BANKING
Chase account holders report transfer failures
The Sun reports on the Chase customers who’ve seen funds disappear when trying to transfer funds to their account from a different bank. Because Chase does not accept payments via Chaps (Clearing House Automated Payment System); transfers made from banks using this method have simply disappeared. One Barclays customer lost access to £85,000 until the Telegraph got in touch. Another customer tried to pay in Premium Bond winnings to his Chase account. But National Savings & Investments (NS&I), which runs the prize draw, was unable to verify the account with the third party credit agency it uses. The Sun notes that Chase also does not support Confirmation of Payee - a protective measure designed to help stop customers from losing millions of pounds to bank transfer scams.
Amigo plans to restart lending under new brand
Amigo Loans is planning to launch two lending products, a personal loan and a guarantor loan, under a new brand, RewardRate. The move comes after the UK subprime-focused company was forced to pause lending following a deluge of claims that it failed to properly check whether its loans were affordable. Last month it was granted High Court approval for a rescue plan which included compensation for past customers. The new products will be subject to approval by the financial watchdog, the Financial Conduct Authority.
Hadleigh locals reveal dismay at branch closure
The BBC talks to local businesses in Essex about what the closure of the last bank on their high street will mean for them. Lloyds Bank is due to close its Hadleigh branch in September. A coffee shop owner says bank closure mean fewer customers and more difficulties with sorting out financial problems. Jade Uko, from the Federation of Small Businesses, says easy access to cash is still important. She adds: "Town centres are an eco-system. Access to cash needs to be protected not just for the consumer but for small businesses.” A spokesman for Lloyds Bank, which is closing 60 branches across the UK, says: "We've seen far fewer people visit our Hadleigh branch over several years, with customers now choosing to do their banking in different ways."
'Worrying rise' in crypto scams - Santander
Santander UK has reported a worrying rise in cryptocurrency scams which falsely claim to be endorsed by celebrities. Chris Ainsley, the bank's head of fraud risk management in the UK, said people are persuaded to click on links run by fraudsters after seeing celebrities appear to advertise cryptocurrency online.
PRIVATE EQUITY
PE swoop on listed European firms runs into trouble
Private equity-led bids for listed companies in Europe hit a record $73bn in the first six months of this year to date, more than double volumes of $35bn in the same period last year, according to Dealogic data. However, prospects for deals in the second half look less promising as target companies and their shareholders are increasingly bristling against cheap punts which they say fail to reflect fair value of their underlying businesses. "In theory it's the right time to look at take-privates as valuations are dropping. But the execution risk is high, particularly in cases where the largest shareholder holds less than 10%," said Chris Mogge, a partner at European buyout fund BC Partners.
INTERNATIONAL
European bank stocks are priced for an economic depression
The Telegraph’s Ambrose Evans-Pritchard and Jeremy Warner explain why European banking stocks are so cheap at the moment, noting massive shorts put on Spain’s Banco Santander and Banco Bilbao Vizcaya Argentaria, Italy’s Intesa Sanpaolo, and France’s BNP Paribas by Bridgewater. The hedge fund is also shorting insurers AXA and Allianz, along with fossil energy and semiconductor stocks. The suggestion is that as inflation forces the ECB to halt purchases of Club Med bonds, the covert bail-out of Italy and Spain has quietly come to a halt. Elsewhere, Germany’s regional cooperative and savings banks have seen margins erode due to negative rates, which have also undermined the traditional banking model of lending to companies for productive investment. Messrs Evans-Pritchard and Warner says European bank stocks are priced for an economic depression and the doom-loop witnessed a decade ago is lurking just around the corner. Meanwhile, HSBC estimates that European equities could see a drop between 6.4% and 8.5% in earnings per share this year compared to consensus estimates of a rise of more than 11%, because the ECB remains behind the curve in tackling inflation.
Goldman Sachs expects major losses from consumer unit
Goldman Sachs expects its consumer unit will record losses of more than $1.2bn this year, due to the addition of new business lines, pandemic effects and a surge in costs. The bank said it will also be forced to set aside more provisions for loan losses as the economy sputters.
Credit Suisse ready for ‘good risk opportunities’, says new risk chief
David Wildermuth, the new chief risk officer at Credit Suisse, has said the lender is preparing to take on riskier business after having to rein in risk-taking following the Greensill Capital and Archegos disasters.
Citi tech tweaks halt UK online ETF purchases
Changes to tech systems at Citigroup forced the suspension of the online purchase of exchange traded funds for UK customers, who were instead having to place orders over the phone.
Santander considers bid for Citibanamex
Santander has hired Credit Suisse and Goldman Sachs to look at a possible bid for Citibanamex, Citigroup's retail bank in Mexico. The Spanish bank had previously submitted a non-binding bid for Citibanamex, sources say.
AUTOMOTIVE
Lotus commits to only making new electric cars from 2023
Lotus has pledged that all new mainstream vehicles will be electric from next year. The commitment was made under its new Environmental, Social, and Governance (ESG) Charter. Matt Windle, managing director at Lotus Cars, said the move meant “Lotus will become the first established sports car maker in the world to have a fully electrified product range.” The automaker also said that it will become certified as a net-zero business through Science-Based Target initiatives and promised to put its employees at the heart of sustainable growth initiative.
Government backs British lithium refinery hopeful
The Government has invested in Livista Energy, a company looking to set up one of the first lithium refineries in Europe. Britain has deposits of lithium and start-ups Cornish Lithium and British Lithium are exploring commercial mining. The funding for Livista came as part of a £43.7m package of co-investment from the Government and the automotive sector for 21 projects aiming to decarbonise the car industry. The move is also designed to reduce Britain's reliance on China for what is a key electric battery component.
FINANCIAL SERVICES
Jupiter names new chief as Andrew Formica prepares to exit
Andrew Formica, the CEO of Jupiter Fund Management, is retiring after only three years at the London-listed fund group. He will be replaced by the asset manager’s new chief investment officer, Matthew Beesley. Jupiter has averaged net outflows of £4bn a year for the past four years.
Travelex banking on a bounce back
The foreign currency exchange Travelex plans to hire more than 1,000 workers in the UK after a pandemic rescue deal that saw 1,300 jobs axed. The company said it was hiring across its retail, wholesale and head office operations following new contract wins and the rebound for the UK travel industry following the end of COVID restrictions.
LEISURE & HOSPITALITY
Cost of living crisis hits outgoing UK national lottery operator
Camelot has revealed a fall in sales amid signs players had "tightened their belts" because of the mounting cost of living crisis. The outgoing National Lottery operator revealed that sales fell 3% to £8.1bn in the year to 31 March with most of the decline due to a 7% fall in sales of National Lottery Instants - down £240m to £3.4bn.
MANUFACTURING
Government clears path for sale of Meggitt to US firm
The Government has said it is likely to accept the national security concessions made by Parker-Hannifin to satisfy concerns about its £6bn takeover of British defence company Meggitt, which is a key supplier for civil and military aircraft and provides parts to the RAF Typhoon jet fighter. The sale is one of a number of US takeovers in the British defence industry, many of which have drawn national security concerns.
RETAIL
Walgreens shelves plans for Boots sale
Walgreens Boots Alliance has abandoned plans to sell high street chemist Boots, stating that no bidder had made an offer that "adequately reflects" what it believes the business is worth. Walgreens is understood to have been seeking up to £7bn for Boots, however it told shareholders yesterday that market turbulence had "severely" curtailed the availability of financing for buyers.
ECONOMY
Chancellor rebuffs demands for cut to corporation tax
A scheduled rise in Corporation Tax in the autumn Budget will go ahead, the Chancellor has said, resisting a call from Tory backbenchers and reportedly Boris Johnson too for the increase to be scrapped. The levy is set to rise from 19% to 25% next year. But Rishi Sunak is looking to use some of the money raised to create a major new tax incentive to drive investment into the UK. Meanwhile, Jacob Rees-Mogg has said cutting taxes immediately may reduce inflation. The Brexit Opportunities Minister cited President Reagan’s move to cut taxes in a high interest rate environment in order to bring public expenditure under control – because it was unaffordable. The increased tax take and boost to the economy the tax cuts brought soon meant the budget deficit in the US got under control, Rees-Mogg explained.
OTHER
Central bankers face a challenge to monetary policy orthodoxy
Sir Howard Davies, the chairman of NatWest Group, writes on the challenges facing central bank governors today. He says that as inflation soars, the Fed, ECB, Bank of England and others are more regularly challenged than in the past. But monetary policy makers should not assume their reputations will recover as well as they have done in the past. Governors are even facing criticism from their immediate predecessors, as well as politicians, and will need to “marshal their defences more effectively” going forward “and should not assume that central bank independence is the end of monetary history.”