TUI report widened first quarter adjusted loss
TUI (LON:TUI) have given shareholders a mixed update on Tuesday, following a turbulent period of trading for all names in the airline and travel industry.
The travel and holiday operator reported a widened first quarter adjusted loss, and therefore changed its guidance range for annual earnings.
The firm also said that continued delays with Boeing (NYSE:BA) with the delivery of 737 aircrafts had affected trade, and subsequently led to a slower than expected period of trading.
For the three months ending December 31, the company’s underlying loss before interest & tax increased 77% to €146.9 million from €83.1 million the year prior.
Notably, TUI did see revenue rising 7.7% to €3.85 billion from the €3.57 figure just one year ago.
TUI attributed this loss to stunted growth and performance in the Holiday Experiences Unit, along with higher costs in the cruise sector and a €45 million replacement charge following ongoing supply issues from Boeing.
First quarter underlying earnings before interest, tax, depreciation and amortisation totaled €111.5 millions from €27.2 million a year ago, as net loss narrowed by just under 6% to €105.5 million.
TUI gave shareholders a positive tone when they announced expectations to record high single digit percentage growth across 2020, which seemed to boost the share price on Tuesday.
Annual EBIT is now expected to be between €850 million to €1.05 billion versus previous €R950 million to €1.05 billion guidance range.
Going forward the firm said:
“FY20 in terms of booking trends has started exceptionally well, with the UK delivering its best bookings volume month in the company’s history. We are pleased with customer booking development to date for both programmes however the Boeing 737 Max grounding continues to weigh on our operational performance, with an extended grounding now expected for the rest of the financial year. We will continue to focus and deliver on our four strategic initiatives as outlined in our FY19 full-year results update; progress of our initiatives and our Markets and Domain Transformation Programme are on track.
For our Hotels & Resorts business, as indicated at our FY19 full-year results, we plan to grow this segment through both asset-right and asset-light approaches. We currently have 17 hotel openings planned for the year, with a number in our key brands Riu and Robinson through an asset-right approach. For our flagship leisure brand TUI Blue, we plan expand to almost 100 hotels through asset-light re-positioning of our existing hotel portfolio. During Q1, one new TUI Blue hotel was opened and nine re-positioned.”
Tekcapital subsidiary Belluscura fight to battle coronavirus spread
Tekcapital (LON:TEK) have said that one of its subsidiaries in Belluscura PLC have filed a patent for an oxygen device which treats respiratory diseases.
Interestingly, Tekcapital noted that the new device could treat patients that had been diagnosed with the coronavirus.
The firm said: “The latest patent application covers devices and systems for treating people suffering from ARDS including patients suffering from the coronavirus. The primary cause of death from respiratory viruses like the coronavirus and influenza, are the result of the fluids accumulating inside the alveoli (the tiny air sacs of the lungs) which ultimately leads to the failure of the transfer of oxygen to and carbon dioxide out of the blood. The current primary treatment for ARDS is oxygen therapy along with ventilator support.”
The epidemic of the coronavirus continues to dominate news headlines, and since the outbreak millions have been wiped off Chinese shares and stocks, and the death toll and those infected just continue to rise and rise.
The development from Tekcapital may have come at a time where it may not just benefit the firm, but have global applications.
Despite the numerous attempts from global governments to tackle the coronavirus, it seems that the issue is falling quickly out of hands.
Commenting on the patenting activities, Bob Rauker, CEO of Belluscura, said:
“We are very excited about our next generation oxygen technologies. With the launch this year of our first product, the X-PLOR™ portable oxygen concentrator, into the respiratory treatment field where over 250 million people suffer from chronic obstructive pulmonary disease (COPD), the third leading cause of death, it is critical that we continue to innovate into the ever-expanding oxygen therapy market.”
Clifford M. Gross Ph.D., Executive Chairman of Tekcapital plc commented:
“We are pleased to see the additional progress of Belluscura as it continues to strengthen its intellectual property in the oxygen therapy space to help patients afflicted with acute respiratory distress caused by the Coronavirus. Additionally, we anticipate that Belluscura is likely to receive FDA clearance for their portable oxygen concentrator within the next 90 days. ”
Tekcapital succeed with Salarius
Tekcapital updated the market in October, which enlightened shareholders about their their portfolio company Salarius Ltd (NASDAQ:SLRX) expanding. Tekcapital owns 97.5% of the share capital of Salarius ltd. In Salarius portfolio update, consumers were given an insight into Microsalt stating “Salarius, is the developer and manufacturer of a proprietary low sodium salt called MicroSalt.” Salarius have worked an agreement with a diversified snack manufacturer to include Microsalt in the production of company snacks. However, no financial terms of the contract have been published. The patented Microsalt has been a product development funded by Tekcapital, and the success has paid off after landing this huge contract. Tekcaptial have seemed to tap into an exciting market with the development of Microsalt. The low sodium ingredients market is estimated to reach $1.76 billion by the end of 2025, with a compound annual growth rate of 11.7%. By using Microsalt, firms are given the flexibility of creating the same snacks with less sodium content, without giving up quality and taste. Shares in Tekcapital trade at 5p (+9.28%). 10/2/20 15:29BST.Panther Metals surges 50% as Annaburroo gets green light
Shares in Panther Metals (LON:PALM) have rallied over 50% on Monday afternoon, as the firm told its shareholders that it had won an exploration permit for its operations in Australia.
Panther Metals shares trade at 4p (+52.90%). 10/2/20 15:05BST.
The firm said that the exploration permit at the Annaburroo gold project in Australia had been granted, and it seems that this has caught shareholder optimism.
The Annaburroo Gold Project comprises a single licence (EL32140) covering an area of 149.8km2, located 105km to the southeast of Darwin, Northern Territory.
Grab samples at the asset have found gold grades of 61.2 grammes pet tonne and 50.8 grammes per tonne.
Darren Hazelwood, CEO, commented:
“The grant of the Annaburroo Gold Project license allows the Company to proceed with its maiden exploration programme on its fully-owned gold exploration projects in the Northern Territory. I expect this programme to commence from Q2 of 2020. With the Company fully funded into 2021 for our planned work programmes, we look forward to reporting on the corresponding results of these programmes accordingly.
Meanwhile, the appointment of Dr. David Groves is another seminal moment for the Company, confirming recognition from within the geological community of Panther Metals commitment to excellence in its pursuit of economic mineral discoveries. I would like thank Dr. Groves for agreeing to join the Company at this important time and I personally look forward to engaging with one of the most widely respected geologists in the world”.
Panther Metals continue to grow
In October, the firm gave another impressive update to shareholders where it announced had secured its first exploration licence in the Northern Territory, Australia. Its Exploration Licence Application regarded it Marrakai Project, which is located in Pine Creek Orogen. The ELA covers an area of 10.1 square kilometres, which has been the recorded source of some 500 ounces of gold nuggets (the largest of which was 30 ounces) and other ‘geochemical anomalies’. Speaking on the update, CEO Darren Hazelwood remarked, “The granting of the Marrakai licence cements Panther’s entry into the Australian exploration space. Our stated aim was to target the commodity rich jurisdictions of Australia and North America. I’m delighted to confirm to the market Panther Metals has, once again, achieved its goals.” Panther Metals should be very pleased with the reaction to the update provided, and this should spark shareholder confidence for 2020.Trans-Siberian Gold shares jump 6% following positive estimates in Russia
Trans-Siberian Gold (LON:TSG) have seen their shares jump on Monday following developments made regarding their Russian operations.
The firm said that they had reported a mineral resource estimation of one million ounces of gold at their Rodnikova deposit.
Looking at the JORC-compliant estimate, this indicated a mineral resource estimate of 3.1 million tonnes at a grade of 5.3 grammes of gold per tonne, for 519,000 ounces of gold.
The estimate also found an inferred mineral resource of 3.2 million tonnes of gold at a grade of 4.8 grammes of gold per tonne, for 491,000 ounces of gold.
Alexander Dorogov, Chief Executive Officer of TSG, commented:
“It is pleasing to confirm a 1million ounce gold Mineral Resource Estimate at Rodnikova. The JORC Mineral Resource Estimate validates previous reported estimates under the GKZ classification and also the value-created following its cost-effective acquisition last year.
We remain on track to deliver an initial scoping study in Q2 2020. This study will assist in de-risking the project by establishing the framework for understanding the economics of future mine development scenarios and will also provide guidance for near-term exploration programmes to maximise the delineation of further economic mineralisation”.
Trans-Siberian’s Vein 25
A few weeks back the firm also updated the market on their Asacha Gold Mine operations. The company said high-grade gold intersections were obtained in a more or less complex structural environment, with initial drilling results of 133 grams per tonne of gold and 57 grams per tonne of silver at over four meters. The firm told shareholders that it will continue drilling over the next few months as it plans for a second drill to be mobilized adding to the site. In addition to the north extension of Vein 25, five other target areas will be drill tested during the year. To achieve this, the firm said that its board has approved a 2019/20 drilling program totaling 25,000 meters with the potential for further expansion.Strong start to 2020
Trans-Siberian Gold have started 2020 very well, despite a slowdown at the end of 2019. The firm saw its shares in red after mineral estimation analysis had been overestimated. The total measured, indicated, and inferred mineral resource for the Kamchatka-located mine has fallen to 313,000 ounces of gold and 675,000 ounces of silver as at the start of December 2019. The estimate before the results were published was 553,000 ounces of gold and 1.3 million ounces of silver which showed a 43% and 93% drop respectively. Trans-Siberian have seen a few hits and bumps along the way, however today’s update has sent a positive message to shareholders. The firm will hope that the good run can continue and continue to lift share price. Shares in Trans-Siberian Gold trade at 58p (+6.42%). 10/2/20 14:51BST.Halifax: house prices grow in January
New data revealed that house prices rose in the month of January as the outcome of December’s general election seems to have provided some political stability.
According to the latest Halifax House Price Index, house prices in January were 4.1% higher than in the same period a year prior.
The data also revealed that house prices rose by 0.4% on a monthly basis.
“Irrespective of political persuasion, the election result has provided us with a clear path ahead, which in turn has improved market sentiment,” Iain McKenzie, CEO of The Guild of Property Professionals, said in a statement.
“With signs of stability returning to the market, even if ever so slight, we are seeing the fires of the property market reignite, with activity once again on an upward trajectory which we anticipate will continue at a modest rate over the coming months,” the CEO continued.
Russell Galley, Managing Director at Halifax, also commented on the data: “A number of important market indicators continue to show signs of improvement. We have seen a pick-up in transactions with more buyer and seller activity consistent with a reduction in uncertainty in the UK economy.”
“However, it’s too early to say if a corner has been turned. The recent positive figures may actually represent activity that would ordinarily have been expected to take place last year, but was delayed by economic uncertainty. So while housing market activity has undoubtedly increased over recent months, the extent to which this persists will be driven by housing policy, the wider political environment and trends in the economy,” Russell Galley continued.
Commenting on the future, Russell Galley added: “Looking ahead, we still expect a moderate rate of house price growth over the course of the year. Demand is likely to continue to exceed the supply of properties for sale across the UK, with the subdued pace of new building also adding to upwards price pressure. The environment for mortgage affordability should stay largely favourable. However with the growth in rental costs accelerating, many first-time buyers will continue to face a significant challenge in raising necessary deposits.”
Blackfinch Group launch technology focused Spring VCT
Blackfinch Group announced that they have launched their first Venture Capital Trust, which targets growth-stage tech-enabled companies.
The Gloucester-based investment and asset manager launched the Blackfinch Spring Venture Capital Trust, which will encompass a portfolio of technology and technology-enabled companies, which have already raised funding, gained traction and are seeking to accelerate the scale-up process.
The Blackfinch Spring VCT will also be a follow-on funder for the Blackfinch Ventures EIS Portfolios, which puts a focus to technology start-ups at the heart of its investment procedures.
Blackfinch Ventures targets high-growth opportunities, supporting start-ups, early stage and growth-stage businesses with technological potential. The focus is on disruptive businesses, offering products that address real world needs, with the capability to make an impact in global markets.
Richard Cook, Founder and CEO of Blackfinch Group, said:
“This launch marks a key milestone in Blackfinch’s continued growth and will further enhance the product range we offer to advisers and their clients. The Blackfinch Spring VCT will invest in companies operating across multiple sectors. The VCT will focus on its own high-quality deal flow as well as follow-on funding for the highest performing companies in the Blackfinch Ventures EIS Portfolios. These are innovative new firms at the growth stage of their development, bringing a higher chance of success.”
Dr Reuben Wilcock, Ventures Director at Blackfinch, said:
“The Blackfinch Ventures team will carefully select strong, new opportunities from all around the UK, backing some of the country’s most talented founders. The Blackfinch Spring VCT will give clients the chance to diversify their portfolios through exposure to the tech sector. The VCT is targeting dividends of 5% p.a. by 2024; additional benefits include venture capital tax relief and the potential for special dividends through earlier exits and those that exceed projected performance.”
Last week, I had an opportunity to catch up with Dr Reuben Wilcock to discuss the new launch and all things investment related.
Dr Reuben has been working at Blackfinch since February 2019, and held an initial position as a Ventures Partner then transitioned into the Director of Ventures. He has played an instrumental role in the launch of the Blackfinch Venture Capital Trust, and speaking with him I managed to pick his brains on a few topics.
As mentioned previously, Blackfinch have looked to put technology at the heart of their investment process. This certainly complements the background of Dr Wilcock, having had a background in Electronic Engineering having studied at PHD level at the University of Southampton.
Notably, he has published over 45 research papers in his field and has experience dealing with high tech start-up companies, having founded Future Worlds in February 2015. Future Worlds has supported over 250 entrepreneurs and helped launch over 50 companies and start-ups, where Dr Wilcock has used his experience to help young talented people gain investment into some very interesting projects and businesses.
The combination of expertise and knowledge has made him the perfect character to kickstart the new VCT project for Blackfinch.
The Venture Capital Trust Scheme was set up by the government in 1995, and provided an opportunity for the private sector to invest into high growth companies, with the end goal to stimulate jobs and boost employment.
Speaking to Dr Wilcock on the Venture Scheme he told me “The VCT is a great opportunity for investors to diversify their portfolio. Investors can benefit from 30% initial income tax relief on the sum invested and, depending on performance, tax-free dividends and growth”.
Looking at Blackfinch as a firm, I was informed that the investment choices within the VCT are thoroughly scrutinised before decisions are made. It was interesting to note that a thorough laid out process is conducted, where all members of the ventures team are consulted on a firm. The focus for Blackfinch is the potential of the company they are researching, and that the products can make a significant difference otherwise known as a “disruptive product”.
Dr Reuben spoke to me, also adding that Blackfinch particularly wanted to focus their interests on companies that operate in big, growing markets, typically with a market value of at least £1 billion, with room to expand with growing trends. The Blackfinch Spring VCT targets investors who have the appetite for high-risk return, and want to help accelerate the growth of smaller companies with big potential.
Interestingly, Blackfinch have made a real effort to understand and get to know the person behind the business, their values and what difference they are trying to make in the world of technology and business. This forms one of the main criteria of Blackfinch’s investment choices.
Going forward, I was told about three areas which seem particularly intriguing to Blackfinch and Dr Reuben.
- Food technology – with the rise of vegan eating habits, and many people now making an ensured emphasis to cut down meats in their diets this was an area which had a lot of potential. Dr Reuben informed me that many consumers and businesses are now focusing on the way that food is made, delivered, packaged and shipped. The rise of environmentalism has never been so important, and investing into the food technology industry is one that will drive trends, change the nature of food patterns and is a sector which creates a lot of impact.
- The next sector is one that has been really accelerating over the last few years. The rise of financial technology or “FinTech” has been an interesting new consideration for investors and businesses. This was highlighted as an emerging market, and certainly there are many developments that need to be made.
- The final sector which was of note was the fitness technology industry. Dr Reuben spoke to me about the importance of personalization, and how there is an added emphasis placed on people’s activity and diets. The fact that people now don’t have time to be working out fitness plans and regimes has brought about the rise of fitness technology. This is a growing market, and one that Blackfinch identified to have huge consumer and investor potential.
As our conversation progressed, it was interesting to see how Dr Wilcock had laid out a definitive strategy to ensure that the companies that Blackfinch would be investing into had a balance between potential and risk, and it was impressive speaking to someone who had such a vast range of experiences and industry knowledge.
As our conversation continued, we reached the final question which I had which looked at examples of companies that Blackfinch had already invested in.
I was delighted to be informed of three very different companies that had been identified by Dr Wilcock and his team, and the three are as below.
The first company, was one called TENDED. This is a firm that is slightly different from the sectors that had been outlined previously, however one that had huge philanthropic purpose, and certainly a firm that was changing the dynamic of the approach to personal safety with an impressive combination of technology and enterprise.
In essence, TENDED offer a range of products which look similar to a smartwatch or a fitness band, however the main purpose is different to counterparts such as the Fitbit. The TENDED device can tell whether the individual using it gets into an accident or gets into any unwanted trouble.
Using smart technology, this allows the user to quickly contact an emergency number which has been preregistered onto the device. One of the main strengths which Dr Wilcock spoke about was the look of the product and also the easy nature of user interface, which was one of the primary reasons for investing into this company. Blackfinch initially invested into this company in April 2019, and the firm has grown and developed working with Blackfinch over the last few months.
The second company which was mentioned was KINTERACT. This firm once again have managed to make themselves stand out in the market, combining the power of education with technology.
Kinteract offer a simple way for teachers and parents the ability to track their child’s educational progress and offer insights into where developments can be made.
Using the Kinteract technology software, teachers can log observations to recommend learning and development for children’s curriculum and subjects of learning. The firm have really made an effort to make the learning process one that is inclusive, as parents and teachers are given a user interface platform which allows instant dialogue through the Kinteract app.
Additionally, the firm offer additional services such as location sharing and progression updates for parents and teachers to monitor how a child is performing in all aspects of his or her life, which is a brilliant development in the world of children’s learning.
The best thing about this product I feel is that it is such a versatile and portable product, which is built around a “rich and fluid data set” about the child and what the best ways for the child to develop his or her learning.
On their website, Kinteract emphasize that this is not just a product for children and that the applications are unlimited all the way to adult learning and graduates who are looking to really nail down and tailor a unique learning experience.
It is so apparent to see why Blackfinch have invested in this company, and it seems like the potential is huge for the firm.
Another interesting company which was noted by Dr Wilcock was called Kokoon. Upon further research into the company my initials thoughts were that this was just a normal headphone company, however I was not more wrong.
Where Kokoon have differentiated themselves in the market is that the headphones and products they supply allow the user to look at their brain and psychological activity.
Interestingly, Kokoon is a company which has looked to expand their dimensions as their headphones allow companionship with other apps providing therapy and mediation solutions for those that require services such as CBT courses or sleep aids.
Blackfinch through this investment have combined two key areas of development, technology and science. Kokoon have used scientific expertise to market their products, and it was a breath of fresh air to see that already 15,000 headsets had been sold showing the massive potential for this product to be the first of its’ kind in the market.
Through this investment, Blackfinch changed the nature of their investments as I was told that this was a company that was in the latter stages of its developments, tailing from the traditional narrative that Blackfinch only invest in start up or early stage businesses. However, this does show a degree of flexibility from Blackfinch which should attract both investors and businesses to work with them.
As our conversation concluded, it was clear to see that Dr Wilcock, Richard Cook and the team at Blackfinch have really done their research into the launch of their new Venture Capital Trust, and by giving the examples of firms that they have invested in, this really sets a high benchmark for future performance.
Richard Cook added that, “Blackfinch has always been very entrepreneurial and as part of that our growth has been driven by supporting groundbreaking new businesses. As an early stage investor with extensive experience in founding and growing companies, we are now applying this to supporting innovative new firms through the Blackfinch Spring VCT.”
The Blackfinch team were a pleasure to work with and it was great for me to catch up with the man managing the expert team that drove the new technology based VCT, and certainly it is something which I would recommend to go and have a look at, as the future looks very bright for budding entrepreneurs and investors that want to work with Blackfinch.
Atlantic Capital Markets remain positive on Smurfit Kappa following a strong 2019 and dividend increase
Atlantic Capital Markets have maintained their positive stance on sustainable packaging group, Smurfit Kappa (LON:SKG), following a 7% increase in EBITDA in their full year results.
The rise in profit allowed the board to increase the final dividend by 12% to 80.9 cent per share.
In addition to the strong full year results, Smurfit Kappa shares are an increasingly attractive proposition due to their ESG credentials.
“The figures are great news for all concerned,” said John Woolfitt, Director of Trading, Atlantic Capital Markets.
“Smurfit has always been our top pick in the sector and the news of them returning to profit and increasing the dividend is positive for shareholders and sends a strong message out to the markets regarding the business position and the year ahead.”
“Profit before tax for the year to 31 December was €677m, compared to a loss of €404m the previous year. Last years loss was largely due to the Venezuelan business being seized by President Nicolas Maduro’s regime. This now looks to be behind the firm with them persuing proceedings to seek compensation from the government of Venezuela.”
“Despite a challenging backdrop for the sector Smurfit have yet again proved themselves to be in a strong position with solid performance and a confident
outlook for the year ahead.”
Smurfit Kappa Dividend Hike
John Woolfitt also pointed to the increase in dividend as a reason to be bullish on the stock. “Smurfit is a business built on quality, from their products through to their management and staff and this is shown in the bullish increase in the dividend,” John said. Tony Smurfit, Group CEO, summarised the results: “2019 represents another period of strong delivery and performance for SKG. EBITDA was €1,650 million, a 7% increase on 2018 with an increased EBITDA margin of 18.2%. Our vision is to be a globally admired company, dynamically delivering secure and superior returns for all stakeholders. Our recent performance shows progress towards the realisation of our vision. “Across 35 countries, we continue to create market leading innovative solutions for over 65,000 customers, delivering sustainable and optimised paper-based packaging. The 2019 outcome also reflects our performance culture, which has, at its core, an unrelenting customer focus. “During the year, we continued to strengthen our integrated model, following the acquisition of Reparenco in 2018, and our more recent acquisitions in France, Bulgaria and Serbia. These acquisitions significantly enhance our business and further expand our geographic reach. As with previous mergers and acquisitions, the new teams have integrated well and further strengthen the depth and quality of the Group. “Our European business continued to perform strongly, delivering an EBITDA margin of 19.0%. Demand growth was ahead of the market and in line with our expectations for the year with particularly good performances in Iberia and Eastern Europe. “The Americas region continued to perform well, delivering an increased EBITDA margin of 17.5% up from 15.7% in 2018. Our three main countries of Colombia, Mexico and the US had strong financial performances with demand in Colombia particularly strong.”Dow Jones misses chance to hit all-time high after wow Wednesday
After an incredible 500 point bounce on Wednesday, the Dow Jones misfired after the bell on the Thursday session.
The index will likely be forgiven for today’s flummox, after a sensational start to 2020. However, investors will likely see it as an opportunity missed after China’s Valentine’s love letter, and its proposition to slash its tariffs.
Speaking on market movements during the latter knockings of the Thursday session, Spreadex Financial Analyst Connor Campbell stated:
“Poised for a fresh record peak in the pre-market, the Dow Jones bottled it after the open, investors getting cold feet once the bell rang on Wall Street.”
“Instead of celebrating news that China will halve tariffs on 1717 US goods as a Valentine’s Day treat, the Dow loitered unchanged just under 29300.”
“To be fair to the index, it had a spectacular session on Wednesday, rising close to 500 points. And it is now 1000 points above its end of January lows. So it has perhaps earned a break.”
“The Dow’s level-headedness failed to impact the Eurozone indices. The CAC re-crossed 6000 as it expanded its gains to 0.7%, while the DAX spent the day nearing a fresh all-time high of its own, adding 0.6% to sit a smidge above 13550.”
“The FTSE was somewhere between Dow and DAX, rising just 0.2% as it stuck its nose above 7500. It arguably would have been a bit livelier if Brent Crude’s 1.1% decline hadn’t sent BP and Shell down 1.6% and 0.7% respectively. This as the black stuff waits for OPEC+ to declare their plan to tackle a coronavirus-informed drop in demand.”
“That its gains weren’t more robust was a surprise considering sterling continued yesterday’s losses, falling 0.3% against the dollar to hit a 6-week low of $1.295. It was in marginally better health against the euro, a 0.2% loss leaving much of Tuesday’s rebound intact. It’s going to be a tricky few months for the currency, as the UK and EU start to feel each other out regarding the future of their trade relationship.”
Nationwide told to refund £900,000 in unstated overdraft charges
Nationwide Building Society (LON:NBS) has been ordered to pay back £900,000 to its customers after failing to notify them of charges on unarranged overdrafts.
The company said that it sent text alerts, however the message somehow didn’t contain the necessary information to warn customers that they would be charged.
According to the Competition and Markets Authority, some 70,000 people were affected by the company’s negligence, with these individuals already known to Nationwide as having difficulties managing their accounts.
The CMA doesn’t have the power to impose a fine, though the refunds paid by the Group will reimburse the full extent of charges incurred by companies entering into unauthorised overdrafts.
Under CMA rules, customers with personal current accounts must receive text alerts before a company imposes unarranged overdraft charges. This allows consumers to take the necessary steps to avoid unexpected fees.
Today’s announcement is just the newest wrongdoing by big financial players, in what seems to be a losing battle to rekindle consumer trust in the banking sector.
It marks the second time Nationwide has breached this same banking order within the last six months, with it being told to refund £6 million to customers in August.
This was somewhat overshadowed by the traction gained by the wrapping up of PPI repayments by big players such as Lloyds (LON:LLOY) during 2019. The situation of consumer confidence in banks will likely worsen before it improves, with the EU saying it will exclude the UK from the MiFIT II regulatory framework.
CMA response
Adam Land, senior director of remedies, business and financial analysis at the CMA, said: “Banks and building societies that fail to send customers text alerts saying they will be charged if they enter an unarranged overdraft are breaking the rules. The fact that Nationwide is a repeat offender makes it even more serious. “Following our action, it will now repay all affected customers, and quickly.”“This issue will not occur again”The CMA saidt Nationwide has appointed an independent auditor to review its processes.