BANKING
Mortgage approvals drop
New figures from UK Finance have shown that the number of mortgages approved by major High Street banks has fallen amid fears of a stagnant housing market. A total of 80,127 loans were handed out in November - down 10.6% on a year earlier. The amount lent dropped 2% to £23.1bn. The average property now costs £231,095, up 2.7% in a year - the smallest increase since July 2013. Meanwhile, separate research has shown that lending to businesses over the past 12 months dropped by 1.7% and business deposits at banks grew by 1.6%, while the £11.3bn of credit card spending last month was 7.5% higher than November 2017.
Zopa considers stock market listing
Zopa, Britain's oldest peer-to-peer lender, has revealed plans for a future stock market flotation as it looks to take on the high street banks. Chief executive Jaidev Janardana said the group would consider the move in two or three years' time to help it expand after securing a banking licence. Mr Janardana said Zopa can become a "major force in retail banking" and can offer a better alternative to the major players, by cutting out product complexity.
Changing face of Britain’s banks
Helen Cahill in the Mail looks at how women are set to seize the top jobs at the UK’s biggest banks. TSB is set to appoint Debbie Crosbie as its new chief executive in 2019, the first time a woman has held the role at the bank. Meanwhile, other banks have lined up female leaders-in-waiting including RBS, Santander UK and Lloyds.
Banks trim credit card transfer deals
Research by MoneyComms has revealed that the length of interest-free credit-card deals has fallen by more than a third at some banks. Halifax offered 43 months at 0% on balance transfers in January last year. Now, it offers a maximum of 28 months. MBNA, Barclaycard, Lloyds and Sainsbury's Bank have also reduced their terms considerably.
Starling criticised over security
Starling Bank is reviewing how it stores sensitive information after a customer complained that his passport details were shared with him on a web link. Ben McRae accused the mobile-only bank of failing to take security seriously. Starling denied there had been a data breach but said it would examine its use of "private links".
Ringfencing rules could leave British banks at a disadvantage
Experts have warned that Bank of England rules for lenders which came into force yesterday and directly affect Barclays, HSBC, RBS, Lloyds Banking Group and Santander could put UK banks at a disadvantage.
Fund manager sets sights on RBS and Lloyds
Neuberger Berman has disclosed short positions against Lloyds and RBS. The fund has taken out a $3.3m (£2.6m) bet against a host of banks, with Lloyds being one of the largest banking shorts in the fund's portfolio. Other banks that have been shorted include Wells Fargo, Spain's BBVA and Italy's Unicredit.
Central banks’ embrace of blockchain remains too timid
Eswar Prasad, a senior fellow at the Brookings Institution, calls on central banks to innovate and adapt to new financial technologies, saying embracing distributed ledger technology “could transform modern financial systems.”
Family BS deal pays 1.45%
Family Building Society has launched Premium Saver 2, an account paying 1.45% - close to the market-leading 1.5% from Marcus by Goldman Sachs. Savers using the new Family account can only add to it until February 13.
PRIVATE EQUITY
Franklin Square loan fund plunges after switch to KKR
Franklin Square Investment Corp - a $2bn loan fund once managed by Blackstone - has lost over a quarter of its market value since KKR took over management of the vehicle.
INTERNATIONAL
Deutsche chair: No merger or bailout needed
Chairman Paul Achleitner insists Deutsche Bank can survive without a merger or a taxpayer bailout. He said the bank has a “very strong capital basis compared to its competitors,” and suggested that despite speculation it is unlikely that Deutsche will merge with rival Commerzbank. On suggestions the bank could need financial support, Mr Achleitner said: “This scenario will not come about.”
US banks to cut London-EU commuting support for staff after Brexit
Large US banks planning to relocate hundreds of staff in the first phase of Brexit have reportedly warned employees that commuting from London to European cities is “not a long-term option”.
Banks urged to step up war on money laundering
The ECB has said that banks need to step up their efforts in the battle against money laundering and accept lower profits in return. Klass Knot, an ECB board member, said: “Banks need to adhere to rules and laws under any circumstance. This has its costs, automatically lowering profitability.” He said banks have tried to minimise compliance costs in order to keep profits higher. Valdis Dombrovskis, the European Commission’s Vice-President for the Euro, added that the EU needed to step up its response on money laundering after a series of scandals, including those at Danske Bank and Deutsche Bank.
European banks suffer torrid year
European banking shares have suffered their worst year since the eurozone debt crisis, sparking concerns that the struggling sector could become a brake on the economy next year. An index tracking Europe's banks has plunged 35% since January to hit its lowest level since the aftermath of the Brexit vote with Deutsche Bank and Commerzbank more than halving in value. Eoin Murray, head of investment at Hermes, said a combination of deteriorating bank profits, tighter post-crisis regulation, central banks beginning to suck liquidity out of financial markets, and a flattening yield curve have weakened banks across Europe.
China to end the year as worst performing stock market
China was the world’s worst-performing major stock market in 2018, shedding some $2.3trn in value, after a trade dispute with the US and a crackdown on shadow banking.
Global investors sidestep Indian bankruptcy with rescue finance
The FT looks at how global investors such as Bain Capital and BlackRock are lending to companies in India before they are forced into a new, rigorous bankruptcy process.
AUTOMOTIVE
£100bn wiped off world’s top carmakers
More than £100bn was wiped off the value of the world's biggest listed carmakers last year. The biggest loss was recorded by Mercedes owner Daimler, which suffered a £22bn drop after two profit warnings. Ford lost £13bn, while Volkswagen fell by almost £12bn.
AVIATION
UK’s airports paid £6bn in dividends over past decade
New research by the FT has revealed that investors in the UK’s busiest airports received £6.7bn in dividends in the past decade, despite those airports issuing billions of pounds in debt.
FINANCIAL SERVICES
FCA targets Bitcoin dealing
The Financial Conduct Authority is currently investigating 18 companies in connection with cryptocurrency transactions, the Telegraph reports. Figures released to the paper show nearly 70 probes have been launched in total. Christopher Woolard, the executive director of strategy and competition at the FCA said the regulator, the Treasury and the Bank of England would all be addressing the threat in the coming months and encouraging more "beneficial innovation".
Sharp fall in FCA fines
Fines levied by the Financial Conduct Authority fell sharply last year. The watchdog penalised firms a combined £60.5m in 2018, down by almost three quarters on the £229.5m the previous year. It was the second smallest haul by the City regulator since the £35m taken in 2009. The sharp drop reflected the huge £163m fine imposed on Deutsche Bank in 2017 over anti-money-laundering rules, which accounted for almost three quarters of the total that year.
UK financial regulator to overhaul its treatment of whistleblowers
The FCA is to overhaul how it deals with whistleblowers following complaints from people who have tried to report wrongdoing at banks and other companies in the financial services sector.
Standard Life Aberdeen sees heavy outflows
According to new data, the world’s largest money managers have seen billions pour out of their funds in their worst year since the financial crisis. Standard Life Aberdeen finished the year as the second-worst-performing stock on the FTSE 100 and revealed in August that £16.6bn had left the company in the first half of the year. Meanwhile, in the U.S., BlackRock, the world's largest money manager, has shed a quarter of its value, $14bn (£11bn), while Invesco's shares have dropped by 53%.
Payday lenders could collapse
Debt campaigners have warned that more payday lenders could follow Wonga and collapse in 2019. Figures from the FCA show that new affordability complaints made against "payday or instalment loan" firms are expected to soar by 167% in the next 12 months to 50,000 - up from 18,378 in 2017/18.
More financial turmoil ahead
Fund manager Crispin Odey has predicted that more financial turmoil will take place in 2019 as political chaos grips stock markets. Mr Odey said the rise of “populism” would continue to send jitters through the City after a rout that has seen the FTSE slump more than 10% since October.
Funding to boost app
Fintech start-up Nexves has secured funding from Scottish Edge as it looks to launch an app which works on the basis of Open Banking. It says the service, which founder Chris Herd has described as the "Netflix of financial services", will enable users to log in with their existing bank details and access services designed to help them invest smartly and reduce spending. Nexves is currently participating in accelerator programmes through Royal Bank of Scotland and Elevator.
HEALTHCARE
Insurance is not the answer for UK social care woes, says insurer
Legal & General has warned that insurance is not a solution to Britain’s growing care crisis. Boss Nigel Wilson explained that private long-term care insurance had failed in other areas of the world.
MEDIA AND ENTERTAINMENT
Sony/ATV music boss predicts dealmaking surge
Martin Bandier, chief executive of Sony/ATV, says investment and consolidation in the music sector is set to continue, with private equity groups and other investors seeking lucrative copyrights that generate revenue.
Reed Elsevier considering approach for rival
Reed Elsevier is reportedly considering a £200m takeover of events firm Mack Brooks. Another potential buyer is Belgian private equity firm Core Equity.
ECONOMY
Value of London listings fell by £5bn in 2018
The value of listings on the London Stock Exchange fell by a third last year. The number of businesses which went public in London dropped from 108 to 79 during 2018, while the amount of money raised from stock market floats plunged £5.5bn on the previous year to £9.6bn. Although activity slowed in 2018 amid fresh fears over Brexit, the LSE said it listed over three times more international companies than any other European exchange. However, IPO advisers say they expect the first three months of this year to be “sparse” in the run up to Brexit.
Optimistic Britons defy gloomy outlook
Half of Britons believe that their personal finances will remain the same or improve in 2019, a poll for the Times has found. Asked about their financial prospects for the coming year, 13% believe they will get better and 37% say they will remain the same. However, the number who believe that their financial situation will worsen has grown by three percentage points from 37 at the end of 2017 to 40 in the latest poll, with “don’t know” on 10%.
OTHER
Damehood for Gadhia
Jayne-Anne Gadhia, the former boss of Virgin Money, has been recognised in the Queen's New Year's honours list. Ms Gadhia is to be made a Dame for her contribution to financial services and women in the finance industry. Donald Brydon, the former chairman of the London Stock Exchange, has been awarded a knighthood. Tom Blomfield, founder and chief executive of Monzo, has been honoured with a CBE.