Capital Markets Corporate

November 27, 2020

Our Weekly Newsletter

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Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.

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AIA sponsorship is stain on Spurs shirts, say Kick Out Coal campaigners  

The climate credentials of Tottenham Hostpur’s shirt sponsor AIA are among the lowest of any football club in the UK, according to a new report by fossil fuel divestment activists. The Hong Kong-based insurance company holds a stake of at least $3bn in coal projects, sparking the start of the AIA Kick Out Coal campaign which comprises several divestment groups. It is added that several Premier League sponsors have poor climate records, including Chevrolet (Manchester United), Etihad (Manchester City) and Fly Emirates (Arsenal), with this cohort increasingly coming under scrutiny. (From The Guardian, 24 November 2020)

Starling Bank claims to be UK’s first profitable challenger bank  

UK challenger Starling Bank claims to have become the first among its peers to break even after posting £9m in revenue and £800,000 in profit for October. The bank reports that it has accrued 1.8 million accounts, £4bn in deposits, and lent more than £1.5bn, with more than 827,000 new accounts opened between 2019 and 2020. It is noted that competitors including challenger bank Monzo and fintech unicorn Revolut have yet to make a profit. (From Fintech Futures, 23 November 2020)

NS&I apologises for delays amid savers’ exodus

National Savings and Investments (NS&I) has apologised to savers trying to get through on the phone on the day it slashed its rates. The wide-ranging rate cuts initially announced in September came into effect earlier this week; NS&I’s direct saver will now offer 0.15% interest, down from 1%, and the rate on its income bonds has fallen to 0.01% from 1.15%. The cuts meant there were extremely high call volumes, leading to delays as many savers tried to withdraw their money. (From BBC, 25 November 2020)

DB scheme members relief as scrapping inflation measure is delayed until 2030 

The government has pushed plans to scrap RPI and replace it with CPIH as a measure of inflation back to 2030 amid pressure from pension scheme members that it could reduce their retirement incomes. Changing the inflation measure would reduce the annual increase in the value of retirement savings that traditional final salary – or defined benefit – scheme members benefit from. RPI often overshoots the level of inflation in the economy by one percentage point, while CIPH tends to produce a lower inflation estimate. As a result, inflation-linked DB pension schemes would be in line in for lower annual top-ups if CIPH was adopted. (From Money Marketing, 25 November 2020)

High demand for properties maintains healthy level of SDLT receipts  

Stamp Duty receipts plunged over £1bn in the three months to September compared with the same period last year, due in part to the government raising the threshold of when tax charges apply on property transactions. However, receipts recovered 27% between Q2 and Q3 2020, triggered by high levels of buyer activity putting upward pressure on property prices. This has caused properties that were priced below £500,000 before the adjustment to jump in value, pushing them above the new threshold. (From FT, 20 November 2020)

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