BANKING
NCA’s bank signature fraud inquiry ‘on track’
The National Crime Agency (NCA) says it is conducting “ongoing inquiries” into allegations of widespread signature forgery at UK banks. Rob Jones, director-general of the agency’s National Economic Crime Centre, said there had been a “thorough review” of evidence that had prompted further action, adding that the NCA, Serious Fraud Office and Financial Conduct Authority had “identified a number of individuals we wish to speak to in pursuit of our inquiries”. This came in a written response to a letter from Mel Stride, chairman of the Treasury Select Committee, who last month sought an update on the agency’s work, with the committee and the All-Party Parliamentary Group on Fair Business Banking having expressed concerns about claims that several banks have falsified signatures. An NCA spokesman said: “We are continuing to assess the material submitted and information obtained following preliminary inquiries … We are making a thorough assessment to determine whether there are grounds for a criminal or regulatory investigation.” A spokeswoman for UK Finance said: “Forgery is a criminal offence and banks will continue to be vigilant against such types of fraud. We urge anyone with evidence of forgery ... to report it to their bank as well as the relevant authorities.”
Swift set to disconnect Russian banks
Seven Russian lenders could be cut off from the Swift network under proposals being discussed as part of sanctions being rolled out following the invasion of Ukraine. Swift says it is waiting to see which banks authorities want disconnected from its global financial messaging system after the EU, US, Britain, France, Germany, Italy and Canada agreed to ensure that selected Russian banks are removed to harm their ability to operate globally. Russia's second-largest bank, VTB Bank, could be removed from Swift, as could Vnesheconombank, Rossiya Bank, Sovcombank, Bank Otkritie, Novikombank and Promsvyazbank. The EU has already sanctioned executives from the banks over Russia's invasion of Ukraine. Elsewhere, the EU’s Single Resolution Board says the Austrian operations of Russia’s biggest lender, Sberbank, will go into insolvency while its Croatian and Slovenian units are being transferred to new owners. Meanwhile, European Commission President Ursula von der Leyen has said that the EU is targeting Russia's "financial system, its hi-tech industries and its corrupt elite", adding that sanctions would "take a heavy toll on the Russian economy and on the Kremlin" and help end the financing of the war.
Tesco Bank to close Isle of Man credit card accounts
Tesco Bank has informed 1,200 people on the Isle of Man who use Tesco Bank credit cards their accounts will be closed later this year. Tesco said it needed to avoid the risk of providing financial services to non-UK customers following Brexit.
NatWest and RBS's banking apps suffer outage
NatWest and RBS's banking apps suffered a two hour outage on Tuesday. Thousands of users reported issues with the NatWest app - 75% said they couldn't login to the mobile app, 24% were having problems with online banking, and 1% reported issues with transferring funds.
PRIVATE EQUITY
PE consortium decide against Boots bid
Sky News reports that a consortium comprising Bain Capital and CVC Capital Partners decided against submitting an offer for Boots last week. The decision came after months of work undertaken by Bain and the involvement of Dominic Murphy, a CVC partner who has been an instrumental figure in Boots' ownership over the last 15 years.
INTERNATIONAL
Profits up as banks reduce credit loss reserves
US banks saw their profits jump nearly 90% in 2021, according to the Federal Deposit Insurance Corporation (FDIC). Banks reported $279.1bn in profits in 2021, up $132bn on 2020, with the increase due mainly to economic growth and banks reducing money set aside to protect against credit losses amid the pandemic, which fell by $163.3bn in 2021. FDIC analysis shows that banks reduced their credit loss provisions across all four quarters of 2021. Martin Gruenberg, FDIC’s acting chairman, has cautioned that banks still face a number of headwinds including rising interest rates, highlighting that higher rates could weigh down real estate and impact borrowers' ability to repay.
JP Morgan invests in blockchain analytics firm
JPMorgan has invested in blockchain analytics firm TRM Labs, joining a growing list of payment industry firms including Paypal Ventures, Visa and American Express that have invested in the firm which monitors crypto transactions for suspicious activity and traces the movement of illicit funds. The announcement comes less than a week after BNY Mellon announced a partnership with Chainalysis, a compliance and blockchain analytics firm which also tracks illicit activity taking place on the blockchain.
AVIATION
Boeing suspends Russian airline support
Manufacturer Boeing is suspending parts, maintenance and technical support for Russian airlines following Russia's invasion of Ukraine.
FINANCIAL SERVICES
FCA offers staff 5% pay rise
The Financial Conduct Authority (FCA) has offered workers a new deal as it looks to resolve a long-running dispute over pay, saying it will increase current proposed pay rises and give workers a one-off cash payment. Under the plans, some of the City watchdog’s lowest paid employees will see a wage increase of at least £4,300, while workers that meet performance targets will get a £5,500 pay increase. Average pay across the FCA’s workforce will rise 7% this year and 12% over the next two years. The regulator had been in discussions with staff over the structure of the new employment package, with FCA staff bonuses set to be scrapped from next year under a pay structure is designed to link wage increases to performance. Unions have spoken out over the proposals, saying some staff face significant pay cuts once bonuses are removed.
Mastercard and Visa cut Russian banks from their networks
Visa and Mastercard have blocked multiple Russian financial institutions from their network, complying with government sanctions imposed over the invasion of Ukraine. The US sanctions require Visa to suspend access to its network for entities listed as Specially Designated Nationals. It means that clients at three of Russia's 10 largest banks - VTB, private lender Sovcombank and central-bank-owned Otkritie - can no longer pay with ApplePay and GooglePay services.
Abrdn reports first revenue rise since merger
Abrdn has reported an increase in fee-based revenue for the first time since the merger of Aberdeen Asset Management and Standard Life in 2017. As part of its full year results, the fund house formerly known as Standard Life Aberdeen posted a 6% rise in fee-based revenue to £1.5bn in 2021. This drove adjusted operating profit up 47% to £323mn, compared with 2020, and pre-tax profit rose 33% to £1.1bn.
AIG steps back from coal, Arctic energy underwriting
AIG has said it will no longer provide underwriting services and investments for the construction of any new coal-fired power plants, thermal coal mines or oil sands. The company also said it would stop providing insurance cover and investments for any new Arctic energy exploration activities.
UK moves to regulate minibonds in capital markets shake-up
The Government has said that it will regulate minibonds in the same way as shares, as it outlined plans to make its capital markets more appealing to investors.
Archegos in settlement talks with banks
Archegos Capital Management is reportedly in talks with global banks to avoid a legal battle that would expose details of the deals that led to the family office's collapse last year. The potential legal battle is focused on swaps contracts agreed between the banks and Archegos at a time when the practice of block trading was under scrutiny from regulators in the US.
LEISURE & HOSPITALITY
888 fined £9.4m and handed Gambling Commission warning
Gambling firm 888 has accepted a £9.4m fine from the Gambling Commission, following social responsibility failings, with the industry watchdog also issuing an official warning over the firm’s conduct and ruling that it must undergo extensive independent auditing. The failings include not effectively identifying players at risk of harm. The company also failed to carry out proper ‘source of funds’ checks to prevent money laundering.
MANUFACTURING
Manufacturers growth picks up in February
The UK’s manufacturing sector has grown at its fastest pace in seven months as demand increased and supply chain delays and raw material shortages eased. The IHS Markit/CIPS Purchasing Managers’ Index rose to 58 for February, up from 57.3 in January on an index where a score above 50 represents growth. While manufacturing output and new orders from UK-based customers rose across all sub-sectors, new export business fell for the fifth time in six months due to ongoing pandemic restrictions and Brexit-related issues. Around 64% of respondents said they believed production would increase over the next 12 months, while the report also shows employment increased for the 14th consecutive month.
REAL ESTATE
Mortgage approvals hit highest rate since July
Mortgage approvals for house purchases rose in January, according to Bank of England figures, with 73,922 mortgage approvals recorded. This is the highest total since July 2021, when 75,900 mortgages were approved, and exceeds the 12-month pre-pandemic average of 66,700 logged in the period to February 2020. Analysis by Savills shows that mortgage approvals in the opening month of 2021 were 30% below a previous peak seen in November 2020. The value of mortgages approved was up 4% between December 2021 and January 2022. Lenders borrowed £226,673 on average, with this up slightly on December’s £226,091 and 3.4% higher than January 2021’s total. Overall, £5.9bn was borrowed, outdoing the £4bn recorded in December and the pre-pandemic average of £4.3bn. Commenting on the increase in approvals, Nicholas Christofi of Sirius Property Finance said: “What goes up must inevitably come down, but it certainly seems as though we’re yet to hit the ceiling where mortgage approvals are concerned.”
ECONOMY
Borrowing falls back in January
Bank of England data shows that borrowing declined in January, with borrowing using credit cards, personal loans and overdrafts totalling around £600m compared to £800m in December. The annual growth of consumer credit borrowing accelerated to 3.2% in January, up from 1.5% in December. This marked the highest annual growth rate since March 2020, when the increase was 3.7%. The data shows that the effective rate on new personal loans fell by six basis points, to 6.21%, while the effective interest rate paid on individuals’ new time deposits with banks and building societies rose by 31 basis points to 0.67%. Large businesses' borrowing from banks rose to £1.7bn in January, while SMEs repaid £800m. Meanwhile, households deposited £7.8bn into banks, building societies and NS&I accounts. This was lower than the £9.4bn per month average seen over the previous year but higher than the pre-pandemic average of £5.5bn.
OTHER
Investment in small London firms passes £10bn
Equity investment into London’s smaller firms surged past £10bn in the first three quarters of 2021, according to figures from the state-owned British Business Bank. The total was up by 152% in the first nine months of the financial year, surpassing the £5.8bn seen across the whole of 2020. The report shows that smaller businesses in London accounted for 70% of total UK investment. Across the UK, £14bn was invested over the same period, a 130% increase on 2020. Challenger and specialist banks like Starling and Monzo saw a record share of the bank lending market at 51%, with this up from 32% in 2020.