BANKING
FCA launches proceedings against NatWest
The Financial Conduct Authority (FCA) has launched criminal proceedings against NatWest, with the state-owned bank allegedly failing to prevent money laundering. In the first prosecution brought under rules introduced in 2007, the City watchdog says the lender failed to monitor and properly scrutinise transactions linked to a corporate customer account collecting “increasingly large cash deposits”. Between November 2011 and October 2016, £365m was paid into the account, including £264m in cash. NatWest could face unlimited fines if it is found guilty of breaching anti-money laundering rules that have yet to be tested in UK courts. In a statement, NatWest said it took its responsibilities to prevent money laundering "extremely seriously" and had been co-operating with the FCA. The regulator has told BBC News it would not be seeking to withdraw any of the bank’s regulatory permissions to trade should it be found guilty.
Borrowers impacted by pandemic face rising mortgage payments
A survey by Legal & General Mortgage Club shows that borrowers who have suffered a drop in income during the pandemic could soon be paying more in monthly mortgage repayments, with one in three considering staying on their current lender’s Standard Variable Rate (SVR) once their existing mortgage product expires. The analysis suggests that moving onto a lender’s SVR could increase annual mortgage repayments by more than £2,500 when compared to an average two-year fixed rate product. Research suggests that the impact of the coronavirus is deterring some borrowers with maturing loans from remortgaging. Over 700,000 borrowers who will reach the end of their two- and five-year residential fixed-rate mortgages in 2021 could be hit.
First shared branches set to open
Britain's first shared bank branches are set to open their doors this spring, with it hoped that the facilities will provide a lifeline for customers and small businesses in regions where branch closures have left people without access to banking services. The shared branches will offer counter services run by the Post Office, enabling customers from any bank to deposit cheques, pay bills and withdraw cash. There will be self-service machines which small businesses can use to deposit takings. Details of the first branches are expected by the end of March, with the hubs scheduled to open once lockdown restrictions ease in April.
Savings rates hit record low
Analysis by Moneyfacts.co.uk shows that savings rates have fallen to record lows since the start of UK's first lockdown, with the average easy access savings rate less than a third of what it was a year ago. The report says the typical easy access rate hit a record low of 0.16% at the start of March, falling from 0.56% on March 1, 2020. Moneyfacts.co.uk also found that there are 383 fewer deals on the market, including cash Isas, than there were last year, with 1,385 products.
Former Goldman Sachs analyst faces trial over insider dealing
Mohammed Zina, a former Goldman Sachs analyst, and brother Suhail, a former Clifford Chance solicitor, will go to trial in April 2022 after the Financial Conduct Authority (FCA) accused them of insider dealing and fraud. The total profit from the alleged insider dealing was £142,000, the FCA said, while the fraud charges relate to three personal loans totalling £95,000.
PRIVATE EQUITY
Inovia Capital focuses on European growth-stage firms with first transatlantic fund
Inovia Capital’s first transatlantic fund has closed at $450m as the Canadian venture capital firm maintains its focus on European growth-stage firms. The company’s Patrick Pichette commented: “We have a clear strategy for Europe… We only focus on growth, in contrast with Canada where we invest from seed to IPO and beyond.”
INTERNATIONAL
German regulator starts Greensill Bank insolvency proceedings
Germany's financial regulator Bafin has submitted a filing to a court to start insolvency proceedings for Greensill Bank. The bank's owner, Greensill Capital, entered insolvency last week after losing insurance coverage for its debt repackaging business. Meanwhile, Credit Suisse has warned it may book a charge following the collapse of Greensill Capital. The Swiss bank last month closed a $10bn suite of supply-chain finance funds linked to Greensill and is also trying to recoup a $140m loan it made to the company.
Santander buys Indosuez's wealth management business
Santander is acquiring a $4.3bn portfolio of client assets and liabilities from Indosuez Wealth Management, the global wealth management brand of Credit Agricole in Miami. The Spanish bank said the deal would be executed through Banco Santander International, part of its private banking division.
Commerzbank chairman resigns due to health reasons
Hans-Jörg Vetter, chairman of Commerzbank, has announced his resignation, citing health reasons. Deputy chairman Uwe Tschäge is to assume the role on an interim basis.
AUTOMOTIVE
Volkswagen announces cost-cutting plans
Volkswagen is targeting a reduction of fixed costs by €2bn in the next two years. Ahead of the firm’s annual results release, VW announced a goal of reaching an operating margin of 7% to 8% by 2025, predicting a 5% to 6.5% margin by the end of 2021.
FINANCIAL SERVICES
Brexit won’t lead to lower capital requirements
The Bank of England has said that a review into Britain’s financial rules post-Brexit will not lead to any “radical departure” or a reduction in capital requirements. Brexit has prompted the Government to look at insurance capital rules inherited from the EU, with some commentators suggesting this could lead to fewer requirements. But the BoE’s Deputy Governor Sam Woods, who also leads the Prudential Regulation Authority, indicated that would not be the case and there would be a shift towards more rule-making. “Now that we have left the EU we have no interest whatsoever in lowering levels of resilience or policyholder protection, but we can and should make changes to tailor regulation so it fits our market better and is more efficient and coherent,” he said in a speech to the Association of British Insurers.
Card fees for EU purchases set to increase
Visa is reportedly set to increase fees for purchases made by UK-based customers from most of Europe as of October. The payments firm plans to inform clients that so-called interchange fees will increase to 1.5% for online credit card payments - a fivefold increase. For debit card transactions, the rate will go up from 0.2% to 1.15%. The move to increase interchange fees will bring it into line with rival MasterCard, which announced a similar move in January. The firms have been able to raise the levy they charge because of Britain's exit from the EU, which regulates the fees within the trading bloc.
Watchdog widens Amigo probe
The Financial Conduct Authority (FCA) has expanded its probe into how Amigo Loans handled mis-selling complaints from customers. The City watchdog has been looking into how the lender assessed its clients’ creditworthiness since May 2020 and has now announced that it is extending the scope of the investigation to include the company’s complaints handling process. The FCA will consider whether complaints have been handled appropriately and whether customers have been treated fairly. Amigo said it will continue to cooperate fully with the FCA.
City minister calls for 'responsible capitalism' in financial services
City Minister John Glen has suggested that the financial services sector should move toward a form of capitalism that takes more than just shareholders’ interests into account. Writing for the Social Market Foundation think-tank, Mr Glen said that the coronavirus crisis should accelerate the UK’s movement to a more “responsible capitalism”. He added that the UK’s financial services sector is “ideally placed to showcase this responsible capitalism and help build an inclusive, stakeholder economy.” Noting that large companies have “increasingly recognised their obligations to society as well as to their shareholders,” Mr Glen suggested that the “ESG, responsible capitalist agenda needs to focus on inclusivity, not a divisive, identity politics-driven agenda”.
Morrissey appointed new AJ Bell chair
Baroness Helena Morrissey is to chair wealth manager AJ Bell, after announcing plans to step down from the board of rival St. James's Place.
REAL ESTATE
House prices climb 12% in a year
Analysis by Halifax shows that Bury St Edmunds in Suffolk and Banbury in Oxfordshire have seen the biggest house price rises during the pandemic, with average prices up by more than a third. The analysis, which is based on regions with at least 100 house sales between the beginning of March 2020 and the end of February 2021, shows that Bury St Edmunds has seen the biggest jump, with the average sale price up 37% from £267,217 to £367,421. Banbury has seen average house prices rise 36%, from £283,830 to £385,556m, while third-placed King's Lynn saw values climb 28%. The report shows that the typical value of a home in Britain is up 12% over the past year, climbing from £285,428 to £320,457.
RETAIL
Greggs to roll-out new shops despite first loss since 1984
Greggs is to open 100 new shops in 2021 as it bets on a post-pandemic recovery. The bakery chain’s plans come despite its first loss for 36 years in 2020 after sales fell by a third amid coronavirus lockdown measures. Sales at company-managed shops fell by more than 36% last year. Greggs reported a pre-tax loss of £13.7m, its first since listing on the stock market in 1984.
ECONOMY
Britons set for £50bn spending spree
A report from the Centre for Economics and Business Research (CEBR) and Isa provider Scottish Friendly suggests Britons will go on a £50bn spending spree once pandemic-related restrictions are lifted, spending money saved over the past year. The analysis says households intend to take more holidays and eat out more, with a quarter of the £192bn in savings accumulated amid the lockdown expected to be spent. While Scottish Friendly and the CEBR estimate that 26% of the savings would be spent, a recent Bank of England report suggested that 5% of the £125bn of excess savings generated between March and November 2020 would be spent.