21st February 2022
Bite-sized business news from the UK and beyond
Good morning After Dudley and Eunice, Franklin is the next storm set to hit the UK in the space of one week. To find out why and how storms are named, and even submit a name of your own, check out this Met Office guide.
Today's stories
- Natwest back in black, pays gov ÂŁ1.7bn
- Major data leak at Swiss banking giant
BANKING
Natwest back in black, pays gov ÂŁ1.7bn
Whatâs going on?
Natwest swung back into profit last year, boosted by recovering consumer spending post lockdown. The state-owned bank posted profits of ÂŁ4bn in the 12 months to December 2021 after making a ÂŁ351m loss the year before. It also announced a dividend of ÂŁ3.8bn with the government receiving ÂŁ1.7bn.
Why is this important?
The performance of high street banks is seen as a read across for the UK economyâs health.
During 2020 banks were cautious about lending as lockdown saw many industries grind to a halt. Banks also set aside billions of pounds to cover potential loan losses from suffering businesses and individuals.
But things turned out better than expected and last year banks were able to release the cash they had set aside for bad loans.
Natwestâs return to profitability has been helped by a resurgence in consumer confidence as households deplete their lockdown savings and return to spending. The booming housing market has also led to strong demand for mortgages.
The bank, formerly Royal Bank of Scotland, received a ÂŁ50bn bail out in 2008 during the Global Financial Crisis when the government took a 84% stake.
Over the past 14 years the taxpayer has slowly been recouping its cash and Natwest is now 51% state owned with the chancellor planning to sell down even more in the coming months.
Zooming out
This week will see earnings reports from other major lenders including Barclays and Lloyds. Their performance is expected to be strong like Natwest, with profits driven by the rebound in the economy post Covid restrictions.
But, as is the case with any company these days, rising interest rates and inflation are likely to impact future trading.
Squeezed consumer budgets and rising borrowing rates could dampen demand for loans this year.
BANKING
Major data leak at Swiss banking giant
For generations Switzerland has been renowned for its highly secretive banking sector where the rich and powerful are able to hide their wealth.
But over the weekend that secrecy was breached when details of 30,000 clients of Credit Suisse, Switzerlandâs second-biggest bank, revealed some unpleasant details and suggested that the bank may have failed to do proper checks on many customers.
A whistleblower gave the information to German newspaper SĂŒddeutsche Zeitung and over 100 journalists have spent months analysing the data.
Credit Suisse said in a statement that it âstrongly rejects the allegations and insinuations about the bankâs purported business practicesâ.
Having a Swiss bank account isnât illegal but banks are supposed to avoid clients whose cash has come from criminal activity.
Investigations by the media suggested they have evidence that Credit Suisse accounts had been used by clients involved in serious crimes such as torture, corruption, money laundering or drug trafficking. The data covers accounts opened from the 1940s until well into the last decade, that hold over $100bn.
Credit Suisse pointed out it had taken "significant additional measures over the last decade, including considerable further investments in combating financial crime".
The news comes just weeks after the bankâs CEO left after he broke Covid regulations in another scandal.
Stat of the day
Damage from Storm Eunice could cost more than ÂŁ360m
Other stories to keep you in the loop
- Self-isolation laws set to end in England
- Retail sales bounce back as Omicron threat recedes
- More than 17,000 stores closed across UK last year
- Lufthansa and Swiss Air to suspend flights to Ukraine capital
- Worst supermarket for online order substitutions revealed, as shopper gets fish instead of ice cream
- Transport for London may go bankrupt without extra funds, claims mayor
Interesting links from around the web
- The best way to answer âtell me about yourselfâ and 2 other common, tricky interview questions
- The best podcasts no matter your interests
- Chefsâ and food writersâ reveal their favourite grocery bargains
