![]() Some shareholders also questioned why lenders not normally associated with large-scale UK equity issues - namely HSBC and Santander - had been paid to facilitate them. ![]() The warning was sent after complaints from several City firms, including independent investment bank Numis. In its letter, the FCA cited some recent advisory roles that may have been “in name only” - meaning the bank takes a cut of the fees without doing much, or any, additional work. See also: Chinese regulator preps for market clampdown ![]() “Compliance is investigating and wants to get its ducks in a row before the FCA follows up on its ‘dear CEO’ letter,” the person says, noting that the bank expects the regulator to do so by the autumn.īanks will often lend to longstanding clients on favourable or even lossmaking terms in the hope of winning more profitable business in the future, such as underwriting share issues, advising on mergers and acquisitions, or selling bespoke derivatives products such as swaps. ![]() “There have been concerns about mixing plain-vanilla loans with more complex markets products and a hard-sell approach to firms who might not understand what they are getting into,” says a senior Deutsche banker briefed on the matter. Last month the Financial Conduct Authority (FCA) sent an unusually strongly worded letter to the heads of UK lenders after receiving “credible reports” that some were abusing their lending relationships with struggling clients to strong-arm them into buying other services, while negotiating new or existing debt facilities.īanks’ compliance teams are combing through phone and computer records of transactions because no face-to-face meetings have taken place during the UK’s two-month COVID-19 lockdown, spokespeople tell the FT. ![]() Those services could include advisory roles on share issues or bond deals, or the sale of hedging products such as currency swaps or interest-rate derivatives. Barclays, Deutsche, HSBC and Santander among lenders conducting internal reviews. ![]()
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