Category Archives: Banking

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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UK banks expect sharp rise in defaults on unsecured debt

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Lenders forecast biggest quarterly increase in missed repayments on credit cards and loans since 2009

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Britain’s biggest high street lenders expect the sharpest rise in defaults on unsecured lending since 2009, according to a Bank of England survey, as households come under growing pressure amid the cost of living crisis.

The figures from Threadneedle Street show banks expect a marked rise in the number of people who fail to meet repayments on credit cards, loans and other forms of unsecured borrowing over the next three months.

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UK car finance: ‘millions of drivers could get payout’ as watchdog investigates

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FCA to examine whether consumers have been charged inflated prices for loans on new and secondhand cars

Millions of drivers could be in line for a payout, it has been claimed, after the UK financial watchdog opened an investigation into whether consumers had been unfairly charged inflated prices for loans on new and secondhand cars.

The Financial Conduct Authority said on Thursday that it had decided to examine whether a compensation scheme was needed to deal with alleged large-scale mis-selling in the £50bn-a-year motor finance sector.

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UK students launch Barclays ‘career boycott’ over bank’s climate policies

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Campaign at leading universities such as Oxbridge and UCL warns lender it will miss out on top talent if it finances fossil fuels

Hundreds of students from leading UK universities have launched a “career boycott” of Barclays over its climate policies, warning that the bank will miss out on top talent unless it stops financing fossil fuel companies.

More than 220 students from Barclays’ top recruitment universities, including Oxford, Cambridge, and University College London have sent a letter to the high street lender, saying they will not work for Barclays and raising the alarm over its funding for oil and gas firms including Shell, TotalEnergies, Exxon and BP.

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George Osborne to collect share of £28m payout for work at City advisory firm

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The former chancellor is one of four partners at Robey Warshaw, which did not specify how much he would collect

George Osborne will collect a share of a £28m payout for his work as partner at the City advisory firm Robey Warshaw.

The former chancellor, who orchestrated the austerity drive after the financial crisis, is one of four partners at the Mayfair-based company which announced on Friday it would pay out a total of £27.98m to four men.

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Russia warns US and Europe over reports Ukraine may get its seized assets

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Kremlin threatens ‘serious consequences’ if there is an unprecedented seizure of Russian assets held abroad

The Kremlin has threatened Europe and the US with “serious consequences”, including tit-for-tat financial seizures or even a break in diplomatic relations, if Russian assets held abroad are given to aid the Ukrainian budget and war effort.

A spokesperson for Vladimir Putin told reporters on Friday that if the Biden administration and European leaders planned to seize Russian central bank assets believed to be in excess of $300bn (£236bn) that were frozen after Moscow launched its full-scale invasion of Ukraine in February 2022, they should “realise that Russia will never leave those who do it alone”.

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Cambridge University reportedly could drop Barclays in favour of greener bank

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UK lender is a major European funder of oil and gas projects and university has said it does not want to back fossil fuel expansion

Cambridge University could cut ties with Barclays after more than 200 years over the bank’s refusal to stop financing new oil and gas projects, according to the Financial Times.

It reported that Cambridge is looking for an institution with robust climate policies to manage “several hundred million pounds” in cash and money market funds – a mandate expected to cover more than £200m in assets and generate about £10m in fees a year.

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Australia news live: Reserve Bank to deliver year’s last interest rates decision as economists tip no change

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Poll finds 28 of 30 economists expect central bank to keep cash rate steady at 4.35%. Follow the day’s news live

Good morning, and happy Tuesday.

I’m Emily Wind and I’ll be with you on the blog today – many thanks to Martin for kicking things off.

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Digital pound should not be considered until risks addressed, MPs warn

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Treasury select committee highlights concerns over data privacy and increased possibility of bank runs

The idea of creating a digital pound should not even be considered until the UK government and Bank of England address concerns over data privacy and the increased risk of bank runs, a parliamentary committee has warned.

MPs on the Treasury select committee said that while it was true that the rollout of a central bank digital currency could trigger fresh innovation and competition in the payments sector, serious questions remained about whether the positive effects outweighed the risks and costs.

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How the climate credentials of Australia’s big banks stack up

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ANZ stands out as ‘laggard’ while Commonwealth Bank and Westpac have restrictions on facilitating bonds for fossil fuel clients

There is a growing gulf between the climate policies of Australia’s big banks, with some pledging to severely limit future financing for fossil fuel projects, while others have left the door open, according to an analysis of updated lending policies.

Part of the discrepancy lies in the banks’ approach to arranging bonds, which are used by companies to access financing along with, and sometimes instead of, a direct loan.

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