BANKING
NatWest chief says UK a paradise for scammers
David Lindberg, the chief executive of retail banking at NatWest, has said the UK is the worse market in the world for financial scams. "Fraud and scams are an industry," he said. "They're intelligent, and they move fast, and it's heartbreaking to see how they try to destroy lives." He called for more institutions to join the Contingent Reimbursement Model code, which aims to reduce both the occurrence and impact of push payment scams. "It sets out standards for those that are in the code to adhere to. I can see fraud and scams dropping amongst that group. Those that aren't part of that - often the way money is leaving the country and going into the pockets of scammers is through those."
Buy now pay later shopping could affect mortgage acceptance
Mortgage applicants are reportedly being turned down if they have used buy now pay later deals in shops. Experts now urge borrowers to think twice before using the convenient checkout option from brands such as Klarna. Mortgage adviser Sabrina Hall, of Kind Financial Services, says a client was rejected after using this type of credit, although the decision was overturned. She says: “All lenders view buy now pay later schemes differently. My client was showing many transactions on bank statements and the lender was worried they were living beyond their means.”
Arbuthnot to restore dividend
Arbuthnot Banking Group has restored its payout to shareholders to pre-pandemic levels, making it one of the first banks to take advantage of the relaxation of rules on dividends. Arbuthnot reported £3m of profit for the six months to June 30, compared with £200,000 in the
first half of last year, which captured the start of the pandemic.
Customer loans rose by 12% to £1.7bn.
Barclays names new heads of investment banking amid deal boom
Jean-Francois Astier and John Miller - two top investment bankers at Barclays - have been promoted to new roles overseeing the advisory division. The bank also said its co-heads of equity capital markets for the Americas, Kristin Roth DeClark and Taylor Wright, will become global co-heads of the overall capital markets business.
Nationwide launches cheapest five-year fixed rate mortgage on record
Nationwide has upped the stakes in the mortgage rate wars by launching a five-year fixed rate home loan with an interest rate of 0.99%. The lender’s offer is the first five-year deal on record to charge borrowers an interest rate of less than 1% during the fixed rate period. The mortgage is available to those with a deposit of at least 40% and comes with a fee of £1,499.
PRIVATE EQUITY
BlackRock increases opposition to high executive pay in Europe
BlackRock has increased its opposition to executive pay in Europe over the past year, details of the asset manager’s voting records show, indicating an increased willingness to drive up corporate governance standards. BlackRock said it voted against management on 33% of “say-on-pay” proposals in European
companies in the year to the end of June – up from 26% last year. This increase in opposition votes was “largely attributed” to BlackRock's opposition to adjustments that companies made during the
pandemic. “BlackRock opposed executive pay programmes when companies were not able to explain how these adjustments supported long-term, sustainable value creation for shareholders, ” said Sandy Boss, global head of investment stewardship.
INTERNATIONAL
UBS profits surge as wealth management arm shines
UBS reported an earnings jump of 63% to $2bn for the second-quarter as buoyant markets and a boom in mergers and acquisitions drove profit up at the world’s largest wealth manager. "The momentum is on our side. We have no intention of letting go," Chief Executive Ralph Hamers told analysts on a call, adding across each
region the bank had recorded its highest profit levels in more than five years. "You can expect us to continue to focus on growth on the wealth side, but on efficiency as well (as we) continue to invest." Hamers also said investment bankers will be able to work part time from home under a new, permanent hybrid
working model. He said about a third of roles, like traders, will find
it easier to work from the office but at least two thirds of staff
should be able to do some work from home.
Nasdaq to spin out exchange for private businesses in deal with banks
In a joint venture with SVB Financial, Citigroup, Goldman Sachs and Morgan Stanley, Nasdaq will split off its platform for share dealing in private companies in the hope of boosting dealmaking activity. The new venture will “develop a full suite of liquidity solutions for private companies” where pre-IPO firms, brokers and investors can access, connect, manage and execute their private stock transactions, Nasdaq said.
Deutsche Bank raises junior banker pay
Deutsche Bank is raising the amount it pays investment banking analysts by $15,000 to $100,000, a source familiar with the matter told Reuters late on Tuesday. U.S. analysts being promoted to the associate level midyear will see their pay rise by $25,000 to $150,000.
JPMorgan grants Jamie Dimon ‘special’ stock award to stay at bank
Jamie Dimon, the CEO of JPMorgan Chase, is to be granted a “special award” of 1.5m share options as part of efforts to persuade him to stay at the bank for a “significant number of years”.
FINANCIAL SERVICES
Fund managers pushed towards ESG
A new report has found that regulatory imperatives and investor demand are driving an increased focus on ESG principles. The study found that three-quarters of the fund managers questioned – holding £15.5trn in assets – are being influenced by investors and policymakers to drive sustainability outcomes. Some 76% of respondents cited regulation as a ‘significant' or ‘very significant' factor in their approach to ESG. These include regulatory initiatives introducing new frameworks for sustainable finance, including the EU Taxonomy Regulation and the Sustainable Finance Disclosure Regulation.
Crypto exchange FTX secures backing from venture capital and hedge funds
Cryptocurrency exchange FTX has raised $900m from more than 60 investors including the venture capital firms Paradigm and Sequoia Capital and the private equity group Thoma Bravo, valuing the business at $18bn.
Belfast’s booming financial services rise above political unrest
Despite recent unrest, the flow of investment into Belfast from financial and professional services firms has not abated, with Citigroup and local firm FinTrU among those planning to add hundreds of jobs in the city.
LEISURE & HOSPITALITY
Hospitality chiefs furious over vaccine passport plan
The Government’s move to coerce the young into getting a Covid jab by requiring proof of vaccination before they can enter a nightclub or other crowded venue has been described as “disgusting” by a senior Tory MP. Boris Johnson has faced a furious backlash since proposing the move but Downing Street yesterday said it could go further and demand people prove they are double-jabbed to get into other hospitality venues, including pubs. Cabinet ministers previously denied there were plans to introduce certification. Night-time economy bosses describe the U-turn as a “bad idea” with eight in 10 nightclubs warning they do not want to implement vaccine passports amid concerns the requirement will damage their trade even further.
Revolut launches travel booking service
British-based digital banking app Revolut, which raised around $800m last week, is launching a new service allowing users to book travel. The new product will allow users to make reservations for flights, car rentals, and other travel needs.
MEDIA & ENTERTAINMENT
Channel 4 attacks privatisation plans
Plans to privatise Channel 4 have been criticised by the broadcaster, which accuses the Culture Secretary of failing to provide evidence a sale would be positive for the company. Channel 4 chairman Charles Gurassa said in a letter to Oliver Dowden that the “lack of any detailed analysis, evidence or impact assessment” leaves the board “deeply concerned” for the broadcaster’s ability to deliver its remit and considers the consequences “harmful” for the UK’s creative economy.
PROFESSIONAL SERVICES
FCA: Debt packager firms could be putting consumers at risk
The City regulator has warned that some debt packager firms, which advise people on how to deal with their debts, appear to have manipulated consumers’ incomes and outgoings to meet criteria for going financially insolvent, earning them higher fees. The Financial Conduct Authority (FCA) said in some instances consumers’ circumstances and vulnerabilities, including mental health issues and economic abuse, had not been properly taken into account. Sheldon Mills, executive director, consumers and competition at the FCA, said: “The practices we’ve seen in this sector fall far short of the standards we expect from firms, let alone those claiming to offer help to people in need. We will not allow firms to profit from debt advice which puts their customers at risk of harm.”
REAL ESTATE
£15bn worth of London homes lying empty
Homes worth a collective £15bn are lying empty in London, according to new data gathered by insurance firm Admiral. London has made a name for itself as a destination for ultra-wealthy buyers to snap up prime real estate as assets and holiday homes, while prospective homeowners squabble over a reduced supply. Some 29,242 houses have been left unoccupied for at least six months in the capital, with Southwark being home to the highest number of long-term empty properties, according to Admiral's Freedom of Information (FOI) request.
High-quality new builds can boost market
High-quality new build homes can help to push up house prices for people who already live in the area, the Housing Secretary has said. Robert Jenrick said new homes were often unpopular because they were constructed to poor standards but added that a "less explored" thesis was "how the decline in quality that we have seen since the post-war period has corresponded with ever-increasing opposition to new housing.” He went on to say that "the case for new housing is more important than ever but it is also more difficult to make than ever. Far from beauty and quality being a luxury, they are key to unlocking community consent for development and housing."
RETAIL
Bidding war for Morrisons looks unlikely
Apollo has withdrawn from a potential bidding war for UK supermarket chain Morrisons. Instead, the US private equity group wants to join forces with another consortium whose £6.3bn ($8.7bn) takeover bid has already been accepted. Earlier this month, Morrisons agreed to an offer by another US group led by Fortress Investment Group. The takeover bid, led by Fortress Investment Group, is subject to shareholder approval.
ECONOMY
Inflation more dangerous than Delta variant
Ambrose Evans-Pritchard asserts in the Telegraph that Monday’s stock sell-off and rush into safe-haven bonds was not driven by a surge in Covid cases but a recognition that inflation is overshooting central bank forecasts and policymakers will overtighten to compensate. Evans-Pritchard says a report from the House of Lords last week is key to understanding the issue. Peers on the Economic Affairs Committee implicitly accused Bank of England Governor Andrew Bailey and fellow rate-setters of “falling captive to political masters, letting rip on inflation, and playing fast and loose with the credibility of British monetary management.” Now the Bank is finally tacking hard, with a variant of this hawkish turn also underway in the US, but if the Bank of England, the Fed, and their peers do not “lance the QE boil now, they probably never will” Evans-Pritchard continues. “Inflation will be allowed to take hold and the world will be back to the 1970s. Markets are having great difficulty deciding which of these two outcomes is more likely.”
OTHER
Penalties issued to FDs fall as HMRC focuses on furlough fraud
Data obtained by Pinsent Masons show the number of penalties issued to finance directors at large businesses by HMRC has dropped from 148 to just 20 in a year. Partner Jake Landman explained that the fall is due to HMRC having to shift the focus of their investigations away from tax disputes with big businesses to investigating furlough fraud. "As more furlough fraud cases are closed and the lockdown finally ends we would expect compliance work focused on big businesses to increase,” he said.