BANKING
Hotline set to target bank scammers
More details have emerged about a hotline for banking customers who fear that they have been targeted by fraudsters imitating their bank, HMRC or other legitimate entities. Calling 159 will put callers directly through to staff at their banking provider as part of a 12 month pilot scheme being managed by Stop Scams UK, a new industry body backed by the Financial Conduct Authority and Ofcom. Barclays, Lloyds, NatWest, Santander and Starling Bank are all part of the new scheme so far, covering 70% of UK current account holders. TSB helped develop the 159 scheme and plans to implement the number from January 2022. Ruth Evans, chair of Stop Scams UK, said: “Criminals rely on forcing people into heat-of-the-moment decisions, and calling 159 is a simple, practical tool to break their spell. 159 is the result of an unprecedented collaboration between major banks and telecoms firms who are working with Stop Scams UK to put a stop to fraud.”
Hundreds of firms join bank legal battle
More than 800 small businesses have joined forces in a long-running legal battle against the Clydesdale and Yorkshire banks, with RGL Management, which is managing the legal action, adding 436 claims on behalf of 266 small firms against the lenders, which are now part of Virgin Money, and their former owner, National Australia Bank. This takes the total number of claims to 1,345, representing 823 small businesses. The case relates to fixed-rate tailored business loans offered to small businesses between 2001 and 2012, with RGL saying small firms were unfairly charged high break fees when they sought to end the loans early. It also claims interest rates on the loans were "deliberately and systematically" overpriced. A spokesman for Virgin Money said: "There is absolutely no merit in the allegations”.
Close Brothers' profit up 88%
Merchant banking group Close Brothers has seen profits surge in the first half of the year. Group income climbed by 10% in H1, while adjusted operating profit grew to £270.7m – with this marking an 88% increase on the previous year. Revenue grew across all departments, with the banking division seeing 10.9% loan book growth, while customer deposits grew by 12% and income in asset management also rose. Winterflood Investment Trusts, the company's securities arm, saw adjusted operating profit increase by 27% to £60.9m in the first half of 2021. Chief executive Adrian Sainsbury noted the challenger bank's “strong financial performance,” saying it had “made the most of the opportunities arising as the economy recovers from the effects of Covid-19.”
Banks praised for support measures
Halifax and Bank of Scotland have been awarded "mental health accessible" accreditation after improving their support measures in place for customers with mental health issues. Lloyds Bank secured similar recognition in 2020.
PRIVATE EQUITY
Goldman Sachs’ PE venture comes to market
Petershill Partners, Goldman Sachs’ private equity investment vehicle, made its London debut yesterday. Petershill shares were launched at 350p ahead of the initial public offering, valuing the company, which owns stakes in 19 private equity firms and hedge funds, at £4bn. Petershill is part of Goldman Sachs Asset Management and was founded in 2007 to invest directly in alternative asset managers and gain exposure to their predictable streams of management and performance income.
Blue Prism takeover agreed
US private equity firm Vista Equity Partners has agreed a £1.1bn takeover of Blue Prism, a British tech company that specialises in robotic process automation which uses software to carry out clerical office tasks. Blue Prism may face hurdles to securing approval from the 75% of shareholders who need to approve the deal, with concern over job losses as Vista plans to merge the firm with US-based data company Tibco.
INTERNATIONAL
ECB will not overreact on inflation
European Central Bank (ECB) president Christine Lagarde says a burst of inflation across Europe is temporary and will not lead the Bank to "overreact" by withdrawing stimulus or raising interest rates. Saying the increase is “mostly a phase of temporary inflation linked to reopening”, she added: “The key challenge is to ensure that we do not overreact to transitory supply shocks that have no bearing on the medium term”.
Regulators check banks' climate risk
The results of a study into the climate risk of Australia's five largest banks will be published next year, the Australian Prudential Regulation Authority has announced. The climate vulnerability assessment has been looking at the potential financial risks to large banks, the financial system and economy posed from climate change. The regulator is considering launching an annual climate risk self-assessment survey for banks and other regulated entities.
UniCredit launching new Italian wealth division
UniCredit has created an Italian wealth management and private banking division that will be led by Stefano Vecchi. The division will serve around 140,000 clients with more than €100bn in assets. Mr Vecchi will report directly to Niccolò Ubertalli, head of UniCredit Italy. Meanwhile, it has been announced that Mirko Bianchi is stepping down as head of the group's wealth management and private banking business.
AUTOMOTIVE
Moke’s Britain move
British car brand Moke is bringing production back from France to the UK after securing a Government grant.
FINANCIAL SERVICES
Labour calls for City focus in future trade deals
Labour has called on the Government to include more provisions for financial services in post-Brexit trade deals, with Shadow International Trade Secretary Emily Thornberry saying that the economic crisis would have been “substantially worse if it wasn’t for the preparedness and resilience of the financial services sector”. She told a TheCityUK event at the Labour conference that she does not see “sufficient plans” for the Government to build on the strength of the financial services sector in trade negotiations, adding: “That needs to change if we’re going to maximise the export potential for our services sector and reap the benefits it will bring the UK in jobs and growth”. Ms Thornberry urged Chancellor Rishi Sunak to push for the UK to regain access to EU financial services markets by brokering an equivalence deal with the bloc, noting that Labour believes securing regulatory equivalence for the financial services sector and mutual recognition of qualifications “should be top priority when it comes to trade policy”.
Watchdog has no plans to revive suitability review
The Financial Conduct Authority (FCA) has no plans to revisit its second suitability review of retirement advice, having cancelled it several months ago. Sarah Pritchard, executive director of markets at the FCA, said the watchdog does not have “any immediate plans” to revisit its suitability review, with the regulator instead focusing on other areas in the pensions landscape, such as ensuring consumers are receiving the right level of advice and guidance. She said this is one of three FCA priorities, alongside ensuring that products are designed to offer value for money and tackling scams. The FCA started quizzing advisers on their retirement income advice records at the beginning of 2020 but delayed the review as it shed "non-critical" work amid the pandemic. In September 2020 the FCA said it had dropped off its regulatory timetable and faced an indefinite delay, with it confirming the review had been cancelled in July this year.
FCA: No LCF and Blackmore whistleblowers
The City watchdog has not been contacted by whistleblowers in either the Blackmore Bond or the London Capital & Finance scandals, with Mark Steward, the Financial Conduct Authority’s (FCA) head of enforcement, saying it had not received reports from anyone it would have classed as a whistleblower under the Public Interest Disclosure Act, the legislation that governs how whistleblowers need to be protected. Speaking at the regulator's annual public meeting, Mr Steward said the FCA should have treated other intelligence it had received more effectively. He said “rigorous disciplines” that apply to the way the regulator handles formal whistleblowing under the Public Interest Disclosure Act “hasn't applied in the past to intelligence received from other third parties that is not formal whistleblowing intelligence.” He added that the FCA has “lacked a broad triage” for other types of intelligence it has received, insisting this is “absolutely something that is front and centre in the transformation agenda.”
Social media firms warned over 'dodgy' financial ads
The Financial Conduct Authority (FCA) has told social media firms they face action if they do not do more to prevent advertisements for "dodgy financial promotions". FCA analysis shows that consumers lost nearly £570m to investment scams in the 12 months to April, with banking industry body UK Finance warning that such fraud is a "national security threat". The FCA's head of enforcement Mark Steward pointed to adverts "feeding social media with dodgy financial promotions" and said the regulator is putting social media firms “on notice that we expect them to be involved in this process of protecting the community”. Warning that it is too easy for scammers to hide their identity and location online, he added: “This is why the gateway through social media needs to be regulated.”
Wise chief fined after defaulting on tax bill
Kristo Kaarmann, CEO of money transfer business Wise, has been fined for defaulting on his tax bill. HMRC said Mr Kaarmann has been hit with a penalty of £365,651.21 over £720,495 of unpaid taxes or duties in the year to April 2018, with the tax authority deeming him a “deliberate tax defaulter”. A spokesman for Mr Kaarmann played down the matter, suggesting he was late submitting his tax returns as he got behind on his administration. The Times’ Patrick Hosking says the matter has raised questions about Mr Kaarmann’s fitness and properness to head an authorised financial institution. It is noted that the Wise CEO is approved by the Financial Conduct Authority to carry out executive functions, according to the register of approved City workers.
REAL ESTATE
House prices still rising as stamp duty holiday deadline nears
Zoopla analysis shows that UK house prices have continued to rise in the months leading up to the end of the stamp duty holiday. The analysis shows that prices have risen 1.2% over the past three months, taking the average up to £235,000. Over the past year, prices across the UK are up by 6.1%. While some commentators had expected the property market to start to cool as the stamp duty holiday deadline of October 1 neared, Zoopla said that there had been “no sign of a cliff edge in demand” as the cut-off approaches. The Zoopla report also shows that the time it takes for a property to sell remains at record low levels, taking 27 days on average while pre-pandemic it would typically take more than 50 days to find a buyer. Looking ahead, Zoopla expects the property market to remain “busy compared to historical norms”, saying that this will see prices continue to rise but probably at a slower rate than in recent months.
RETAIL
Card Factory posts loss despite surge in revenue
Card Factory has reported a loss, despite a surge in revenue during the first six months of the year, with the greeting cards specialist reporting revenue growth in H1 FY2021/22 despite its stores being shut for more than 10 weeks during the period. The company reported a £6.5m loss in H1 with net debt remaining close to £100m.
ECONOMY
5-year RPI inflation expectations hit decade high
A measure of financial markets' medium-term expectations for inflation has risen to its highest level in more than a decade. The gauge, which focuses on the RPI measure of inflation used for British government bonds rather than the lower CPI measure targeted by the Bank of England, saw five-year forward inflation expectations rise to 3.9054% yesterday, up 3 basis points from Monday's reading. Analysis of historic data shows that the gauge previously had an end-of-month peak of 3.8689% in June 2008. It last averaged above its current level in February 2000.
Half of Brits expect economy to get worse
An Ipsos MORI survey for the Evening Standard shows that optimism around the economy has slipped in the last month. The poll found that 53% of respondents expect the economy to get worse over the next 12 months, with this up on the 39% who said the same in August, while 31% believe it will improve, down from 44% last month. This means the Economic Optimism Index now stands at -22 compared with +5 a month ago. The Standard notes that the poll of 1,008 adults was conducted before the petrol crisis but suggests “the storm had broken” over issues such as an upcoming National Insurance increase, higher energy bills and the removal of the £20 uplift to Universal Credit.
OTHER
FCA launches pay overhaul
The Financial Conduct Authority (FCA) has launched a consultation to overhaul staff pay, with chief executive Nikhil Rathi announcing that the regulator will look into reforming benefits and remuneration. Mr Rathi said he was "confident" that the reforms will "achieve a transformed FCA" and "make sure we are incentivising the right approach and performance and the right culture". This comes after FCA staff launched a campaign to unionise amid fears that changes to pay grades could reduce remuneration by up to 15%, with campaigners saying bosses at the City watchdog were planning to impose cuts by reducing pay, benefits and career opportunities on an "unprecedented scale".