BBA https://www.bba.org.uk The voice of banking Thu, 29 Jan 2015 13:40:23 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 Al Rayan Bank https://www.bba.org.uk/about-us/members/al-rayan-bank/ https://www.bba.org.uk/about-us/members/al-rayan-bank/#comments Thu, 29 Jan 2015 10:32:41 +0000 https://www.bba.org.uk/?post_type=company&p=39575 Read More]]> Al Rayan Bank, formerly Islamic Bank of Britain, is the UK’s only wholly Sharia-compliant retail bank.

By solely focusing on ethical banking activities, which are in keeping with the values of Islam, Al Rayan Bank is able to make a significant and lasting difference to Muslims, and non-Muslims, throughout the UK.

Sharia compliant banking operates without the use of interest and is founded on Islamic finance principles derived from trade, entrepreneurship and risk-sharing. So, instead of paying interest on its savings accounts, Al Rayan Bank pays profit, which it generates through ethical investments and then shares with the customer.

Similarly, Al Rayan Bank’s property finance customers do not pay interest.  Instead they purchase property with the Bank, buying the Bank’s share over time and paying rent on the portion that they do not yet own.

Al Rayan Bank has a dedicated Sharia Compliance Officer and a panel of respected Sharia Scholars, called the Sharia Supervisory Committee, which acts as an independent body to guarantee that its products and activities are at all times Sharia compliant.

With a strategically located branch and agency network throughout the UK, a highly trained UK-based contact centre, secure online banking and 24 hour automated telephone banking, Al Rayan Bank provides ethical, Sharia compliant savings, finance and current account services to over 50,000 personal, business and premier customers.

www.alrayanbank.co.uk

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BBA Brief – 29 January 2015 https://www.bba.org.uk/news/bba-brief/bba-brief-29-january-2015/ https://www.bba.org.uk/news/bba-brief/bba-brief-29-january-2015/#comments Thu, 29 Jan 2015 10:16:05 +0000 https://www.bba.org.uk/?post_type=news&p=39567 Read More]]> Investment banks eye peer-to-peer lending

The FT (£, p1) reports that Goldman Sachs and Société Générale are amongst several potential bidders for Aztec, an emerging peer to peer financing platform. P2P competitors initially spurned banks, trying to use state of the art technology to match potential investors with those looking for finance. However, this growing sector is now turning to large finance groups to fuel its expansion. The same paper also reports that Arianna Huffington, who leads the Huffington Post Media Group, has joined the board of Payoff, one of the leading US peer-to-peer lenders.

Carney calls for eurozone fiscal union 

In a widely reported speech Bank of England Governor Mark Carney has said the eurozone needs to do more to “share risks”, adding that the failure to have a single fiscal authority puts the area in an “odd position” compared with other currency unions (BBC). Speaking in Dublin, Mr Carney said: “European monetary union will not be complete until it builds mechanisms to share fiscal sovereignty.” The Governor’s intervention came a week after the European Central Bank unveiled a €1.1 trillion (£846 billion) bond buying programme to boost growth across the ailing eurozone.

Greek bank shares suffer their worst day’s trading as Athens mulls new debt plan

The Daily Mail (p70) reports that share prices of Greek banks plummetted by more than 27% yesterday, taking losses since last Sunday’s election to 40%. The falls came as Germany’s Bundesbank warned that Greece would lose access to bailout money from the European Central Bank if it reneges on its austerity package. Customers have withdrawn around £6 billion ­- around 4% of Greek bank assets – since last month when Syriza became the expected winner of the country’s general election.

Basel discusses new bank disclosure rules

Banks will be obliged to disclose the risks on their balance sheets in even greater detail under proposals being discussed by the Basel Committee on Banking Supervision, the FT (£, online only) writes. The moves are part of an ongoing strategy to make it easier to compare the financial health of banks and ascertain whether some organisations should be holding more capital to cover their risks. Stefan Ingves, the committee’s chairman, said: “These changes substantially strengthen the disclosure framework and will help users of the disclosures to better understand and assess the measurement of a bank’s risk-weighted assets.”

Diary

CBI: Monthly distributive trades survey

Nationwide House Price Index

Social Market Foundation: Chalk + Talk – Britain and the EU

Latest from our sponsor – Jaywing

Affordability remains top of the agenda for credit providers with a key focus being how to make the appropriate checks to protect the consumer without damaging the customer journey. Read how to achieve this in Ben O’Brien’s recent article for Marketing Tech.

Latest from the BBA

In an incisive podcast Chief Economist Richard Woolhouse analyses the BBA’s latest High Street Banking statistics.

Stat of the day

There have been 457,031 downloads of banking apps by customers aged 60 or over. Nearly 20,000 of these customers are 80+ (BBA).

In Brief 

For the fifth successive month the annual pace of house price growth slowed to 6.8% during January, according to the Nationwide index (BBC).

Andy Haldane, the Bank of England’s Chief Economist, tells the Daily Post that interest rates may not return to 2.5% until 2019.

The Financial Conduct Authority is expected to say that up to 6,000 more small businesses could be able to join its interest-swap selling compensation scheme over products with interest rate caps, the Times (£, p39) reports.

The Telegraph (B2) reports that the Federal Reserve’s latest open statement suggests that US interest rates could rise sooner than expected.

HM Revenue and Customs figures covered by the BBC show that 1.2 million house were sold in 2014 – a rise of 14% on the previous year and the most since 2007.

Alibaba, the Chinese e-commerce giant, is considering entering the small business lending market FT (£, p19).

CityAM (p2) reports that the Qatari sovereign wealth fund is close to winning the two-month takeover battle for Songbird Estates, the owner of Canary Wharf.

The Times (£, p39) reports that Adam Applegarth, the former chief executive of Northern Rock, is to join the American private equity group Pine Brook Partners.

A study by the New Wealth Foundation featured in the Guardian (p27) claims Britain is home to 840,000 “dollar millionaires”, with assets excluding their main home worth more than £660,000.

What the commentators say:

In a look at the current savings account market the Telegraph’s Sophie Christie finds products offering annual returns of as much as 6%.

Ralph Atkins and Michael McKenzie (FT, £, p9) explore what more the world’s central banks should be doing to promote economic growth.

Writing in the Telegraph (B2), Ambrose Evans-Pritchard explains the “unbridgeable chasm” between Greece’s new government and the troika that oversees the country bailout package.

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A flavour of things to come https://www.bba.org.uk/news/bba-voice/a-flavour-of-things-to-come/ https://www.bba.org.uk/news/bba-voice/a-flavour-of-things-to-come/#comments Wed, 28 Jan 2015 16:29:23 +0000 https://www.bba.org.uk/?post_type=news&p=39512 Read More]]> Richard Woolhouse, Chief Economist at the BBA reflects on the December 2014 high street banking statistics and says that although there is a mixed picture, the health of the banking system is stronger, and therefore helping to support lending into the economy.

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BBA Brief – 28 January 2015 https://www.bba.org.uk/news/bba-brief/bba-brief-28-january-2015/ https://www.bba.org.uk/news/bba-brief/bba-brief-28-january-2015/#comments Wed, 28 Jan 2015 10:08:45 +0000 https://www.bba.org.uk/?post_type=news&p=39427 Read More]]> Recovery “on track,” Chancellor says

The FT (£, p1) leads with news that Britain’s economy grew at 2.6 per cent in 2014, its fastest in a calendar year since the financial crisis. Chancellor George Osborne told MPs that that the figures showed “Britain has the fastest growing economy in the world in 2014”. However, the fourth-quarter growth figures indicated that the British recovery losing some of its momentum, and highlighted its dependence on the services sector, the paper says. The Guardian (p19) quotes economist Chris Williamson from Markit, who warned that several challenges lie ahead for the economy, including potentially a new phase of political uncertainty in the eurozone arising from Syriza’s election victory in the Greece. “The upcoming general election in the UK also poses a threat to stability in the event on an inconclusive outcome,” he adds.

Yesterday, figures released by the BBA showed that the number of house purchase approvals in 2014 was 9% higher than the previous year. New deposits into ISAs run by banks were also up 57% on 2013 (BBC News).

BBA Chief Economist Richard Woolhouse was also quoted by the Guardian on the figures.

Liquidity squeeze looms in Greece

Shares in Greece’s banks have lost a quarter of their value in two days, as the threat of a bank run and the loss of support from the European Central Bank threaten a liquidity squeeze (Telegraph, B4). Yesterday the Athens Bank Index fell to an all-time low, and the country’s five largest banks have lost €15 billion (£11 billion) in four months. Alexis Tsipras, Greece’s new prime minister, unveiled his cabinet which includes a former communist politician and a left-wing blogger in top economic posts (FT, £, p8). The paper adds that the final line-up is likely to raise concerns among investors fearful Athens will row back on reforms, attack big business and take a tough stance on renegotiating Greece’s debt.

Countdown to the general election

With just 100 days to go until the general election, campaigning kicked off in earnest yesterday. Prime Minister David Cameron told Sky News that a Labour government would “wreck economic progress”, while Mr Miliband charged that the Conservatives would leave the NHS “unrecognisable”. Meanwhile, the FT (£, p2) says the City of London would cease to be a leading global financial centre under Green Party plans for the economy. Green Party proposals also include retaining the Government’s stake in RBS and Lloyds Banking Group and using it to create a “People’s Bank” that would “in effect be a high street branch of the Bank of England”.

Today’s diary

House of Commons: BIS Committee – Transatlantic Trade and Investment Partnership

Council Working Group on Benchmarks

US Federal Open Market Committee interest rate announcement

Latest from our sponsor – Jaywing:

Affordability remains top of the agenda for credit providers with a key focus being how to make the appropriate checks to protect the consumer without damaging the customer journey. Read how to achieve this in Ben O’Brien’s recent article for Marketing Tech.

Stat of the day

69,000 – The number of cash machines in the UK, according to research by Link (Telegraph, B3).

In brief

The EU has threatened Russia with further economic sanctions following the killing of 30 Ukrainian civilians in the city of Mariupol last weekend. The EU’s foreign ministers will meet in Brussels tomorrow (Independent, p24).

Financial Conduct Authority chief executive Martin Wheatley told MPs yesterday that his organisation “screwed up” during its announcement of a review into life insurance products, which saw almost £3 billion knocked off the value of London-listed insurers (Telegraph, B4).

A meeting between the banks and Business Secretary Vince Cable yesterday has made some progress towards an industry-wide protocol agreed between the banks, the Post Office and consumer groups, over future bank branch closures (Sky News).

Alex Brazier, former private secretary to Governor Mark Carney, has joined the Bank of England’s Financial Policy Committee (City AM, p15). Mr Brazier will also become executive director for financial stability and risk.

A study by the Scotch Whisky Association has found that whisky is in the third biggest industry in Scotland, behind energy and financial services, and is valued at more than £5 billion to the UK economy (Guardian, p24).

The FCA has announced that two million credit card borrowers could be owed compensation for mis-sold insurance products sold between 2005 and 2013 which offered fraud protection on stolen cards (City AM, p15).

What the commentators say 

In an article for the Times (£, p43), Paul Johnson, the director of the Institute for Fiscal Studies, says although unemployment and inflation are remarkably low “things are not quite as positive as they might appear.” Mr Johnson points out that there remains a large budget deficit, further austerity and growth with little increase in earnings or productivity.

Writing in City AM (p23), Conservative Business and Enterprise Minister Matthew Hancock says part of the UK’s economic growth is down to new business creation. “With 760,000 more businesses now than in 2010, we are rapidly becoming a nation of entrepreneurs,” he says.

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BBA Brief – 27 January 2015 https://www.bba.org.uk/news/bba-brief/bba-brief-27-january-2015/ https://www.bba.org.uk/news/bba-brief/bba-brief-27-january-2015/#comments Tue, 27 Jan 2015 10:41:35 +0000 https://www.bba.org.uk/?post_type=news&p=39351 Read More]]> BBA figures reflect growing economic confidence

High Street Banking figures released by the BBA today reveal consumer confidence is growing as the economy continues to strengthen. In 2014, there were 2.5 billion credit card purchases, some 8% more than in 2013. Annual growth in unsecured borrowing is currently 3.8%, the highest rate since late 2008. In addition, the number of house purchase approvals in 2014 was 9% higher than the previous year.

BBA Chief Economist Richard Woolhouse said: “The mortgage market has been softening since the spring, but for customers taking out home loans right now there are some great deals and we expect the market to begin to grow again this year. Robust employment data is making many of us feel more secure in our jobs and optimistic about our futures. That’s now feeding through to personal lending and credit card data, suggesting people are happy to finally replace the car or spend on household improvements. Outstanding business lending has been falling as larger firms have used the bond market rather than borrowing from banks. Despite this, outside real estate businesses are generally expanding their lending.”

European banks call for capital rules rethink

Senior bankers at Europe’s largest institutions have warned that the European Central Bank’s quantitative easing programme will be “blunted by tough capital rules designed to curb risks in securitisations”, reports the FT (£, p16). Meeting in private sessions at the World Economic Forum, bankers said that revisions to Basel III would “encourage more securitisation, ease the shift of assets from constrained bank balance sheets to capital markets” and make the ECB’s plans “more effective”.

Syriza forms coalition government

Syriza, victor in the Greek election, has formed a coalition with the right-wing party Independent Greeks after falling two short of an absolute majority (FT, £, p1). Although the parties sit on opposite sides of the political spectrum, the right-wingers are “as fiercely opposed as Syriza to the strict conditions attached to the nation’s €245 billion (£182 billion) bailout”. According to the Times (£, p30), the deal was struck with the understanding that Prime Minister Alexis Tsipras would have “a free hand in charting economic policy and negotiating a new deal with lenders”.

However, the FT notes that Greece’s international creditors have “ruled out any outright debt forgiveness and signalled no let up on economic conditions tied to the bailout”. In a second article, the FT (£, p6) quotes Jeroen Dijsselbloem, the Dutch chair of the eurogroup of finance ministers, who said: ”I don’t think there is support for that [writing down Greece’s debts]”. But Alex Stubb, Finland’s prime minister stated: “We will not forgive loans but we are ready to discuss extending the bailout programme or maturities.”

CityAM (p1) reports that shares in the four largest Greek banks fell by around 10% yesterday. The Mail (p62) cites figures from the Bank of International Settlements which reveals that UK banks have lent £8.9 billion to Greece. However, the paper admits that the biggest banks have reduced their exposure to Greece, with regulators stating that exposure is “spread around the financial system among a number of smaller UK lenders”.

Today’s diary

BBA: High Street Banking figures

House of Commons: Treasury Select Committee – FCA – John Griffith-Jones, Chairman and Martin Wheatley, Chief Executive

House of Commons: Treasury Oral Questions

ECOFIN meeting

European Parliament: ECON exchanges views with Wolfgang Schäuble and Pier Carlo Padoan

European Parliament: Reconsultation on MIFs and Fourth Anti-Money Laundering Directive

ONS: Q4 2014 GDP – preliminary estimate

Centre for Social Justice:  How should the next government solve the personal debt crisis? – Andrea Leadsom MP and Stella Creasy MP

Latest from our sponsor – Jaywing

Affordability remains top of the agenda for credit providers with a key focus being how to make the appropriate checks to protect the consumer without damaging the customer journey. Read how to achieve this in Ben O’Brien’s recent article for Marketing Tech.

Stat of the day

57% – ISA deposits in 2014 were 57% higher than in 2013 (BBA High Street Banking figures).

In brief

Kristin Forbes, member of the Bank of England’s Monetary Policy Committee, has warned that interest rates may rise quicker than expected if inflation suddenly rebounds after its recent fall (Reuters).

Complaints over financial firms to the Financial Ombudsman Service fell by 13,000 (15%) in Q4 2014 compared to the previous quarter (Mirror, p46).

CityAM  (p15) reports that the Post Office has rebranded its range of financial products as Post Office Money, announcing that it wants to be a “leading financial services provider” by 2020.

The Mirror (p46) cites BBA figures which show that 600,000 people over 80 in the UK are registered for internet banking. Read the full BBA press release here.

The Financial Conduct Authority (FCA) has outlined plans to introduce further safeguards for savers in the UK pension market, the FT (£, p3) writes, with providers having to undertake more checks to ensure a product is appropriate for a consumer.

Standard & Poor’s cut Russia’s credit rating to “junk” yesterday (FT, £, p1).

The FT (£, p20) reports that the FCA is to scrutinise the advertising of peer-to-peer lending platforms over fears some are mis-selling products as “risk-free” savings accounts.

What the commentators say 

In the Guardian (p29), Nils Pratley suggests that if a deal cannot be struck between the Greek Government and the eurozone’s big powers, Germany may “take its chances with Grexit”.

Writing in the FT (£, p28), Elaine Moore and Philip Stafford argues that the success of the ECB’s quantitative easing scheme will “depend on the way that sellers [of bonds] behave”.

Ed Conway writes in the Times (£, p27) that although the UK and Greece both suffered the symptoms of a large deficit and recession, “the underlying diseases are very different indeed”.

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December 2014 figures for the high street banks https://www.bba.org.uk/news/press-releases/december-2014-figures-for-the-high-street-banks/ https://www.bba.org.uk/news/press-releases/december-2014-figures-for-the-high-street-banks/#comments Tue, 27 Jan 2015 09:30:33 +0000 https://www.bba.org.uk/?post_type=news&p=39305 Read More]]> Richard Woolhouse, Chief Economist at the BBA, said:

“The mortgage market has been softening since the spring, but for customers taking out home loans right now there are some great deals and we expect the market to begin to grow again this year.

“Robust employment data is making many of us feel more secure in our jobs and optimistic about our futures. That’s now feeding through to personal lending and credit card data, suggesting people are happy to finally replace the car or spend on household improvements.

“Outstanding business lending has been falling as larger firms have used the bond market rather than borrowing from banks. Despite this, outside real estate businesses are generally expanding their lending.”

Please read the full release and excel tables via the links below.

Richard Woolhouse speaks to @GECFrost about the latest #GDP figures and their high street banks stats:

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Parker Fitzgerald https://www.bba.org.uk/about-us/associates/parker-fitzgerald/ https://www.bba.org.uk/about-us/associates/parker-fitzgerald/#comments Mon, 26 Jan 2015 14:32:47 +0000 https://www.bba.org.uk/?post_type=associate&p=39278 Parker Fitzgerald is a specialist professional services firm focusing on the delivery of risk and regulatory transformation in the financial services industry.

Key contact: David Weinstein-Linder, Market Engagement Manager

Website: www.parker-fitzgerald.com

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BBA response to BEPS action 14 Discussion draft on making dispute resolution mechanisms more effective https://www.bba.org.uk/policy/financial-and-risk-policy/taxation/fs-taxation/bba-response-to-beps-action-14-discussion-draft-on-making-dispute-resolution-mechanisms-more-effective/ https://www.bba.org.uk/policy/financial-and-risk-policy/taxation/fs-taxation/bba-response-to-beps-action-14-discussion-draft-on-making-dispute-resolution-mechanisms-more-effective/#comments Mon, 26 Jan 2015 13:32:58 +0000 https://www.bba.org.uk/?post_type=policy&p=39257 Read More]]> Proposals to deliver effective dispute resolution mechanisms are an essential part of the BEPS project. It is therefore disappointing that it has not been possible for the OECD to set out more definitive proposals in the discussion draft; particularly that no consensus has been reached on moving towards a binding Mandatory Arbitration Procedure (MAP).

Please read our full response via the download below.

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BBA response to BEPS action 6 Discussion draft on preventing the granting of treaty benefits in inappropriate circumstances https://www.bba.org.uk/policy/financial-and-risk-policy/taxation/fs-taxation/bba-response-to-beps-action-6-discussion-draft-on-preventing-the-granting-of-treaty-benefits-in-inappropriate-circumstances/ https://www.bba.org.uk/policy/financial-and-risk-policy/taxation/fs-taxation/bba-response-to-beps-action-6-discussion-draft-on-preventing-the-granting-of-treaty-benefits-in-inappropriate-circumstances/#comments Mon, 26 Jan 2015 11:58:32 +0000 https://www.bba.org.uk/?post_type=policy&p=39246 Read More]]> The broad scope of these proposals means that activity which we would consider low risk in relation to treaty abuse could be inadvertently affected by the anti-abuse provisions. We therefore believe that the OECD’s policy objectives would be better served by targeting the proposals in manner which addresses specific areas of concern identified by tax administrations. We have previously highlighted areas where we believe the anti-abuse provisions may inadvertently apply. The main body of this provides additional detail in this respect for the OECD’s consideration.

Please read the full response via the download below.

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BBA response to BEPS Action 7: Preventing the artificial avoidance of Permanent Establishment (PE) status https://www.bba.org.uk/policy/financial-and-risk-policy/taxation/fs-taxation/bba-response-to-beps-action-7-preventing-the-artificial-avoidance-of-permanent-establishment-pe-status/ https://www.bba.org.uk/policy/financial-and-risk-policy/taxation/fs-taxation/bba-response-to-beps-action-7-preventing-the-artificial-avoidance-of-permanent-establishment-pe-status/#comments Mon, 26 Jan 2015 11:42:42 +0000 https://www.bba.org.uk/?post_type=policy&p=39239 Read More]]> We note that the proposals in the discussion draft outline several ways in which the establishment of a PE for tax purposes might be artificially avoided. Having reviewed these proposals we are concerned that rather than targeting perceived methods by which a PE may be artificially avoided, the proposals instead lower the threshold for what constitutes a PE. This approach would logically lead to an increase in the number of PEs and we are concerned that this may lead to an increase in double taxation – and potential disputes between jurisdictions – as both source and residency countries seek to apply taxing rights to the same activity. We do not believe that this would be a desirable outcome.

Please read our full response via the download below.

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