Nationwide has become the first high street lender to enter the equity release and retirement interest-only (Rio) loans markets, enabling existing customers to access cash through their properties. The high street lender’s equity release rates will start from 3.49% and it will charge a 6% exit penalty for the first five years, tapering to 0% after year 16 of the plan. Leeds Building Society has up until now been the largest provider to offer such loans and round £4bn was withdrawn last year by older homeowners.

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Standard Chartered is set to pay $1.1bn (£843m) for violating US sanctions against Iran and over inadequate financial crime controls. The penalties, imposed in connection with a range of different investigations in the US and the UK, all date back to before 2014. The London-based banking firm set aside $900m in February in preparation for the settlements. It will pay $947m to US agencies, and £102m to the Financial Conduct Authority. The watchdog said it had found “serious and sustained shortcomings” in the bank’s controls. Bill Winters, the bank’s chief executive, said the circumstances behind the fines were “completely unacceptable” and that the bank did not tolerate “misconduct or lax controls”.

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Figures from the Finance and Leasing Association show that second charge lending business was up 24% in February. The data showed there were 2,163 new agreements made in the month at a value of £98m. This meant new business was up 24% from January to February and 9% year on year in February. Fiona Hoyle, head of consumer and mortgage finance at Finance and Leasing Association, said: “In February, the second charge mortgage market reported its strongest rate of new business volumes growth since May 2017. The popularity of second charge mortgages continues to grow as people opt to improve, rather than move.”

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The Office for National Statistics has identified around 710,000 jobs in the City at risk from new automated technology, with around 39% of jobs in financial services, excluding insurance and pension funding, likely to be automated. Some 1.5m jobs are at high risk of having some of their duties and tasks automated in the future and job losses are more likely to impact the female workforce – with 70% of high risk jobs held by women.

City AM

HMRC figures show that a fifth of all income and capital gains tax is paid by just 100,000 of Britain’s top earners. This group, which equates to 0.15% of the population, pays a total of £35.1bn in these taxes, with the 100 richest taxpayers paying an average of £18m each – with this just over 1% of the total income and capital gains tax take. Alex Davies, chief executive of the investment platform Wealth Club, which obtained the data, said: “The well-off are essential to the country’s finances,” adding: “Any government needs to tread carefully if they think that squeezing these people for even more cash is the solution to our woes.”

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The Sunday Times looks at how a stagnant economy and growing insolvencies have upped the pressure on peer-to-peer lenders. The level of personal insolvencies in the UK is now higher than during the aftermath of the financial crisis, with 115,000 people declared insolvent in 208 – 16% up on the previous year. The paper highlights that Lendy ran into trouble last year following reports that two-thirds of its borrowers had failed to repay their loans on time. In another blow, Lendy and some 5,000 investors are reportedly being sued by a borrower after the platform issued a default notice on its loans. The rise in insolvencies is also rippling through the most established P2P lenders, with Zopa chief executive Jaidev Janardana saying there had been a 15% jump in the probability of a borrower defaulting. The Peer-to-Peer Finance Association estimates that there are about 80 P2P sites in the UK, which have lent a total of about £15bn to date.

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Bank lending to smaller companies has fallen in more than half of the country in the past year, according to research by Hadrian’s Wall Capital. The debt adviser found that 74 of 132 postal areas of Britain saw falls in the value of bank loans to SMEs.

Yorkshire Post

The Bank of England’s monetary policy committee (MPC) voted unanimously to hold interest rates on Thursday, citing weakening global economic conditions and “shifting expectations” concerning Brexit. Separately, UK government borrowing has fallen to its lowest level for 17 years, with borrowing in the 10 months of the financial year to date at £23.1bn – down £18bn on the same period in the prior year. Income tax revenue increased by £3bn”.

The Guardian

Invoice finance and asset-based lending returned to growth in 2018, according to analytics software provider Equiniti Riskfactor. After two consecutive quarterly declines in the first half of 2018, total advances at the end of December 2018 totalled £22.7bn, up over £100m on the previous quarter and up 2.4% on the previous year.

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Figures from UK Finance show criminals fraudulently stole a total of £1.2bn f rom UK bank customers in 2018 – up almost a quarter on 2017, when £968m was stolen. The amount stolen in authorised push payment (APP) scams rose to £354m, although financial providers were able to return a total of £83m of these losses. Banks recorded 84,624 cases of APP fraud last year, almost double the number reported in 2017. Furthermore, cheque fraud losses jumped to £20.6m in 2018, more than double the 2017 figure of £9.8m. Consumer groups described the soaring numbers as “alarming” and warned the true number of victims and losses were likely to be even higher as many people are too ashamed to come forward.

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The Serious Fraud Office has arrested four people over the collapse of London Capital & Finance. The company promised returns of 8% for its mini-bonds or ISAs but collapsed in January after taking £236m from more than 11,500 savers.

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Softbank will invest in early-stage startups, with the launch of a new global tech fund of up to $500m (£384.68m). The Softbank Acceleration Fund could be operational as early as next month. South Korea’s National Pension Service will also invest in the fund, alongside unnamed companies and asset managers.

City AM

Data analysis by Kensington Mortgages has shown that a no-deal Brexit would lead to a 30% increase in mortgage arrears over the next three years and a 17% fall in mortgage lending over a five-year period. The firm used its proprietary risk modelling tool, Vector, to test a series of scenarios based on a representative data set of 750,000 loans (with an outstanding value of £97.2bn) across the UK mortgage lending market. Mark Arnold, CEO of Kensington Mortgages, stated: “Leaving the EU with no deal in place would, according to our model, see more homeowners struggle to make their monthly payments. Our expectation, however, would be that if we did end up exiting without a deal then the Bank of England would step in, as Mark Carney has hinted recently, and stabilise the market. Yet that would come at a cost to the taxpayer, with the public finances propping up homeowners at other people’s expense.”

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BNY Mellon plans to scrap a policy enabling UK employees to work from home, saying bringing an end to a flexible working policy that allows staff to work from home several days a week will ensure “better collaboration and quicker decision making”. The Evening Standard says a number of staff have criticised the proposal, saying some have consulted conciliation service Acas, with several considering legal action over a breach of contract.

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Esme Loans has enlisted Microsoft to build a new cloud-based data warehouse, enabling the Patron to make faster and more targeted lending decisions and provide automated service assisted by artificial intelligence. Microsoft has entered into partnership with the digital lender to build a bespoke data warehouse – a centralised data repository held on an online server – which will allow Esme to improve its customer journey, simplify integration with third parties, and provide a faster end to end application process for customers. Esme will also use the technology to build an AI assisted chat bot on its website, helping answer common customer queries and assist with the application process at critical points.

Esme loans, Press Release

New figures have revealed an increase in the number of mortgage approvals from the start of the year. Almost 67,000 mortgages were given out to buyers in January, an unexpected rise of more than 2,000 compared with December’s figure. By value this amounts to £12.6bn of mortgage approvals, according to Bank of England data, the strongest start to any year since 2016.

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The deputy chief executive of HMRC has admitted that the taxman may not be able to chase contractors for the loan charge because if people had given HMRC complete and correct information about tax schemes and it had not been acted upon, “HMRC is out of time” to make further inquiries. Jim Harra told Nicky Morgan, chairwoman of the Treasury committee, in a letter that even those who had provided HMRC with only some information might still be able to fight their case in a tribunal. The admission comes as dozens of MPs seek a delay to the loan charge pending a review. The charge will hit an estimated 50,000 contractors who used loan-based tax avoidance schemes, usually on the advice of accountants and employers.

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Nicky Morgan, the chair of the Treasury Select Committee, has said that the Government might have to step in and help Wonga customers who have been left seeking compensation after the collapse of the payday lender. Ms Morgan is seeking answers from Wonga’s administrator amid concerns that those who had complaints open at the time of the company’s collapse are being ignored.

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The Times’ Katherine Griffiths considers the wisdom of handing £280m to challenger banks Metro, Starling, Clear Bank and Tide to help boost small business lending. Royal Bank of Scotland is footing the bill as a state aid penalty from Brussels and Ms Griffiths says there is not enough transparency over how the winners were chosen. However, for the banks to be successful, she says, it will be key to offer better incentives such as accountancy and payroll services alongside advantages offered by open banking reforms and simplified processes.

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Metro Bank is fighting to contain the crisis caused by a misclassification of commercial loans last month, releasing its full-year results early in a bid to quell investor concern following the surprise announcement of a £350m cash call. Metro also revealed that the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) are set to investigate the circumstances that led to the accountancy error. CEO Craig Donaldson said he had offered to resign, but gained the full support of the board, and has requested that his 2018 bonus be forgone.

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