HSBC to close 82 branches
HSBC is to close 82 UK branches between April and September, saying the move comes as customers increasingly turn to digital banking. It says the closures are not expected to result in redundancies, with staff set to be moved to nearby branches. The bank also noted that all but one of the branches earmarked for closure are within a mile of a Post Office, meaning customers can still conduct day-to-day transactions locally. The move will leave HSBC with a UK network of 511 branches, with the bank announcing that pop-up mobile branches will be rolled out this year. Jackie Uhi, HSBC UK's head of network, said the coronavirus pandemic has “emphasised the need for the changes that we are making”, saying that it “reinforces the things that we were focusing on before and has crystallised our thinking”.
Repossessions set to surge
UK Finance has warned that home repossessions may surge tenfold in 2022 as coronavirus support measures come to an end, saying that while 2,900 properties were repossessed by lenders in 2020, this could rise to 22,300 in 2022. Around 81,300 households were in home loan arrears last year, but figures suggest this could climb to 142,200 in 2021, prompting a surge in repossessions. A ban on seizing homes put in place by the Financial Conduct Authority ends on April 1, while analysis shows that the number of homeowners utilising mortgage holidays rolled out amid the pandemic currently stands at around 127,000. Paula Higgins, of the HomeOwners Alliance, comments: “The Government needs to work with lenders on a long-term plan in preparation for the debt hangover we are facing.”
Goldman Sachs sees earnings surge
Goldman Sachs saw profits jump to $4.4bn in Q4, more than double the earnings recorded in the last three months of 2019. Investment banking revenues rose 27%, while global markets saw a 23% increase. Overall revenues rose 18% to $11.7bn. Across 2020 Goldman Sachs reported profits of $8.9bn, up 13%, while revenue increased 22% to $44.6bn.
Bank of America reveals Q4 figures
Bank of America´s fourth-quarter profits fell 18% from a year ago, hitting $5.57bn compared to $6.99bn in Q4 2019. The fourth quarter saw BoA release $828m from its credit reserves, helping drive fourth-quarter net income up by almost $600m. Elsewhere, BoA’s board of directors announced it will buy back $2.9bn worth of stock in the upcoming quarter.
Eurozone banks scale back lending as bad debt fears grow
A European Central Bank survey shows eurozone banks scaled back lending in Q4, with guidelines and approval criteria for new loans tightened by the most since the financial crisis.
Cost cut could spark sales surge for electric cars
New analysis shows that 29% of drivers would buy an electric car if it was priced below £20,000, while 13% would do so if prices fell to £10,000 or less.
Boeing 737 Max set to land EU approval
After being approved to return to the skies in the US late last year, the Boeing 737 Max could soon secure EU approval following a worldwide grounding in the wake of two deadly crashes. The 737 Max is set to be given the green light for European flights next week.
Brussels warns UK over 'light touch' regulation
Brussels has warned Britain against deregulating the City of London or weakening financial rules after Brexit, with EU Commissioner for Financial Services Mairead McGuinness saying British firms will not be given access to the Single Market unless robust rules are in place. Pointing to a risk to financial stability and referring to the financial crisis, she said: “Many of us remember that era of deregulation or light touch regulation and we will not go back there again.” Ms McGuinness also suggested that the EU would not grant equivalence to 28 sectors until the UK gave greater detail on how far it intends to move away from the bloc’s rules, stressing a need to know “which road the UK intends to diverge on and how many branches there will be on that path.” She insisted that the EU wants “effective regulation”, adding: “We do not like light touch and deregulation is not on our agenda.”
Watchdog ‘slow’ to identify minibond risk
A judicial review brought against the Financial Services Compensation Scheme (FSCS) by four London Capital and Finance (LCF) investors has been told that the Financial Conduct Authority was “slow” to identify the risk presented by minibonds issued. The investors’ lawyer, James McClelland of Shearman and Sterling, said the investments involved in the case were so “unusual” that the Financial Conduct Authority had appeared “slow to identify the risks”. The judicial review centres around the fact that some investors were unable to receive compensation as the FSCS concluded that the act of issuing minibonds was not a regulated activity and thus not protected. The investors argue that by issuing minibonds, LCF was “dealing in investments”, which is a regulated activity.
FCA warns firms over scams
The Financial Conduct Authority has warned financial firms that it will strip them of their regulatory permissions if they do not actively engage with efforts to prevent consumers from being misled into making risky investments. The City watchdog intends to clamp down on companies with out-of-date or incorrect authorisations as it looks to ramp up efforts to protect people from high-risk investment schemes and fraud.
MP criticises BNPL
Labour MP Stella Creasy has urged fashion retailers to temporarily suspend buy now pay later (BNPL) schemes as concerns about debt levels among young customers grow. Lenders such as Klarna and Clearpay should be subject to regulation, some politicians warn, as the StepChange Debt Charity cautions that an increase in the number of people seeking help for such debts has been observed. Ms Creasy said she is “very concerned” by any websites which prioritise BNPL. and companies that offer discounts to push people to use BNPL.
LME moves to permanently close historic ‘Ring’ metals trading floor
The London Metal Exchange’s historic Ring trading floor could be closed for good after the exchange temporarily halted trading in 2020 as a result of the coronavirus pandemic.
IW Capital CEO: Market confidence ‘artificially low’
Luke Davis, CEO of investment firm IW Capital, believes 2021 could reverse much of the economic damage suffered in 2020, commenting: “I do feel that we now have a long period of growth to look forward to.” He added: “Confidence is low only artificially and will jump once the vaccine programme has progressed to a point where restrictions can be lifted.”
LEISURE AND HOSPITALITY
Pubs yet to be served promised grant
Some 75% of wet-led pubs have not yet received a Christmas grant personally promised by the Prime Minister, the British Beer and Pub Association has revealed. CEO Emma McClarkin commented: “Months have passed by yet still thousands of pubs are waiting on the grants they have been promised. Considering we are now in a third lockdown, it is scandalous.”
Hammerson Q1 rent collection at 40%
Retail landlord Hammerson has collected only 41% of the rent owed to it for the first quarter, after a number of tenants were forced to temporarily shut sites in line with lockdown restrictions. Rent holidays, deferrals and moves to monthly payments have been negotiated with some firms across its estate, with approximately 25% of its UK tenants trading as of January 17.
CEO confident over Superdry future
Superdry CEO Julian Dunkerton says he is confident about the fashion chain’s future despite auditors repeating a going concern warning after shop closures and losses relating to the coronavirus crisis. The company saw an underlying pre-tax loss of £10.6m in the six months to October 24, versus a loss of £2.3m in the same period in 2019. Revenue declined 23.3% to £282.7m, and was down 27.2% in the 11 weeks to January 9. Mr Dunkerton said Superdry had approached its lenders for a covenant waiver, adding: “We have £130m of untouched liquidity, we haven't even gone overdrawn.”
Paperchase files intent to appoint administrators
Paperchase is filing a second notice to appoint administrators. The stationery chain, which boasts 173 stores and concessions, originally filed notice on January 5, handing it 10 days protection from its creditors, with the firm saying the latest coronavirus lockdown had put an “unbearable strain” on the retail sector.
Arcadia to shut 31 stores
Administrators are set to close 31 stores under the Arcadia umbrella, with many of the closures hitting branches of Outfit. Arcadia is currently in the process of being sold off, with the deadline for bids having passed on Monday. Contenders reportedly include Next, which is bidding in partnership with US hedge fund Davidson Kempner; US retail giant Authentic Brands, which is linked to a joint bid with JD Sports; China’s Shein; and G-III Apparel, owner of the DKNY brand.
Poll reveals increasing cash refusal
A poll from consumer group Which? suggests that the coronavirus pandemic has accelerated a move toward a cashless society, with 34% of respondents saying they have been unable to pay with cash when making a purchase at least once since March. The study found that grocery stores, pubs and restaurants were the businesses most likely to refuse a cash payment. One in 20 people polled said they rely on cash, while one in seven said they would struggle without it, and two-fifths view cash as an essential backup. Jenny Ross of Which? says ministers must “urgently make the Financial Conduct Authority responsible for tracking cash acceptance levels”, noting that legislation to protect cash promised almost a year ago has yet to be introduced. Natalie Ceeney, author of the Access to Cash Review, says the survey shows that a refusal to accept cash is "creeping into the wider UK economy". John Howells, CEO of Link, said the ATM network estimates that cash usage will have halved by the end of 2021 compared to the start of the pandemic.
Lifeline lined up for freelancers
Freelance workers excluded from state support amid the coronavirus crisis may be granted a lifeline, with a group of MPs calling on the Chancellor to include them in the final round of self-employed grants. While many newly self-employed workers were excluded from help as they had never filed tax returns, by the time February’s round of grants are issued they will have filed full-year accounts, with the tax return deadline coming on January 31. The All-Party Parliamentary Group (APPG) on Gaps in Support has called on HMRC to publish an explanation of why it cannot help freelancers and other groups that have been excluded from support initiatives.