the times | Wednesday December 22 2021 45
Business
NatWest has pleaded guilty to wire and
securities fraud in the United States
and admitted that traders participated
in schemes to manipulate the country’s
Treasury markets over a decade.
The taxpayer-controlled British
lender’s trading business, NatWest
Markets, has agreed to pay almost
$35 million after admitting to activity
involving former employees in London,
Connecticut and Singapore.
The bank, formerly known as Royal
Bank of Scotland, said last night that it
deeply regretted the “unacceptable”
behaviour of a “small number” of staff
who no longer worked for NatWest.
A week ago the lender was fined
£265 million by the Financial Conduct
Authority for failing to stop a money-
SOPHIE MUTEVELIAN/NETFLIXNational Savings & Investments has
increased rates on some savings
accounts for a second time in two
months as it struggles to get enough
money from savers to meet its fund-
raising target.
The Treasury-backed bank, which
has about 25 million customers, yester-
day increased rates on its Direct Isa,
Direct Saver and Income Bonds from
0.1 per cent, 0.15 per cent and 0.15 per
cent to 0.35 per cent.
The rates on all three accounts were
slashed in November last year from
best-buy levels as the bank sought to
force out billions in savings it had raised
over lockdown.
NS&I aims to attract savers to help to
fund public sector spending. All savings
are guaranteed by the government,
NatWest admits fraud charges in US
Callum Jones
US Business Correspondent
laundering scheme involving hundreds
of millions of pounds. HSBC also was
fined £64 million last week for allowing
customers to make transactions worth
millions of pounds without being
checked for money laundering and was
rebuked by the regulator for “serious
weaknesses” in its controls over an
eight-year period.
At a remote hearing before a federal
judge in Connecticut, the general coun-
sel of NatWest Markets pleaded guilty
to one count of wire fraud and one of
securities fraud. The plea was first re-
ported by The Wall Street Journal.
It relates to manipulative trading,
known as spoofing, between January
2008 and May 2014, and again in 2018
when two NatWest traders in Singa-
pore breached a non-prosecution
agreement reached by NatWest in 2017.
NatWest is Britain’s largest businessand commercial bank and is one of the
country’s four leading retail banks,
alongside Lloyds, Barclays and HSBC.
It owns the Royal Bank of Scotland,
Ulster Bank and Coutts brands, as well
as NatWest.
Leonard Boyle, acting attorney for
the district of Connecticut, said: “A
criminal conviction was an appropriate
penalty, given the conduct of NatWest’s
supervisors, its compliance deficien-
cies” and its decision not to take steps to
fulfil its agreement “that resolved a
prior securities fraud scheme”.
Robert Begbie, head of NatWest
Markets, said: “The behaviour of these
individuals was unacceptable and has
no place in the bank we are today.”
NatWest’s plea agreement resolves
the initial spoofing conduct and the
breach of the non-prosecution agree-
ment, the bank said.NS&I lifts savings rates to hit target
George Nixon Money Reporter compared with up to £85,000 in high
street accounts. Its Income Bond rates
have been raised once since 2020, going
from 0.01 per cent to 0.15 per cent last
month.
However, the move does not push
any of the accounts close to the top of
the best-buy tables. The highest-paying
easy-access account is 0.71 per cent
from Investec and the highest-paying
cash Isa is 0.67 per cent from Shaw-
brook Bank. NS&I’s Isa also does not
allow customers to transfer in an Isa
from a different provider.
A saver in one of these NS&I
accounts would earn £35 of interest on
£10,000 of savings. If inflation remains
at the latest rate of 5.1 per cent over the
next year, that money would be worth
£9,548 in real terms.
Halfway through this financial year,
NS&I had raised only a tenth of its
£6 billion fundraising target, according
to its latest accounts. Savers deposited a
net £800 million with the bank between
July and September, compared with
£23.9 billion in the same period last
year, when it offered market-leading
rates of up to 1.16 per cent on its income
bonds. They had pulled out a net
£200 million between April and June.
James Blower, founder of the Savings
Guru, a consultancy, said: “Last month’s
increase to rates was an effort to stem
the exodus, but it was never going to be
enough to do this. This latest move,
while certainly welcome for those
remaining in NS&I, is unlikely to
change that significantly.
“These new rates are way off the pace
at more than half that available from
best-buy providers, and does nothing
to resolve the issues that savers have
with NS&I.”television shows such
as The Crown, Snatch
and Peaky Blinders.
The company says that
it has a 35 per cent
share of the high-end
television facilities
market in Britain.
Once its shares
begin trading next
month, ADF is
expected to have a
market value of about
£37.75 million.
As part of the initial
public offering,
Facilities by ADF is
raising £15 million,
which it will use to
take advantage of the
“significant growth” in
the domestic film and
television industry.
Bosses said that the
sector had benefited
from the “material rise
in consumption of film
and high-end television
content via streaming
platforms such as
Netflix, Disney and
Amazon
Prime”.In addition to the
£15 million that the
company is raising,
selling shareholders,
who include Marsden
Proctor, 51, its
managing director, are
offloading nearly
£3.4 million of shares.
Dixon, 60, and his
family are holding on
to a 23.4 per cent
stake, according to
official filings.
Canaccord Genuity,
the Canadian
investment house, is
among those to have
invested before ADF’s
stock market debut
next month. It has
taken a 6.6 per cent
stake, as has
Ennismore Fund
Management, the
London-based small-
cap investor. Business
Growth Fund, which
has backed other small
businesses including
Gymbox and
Genedrive, the Aim-
listed diagnostics
group, has acquired a
15.9 per cent stake.ADF provided facilities
during the filming of The
Crown and Peaky
Blinders, far left, which
have been part of the
boom in productionSchroders sees green
shoots sprouting
G
o where the puck is
heading, not where it is
now. The aphorism of the
ice hockey legend Wayne
Gretzky is frequently on
the lips of Peter Harrison, Schroders’
chief executive, who has just
embarked on his biggest deal yet. He
is paying £358 million for three
quarters of Greencoat, an investment
house specialising in wind turbines,
solar farms and other renewable
energy assets. So has he really seen
the future, or is he heading straight
into an overpriced mêlée of crashing
helmets and flailing sticks?
Greencoat operates in two of the
most fashionable areas of fund
management: private assets and
renewable energy. And Harrison has
had to pony up a spicy 24 times
ebitda profits to take control of it.
But there seems to be a whole lot
more mileage in these asset classes.
Institutional investors are
clamouring to put more cash into
them. With Schroders’ global
distribution muscle behind it, the
newly absorbed Schroders Greencoat
should be able to do in America and
Europe what it has done so
successfully in the UK.
New technologies can feed this
growth still further. What it has
achieved in wind and solar could
now be extended deeper into areas
such as hydrogen, batteries and
charging networks for electric cars.
Unusually for a City firm, Greencoat
is peopled not by classicists and
philosophy graduates, but engineers.
Harrison toyed with buying M&G
last summer, a potentially seismic
deal costing £7 billion or more that
would have been primarily about
cost-cutting — trying to crunch two
disparate cultures together, remove
the duplicated costs and harness
economies of scale. Instead, he has
done another bolt-on of a much
smaller business focused
unashamedly on growth. The
approach has worked repeatedly —
Schroders has bought fifteen
businesses over the past five years, all
with strong niche positions in a
specialist asset class or a client
category.
That philosophy is bad news for
the owners of unloved, mid-ranking
fund managers such as M&G, Jupiter
and abrdn, which continue to lose
market share to the giants of passive
investment and might have quite
liked the warm embrace and deep
pockets of Schroders. The puck has
passed them by.Glass is half-empty
T
he chancellor’s new bailout
fund for hospitality businesses
has the virtue of relative
simplicity. All restaurants, pubs and
hotels normally paying business
rates will qualify for a no-strings
bung of either £2,700, £4,000 or
£6,000. That will tide over some for a
week or two, though it won’t be
terribly meaningful for larger
businesses. By administering the
scheme through local councils, the
government should minimise the
egregious levels of fraud seen with
other previous support measures.
Yet the absence of conditions
raises questions about how useful it
will be in keeping people employedor, indeed, firms in business. There
seems to be nothing to stop
recipients taking the money, paying
themselves a Christmas dividend
while sacking their staff and leaving
suppliers in the lurch.
There was a jarring note in the
Treasury statement as it suggested
the average hospitality business was
in good financial shape. Net cash
deposits of the industry today were
£7 billion, or 40 per cent higher than
at the start of the pandemic, it said.
The failure rate, meanwhile, was
25 per cent lower than in pre-Covid
times. It sounds like Rishi Sunak
doesn’t entirely believe this handout
is necessary. He won’t want it to be
seen as setting a precedent for
further largesse. One glance at the
public finances explains why.
Government borrowing last
month, though down on a year
earlier, was higher than expected.
Progress in tackling the deficit was
slow and likely will be slower still in
the coming months. Sunak will need
a very understanding gilt market.Rates of interest
N
ational Savings & Investments
is the first big savings
institution to start raising
rates since the base rate increase of
last week. The state-owned company
is modestly lifting the yield on about
a quarter of its products by value —
or £50 billion-worth.
This isn’t really about the base
rate. NS&I has a fundraising target
set by the Treasury of £6 billion this
fiscal year and is in danger of
undershooting it, having slashed
most of its saving rates as well as the
premium bonds prize pool last year.
Hence the nudging up of rates for
the second time in two months.
Banks and building societies won’t be
in a hurry to follow unless they have
to. The rise of borrowing rates gives
them the opportunity to widen
margins.
NS&I can be a huge influence in
the savings market, but it is not clear
how depositors will behave in this
new time of 5 per cent-plus inflation.
Will they be prepared to vote with
their feet simply to ensure that their
savings get eroded by only 4 per cent
a year in real terms, rather than the
full 5 per cent? This is the era not of
the rate tart, but the rate refugee.For the record
J
an du Plessis is the new choice
for chairman of the board
standards and accounting
regulator, the Financial Reporting
Council (report, page 46). Sadly, it
didn’t have the space to list all the
baubles in his “distinguished track
record”, which as well as the
chairmanships of BT and Rio Tinto
included a directorship of Lloyds
TSB. Yup, he was one of the fifteen
directors to approve the bright
wheeze to buy HBOS in 2008 and so
send £50 billion up in smoke. It is still
the costliest mistake ever made in a
British boardroom. He’ll want that
recorded because the FRC is a
stickler for personal accountability.business commentary Patrick Hosking
[email protected]
Alistair Osborne is away