HIGH street banking has suffered a fresh blow after it emerged 43 branches in Scotland are earmarked for closure and the UK’s last independent bank is going out of business.
In a sombre day for the beleaguered sector, Clydesdale Bank announced it will shut more than a third of its 111 remaining offices while 182-year-old Airdrie Savings Bank revealed it was preparing for a “phased end to all business activities”.
The combined number of jobs under threat total around 270 as Clydesdale pull down the curtain on 40 branches with Airdrie set to close three offices.
Holding company CYBG, which owns Clydesdale, also announced that 39 branches and 200 jobs are also at risk at its sister group Yorkshire Bank as the firm moves to save £100 million in a bid to counteract the impact of lower interest rates and the potential for a post-Brexit slowdown of the economy.
See more at: http://www.heraldscotland.com/news/15032228.Black_day_for_Scottish_banking_
The EU’s chief negotiator in the Brexit talks has shown the first signs of backing away from his hardline, no-compromise approach after admitting he wants a deal with Britain that will guarantee the other 27 member states continued easy access to the City.
Michel Barnier wants a “special” relationship with the City of London after Britain has left the bloc, according to unpublished minutes seen by the Guardian that hint at unease about the costs of Brexit on continental Europe.
Barnier told a private meeting of MEPs this week that special work was needed to avoid financial instability, according to a European parliament summary of the session. “Some very specific work has to be done in this area,” he said, according to the minutes. “There will be a special/specific relationship. There will need to be work outside of the negotiation box … in order to avoid financial instability.”
Barnier later moved to clarify his comments, claiming on Twitter that he referred to a “special vigilance” required to ensure the EU remained financially stable after Brexit.
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The banking sector is to face fresh scrutiny from MPs, who are embarking on a new inquiry to examine rules put in place after the financial crisis in 2008 to prevent further billion-pound taxpayer bailouts.
Andrew Tyrie, the Conservative MP who chairs the Treasury select committee, said the public had a right to know if they were protected from a repeat of the financial crisis, when £65bn was pumped into Royal Bank of Scotland and Lloyds Banking Group.
“The public was forced to foot the bill – and a large one – when the banks got into trouble during the crisis. They are still footing the bill now, with the profitable disposal of RBS looking like an ever more distant prospect,” said Tyrie.
Last month, RBS failed the Bank of England’s stress test – an annual health check of the sector introduced after the crisis – in a move exacerbating the problems facing Philip Hammond in reducing the taxpayer stake below 73%. The chancellor said in October that a sale of any more shares in RBS was not practical after his predecessor George Osborne sold off a 5% stake at a £1bn loss in August 2015.
See more at: https://www.theguardian.com/business/2016/dec/19/mps-test-rules-uk-bank-bailouts-andrew-tyrie
Crowdfunding platforms need tougher rules and restrictions in order to protect investors, the Financial Conduct Authority has said.
The financial watchdog has raised concerns about loan-based businesses, which allow borrowers and lenders to join up without involving banks, and investment platforms, through which members of the public invest in a business or campaign directly.
The FCA said it was difficult for investors to compare crowdfunding investments with other assets given it was often unclear exactly what was being offered.
As a result, investors struggle to assess the risk and returns of giving their money to crowdfunding platforms, and there were some conflicts of interest that were not being managed properly.
Additionally, crowdfunding schemes did not always meet the FCA’s requirements to be “clear, fair and not misleading”, it said.
See more at: http://www.telegraph.co.uk/business/2016/12/09/watchdog-launches-crackdown-crowdfunding/
The Bank of England is due to provide a snapshot of the strength of Britain’s biggest lenders after assessing their resilience to a dramatic economic downturn and sharp fall in house prices.
Threadneedle Street will announce the outcome of its annual health check of the six biggest banks – and one building society, Nationwide – on Wednesday, alongside its assessment of the major risks to the financial system in the wake of the Brexit result.
The Bank will also scrutinise the effectiveness of measures aimed at limiting the risks in the housing market. It has previously said it is concerned about the ability of some households to keep paying their debts if unemployment rises and wage growth stalls.
See more at: https://www.theguardian.com/business/2016/nov/27/bank-of-england-announce-stress-tests-uk-banks-fpc-fsr
The German government and financial authorities are working on a rescue plan for Deutsche Bank in case it cannot pay fines in the US, according to Die Zeit newspaper.
Germany’s biggest lender is facing a $14bn (£10.8bn; €12.5bn) bill for mis-selling mortgage-backed bonds before the financial crisis of 2008.
In the worst-case scenario, the government would even take a 25% stake in the bank, according to the article.
Deutsche Bank has denied the report.
In a statement, the German finance ministry stressed: “This report is false. The federal government is preparing no rescue plans. There is no reason for such speculation. The bank has said that clearly.”
Die Zeit wrote that “despite earlier denials”, the rescue plans were being prepared and would come into force if the bank needed additional capital to pay the fine and could not raise the money from the markets.
The record fine was imposed by the US Department of Justice earlier this month and is nearly triple the amount Deutsche had put aside to cover the payout.
See more at: http://www.bbc.co.uk/news/business-37496268
A new advertising campaign is being launched to persuade more people to switch bank accounts – because not enough people are doing so.
The Switch Guarantee service was launched exactly three years ago, but the numbers using it have fallen consistently.
In the year to the end of June 2016, the number of switches averaged 88,031 a month.
That compares with a monthly average of 92,448 in the previous year.
Most account holders have steadfastly refused to move, despite incentives worth up to £220 being offered by banks and building societies.
Bacs, the organisation responsible for the switching service, will launch the new advertising campaign in newspapers, social media and online this weekend.
See more at: http://www.bbc.co.uk/news/business-37383259
The use of internet banking on a computer has fallen for the first time, as users switch to mobile apps.
On average, customers logged on to banking websites 4.3m times a day in 2015, down from 4.4m in 2014, according to the British Bankers Association (BBA).
At the same time the use of apps – on phones and tablets – went up from 7m logins a day in 2014, to 11m last year.
In total, customers used such apps 4bn times in 2015, the BBA said.
“Customers love the new technology that is allowing us to bank round the clock,” said Anthony Browne, the BBA’s chief executive.
“You can set up standing orders while standing in the queue for the bus and check your balance while checking in at the airport.”
See more at: http://www.bbc.co.uk/news/business-36857433
Japan’s companies could flee the UK post-Brexit, the country’s government has warned, if Britain is cut off from Europe and the world.
The bold statement does not reflect the public aims of Britain’s leaders nor those of the EU, but Japan’s warning reflects worries over the potential shock to global trade if ties with other nations are severed altogether.
“Japanese businesses with their European headquarters in the UK may decide to transfer their head-office function to continental Europe if EU laws cease to be applicable in the UK after its withdrawal,” the government said in a statement at the G20.
The document handed a list of demands to the UK and EU, warning that tariffs on international trade “could suppress the revenues of businesses” while burdensome red tape on trade between the UK and EU would “increase the costs of logistics operations, which would have a significant impact on business operations”, and that retaining and banking passport is vital.
See more at: http://www.telegraph.co.uk/business/2016/09/05/japans-threat-to-cut-investment-in-the-uk-would-hurt—but-is-un/
Banks and policymakers must press on with reforms to make the global financial system safer in order to support long term growth and ward off fresh stability threats, according to Mark Carney.
Ahead of the G20 meeting in China this weekend, the Governor of the Bank of England urged policymakers to “finish the job” of implementing reforms to end the “too-big-to-fail” problem and make derivatives markets more robust.
Writing to world leaders in his capacity as the chairman of the Financial Stability Board (FSB), Mr Carney said the resilience shown by financial markets following the Brexit vote and January stock market sell-off demonstrated the benefits of rules introduced since the collapse of Lehman Brothers in 2008.
“The financial sector is now more likely to dampen shocks rather than amplify them,” he said.
While “significant progress” had been made since the financial crisis to avoid a repeat of the turmoil in 2008 by forcing banks to build up their capital buffers, Mr Carney warned: “Significant progress must not lead to complacency.”
See more at: http://www.telegraph.co.uk/business/2016/08/31/mark-carney-urges-policymakers-to-finish-the-job-of-ending-too-b/
Britain’s economy will slow down but should not go anywhere close to a recession, according to economists at credit ratings agency Moody’s, while growth in the rest of the world is also “stabilising.”
Although markets dived on the referendum result in June, stock prices have recovered and now economists also believe the impact of the vote will be relatively modest, compared with some early fears.
The lower pound should support economic growth in the UK, Moody’s said, while the government is expected to loosen the purse strings to shore up GDP.
Moody’s economists predict growth of 1.5pc this year and 1.2pc in 2017.
“Uncertainty around the future of the economy outside the common market will continue to dampen business investment and consumer spending, as businesses hold back on hiring and making long-term investments, and as consumers postpone large spending decisions,” said senior analyst Madhavi Bokil.
“However, the fall in the sterling will mitigate some of the negative effect in the short term by providing a boost to exports. Our baseline growth forecasts also incorporate the assumption that some fiscal loosening and monetary policy accommodation will support the economy, eurozone limiting the slowdown in growth.”
See more at: http://www.msn.com/en-gb/money/news/uk-to-avoid-recession-and-world-economy-to-%E2%80%98stabilise%E2%80%99-as-brexit-shock-passes/ar-BBvKoLO?li=AAdeCd7&ocid=spartanntp
UK employers have become more cautious about hiring new staff following the vote to leave the EU, a report claims.
The proportion of employers expecting to increase staff over the next three months dropped from 40% ahead of the vote to 36% after it, according to a survey by HR body the CIPD and Adecco.
It said the fall was “significantly sharper” among private sector firms.
“There has been a clear deterioration in hiring intentions… as a result of the Brexit vote,” the report said.
The CIPD said the survey’s results suggested post-Brexit economic forecasts of a marked downturn in the labour market next year would be proved right.
“While many businesses are treating the immediate post-Brexit period as ‘business as usual’, and hiring intentions overall still remain positive, there are signs that some organisations, particularly in the private sector, are preparing to batten down the hatches,” said CIPD acting chief economist Ian Brinkley.
See more at: http://www.bbc.co.uk/news/business-37079286