Development Finance Today has asked specialist finance brokers whether lenders should have the authority to withhold valuation documentation. Robert Collins, director at Sirius Property Finance, said “It benefits all parties if information like this can be shared more openly [so that] everyone is aware of the true situation.” Elsewhere, Stephen Burns at Adapt Finance, said: “We expect the lender to release the valuation to our client in every case”. John Kerrigan, director of the structured finance team at Arc & Co, added that lenders tended to hold on to valuation reports for control and to avoid external influence. However, Joe Arnold, managing director at Arnold & Baldwin, believed that it was important to remember that a valuation report was undertaken by a lender for their protection and so it was up to that lender to choose whether or not to disclose the information.
Development Finance Today

The Sunday Times says companies looking for finance are still struggling to secure loans, despite big banks insisting they are committed to lending to small businesses. Figures from UK Finance show the outstanding balance of loans and overdrafts to small businesses by major lenders fell by 6.9% to £87.2bn across the country between the final quarters of 2015 and 2017, with small business lending in parts of Yorkshire falling by 27.5% in just two years.
The Sunday Times

Rosamund Urwin examines Britain’s challenger banks in the Sunday Times, and asks whether new entrants to the sector will ever be able to take on the big four banks. She says for truly new entrants such as Metro, Starling and Monzo, the biggest problem is growth. She adds that the path to profitability is also slow, but notes that one thing in the challenger banks favour is technology. Ms Urwin ends by saying that there is a further spectre on the horizon: the possibility that tech titans such as Amazon will venture into banking. In a separate article, Ms Urwin profiles Goldman Sachs’ new bank Marcus. The retail bank will formally open to the British public this month after a soft launch for staff.
The Sunday Times

The Telegraph looks at the reasons why UK venture capital companies have upped their investments in the UK tech scene. In the three months to the end of June, around £1.6bn was invested in UK businesses, across 244 deals, and the region accounted for six of the 10 top European deals done. David Mott, chair of the British Private Equity and Venture Capital Association notes that the gap between the UK and the US is also starting to close.
The Daily Telegraph

New figures from UK Finance reveal that lending against assets other than invoices during the second quarter amounted to £4.3bn, a 5.6% year-on-year increase. Invoice finance, where advances are made against debt, fell to £17bn, compared to £17.7bn a year earlier, with total advances to all client businesses supported by invoice finance and asset-based lending standing at £21.4bn, a 1.9% decrease. The total number of finance clients rose 1.1% to 40,333, while the number of clients with a turnover of more than £10 million increased to over 5,000, up 7% on 2017.
Asset Finance International

A report by the National Audit Office reveals that a fifth of UK adults have less than £100 in savings, raising concerns that the country’s savings culture has been eroded by a decade of ultra-low interest rates. Baroness Ros Altmann, a former pensions minister, stated: “Having little or no savings may force people into the hands of loan sharks or high cost emergency loans, and that can lead to a negative spiral of debt.”
Daily Mail

Royal Bank of Scotland is to cut its English and Welsh branch network in half in January, resulting in the loss of over 250 jobs. Following the restructuring, required after RBS failed to sell its Williams & Glyn brand, NatWest will have 651 branches in England and Wales, plus five in Scotland, while there will be 99 RBS branches in Scotland and 54 in England, including six in London and the south east. Claire Reading, Development Manager at the Federation of Small Business, said the losses would further hurt small businesses which value bank branch access. “Demand for new finance among small firms is already low, hampering their expansion and wider economic growth. A diminished branch network could well make a bad situation worse.”
The Daily Telegraph

TSB chief executive Paul Pester is stepping down in the wake of the major IT failures at the bank. His departure comes just a day after the bank announced it is investigating how planned maintenance of its online banking systems over the weekend left thousands of customers locked out of their accounts on Monday. TSB non-executive chairman Richard Meddings will take on the role of executive chairman as the search for a new CEO begins. Mr Meddings said: “Although there is more to do to achieve full stability for customers, the bank’s IT systems and services are much improved since the IT migration.”
Evening Standard

A new ranking to be published today by the New Financial think tank shows that Britain is the most important financial centre in Europe, and second only to the US elsewhere. The UK ranks particularly highly on international factors thanks to the size of the City’s banking sector and its pivotal role in the global financial system. William Wright, New Financial’s founder and managing director, noted: “London both in terms of domestic financial activity and international financial activity is in a league of its own in Europe.”
City AM

Bank of England (BoE) figures show that unsecured consumer credit grew by 8.5% in July, down from 8.8% in July. This marks the slowest growth rate in nearly three years. July saw the net amount of new consumer borrowing decline to around £800m, from £1.5bn the month before. Consumers put the second lowest amount of cash on their credit cards since April 2016 during July, at £213m. Meanwhile, BoE data shows approvals for house purchases fell to 65,000 in July with remortgaging approvals down to 45,000. In June British lenders approved 65,619 mortgages, rising 1.5% from 64,684 in May and reaching the highest level since January. John Eastgate, sales and marketing director at OneSavings Bank, said consumers are “putting the brakes on home buying decisions” amid fears of current political volatility.
The Times

BTL lenders experiencing sub-optimal success could quietly retreat from the market as margins in the owner-occupied space are much thinner, according to a report produced by Shawbrook Bank. Research predicted that the market would continue to dampen until 2021, before stabilising and return to growth in the following two years.
Bridging and Commercial

Wonga has announced its intention to go into administration. In a statement Wonga said: “Customers can continue to use Wonga services to manage their existing loans but the UK business will not be accepting any new loan applications.” Wonga’s overseas businesses will continue to trade, the company said. The Financial Conduct Authority said it will “continue to supervise Wonga once it is in administration and is in close contact with the proposed administrators with regard to the fair treatment of customers.”
The Daily Telegraph

The net value of all of the UK’s assets topped £10trn for the first time in 2017, thanks to surging land and house prices. The ONS said almost all of the rise to £10.2trn from £9.75trn was fuelled by a £450bn rise in land values. Housing wealth now makes up 17.8% of the UK’s net worth, and added to land this takes the two to a total of 70.7% of net assets. The steady increase in land values is expected to trigger further calls for a land value tax or new rules allowing local authorities to benefit from the rise in values by allowing them to buy land earmarked for development.
The Guardian

Figures from the Office for Budget Responsibility show corporation tax receipts have surged since the rate was cut. The levy raised £57.6bn last year, when firms handed over 19% of profits. That was 44% more than in 2010 when corporation tax was 28%. Corporation tax receipts have also risen 26% since the EU referendum. Sam Dumitriu of the free market Adam Smith Institute think-tank said the figures should prompt ministers to reduce tax on firms which invest. “A competitive corporate tax rate has made Britain a more attractive place to do business,” he said.
Daily Mail

The Competition and Markets Authority is considering proposals by Britain’s nine biggest accounting firms to shake-up the audit market and end the dominance of the Big Four. ICAEW chief executive Michael Izza, David Barnes, chairman of the accountants’ Policy & Reputation Group, and a representative of ICAS met the CMA on Tuesday to propose suggestions to reform the industry. The CMA gave no indication of whether it would move ahead with a full review of the accounting profession, according to Mr Izza.
The Times

The SME Alliance – a small business group that lobbies for fair treatment by banks and advisers – is set to launch its own investigation into the treatment of small firms by RBS’s now-defunct Global Restructuring Group. The SME Alliance’s report into the GRG aims to gather “evidence of dishonesty and lack of integrity by RBS executives” which it hopes will allow the FCA to take disciplinary action through a piece of regulation known as the senior managers’ regime (SMR).
ITV News

Figures from UK Finance show UK business borrowing overall contracted by 2.2% over the last 12 months. The largest fall in lending came in the construction industry, which reported a decrease of 6.9%. However, lending to manufacturers grew by 7.1%. UK business deposits for non-financial companies grew by 1.9% over the last year. Stephen Pegge, managing director, Commercial Finance at UK Finance, said overall demand for finance “remains subdued amid ongoing economic uncertainty.” Meanwhile, gross mortgage lending in July was £24.6bn, about 7.6% higher than a year earlier. Credit card spending was 8.1% higher than a year earlier, with outstanding levels on card borrowing growing by 5.3% over the year.

View Article

Business expert Rob Rutter has accused banks of adding to the pressure on high streets by failing to support small businesses when they hit financial difficulties. He said: “Banks have become so slow and bureaucratic they are acting as a handbrake on the economy rather than an accelerant.”
Sunday Express

Payday lender Wonga has said it was considering “all options” after reports suggested it was on the brink of collapse. The developments comes after a surge in compensation claims against the firm, amid a government clampdown on payday lenders. According to Sky News, the firm is exploring the possibility of a pre-pack administration. However, it could also look to sell assets, including its Polish subsidiary to bolster its cashflow.
The Guardian

Britain’s banks are relaxing lending standards and reducing fees in order to maintain growth, as profit margins are hit by competition and a weakening housing market
Financial Times