Chase to ban crypto payments
JPMorgan's UK bank, Chase, is banning its 1.6m UK customers from buying cryptocurrencies due to a surge in scams. Highlighting concerns over financial crime, the bank has told customers that “fraudsters are increasingly using crypto assets to steal large sums of money from people.” It added that customers would still be able to make payments through other banks but warned that they may not be able to get their money back. A Chase spokesperson said the bank has seen an increase in the number of crypto scams targeting consumers. Starting from October 16, customers will no longer be able to make cryptocurrency transactions via debit card or outgoing bank transfers. This move follows the restrictions imposed by NatWest, HSBC, and Nationwide earlier this year. The amount of money lost to crypto fraud has increased by 40% in the past year, surpassing £300m for the first time.
Close Brothers' profit halves
A strong second half of the year was not enough to stop merchant banking group Close Brothers' profit halving compared to the year before due to provisions related to legal finance specialist Novitas. In the year to July, operating pre-tax profit dropped 52% to £112m, down from £232.8m the year before. This mainly related to the £114.6m set aside for bad loans from Novitas, which Close Brothers acquired in 2017. Excluding the Novitas provisions, operating profit still fell year-on-year as its market making business Winterflood continued to struggle in difficult conditions. Impairment losses rose to £204.1m. Close Brothers' loan book grew 5% to £9.5bn and its asset management arm saw net inflows of 9% across the year.
EU banks meet global capital requirements ahead of deadline
European banks in the EU have largely met the stricter global capital requirements ahead of the 2028 deadline, with a shortfall of only €600m, according to the European Banking Authority (EBA). The global Basel Committee introduced additional capital requirements in 2017, and the EU, along with the UK and the US, is now incorporating these requirements into its rule books. The EBA's monitoring exercise of 157 banks across the EU at the end of 2022 found that they were implementing the Basel rules.
UBS signs MOU to explore collaborations
UBS has signed a memorandum of understanding with Industrial and Commercial Bank of China to explore collaborations in China and overseas markets. UBS has been keen to grow its footprint in China and the deal includes cooperation in asset management, wealth management, and investment and corporate banking. The agreement also covers product development and distribution, client coverage, global market trading, investment and financing, research, asset custody and exchange of expertise.
ANZ fined for misleading customers over credit card fees
Australian bank ANZ has been fined A$15m by the Federal Court for misleading customers about credit card fees. The bank failed to inform customers that their credit card account balances were lower than indicated, resulting in unexpected fees and interest when they took out cash advances. Over 186,000 accounts were charged an average of A$45 in fees and interest between May 2016 and November 2018, with some customers unfairly charged thousands of dollars. ANZ has already paid back A$8.3m to affected customers. The financial regulator emphasized the importance of clear and accurate information for consumers regarding their money and fees.
Wells Fargo and Centerbridge team up on $5bn private credit fund
Wells Fargo has partnered with asset manager Centerbridge to launch a $5bn private credit fund that will lend to mid-sized US companies.
FCA: Financial knowledge must improve
The Financial Conduct Authority (FCA) has said that consumers' knowledge of financial matters must improve if markets are to thrive. Sarah Pritchard, the FCA’s executive director of markets, said the City watchdog needs industry engagement in its review on advice and guidance boundaries to make the "most of futureproofing our new smarter regulatory framework." She said the FCA is prioritising regulatory reform through its advice and guidance boundary review, noting that, along with the Treasury, it has set out the principles that will guide the reform so that it can “create the environment” and “set the foundations” for the UK to “thrive.” Ms Pritchard said markets are more likely to thrive if there is confidence in them, adding that this can only be maintained if action is taken against fraud and those committing it.
FCA in big screen warning over speculative investments
The Financial Conduct Authority (FCA) has issued a warning to cinemagoers about the risks associated with speculative investments driven by hype. The regulator has created a cinema ad tied to Dumb Money, a film centred on the GameStop saga - which saw individual investors buying shares based on web-based message board tips, resulting in volatile share prices and losses for some investors. The FCA's InvestSmart campaign aims to encourage consumers to make better-informed investing decisions and the ad highlights the dangers of investing based on anonymous tips.
Negative media coverage blamed for slump in London floats
Clare Cole, director of market oversight at the Financial Conduct Authority (FCA), has blamed negative media coverage of businesses for contributing to a slump in London flotations. Suggesting that journalists could do more to improve the business environment, she said: "We are very negative about our entrepreneurs and our listed issuers." Analysis shows that the amount of capital being raised by companies launching themselves on London's markets fell to £593m in the first six months of this year. In the first six months of 2021, £9.4bn was raised by 47 London offerings. Julia Hoggett, chief executive of the London Stock Exchange, has called for an exploration of why private markets have become such an "incredibly attractive alternative" to public markets.
Meta pays £149m to surrender office lease
Meta, the owner of Facebook, has paid £149m to surrender the lease on a central London office block after two years. The social media group's UK division is handing back the keys to the eight-storey block near Regent's Park, which it took on in 2021. Meta had lined up an accounting firm to take on the lease, but the landlord, British Land, blocked the deal. Instead, Meta has paid the equivalent of seven years' rent to escape the lease.
Amazon sued by US in landmark monopoly case
The US Federal Trade Commission (FTC) has filed an antitrust lawsuit against Amazon, saying the tech giant restricts retailers on its marketplace from discounting, stifling competition. Other allegations include that Amazon gave preference to its own products on its platforms. The FTC said: “Left unchecked, Amazon will continue its illegal course of conduct to maintain its monopoly power.” David Zapolsky, Amazon’s general counsel, argued: “The practices the FTC is challenging have helped to spur competition and innovation across the retail industry,” adding that they have also produced greater selection, lower prices, and faster delivery speeds. The lawsuit follows a four-year investigation and federal lawsuits filed against Alphabet’s Google and Meta’s Facebook.
Think-tank: UK economy ‘will shrink for two years’
Adam Posen, president of Peterson Institute for International Economics (PIIE) think-tank, believes the UK economy will shrink this year and in 2024. The PIIE predicts that the UK will see a 0.3% drop in GDP this year followed by a fall of 0.2% in 2024. In contrast, the report predicts that the eurozone and the US are set to see growth. Mr Posen, a former member of the Bank of England’s rate setting Monetary Policy Committee, said factors related to the underlying weakness of the economy and the fallout from Brexit would leave the UK behind while most other developed economies expanded. Mr Posen said: “The UK won’t be in recession all of next year, but the recovery will be held back by higher-than-expected inflation and in response,” adding that the Bank “will need to keep interest rates higher for longer.”
Digitisation of shareholdings system could harm shareholder rights
Activists have warned that proposed digitisation of the UK shareholdings system could harm shareholder rights. The Treasury's Digitisation Taskforce has suggested that all retail investors be required to hold shares via an intermediary platform, which has raised concerns among investor groups. Certified shareholders who buy shares directly from a company currently receive paper certificates and have the ability to freely take corporate action. However, investors who use nominee accounts via a platform must go through the platform to exercise shareholder rights. Simon Rawson, deputy chief executive of ShareAction, fears the proposals could make holding companies accountable "virtually impossible" and reduce shareholder activism. ShareSoc and the UK Shareholder Association say the proposals potentially limit the ability of shareholders to communicate, gather support and campaign on issues where they feel the board is not acting in their interest. The taskforce's final report is due next year.
UK tech climbs to record value
Data from HSBC Innovation Banking shows that the total value of the UK’s tech sector has climbed to its highest ever level this year, hitting $996.8bn. This is up from $988bn last year. This means the UK’s tech sector is the third most valuable in the world, behind only the US and China. The report shows that investment into London-based start-ups slowed to $8.6bn in the first nine months of this year, falling from $19.2bn in the same period last year. Firms across the UK have raised $14bn, less than half of the $31bn raised in 2022.