intervene while Former pensions minister and Tory peer Baroness Altmann said LV was threatening to be the “latest in a long line of great British names that have fallen to private equity, and have all too often found that their traditions of great service have not been maintained as well as you might expect.”
HSBC to expand Asian wealth management business
As part of HSBC’s plans to become Asia's top wealth manager by 2025 the bank is exploring re-entering India's private banking market having recently exceeded its hiring targets for its Chinese retail wealth management business. "We are the leading international bank in China, so we want to squeeze that opportunity," said CEO of Wealth and Personal Banking Nuno Matos. "On the private banking side, we are now in clear expansion mode," Matos added. HSBC exited the Indian private banking business in 2015 but is now exploring whether to re-enter onshore private banking in the country. Currently, HSBC is focusing on catering to wealthy Indians from its global hubs in Singapore, London and the Middle East.
Norway banking sector robust
Norway’s central bank said in an annual report on Tuesday that the country’s banks are well-equipped to cope with a new downturn while the economic recovery has improved the outlook for financial stability. "The stress test in this report shows that the largest Norwegian banks can weather a sharp downturn without having to tighten lending substantially," Deputy Governor Ida Wolden Bache said in a statement.
S&P upgrades Deutsche Bank
Standard & Poor's has upgraded several of Deutsche Bank's ratings, including its long-term issuer credit and senior preferred debt ratings to "A-" from "BBB+". The ratings agency cited gains from the bank’s restructuring programme for the move.
Soaring used car prices drive cost of claims up
The rise in the cost of second-hand vehicles has pushed up the cost of motor claims to just above its expected range of 3% to 5%, according to Direct Line. Used car prices are 21.4% higher than they were a year ago, pushing up the cost of write-offs.
Persimmon and Vistry publish upbeat trading updates
Persimmon and Vistry Group both published upbeat trading updates on Tuesday citing healthy profit margins and rising customer interest. Persimmon expects to build about 15,000 homes this year and Vistry 11,000.
Treasury to hand law-making powers to City regulators
The Treasury will hand the power to make the rules governing financial services to regulators in a move designed to make the Square Mile more competitive post-Brexit. The Government will gradually repeal significant amounts of retained EU law so that the Financial Conduct Authority and the Prudential Regulation Authority can replace it over time. But, this overhaul, which would shift control of the industry away from Whitehall, would not necessarily equal watered down rules in Britain. Barney Reynolds, head of financial services at Shearman & Sterling, said there was a lack of urgency from the Treasury and that its report was “unambitious and disappointing”. Elsewhere, Miles Celic, who runs industry lobby group TheCityUK, welcomed the proposals but called for a regular independent review of the UK’s financial regulatory regime to ensure that the rules are proportionate. Chancellor Rishi Sunak said: “Today’s proposals will support the future strength of the UK as a global financial centre, ensuring an agile and dynamic approach to regulation that supports the growth of the UK economy, without diverging from our continued commitment to high international standards.”
Blackstone and Sixth Street hire bankers to sell mortgage platform Kensington
Kensington Mortgages, which offers home loans to the self-employed and over-55s, is to be auctioned by Morgan Stanley, according to Sky News. The company has been owned by Blackstone and Sixth Street - since 2014, when they took Kensington Group private. City sources said that the process, which has yet to formally get underway, could lead to a break-up of Kensington with separate buyers for its mortgage portfolios and the platform which services customers.
AstraZeneca commits to vaccines business with new division
AstraZeneca is to create a new vaccines unit as the Anglo-Swedish drugmaker plans for the future of its coronavirus shot beyond the pandemic. The company said the reorganisation would bring together people who had previously been based in different parts of the business and will be dedicated to the COVID-19 vaccine and tweaked versions to deal with new variants of Sars-CoV-2.
Rolls buoyed by nuclear backing
Shares in Rolls-Royce jumped 3.6% on Tuesday following news that the Government would by backing the company’s civil nuclear technology to the tune of £210m. Shares rose to 144¾p, their highest level since the onset of the pandemic.
Repossession claims by banks up by 50%
Homeowners hit by the pandemic are now losing their homes, evicted by banks in court hearings, a joint probe by Money Mail and The Bureau Of Investigative Journalism has found. The ban on bailiff-led evictions was extended until the end of May in England and the end of June in Wales. But now repossession claims by banks have surged by 50%, rising from 750 in May to 1,160 in June. Reporters sat in on 115 mortgage cases at 30 courts across England and Wales over two months and found ‘Covid' was mentioned in one in three hearings. Nearly half of the cases resulted in a possession order, and average homeowners were £7,900 in arrears. In 81% of hearings the homeowner did not have any legal representation.
Grocery inflation hits 14-month high
The latest data from Kantar reveals like-for-like grocery inflation rose to 2.1% in October – the highest since August last year. Retailers are resorting to price hikes to offset higher costs of transport, fuel, energy, stock and wages, which is seeing the cost of living rise sharply. Meanwhile, the British Retail Consortium Retail Sales Monitor reported that on a total basis sales increased by 1.3% in October.
Funding secured for London F1 circuit
The Daily Mail reports that a consortium seeking to bring a Formula One race to London's East End has secured funding to build a circuit at the Royal Docks in the borough of Newham. London mayor Sadiq Khan is backing the plans, with the hope that the race can go ahead before his term ends in 2024. Josh Wander, founder of investment firm 777 Partners, part of the consortium, says the plan is to build a "world-class sports and entertainment complex that can serve the community year-round and revitalise the surrounding areas. It is the type of thing you really can't quantify until it actually happens, but the impact is dramatic."
NIESR warns of stagnation risk from supply-chain problems
The National Institute of Economic and Social Research (NIESR) has warned that persistent supply-chain bottlenecks risked stagnating Britain’s economy in the years ahead. The think tank predicts that inflation would reach around 5% next year and last longer than the Bank of England expects. Britain's economy was set to grow by 6.9% in 2021 and by 4.7% in 2022, as it recovers from the COVID-19 pandemic, before slowing sharply to 1.7% in 2023 and 1.3% in 2024, NIESR said.
BoE to consult on digital pound
HM Treasury and The Bank of England have launched a joint consultation on the launch of a digital currency backed by the UK’s central bank. Economic Secretary to the Treasury, John Glen, said: “This consultation will begin an open discussion on the role a UK central bank digital currency might play in the UK. I’d encourage everyone to contribute to the discussion so we can explore the opportunities this could bring, as well as understanding any risks it may pose.”