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Daily News Roundup: Wednesday 27th November 2019

Posted: 27th November 2019


Online banks crashed 265 times last year

Analysis by Which? has found that banks are locking customers out of their accounts five times a week because of IT meltdowns. In the last year, the UK’s biggest banks were hit with a total of 265 systems failures. RBS and Santander topped the figures with 18 computer glitches each. This was followed by Barclays (17) and Tesco Bank (16). Starling and M&S Bank were both trouble free. Gareth Shaw, head of money at Which?, said: “The industry is still failing to get to grips with alarmingly frequent glitches, which can cause real stress for people struggling to make payments.”

Citi fined record £44m for breaking the rules

Citigroup has been fined £44m for failing to submit complete and accurate regulatory reports to the Prudential Regulation Authority (PRA) due to deficiencies in its internal controls and governance. The failings relate to activities at three UK subsidiaries of Citigroup and though the governance and reporting failures did not cause Citi to breach liquidity or capital requirements they did lead to significant errors in its returns, the PRA said. The fine could have hit £63m but Citi was given a 30% discount for co-operating with the regulator’s investigation. It's the biggest penalty issued by the PRA.

New-look Virgin Money stores set for December launch

Virgin Money will open its first wave of "ground-breaking" new branches next month as it phases out the Yorkshire Bank and Clydesdale brands. The group will open the doors to newly re-branded Virgin Money flagship "stores" in Manchester, Birmingham and London in December. Virgin’s new stores, open to both customers and non-customers, are designed to be a place for entrepreneurs to co-work and create, with an offering including free coffee, a venue for events and concerts, and a social media studio for content creation.

UK mortgage lending slips

UK mortgage lending fell in October, according to the latest data from UK Finance, as buyers sat tight over the continuing economic and political uncertainty. Though mortgage approvals for home purchases by the main high street banks last month increased 3% and remortgage approvals soared 12.7%, gross mortgage lending across the residential market last month came in at £25.5bn, down 0.9% compared to October 2018.

Hope for ‘mortgage prisoners’

Housing and financial bodies are hoping to inform as many as half-a-million homeowners stuck on costly mortgages whether they are eligible for a better deal. UK Finance in conjunction with the Financial Conduct Authority and other trade bodies are developing ways for mortgage prisoners to expand their remortgage options.

Scottish BS chief makes the case for branches

Scottish Building Society CEO Paul Denton has signalled the mutual's commitment to opening branches with its newest branch opening on Glasgow's Queen Street. Mr Denton said: “I am treating branches as a point of presence within communities whereby they represent brand assurance, a marketing opportunity and they clearly are there for customer service.”

Bank launches top rate account for small firms

Shawbrook Bank has launched an easy access account for small businesses paying 1.05%. The move follows a Centre For Economics & Business Research study that shows small businesses are keeping £100bn sitting in business current accounts earning no interest. Mike Cherry, national chairman of the Federation of Small Businesses, says: “More competition from smaller banks is welcome.”

Colombian billionaire backs Metro Bank

Colombian billionaire Jaime Gilinski Bacal has taken a 4.28% stake in Metro Bank worth almost £15m. The investment will come as a relief to Metro founder Vernon Hill after the challenger bank suffered a tough year.

Lloyds to cut chief António Horta-Osório’s pay by £220,000

Lloyds Banking Group is planning to cut CEO António Horta-Osório’s pay by more than £220,000 while spending £20m on pay rises for the rest of its staff.


Westpac boss quits over money laundering scandal

Westpac boss Brian Hartzer has resigned after the bank was accused by regulators of major breaches of money laundering laws involving millions of international fund transfers, some of which were "high-risk” and possibly linked to child exploitation.

ECB seeks to develop own digital currency

European Central Bank board member Benoît Coeuré has said the Bank is considering whether to develop a digital currency as an alternative to cash.


SMMT: Close trading relationship with EU essential

UK car production could be cut by more than a third if the UK withdraws from the EU without an "ambitious" trade deal, the Society of Motor Manufacturers and Traders (SMMT) has warned. A no-deal Brexit would cost of more than £40bn in lost production by 2024 and result in 1.5m fewer cars being produced. SMMT chief executive Mike Hawes said falling back on WTO rules for imported components and car exports would result in a level of cost increases that the industry would not be able to absorb without prices rises and production cuts.

Audi to cut nearly 10,000 jobs in drive to slash costs

Audi will cut up to 9,500 jobs at its German production sites over the next five years, a move the carmaker says will free up €6bn for investment in electric vehicles and digital technologies.


Thomas Cook collapse costs Gatwick 600,000 passengers

Gatwick airport has said it could take a year or more for the traffic lost following the Thomas Cook collapse to return. Thomas Cook’s collapse stripped Gatwick of 50,000 passengers in the final week of September alone and is likely to cost the company 600,000 passengers this financial year. Overall, passenger numbers are up slightly and Gatwick hopes new routes to South America will benefit the company after the UK leaves the EU.


FCA bans promotion of mini-bonds to retail investors

The Financial Conduct Authority has announced a one-year ban on the marketing of mini-bonds to retail investors. The move follows the collapse of London Capital & Finance (LC&F) in January and the subsequent launch of probes into the mini-bond market. The ban will only apply to unlisted mini-bonds. The Serious Fraud Office is investigating LC&F’s collapse and the FCA has commissioned an independent review of its oversight of the firm. The ban on the promotion and mass marketing of speculative mini-bonds to retail consumers will take place from 1st January.

LSE gets support for deal

Shareholders have approved the London Stock Exchange’s £22bn takeover of Refinitiv. LSE said it was “on track” to complete the acquisition during the second half of 2020, with bankers, lawyers and other advisers expected to pocket more than £280m in fees for the deal. LSE chief executive David Schwimmer said the deal would increase the company's presence in the US.

Zopa can’t bank on winning a licence

The Times’ Katherine Griffiths says wobbles in the P2P sector do not help Zopa’s case when it comes to winning a full banking licence. The company needs to raise £100m-£150m in the next few days to support its full approval as a bank and has hired investment bankers to help it to raise the funds or find a buyer by next Tuesday.


De La Rue 'teetering on the brink'

De La Rue has shelved its dividend this year amid warnings that there is “significant doubt” on its ability to continue to operate. The banknote maker fell to a £9.2m loss in the six months to the end of September, from a £10.1m profit this time last year, while net debt ballooned from £107.5m in its 2018 half-year to £170.7m this time around.


Shaftesbury hit by Covent Garden writedown

West End landlord Shaftesbury took a near 20% writedown on the retail valuation its joint venture with Longmartin in Covent Garden this year. Profit after tax fell from £175.5m to £26m in the year ended September 30 due to the revaluation of its portfolio, which dipped 0.6% to £4bn overall, though net property income was up 4.5% to £98m. Shaftesbury increased its dividend for the year to 17.7p, up 5.4% on 2018.


Pets At Home profit jumps

Pets At Home has reported an 18.9% year-on-year increase in underlying profit before tax to £45m for the six months to 10 October, with group revenue rising 7.6% on a like-for-like basis to £546.3m, a 9.4% increase in overall sales growth. Like-for-like revenue for its veterinary business rose 6.4%.


Man City’s $500m stake sale breaks sports valuation record

Manchester City's Abu Dhabi-based owners have agreed to sell a $500m stake of City Football Group to US private equity firm Silver Lake in a deal that values the sports group at $4.8bn.


Goldman bullish on the UK economy

Goldman Sachs has taken a bullish position on the UK economy urging clients to buy up stakes in British firms. Goldman economists have upgraded their growth forecasts for the next three years, predicting a rise of 2.4% in the second half of 2020. For 2021 the bank is expecting growth of 2%, up from 1.6%, and in 2022 it has raised its forecasts from 1.8% to 2.1%, providing Brexit clarity and fiscal stimulus can be delivered. Goldman's economists also expect a modest recovery in global growth in 2020 adding that "downside risks to equity markets seem limited".

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