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Daily News Roundup: Wednesday, 18th August 2021

Posted: 18th August 2021


Big banks trail rivals on green credentials

Building societies and specialist banks have come out on top in Which? rankings of financial entities’ green credentials. The study saw the consumer group work with campaigners Ethical Consumer to rate the sustainability of 18 savings providers. Triodos Bank topped the list, with building societies Ecology and Nationwide in second and third, followed by Leeds and Skipton building societies. In a ranking where the maximum score was 100, Triodos scored 92. Among the bigger banks, NatWest scored 54, Lloyds 52, HSBC 44 and Barclays 41, while Santander was lowest of the big banks with a rating of 35. Co-operative Bank led the bigger lenders, scoring 58. Triodos Bank chief executive Bevis Watts said: “Sustainability is absolutely at the heart of Triodos Bank and we're pleased to enable people's money to be used as a force for good through our savings accounts, as well as current accounts and investments.”

Shared hubs trial to be extended

Trials of shared banking hubs are to be extended, with test initiatives in Cambuslang, South Lanarkshire, and Rochford, Essex, that were due to finish in October now set to conclude in April 2023. The trials involve sites managed by the Post Office which include counter services, ATMs and the opportunity for local businesses to deposit cash. Members of staff from different banks visit the hub once a week to help with trickier transactions. The trials are part of a project aiming to test ways to ensure people and businesses have access to cash and they also address the issue of bank branch closures. Natalie Ceeney, chair of the Access to Cash Action Group who oversees the trials, said: “It is really clear that the hubs have been hugely popular and it would be a bad decision to close them. The banks have therefore taken the view that they want to keep them open, and keep innovating in them so we can refine the model further”. Elsewhere, start-up OneBanks has announced a trial that will involve the nationwide rollout of its “shared branch kiosks”.

Mortgage deals last just 21 days

Mortgage deals now have the shortest shelf life on record as super-low interest deals “sell out” in record time. According to Moneyfacts, the average mortgage is now available for just three weeks before being re-priced. This is the lowest it has ever been, matching the previous all-time low in May 2017 – and a drop of nine days in the last month alone. These short-lived deals are being fuelled by the rate war where lenders are courting low-risk customers by offering loans with ever-cheaper interest to borrowers with large deposits. Halifax's 0.83% rate on a two-year fix is the current lowest.


Electra Private Equity in hospitality demerger

Electra Private Equity has detailed plans for a spin-off of its hospitality brands and will rename the company Unbound Group. Restaurant brands TGI Friday and 63rd+1st will be split away under a new company named Hostmore, with shares given to Electra shareholders.


Morgan Stanley announces vaccine plan

Morgan Stanley has asked its US-based employees to provide proof that they have been vaccinated. While around 90% have attested to being vaccinated, they will have to show evidence by October 1.

FIBI profit jumps

First International Bank of Israel saw profit climb 132% in Q2. The bank set aside 165m shekels for bad loan provisions in Q2 2020 but has reversed 128m shekels of that as income in April-June this year. Net profit totalled 390m shekels in April-June, up from 168m shekels a year earlier.


Automaker fined for paying off union leaders

A US District Court judge has fined Fiat Chrysler Automobiles US $30m after the automaker admitted that it paid off United Auto Workers leaders to try to win concessions in negotiations covering factory workers.


FCA warns CEOs of equity crowdfunding concerns

The Financial Conduct Authority (FCA) has written to the bosses of equity crowdfunding platforms to detail the risks it sees in the market, warning that too many consumers are investing in inappropriate, high-risk investments that do not meet their needs. The City watchdog said that while its rules on client categorisation play a key role in protecting consumers, it is concerned that too many consumers “simply click through this process, without sufficient verification by firms.” An area of concern highlighted in the letter from Debbie Gupta, the FCA’s director of consumer investments supervision, is that of the standard and transparency of due diligence conducted on the companies that consumers are being offered the chance to invest in. The FCA also warned that consumers may be holding more than 10% of their investment portfolio in these investments, saying this “could pose a significant risk of harm”.

Covid victims could be denied insurance

The Mail reports that millions of people face being turned down for vital life, critical illness and income protection insurance, with major insurers now routinely denying the cover to those suffering from long Covid. Analysis suggests most major insurers now ask if applicants had the virus. Zurich says it wants to know if applicants have tested positive in the past three months, while Royal London, Aviva, L&G and LV= say they only ask about the past 30 days. Aviva asks customers about earlier infections if the customer was ever hospitalised with the virus, while Royal London says it may need to know any positive tests if the customer has disclosed other medical conditions.


Moderna vaccine approved for over-12s

The Medicines and Healthcare products Regulatory Agency (MHRA) has approved Moderna's COVID-19 vaccine for children aged 12-17, following a similar green light for Pfizer's vaccines in recent weeks. The MHRA noted that it would be for the Joint Committee on Vaccination and Immunisation to advise on whether children in the age group in question should be given the vaccine.


Just Eat boss accepts activist investor criticism

Jitse Groen, founder and chief executive of food delivery group Just Eat Takeaway, says he accepts that criticism over its communication with investors had been fair. Alex Captain, managing partner of Cat Rock Capital Management, one of Just Eat’s biggest shareholders, last month said the firm was an excellent business but its poor communication with the markets had left it “deeply undervalued and vulnerable to takeover bids at far below its intrinsic value”. While accepting there were issues with its investor communications, Mr Groen strongly rejected Cat Rock’s suggestion that it needed to sell some assets. He also dismissed the idea that issues flagged by the shareholder had left it vulnerable to a takeover.


UK regulators to meet steelworkers over mis-sold pensions scandal

The Financial Conduct Authority, Financial Ombudsman Service and Financial Services Compensation Scheme will meet former British Steel Pension Scheme members suspected of being given bad pension advice and eligible for compensation.


Crozier named next BT chairman

Adam Crozier, the former boss of the Football Association, ITV and Royal Mail, has been appointed as the next chairman of BT. He will step down from his position as chairman of online fashion retailer Asos and as a non-executive of Sony to avoid risks of overboarding - where it is suggested a director has taken on too many boardroom roles. He will, however, remain chair of Premier Inn owner Whitbread.


Online grocery sales slip

The proportion of Britons buying groceries online fell 20% in the 12 weeks to August 8, to the lowest level seen since October 2020. This came as shoppers returned to stores amid the ending of lockdown restrictions. The share of grocery sales made online was 13%, down from a peak of 15.4% in February. Year-on-year, total grocery sales were down 4% over the 12-week period. Of the big four supermarkets, Morrisons has seen the steepest fall in supermarket sales, with a 6.2% decline in the 12 weeks. Asda saw a fall of 4.7%, Sainsbury’s recorded a 2.6% dip while Tesco saw a decline of 1.8%. Waitrose’s 0.6% increase was the only upturn in sales among major grocery retailers. The analysis also shows that consumers made an extra 108,000 shopping trips in the latest four-week period compared to a year earlier, while average basket sizes were 10% smaller and grocery prices were up 0.4%.


Unemployment rate falls to 4.7%

Data from the Office for National Statistics (ONS) shows that the unemployment rate fell 0.2% over the last quarter, hitting 4.7%. While the number of employees on payroll rose 182,000 over the last month to reach 28.9m in July, this is still 201,000 below the pre-pandemic level. Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “The world of work continues to rebound robustly from the effects of the pandemic”. Chancellor Rishi Sunak said the ONS figures show that the Government’s Plan for Jobs is working, “saving people’s jobs and getting people back into work.” He added that while “there could still be bumps in the road … the data is promising”. The ONS also revealed that the number of job vacancies reached a record high over the last quarter, with 953,000 vacancies between May and July. Separate ONS figures show that wages including bonuses jumped by 8.8% in the three months to June against the same period last year, with earnings excluding bonuses up 7.4%. The ONS said the rise in earnings was driven in part by the fact people who had been receiving furlough payments during the same period last year were now receiving full pay. 


Mastercard to end magnetic strip on cards

Mastercard is to stop issuing cards with a magnetic strip, saying that none of its debit or credit cards will have a strip by 2033. Mastercard says chip-and-pin and new biometric cards offer greater security. It added that banks in many regions including Europe will be able to issue cards without a strip from 2024. The firm said the pandemic has shown that people are embracing new ways to pay, with contactless payments increasing by more than a billion in the first quarter of 2021 compared with Q1 2020. It is noted that the UK moved to chip-and-pin for all card payments in 2006.

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