BANKING
Banks concerned over higher contactless payment limit
Banks have reportedly raised concerns over an expected increase in the contactless payment limit, saying that an increase from £45 to £100 may increase the risk of fraud. The new limit is expected to be announced by the Chancellor today but a number of lenders have urged ministers and regulators to stagger the increase. They have also suggested that there should be a limit on the number of times cards can be used without a pin on a single day. With a surge in contactless payments amid the coronavirus pandemic, the Financial Conduct Authority announced it would open a consultation into lifting the limit to £100 in January, having already increased the limit from £30 to £45 last April. UK Finance figures show that contactless payments accounted for 64% of all debit card transactions and 46% of credit card payments in September.
Barclays faces shareholder showdown over climate issues
A shareholder resolution has been filed for Barclays’ AGM calling for financing and exposure to fossil fuels to fall in line with the Paris Agreement’s climate goals. The resolution comes as scrutiny on financial institutions increases before the United Nations COP26 Climate Summit later this year, with a similar resolution already targeting HSBC. Environmental lobby group Market Forces, which initiated the motion, said that despite several alterations to policy related to climate change made after last year’s AGM, Barclays “still has not demonstrated that its provision of financial services – particularly in regard to the coal, oil and gas sectors – is aligned with the Paris Agreement”. Barclays is Europe’s biggest financier of fossil fuels and the seventh largest in the world.
Privacy fears over wellness banking
The Mail’s Rosie Taylor looks at wellness banking, an initiative that encourages responsible spending while improving wellbeing by rewarding customers for making healthier choices. Noting concerns over privacy issues linked to the data required for such a system to work, she notes that the Longevity Card and MasLife – two new online wellness banks - insist they will never share or sell health, fitness or spending data with third parties.
PRIVATE EQUITY
Buyout firm executives make millions in 2020
Blackstone’s Stephen Schwarzman took home $610m from dividends and compensation during the past year, a regulatory filing has shown, with second-in-command Jonathan Gray receiving $216.1m and Apollo Global Management chair Leon Black taking $185.2m. Meanwhile private equity executives Henry Kravis and George Roberts of KKR were paid $81.3m and $85.4m respectively.
INTERNATIONAL
Canada's mortgage rates rise
Canadian mortgage rates are climbing for the first time since before the coronavirus outbreak. The lowest rate for a five-year fixed rate mortgage, the most common mortgage in Canada, climbed by 25 basis points last week to 1.64% - the first increase since January 2020. Mortgage rates had been trending lower in since the Bank of Canada cut its benchmark interest rate to a record low of 0.25% last March in an effort to support the economy during the pandemic.
AUTOMOTIVE
FCA drops Lookers case
The Financial Conduct Authority (FCA) has ended an investigation into the sales practices of car dealer Lookers, saying that while a probe into possible mis-selling of financing packages was to be dropped, it had “made its concerns clear relating to the historic culture, systems and controls of the group”. Lookers said in a statement: “The board fully accepts the FCA’s comments and is committed to continue the progress made to date in transforming both culture and the customer experience”.
Volvo announces electric ambition
Volvo is to switch to an all-electric range within 10 years, with the Geely-owned firm’s chief executive Håkan Samuelsson stating: “I am totally convinced there will be no customers who really want to stay with a petrol engine.” This comes after other manufacturers made similar pledges, with Ford Motor saying its line-up in Europe would be fully electric by 2030, while Tata Motors subsidiary Jaguar Land Rover said the Jaguar brand would be converted by 2025.
AVIATION
Budget carriers suffer amid travel restrictions
Ryanair has reported that just 500,000 people flew on its aircraft last month, while rival budget carrier Wizz Air saw passenger numbers fall 87% to 380,000 passengers.
CONSTRUCTION
Taylor Wimpey earmarks £125m for fire safety improvements
Taylor Wimpey has set aside £125m to carry out other fire safety work on its apartment buildings after significant shortcomings were revealed in the wake of the 2017 Grenfell fire. The housebuilder said the fund would support fire safety work for leaseholders in apartment blocks built in the past 20 years.
FINANCIAL SERVICES
Lord Hill: City must break from EU rules
Lord Hill’s landmark review into stock market rules says Britain should use Brexit as an opportunity to overhaul regulations, cutting red tape and allowing company founders to retain more power. Lord Hill, former EU commissioner for financial services, said Brussels is unlikely to grant financial institutions wide-ranging access to its market through the equivalence regime, warning that “sitting here, doing nothing and hoping that somehow, one day the Europeans will give us what we want … is a route to being salami-sliced.” The review makes 15 recommendations, including allowing companies with a premium listing to adopt dual class structures under which founders’ shares carry more voting power than ordinary shares. It also recommends reducing the free float requirement so that a minimum of 15% of shares must be in public hands instead of the current 25%. Rules on special purpose acquisition companies should also be loosened, argues Lord Hill, who also says the UK should move away from EU regulation on the information companies must disclose when floating shares or issuing new capital. The Financial Conduct Authority aims to publish a consultation on the review by the summer, with new rules expected by late 2021.
FCA to ban cold calling from funeral firms
The Financial Conduct Authority (FCA) wants to ban pre-paid funeral plans providers from cold calling, with the financial regulator launching a consultation on how it plans to regulate the sector once it falls under its remit from July 2022. As well as blocking unsolicited calls, the FCA will look to stop firms from using additional fees to drive up profits and ban commission payments to intermediary firms. It has also said that customers should have access to the Financial Services Compensation Scheme and Financial Ombudsman Service.
Compensation call over fund overcharging
MPs have demanded fund groups compensate investors who were kept in expensive contracts when cheaper alternatives were available. Research by Fitz Partners shows that around half of funds with contracts that paid commission to financial advisers who sold them have now moved customers to cheaper share classes, with the Financial Conduct Authority (FCA) banning commission payments to financial advisers in 2018. Kevin Hollinrake, co-chairman of the All Party Parliamentary Group on Fair Business Banking, says fund groups should refund the money, saying that if they opt not to, the FCA “should step in and make them do that.”
Greensill Capital seeks insolvency protection in Australia
Supply chain finance firm Greensill Capital is reportedly seeking insolvency protection in Australia after Credit Suisse suspended $10bn of funds linked to its lending operations. Greensill is looking to invoke a "safe harbour" protection in Australia where its parent company is registered and is also believed to be in talks on a sale of its operating business to Apollo Global Management for about $100m. Further reports suggest that Germany's financial regulator has taken direct oversight of Greensill Bank.
Royal London enters advice with Wealth Wizards acquisition
Royal London has acquired Wealth Wizards from Liverpool Victoria. Royal London said the acquisition of the robo-advice business meant it was now able to help customers who have joined workplace schemes through auto-enrolment as well as support employers and advisers looking to help employees make better financial decisions.
Man Group reports funds under management of $123.6bn
Man Group has raised its dividend by 8%, with funds under management reaching $123.6bn and assets increasing by 8% to $77.2bn.
LEISURE AND HOSPITALITY
Flutter reports increase in revenues
SkyBet and Paddy Power owner Flutter has reported revenues up 28% to £5.3bn on a pro forma basis for the year ended December 31, while pre-tax profits fell from £136m to £1m.
MANUFACTURING
Renishaw goes on the market
Manufacturer Renishaw has been put up for sale by executive chairman Sir David McMurtry and deputy chairman John Deer. Shares rose 770p to 6570p on the news, with the business valued at £4.8bn. UBS has been engaged in the hunt for a buyer which respects the firm’s “commitment to research and development, and the loyalty of our staff, our suppliers, and the customers we serve.”
REAL ESTATE
House prices up 6.9% in February
Figures from Nationwide show that average UK house prices grew 6.9% year-on-year in February, up from the 6.4% growth recorded in January. The average price hit a record £231,068 last month, with this marking a 0.7% month-on-month increase following a 0.2% dip in January. Nationwide's chief economist Robert Gardner said the increase seen in February was a surprise, with growth having been expected to soften as the end of the stamp duty holiday neared. He said the stamp duty holiday may still be providing “some forward momentum” and suggested further policy support in the Budget could further boost activity. Noting that the outlook for the housing market is “unusually uncertain”, Mr Gardner said that “if labour market conditions weaken as most analysts expect, it is likely that the housing market will slow in the months ahead”.
RETAIL
Online sales hit Aldi and Lidl market share
Aldi and Lidl have lost share of the grocery market for the first time in more than a decade, according to a new survey, while Tesco’s share rose for the first time since 2016, amid a surge in online shopping during the pandemic. Online grocery sales accounted for a record 15.4% share of the market in the four weeks to February 21, up from 8.7% last year, as all the big supermarkets increased their provision for deliveries.
ECONOMY
Freeports ‘no magic bullet’ for the economy
A report from think-tank UK in a Changing Europe says freeports are unlikely to offer a “magic bullet” for boosting the UK’s economy, suggesting that the main beneficiaries from the initiative will be the businesses and super-rich individuals who take advantage of the tax breaks they offer. The report says freeports are likely to relocate activity and jobs rather than creating them, with deputy director and report co-author Catherine Barnard saying suggestions that the initiative is going to transform the wealth and prosperity of the country are “simply untrue”. She adds that freeports will help the regions that get them “but possibly to the detriment of those that don’t.”