Barclays pulls back from instant consumer credit
Barclays is scaling back the bulk of its £2.5bn consumer lending operation, a service which offers shoppers credit at several high street retailers including Halfords, Homebase and Wickes. It offers instant loans to customers at the point of sale, both in-store and on the internet. The bank will reportedly stop lending through all retailers except Amazon and Apple from the end of March, with no new borrowing allowed once existing loans have been repaid. Barclays Partner Finance’s portfolio was worth £2.46bn at the end of June, according to the bank’s latest results, compared with a £9.9bn UK credit card book. It earned £76.7m in net interest income in 2021. The Times reports that Barclays is winding down the point-of-sale finance business as the technology platform it uses is old and uncompetitive compared with those of newer rivals. It adds that Barclays will suspend the bulk of new lending while it develops a replacement.
NatWest launches £200 switching offer
NatWest has announced that new and existing customers switching their main current account to the bank will receive £200. Eligibility criteria includes paying in £1,250. The bank is also increasing the rate of interest on its digital regular saver account from 5% to 6% on balances up to £5,000. Lewis Broadie, customer manager at NatWest, said: “We hope these incentives will help customers build their financial resilience and support them in managing some of the pressures of the cost-of-living crisis.” Rachel Springall, a finance expert at Moneyfacts, notes that Lloyds Bank is currently offering a £200 switcher incentive for those switching to their platinum or silver current accounts, while First Direct is offering £175 for those that switch and TSB will pay £125 with their spend and save account which pays monthly cashback.
Goldman Sachs sells Cian stake
Goldman Sachs has sold its stake in Russian real estate database Cian. The bank had, directly or through subsidiaries, owned a 10.1% stake in Cian but filings from the Securities and Exchange Commission show that it no longer holds any shares. No information on the buyer or the fee have been disclosed. Goldman Sachs has also reduced its stake in Russia-focused recruitment firm Headhunter.
Ford to cut a fifth of UK jobs
Ford has announced plans to cut 1,300 jobs in the UK over the next two years, a figure that represents a fifth of its total workforce in the country. This comes as part of a restructuring programme that will see 3,800 job losses across Europe. Of these, 2,800 will be engineering roles and around 1,000 will be in the carmaker’s administrative, marketing, sales and distribution teams. Union Unite said it would be working with Ford to protect "as many jobs as possible."
FCA spares Amigo £73m fine
The Financial Conduct Authority (FCA) has let high-cost lender Amigo off a £72.9m fine, saying paying the penalty would prevent the firm from compensating customers. The City watchdog ruled that the firm failed to carry out proper affordability checks on borrowers between November 2018 and March 2020. The FCA opted to publicly censure the firm instead, even though "the serious failings in this case warrant a substantial financial penalty," saying a fine would have caused Amigo "serious financial hardship." Amigo stopped lending in 2020 and faced compensation claims of around £345m. The firm negotiated reduced redress last year, with this approved by the High Court in May. Amigo is seeking investors to inject £45m to allow it to continue lending. Under the High Court-approved scheme, it has until May 26 to raise the money or the business will be wound down. Amigo CEO Danny Malone apologised to customers impacted by past failings, adding: “As a new board and management team, we fully accept the lessons that needed to be learnt for the future.”
City watchdog sees 'sustained drop' in staff exits
The Financial Conduct Authority (FCA) says it has seen a “sustained drop” in the number of staff exits over the past three months. The claim comes in response to a survey published by union Unite which suggested half of employees were considering leaving the financial watchdog. Unite has written to FCA chief executive Nikhil Rathi, criticising a new pay package which was put together without consulting staff. In a letter responding to Unite, Siobhán Sheridan, the FCA's chief people officer, said: "In the last three months we have seen a sustained drop in the number of leavers and the leaver data we have suggests that this level looks set to continue over the next three months.” Headcount at the FCA reached 4,352 in January, from a full-time headcount of 3,878 at the end of March 2022. The data shows 1,136 colleagues joined the FCA in 2022, a year which saw 649 staff exits. The FCA last month proposed to add two union members to its internal staff consultative committee in response to feedback from employees.
FCA and police raid crypto operators
Authorities have raided several sites as part of what is believed to be the UK's first crackdown on illegally operated crypto ATMs. The raids follow a joint investigation between the Financial Conduct Authority (FCA) and the West Yorkshire police's digital intelligence and investigation unit. The FCA does not regulate cryptoassets but does require firms dealing in crypto to register and prove they have effective anti-money laundering and terrorist financing controls. Mark Steward, the FCA's director in charge of enforcement and market oversight, said the watchdog “will continue to identify and disrupt unregistered crypto businesses operating in the UK.”
BTG Banner - Wc 13.02.23 - PLACED IN MIDDLE OF SUMMARY
LEISURE & HOSPITALITY
Subway hires JPMorgan to explore sale
Subway is exploring a possible sale of the company and has recruited investment bank JPMorgan to steer the process. The restaurant chain, which has about 37,000 franchise-run locations in more than 100 countries, is valued about $10bn.
Amazon boss committed to struggling grocery business
Amazon CEO Andy Jassy has pledged to increase investment in the company’s struggling grocery business - less than a fortnight after announcing that its growth plans had been put on hold. Mr Jassy said he planned to “go big” on bricks-and-mortar after experimenting with product selection, assortment, price points and checkout formats in its food stores. He said a lack of “normalcy” in the pandemic had prevented Amazon from getting its grocery proposition right the first time round but added that he is “hopeful” that the retailer now had a physical store model that resonated with shoppers and could be rolled out this year.
Waitrose slashes prices
Waitrose has joined the supermarket price war with a £100m plan to cut the prices of its own-brand staples. The grocer will cut prices on more than 300 own-brand products by about 20%. It also will reduce the prices of nearly a third of its lowest-priced, own-brand Essential Waitrose range by an average of 14%.
Stride: Brexit created frictions in trade
Work and Pensions Secretary Mel Stride says Brexit created "frictions" in trade that impacted the UK economy. This comes after Bank of England policymaker Jonathan Haskel said investment in the UK had "stopped in its tracks" after Brexit, depriving the economy of around £29bn in lost growth. Quizzed on whether leaving the EU had an impact on investment in the UK, Mr Stride said: "If you have a situation where you create frictions between yourself and your major trading partners, I think you have to accept that will have an impact.” He told BBC Radio 4's World at One: “What I think we need to do now is maximise the benefits of the freedoms we now have, given that we're not part of the European Union," adding that the country has "moved on" from the Brexit debate and now needed to "get out there" and capitalise on the opportunities.
Pay growth climbs but falls behind inflation
Office for National Statistics (ONS) data shows that while regular pay has grown at the fastest rate in more than 20 years, it is still failing to keep up with inflation. Pay, excluding bonuses, increased at an annual pace of 6.7% between October and December 2022. However, regular pay fell by 2.5% when adjusted for inflation and average wages when including bonuses fell by 3.1%. The ONS report also reveals that regular pay in the private sector rose 7.3% year-on-year between October and December, while public sector workers saw an increase of 4.2%. With ONS figures showing that unemployment remained unchanged at 3.7%, Chancellor Jeremy Hunt said the fact the rate remained close to record lows was "an encouraging sign of resilience in our labour market." The ONS figures also show that more than 2.4m days were lost to strikes between June and December, with this the highest total for a calendar year since 1989.
FTSE 100 nears new landmark
The FTSE 100 nearly hit the 8,000 point mark for the first time yesterday, gaining 0.08% to close at 7,953.86 points. Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, has urged caution over the optimism seen on the index so far this year, saying that the “UK’s market mood can change on a dime.” She added that while the economy is “holding up well for now,” questions remain over corporate margins and consumer spending power, “which the forward-looking FTSE may not have correctly priced in.”