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Daily News Roundup: Wednesday 18th September 2019

Posted: 18th September 2019

BANKING

Credit card interest rates hit record high

Research by Moneyfacts shows that the APR on credit card balances reached 24.7% in September, up from 23.4% in September 2018 and the highest level since the firm started recording the data 13 years ago. Analysis shows that some of the lowest charging rates have been pulled from the market, with Tesco Bank’s 5.9% Clubcard credit card removed, while Bank of Scotland, Halifax and Lloyds Bank raised the purchase rate on their cards from 6.4% to 9.9%. MBNA’s Mastercard has risen from 19.9% to 20.9%.

Savers hit by rates as low as 0%

The Mail says that some banks are leaving savers’ money in old accounts that pay next to nothing. It lists the ten lowest-paying accounts, with the lowest an easy-access deal from FirstSave, provided by FBN Bank UK, which now pays 0%. CitiBank's old issues of its Flexible Saver account pay 0.01%, as do old accounts with Danske Bank's SaverPlus. Hinkley & Rugby BS and Intelligent Finance have accounts with a 0.5% rate, while accounts with a 0.10% rate were found at Beehive Money, Britannia, Dudley BS, Halifax and Nationwide. The paper notes that the Financial Conduct Authority is looking at the savings market as part of a wider investigation into how loyal customers lose out, with research from the regulator showing that long-standing easy-access account holders tend to receive interest rates 0.82% lower than new customers.

Poor areas losing cash machines

Research by the consumer organisation Which? has found that poor areas have lost four times as many free-to-use cash machines as more affluent regions in 17 months. The most deprived areas have had 979 free ATMs ripped out or converted to charging units since January 2018. In contrast, wealthier areas have only had 223 ATMs removed. Which?'s Jenny Ross said: “The Government and regulators must urgently get a grip on these rapid changes to the cash landscape.”

FCA widens Metro Bank misreporting probe

The Financial Conduct Authority is investigating senior managers at Metro Bank over a misreporting scandal that saw risk-weightings for loans miscategorised, leaving it without enough capital to protect against potential losses.

UK tech's most popular employers

Monzo has been named among the most desirable companies to work for among UK tech talent, according to a new survey by recruitment firm Hired, which placed Starling Bank and Revolut in the top ten. All of the top 15 global employers for tech workers were US based, with Google, Netflix and Amazon taking the top spots.

Banks can’t now ignore fintech disruptors

Amid the rise of fintechs and big data, Sebastian McCarthy explores how bankers now need to be "tech wizards every bit as much as savvy money-lenders.” A new report from Accenture, he notes, estimates that banks will miss out on as much as $280bn (£225bn) in payments revenue over the next six years if they do not adapt - with 18% of UK banks’ payment revenue likely to be displaced.

Banks urged to flag cyber incidents

City of London police commissioner Ian Dyson, who yesterday told the World Conference of Banking Institutes that large public companies decided not to report cyber-attacks during the Wannacry breach over fears that their reputations would be tarnished, has urged banks to come forward when hit by cyber incidents.

PRIVATE EQUITY

Private equity group AnaCap raises €1bn to pursue European deals

AnaCap has raised €1bn to buy performing and non-performing loans in Europe and has already deployed some of the money, snapping up loans in Portugal for approximately €200m.

INTERNATIONAL

ECB urges lenders to act on debt

European Central Bank chief supervisor Andrea Enria has voiced concern that banks are not taking advantage of favourable markets to issue more debt. She said: “Market conditions are now very favourable ... banks are not paying sufficient attention to this," adding: "To see that banks are not yet issuing massively worries me a little."

Fed injects funds into markets to steady rates

The US Federal Reserve has injected funds into short-term money markets to maintain its benchmark interest rate, auctioning $53.2bn of repurchase agreements. The Fed reportedly plans to inject another $75bn into the financial system when trading resumes today.

Swedbank admits to money-laundering failings

Swedbank has admitted “shortcomings” in its anti-money laundering work. The comments came in a response to an investigation by Swedish and Estonian regulators probing a $135bn dirty money scandal.

JPMorgan Chase announces major Glasgow expansion

JPMorgan Chase has revealed plans to build a new base for its technology operations in Glasgow. The base, in a 270,000 sq ft building in the city’s International Financial Services District, will have space to accommodate up to 2,700 employees.

FINANCIAL SERVICES

Lloyds-Schroders wealth management venture to launch price war

Schroders Personal Wealth, Lloyds Banking Group and Schroders’ wealth management business, is set to launch a price war, charging new clients half as much as some rivals, including St James’s Place.

Saga puts motorbike insurer up for sale

Over-50s insurance and travel specialist Saga has put its motorbike insurance business Bennetts up for sale amid increasing pressure to focus on its core business from activist investor Elliott. Saga put its Titan and Destinology travel brands on the market in March, but has yet to find buyers.

Aquis reveals revenue rise

Revenues at Share trading platform Aquis Exchange soared 165% to £3.4m in the year to the end of June 2019, taking the London Stock Exchange competitor to a market share of 4.8% in the second quarter of this year. Losses on Ebitda narrowed year-on-year from £1.6m to £0.16m, after Aquis earlier this summer bought the Nex Exchange.

LEISURE AND HOSPITALITY

Thomas Cook files for US bankruptcy protection

Tour operator Thomas Cook, which is trying to secure a £900m rescue deal, has filed for Chapter 15 bankruptcy protection in the US to shield itself from legal action.

PROFESSIONAL SERVICES

Staffline posts H1 loss

Recruiter Staffline swung to a £7.7m loss in the first half of 2019 from profit of £10.5m in H1 2018. While revenue rose 11% to £534.6m year on year, Staffline saw net debt more than double from £36.9m a year ago to £89.2m.

REAL ESTATE

First-time buyers boost July figures

July saw almost 2,000 more first-time buyers join the property ladder compared to the same month last year, according to official figures. UK Finance data revealed that there were 32,640 new first-time buyer mortgages completed in July, some 5.8% more than in the same month last year. The number of people moving house remained similar year on year. UK Finance said there were 32,710 home-mover mortgages completed in July, just 1.4% more than in the same month in 2018. This means that in July, there were just 70 more homeowners moving house than there were first-time buyers completing a mortgage on their first property. Meanwhile, there were 5,800 new buy-to-let home purchase mortgages in July, an increase of 5.5%. Remortgages with additional borrowing slumped 7.1% in July, while pound-for-pound remortgages also fell 12.9%.

WeWork shelves IPO

New York-based property group WeWork has postponed its IPO after struggling to generate investor interest amid concerns over the outsized influence of co-founder and chief executive Adam Neumann and operating losses.

RETAIL

Sainsbury’s outperforms peers in latest sales figures

New data has shown that Sainsbury’s was the stand-out performer among the ‘big four’ supermarkets in the 12 weeks to September 8. The data showed that Sainsbury's enjoyed its best period since October 2018, outperforming its peers for the second month in a row despite a 0.1% sales dip. Sales at Tesco dropped 1.4%, while sales at Morrisons and Asda declined 2% and 1%, respectively. The big four, however, continued to concede ground to the German discounters, with sales at Lidl and Aldi up 9.2% and 6.3% respectively.

SPORT

World Rugby 'concerned' by CVC Six Nations deal

Governing body World Rugby has voiced concerns over CVC Capital Partners’ proposed £300m deal with the Six Nations that would see it cede 15% of its commercial rights. “As big an investor in the sport as a private equity firm like CVC will create influence, and that's something that in some areas could concern us,” said World Rugby chief executive, Brett Gosper. “We have a couple of watch-outs and concerns but I'm sure we'll have a chance to discuss those with the Six Nations,” he added.

ECONOMY

Think-tank: Britons are worse off than in 2008

A report from the New Economics Foundation has questioned official statistics and suggests that Britons are £128 a year worse off on average than they were in 2008. The research argues that figures used to calculate GDP do not include essential items that affected the cost of living over the last 10 years, while tax increases that came as part of the coalition government’s austerity measures were excluded from the calculation of GDP. The think-tank added that the impact of the falling pound has been underestimated in calculations, while rising housing costs were also excluded. Alfie Stirling, the foundation’s chief economist, said that while Office for National Statistics data suggests average living standards returned to 2008 levels in 2015, “when calculated to reflect the true costs of living, our analysis has shown that a combination of the depth of financial crisis, austerity and the vote to leave the EU has meant that average living standards are in fact still yet to recover pre-recessions levels”.

OTHER

Carney’s BoE departure date thrown into doubt by looming general election

The appointment of the next Bank of England governor could be delayed until after the next election, while Mark Carney could be asked to extend his term if Brexit is delayed.

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