Category Archives: Banking

Dividends payments soar globally as worker pay stagnates

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Shareholder payouts grew 14 times faster than wages over past three years, says Oxfam report

Shareholders have proved to be more successful at securing bumper payouts than workers have at winning higher pay, according to two studies that show dividends outstripping wages by a considerable margin in recent years.

Oxfam said analysis of global data showed that dividend payments to shareholders over the last three years grew an average of 14 times faster than worker pay across 31 major economies.

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Barclays accused of greenwashing over financing for Italian oil company

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Exclusive: Environmental groups say bank is misleading public over ‘sustainable’ financing for Eni as company vastly expands fossil fuel production

Barclays is being accused by environmental groups of greenwashing after helping to arrange €4bn (£3.4bn) in financing for the Italian oil company Eni in a way that allows them to qualify towards its $1tn sustainable financing goal.

Environmental groups have said the London-based bank is deliberately misleading the public by labelling the financial instruments as “sustainable” at the same time that Eni is in the midst of a multibillion-pound fossil fuel expansion drive designed to increase production.

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Barclays profits tumble 12% as UK interest rates hit mortgage demand

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Pre-tax profits drop to £2.3bn between January and March, down from £2.6bn last year

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Profits at Barclays tumbled 12% in the first quarter, as higher UK interest rates weighed on demand for mortgages and loans and its investment bank was hit by a backdrop of economic uncertainty.

The UK bank said pre-tax profits fell to £2.3bn in the first quarter, down from £2.6bn last year, when it reported the strongest quarterly profit since 2011 after a string of interest rate hikes by the Bank of England.

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Global economic risks ‘could eclipse anything since second world war’, says JP Morgan boss

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In annual letter to investors, Jamie Dimon warns ‘wars in Ukraine and Middle East could become far worse’

The boss of the US bank JP Morgan has warned that the world could be facing the most dangerous moment since the second world war, putting lives and economic growth at risk.

In his annual letter to investors, Jamie Dimon said the world had been “generally on a path to becoming stronger and safer” in recent years but had suffered a major reversal in February 2022 when Russia invaded Ukraine.

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NatWest criticised over £1.2m pay for boss with ‘limited experience’

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Governance adviser says Paul Thwaite could have been offered lower starting salary than predecessor Alison Rose

NatWest has been criticised for paying its new boss a salary of £1.2m despite his “limited experience” as a chief executive, amid a wider shareholder backlash in the City of London over bumper corporate pay.

As the government prepares to sell shares in the bank before the general election, Institutional Shareholder Services (ISS) warned that Paul Thwaite would be paid the same salary as the bank’s former chief executive, Alison Rose, despite lacking her experience as a lead executive.

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Nationwide agrees £2.9bn deal to take over Virgin Money

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Richard Branson has already indicated he will back takeover that will require the agreement of the group’s shareholders

Nationwide Building Society is lined up to take over its smaller rival Virgin Money after the pair formally agreed a deal worth £2.9bn.

The deal, which will solidify Nationwide’s position as the UK’s second largest mortgage lender, will also trigger the resignation of Virgin Money boss David Duffy, and is likely to lead to job cuts as well as an official “review” of the combined group’s workforce.

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Millions more in cash needed to fund UK’s open-banking watchdog

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Exclusive: £10m needed for regulator charged with developing tools to thwart financial crime and protect consumers

Banks are under pressure to stump up millions of pounds in interim funding for the organisation that polices open banking, with regulators saying the new money is needed to prevent financial crime and protect consumers if things “go wrong”.

Large banks including NatWest, HSBC, Lloyds and Santander UK were among more than 40 City firms summoned by the Financial Conduct Authority (FCA) last week to discuss a cash injection into Open Banking Limited (OPL), the body that oversees innovation in this area.

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Virgin Money bosses in line for £6m if Nationwide takeover goes ahead

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Chief executive David Duffy would be biggest winner on £3.5m, with large paydays for about 12 other staff if deal goes through

Banking bosses at Virgin Money are in line for a £6m windfall if Nationwide Building Society pushes ahead with a proposed takeover of the lender, with more than half of that sum set to be pocketed by longtime chief executive David Duffy.

Public shareholder data suggests that 13 executives, board members and senior staff are poised for big paydays from the potential £3bn deal, after accumulating stock through years of service at Virgin Money, which was co-founded by billionaire Sir Richard Branson in 1995.

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The US could be facing a 2008-style financial crisis. Why does Sunak want to copy it?

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The PM’s admiration for Washington’s economic model may backfire amid looming US banking and stock market disasters

One of the consistent themes of the Conservative economic narrative is an admiration for the US and its ability to grow quickly. The way it has bounced back from the pandemic and how it has ridden out the impact of Russia’s invasion of Ukraine should serve as a blueprint.

A neoliberal Conservative analysis puts the emphasis on tech, innovation and a myth-like entrepreneurial spirit that the UK would do well to emulate. What it ignores is the way the US economy zips ahead on fantastical stock market valuations and off-balance-sheet accounting reminiscent of the years before the 2008 financial crisis. And how both these habits could bite back in a big way, much as they did in 2008, and pretty soon.

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Kristalina Georgieva wins backing to run for second term as IMF chief

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Bulgaria’s ‘eternal optimist’ in favour with European finance ministers after first five-year stint encompassing Covid and Ukraine

The head of the International Monetary Fund, Kristalina Georgieva, will run for a second five-year term after being nominated by a string of European countries to lead the global lender.

The Bulgarian economist and champion of policies to tackle the climate crisis will be given the support of her home country, which said she had accepted the nomination for another term starting in September.

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Lloyds sets aside £450m for car loan fines and payouts

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Bank’s profits rise 57% but it says there is ‘significant uncertainty’ over liability amid FCA investigation

Lloyds Banking Group has been forced to put aside £450m for potential fines and compensation for motor finance customers, after the UK regulator opened an investigation into whether consumers had been charged inflated prices for car loans.

The lender, which also owns the Bank of Scotland and Halifax brands, said there was “significant uncertainty” over the extent of any misconduct or loss to customers that could result in penalties or payouts.

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Elizabeth Warren urges regulators to block Capital One’s takeover of Discover

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Senator says $35bn deal merging two of the largest US credit card firms would ‘threaten financial stability’ and reduce competition

Senator Elizabeth Warren has urged regulators to block Capital One’s $35bn takeover of Discover Financial, arguing that combining two of the US’s largest credit card companies would harm consumers and challenge financial stability.

The blockbuster deal would inevitably lead to higher costs and fees for cardholders, according to the leftwing senator.

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UK savers should pick accounts beating rising cost of living while they can

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Many best rates are easy access and notice options rather than ones that lock money away

This week’s news that inflation stayed steady at 4% in January means it is still possible to put your money in a savings account with an interest rate that beats the rising cost of living.

Returns on fixed-rate savings accounts have been falling, but, so far, variable rate deals have remained unchanged.

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At least six Australian banks hit by network outages including Ubank and Bank Australia

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Defence Bank, Beyond Bank, People’s Choice and P&N Bank among others to warn smartphone apps and online transfers unavailable on Thursday

Several Australian banks appeared to be hit with technical issues that caused outages and left customers unable to make online transfers or use mobile banking apps on Thursday.

Banks including Ubank, Bank Australia, Defence Bank, Beyond Bank, People’s Choice and P&N Bank had warnings on their website on Thursday evening that several features including online transfers, smartphone apps and the use of Osko – a secure payment service – were unavailable.

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Commonwealth Bank posts $5bn half-yearly cash profit after ‘deliberate’ shrinking of home loan book

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Latest financial results show CBA now targeting savers over mortgage holders, amid concerns over weakening competition among major lenders

Australia’s biggest lender, Commonwealth Bank, is losing market share in its home loan book through a deliberate strategy of not competing for less lucrative mortgage customers.

The bank’s tactics feed into concerns there are few signs of healthy price competition between Australia’s major lenders operating in one of the most concentrated sectors among comparable economies.

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Lloyds and Santander accused of providing accounts for Iranian front companies

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Both banks deny helping Tehran-controlled oil firm PCC to move money in breach of sanctions

Two of the UK’s largest lenders, Santander UK and Lloyds Banking Group, allegedly held bank accounts for front companies that helped Iranian entities evade US sanctions, according to reports.

The news has rattled investors, who sold off shares in the two banks on Monday morning, amid fears that the lenders could face penalties if they are found to have in any way assisted Iran’s state-controlled Petrochemical Commercial Company (PCC).

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Deutsche Bank to cut 3,500 jobs

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German bank becomes latest global lender to target staff in post-pandemic cost reductions

Deutsche Bank is to cut 3,500 jobs, making it the latest global lender to target employees as part of post-pandemic cost reductions, amid a drop in profits.

The German bank said that while it had made progress on a €2.5bn (£2.1bn) cost-cutting programme that it first announced in 2022, it still needed to save €1.6bn of that total, meaning thousands of staff had to go.

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HSBC fined £57m over ‘serious’ deposit protection failings

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Regulator says bank failed to properly implement Financial Services Compensation Scheme

HSBC has been fined £57m by the Bank of England’s financial stability arm for failing to protect customer deposits in the event of a banking collapse.

It is the second-highest fine imposed by the Bank’s Prudential Regulation Authority (PRA) and reflects the seriousness of the failings, the watchdog said. The highest fine was £87m, imposed on Credit Suisse last July.

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Savings passbooks popular as Britain turns to cash amid cost of living crisis

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While some banks and building societies scrap system, others report increase in usage by customers

While some banks are scrapping passbook savings accounts amid suggestions they are past their sell-by date, other providers have reported an increase in their usage as people turn to cash to help them manage the cost of living.

Newcastle building society said that in 2023 it issued about three times as many passbooks as it did in 2021, and that it is getting new customers on the back of decisions by rivals to axe them.

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China announces 0.5% cut in banks’ minimum reserves

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Biggest reduction since December 2021 will allow 1tn more yuan to be released in form of new loans

China’s central bank has announced a surprise cut to the amount of cash that banks must hold in reserve, hoping to boost the lending available to households and businesses as policymakers try to steer the economy through a fragile recovery.

Pan Gongsheng, the governor of the People’s Bank of China (PBOC), said on Wednesday that the reserve requirement ratio would be cut by 0.5% from 5 February, the deepest cut to the rate since December 2021. The move will allow about 1tn yuan (£110.8bn) to be released in the form of new loans.

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