BANKING
UK Finance: Virus scams see fraud cases jump
UK Finance analysis shows that bank scams have increased by 84% during the coronavirus lockdown, with cases of impersonation fraud nearly doubling in the first six months of the year. The banking trade body said there had been 15,000 reports of such scams, with these resulting in losses of £58m – a 3% year-on-year increase. Of the 15,000 reported impersonation scams, over 8,200 cases involved criminals impersonating the police or a bank, while 6,700 cases involved fraudsters pretending to be from organisations like utility companies, telecoms providers or government departments. Katy Worobec, an economic crime specialist at UK Finance, said: “Criminal gangs are ruthlessly exploiting this pandemic to commit fraud.”
New banks compete over rates
The Daily Mail looks at competition among new banks, saying they are “leapfrogging each other” to pay top rates on fixed-rate bonds. While the best one year fix at the start of the summer offered 1%, several now offer 1.2%. Secure Trust Bank offers the best rate, at 1.25%, while OakNorth Bank yesterday increased its one-year bond to 1.23%, outdoing the 1.2% currently offered by Aldermore, Allicia, Paragon and United Trust banks. Kent Reliance pays 1.17%, the best deal in the high street. The rates all better the 0.3% offered by HSBC and Barclays.
Apple ends Barclays credit-card partnership
Apple has announced the end of a long-time card partnership with Barclays, with the tech giant set to focus attention on its own Apple Card product-financing plans.
PRIVATE EQUITY
Can KKR expand from buyouts to backing young tech in Asia?
KKR, whose $12.5bn Asian buyout fund is likely to be the region’s largest ever, is said to be preparing a $1bn fund to invest in young tech companies in Asia.
INTERNATIONAL
Handelsbanken faces tougher capital requirements
Sweden's financial watchdog has told Handelsbanken to change how it calculates risk at its subsidiary in Britain as of January 1, a move that will increase the amount of capital the bank has to provide for potential losses. Commenting on the Swedish Financial Supervisory Authority’s decision, Danske Bank analyst Andreas Hakansson said the risk exposure amount at the bank will consequently increase by around $7.39bn.
BoA CEO: Q3 may be the revenue trough
Bank of America CEO Brian Moynihan says revenue declines may come to an end after the next quarterly results. Telling the Barclays Global Financial Services Conference that Bank of America’s net interest income is expected to fall by up to $700m in the third quarter due to a drop-off in loan demand, he added: “It looks like Q3 will be the bottom”. Saying the third quarter “could be the trough” for revenue, he added: “It'll take another several quarters before it really starts growing again.”
Goldman appoints new investment chiefs
Goldman Sachs has appointed two new co-heads of its investment banking division across Europe. Gonzalo Garcia and Anthony Gutman will work across Europe, the Middle East and Africa and will liaise directly with Wolfgang Fink, the bank's chief executive in Europe.
AUTOMOTIVE
PSA and Fiat Chrysler overhaul terms of €50bn merger
In an effort to ease the impact of the coronavirus crisis, PSA and Fiat Chrysler have reworked the terms of their €50bn merger so as to preserve more cash.
FINANCIAL SERVICES
Court rules on business-interruption policies
The High Court has ruled that insurers should pay out on some business-interruption claims connected to the coronavirus pandemic, with thousands of firms expected to benefit from the ruling. The Financial Conduct Authority (FCA) brought the case on behalf of businesses after insurers refused to pay out on claims by firms hit by the coronavirus pandemic. While the court considered 21 sample policies from eight defendants - Arch, Argenta, Ecclesiastical, Hiscox, MS Amlin, QBE, RSA and Zurich - the decision will affect policies from more than 60 insurers. The City watchdog said insurers should act quickly now the judgement is in place, saying policyholders who had been denied payouts should be contacted within seven days. The FCA believes about 370,000 businesses and £1.2bn of business-interruption cover will be affected by the ruling, although the judges did not find insurers liable in all cases. Chris Woolard, interim FCA chief executive, hailed the decision as "a significant step in resolving the uncertainty being faced by policyholders".
EU extends UK clearing house access
EU lenders are to be offered an 18-month extension on access to UK-based clearing houses under the latest post-transition period proposals from the bloc. Clearing plays a crucial role for London as a financial centre, with the London Stock Exchange's LCH dominating the continent's €735trn (£658trn) annual market.
LEISURE AND HOSPITALITY
Carnival cites pandemic effects as it announces $3bn loss
Carnival has announced that it expects to post a $2.9bn loss in the third quarter, citing the effects of the coronavirus pandemic on the travel sector.
PROFESSIONAL SERVICES
Competition probe announced after Mitie deal
The Competition and Markets Authority (CMA) is to investigate Mitie’s acquisition of fellow outsourcing firm Interserve’s facilities management business. A spokesperson for Mitie commented: “The transaction was voluntarily referred to the CMA for clearance and we are working closely with the CMA to progress the process,” with chief executive Phil Bentley describing the deal as “transformative” for the firm.
G4S takeover row continues
GardaWorld’s £3bn hostile bid for rival G4S has been rejected, with it and previous offers described as “highly opportunistic” because of the effects of coronavirus. RBS analyst Andrew Brooke believes that private equity entities “will run the rule over G4S, as it is effectively now in play”.
REAL ESTATE
Opendoor unveils plan to go public in $4.8bn deal
Special-purpose acquisition company Social Capital Hedosophia II will merge with property group Opendoor in a $4.8bn transaction.
RETAIL
New Look wins landlords approval for CVA
New Look has secured landlords’ approval for its CVA, safeguarding 11,000 jobs. The agreement allows New Look to switch to turnover-based rents at 402 of its UK stores, which will align rent payments with future sales performance, while a remaining 68 stores will not be charged rent. As part of the agreement, landlords will be able to exit leases more easily if they can secure better terms elsewhere. The approval will allow New Look to access a £40m injection of new capital, while the retailer has also secured a debt for equity swap, reducing senior debt from around £550m to £100m. Backing for the CVA comes despite several landlords, including British Land, NewRiver and Landsec, voting against the deal.
Next to rescue Victoria's Secret UK business
Next has agreed a deal with L Brands to rescue Victoria's Secret UK business from administration, in a move that will save around 500 jobs. The joint venture, of which Next will own 51% and Victoria’s Secret will hold a 49% stake, will operate all Victoria’s Secret stores in the UK and Ireland, subject to approval from its landlords. Its UK online business, which is currently operated in the US, will be folded into the partnership in spring next year.
ECONOMY
Unemployment hits 4.1%
Office for National Statistics (ONS) figures show that UK unemployment rose from 3.9% to 4.1% in the three months to July, with the total number of people jobless climbing by 62,000 over the period. The number of people unemployed from May until July was just above 1.4m. Redundancies increased by 48,000, quarter-on-quarter, with 156,000 recorded. Payroll data shows that 695,000 fewer people are in employment than when the coronavirus lockdown started in March. ONS figures also show that the number of people claiming unemployment-related benefits has hit 2.7m, a 121% increase since March. Darren Morgan, director of economic statistics at the ONS, said that while some of the effects of the pandemic on the labour market “were beginning to unwind” in July as parts of the economy reopened, the employment and redundancy figures show “it is clear that coronavirus is still having a big impact on the world of work.” Considering the ONS findings, Josie Dent at the Centre for Economics and Business Research warned the “worst is yet to come, as the end of the furlough scheme draws near”.