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Metro Bank, the high street lender, is drawing up plans to raise hundreds of millions of pounds of new capital in weeks in a bid to strengthen its troubled balance sheet.

Sky News has learnt that Metro Bank – the first new lender to open on Britain’s high streets in over 100 years when it launched in 2010 – is working with advisers to secure several hundred million pounds in new debt and equity.

City sources said on Wednesday evening that the company had hired bankers at Morgan Stanley to work on the capital-raising plans, while Moelis, another investment bank, is also thought to be involved.

Royal Bank of Canada, Metro Bank’s corporate broker, is also involved in the equity-raise.

Metro Bank’s board, which is chaired by Robert Sharpe, a veteran banker, is exploring a range of options to shore up its troubled balance sheet.

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A potential equity-raise of more than £100m is understood to be among them, although analysts and industry executives have cast doubt on its ability to deliver that following a precipitous fall in its share price.

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Metro Bank has 2.7 million customer accounts, making it one of the 10 largest banks in Britain.

It offers current accounts, business accounts, personal loans and insurance products, and employs about 4,000 people, operating from about 75 branches across the country.

Shares in Metro Bank have halved during the last month to leave it with a market capitalisation of less than £100m, having been valued at about £3.5bn at its peak in 2018.

The company’s directors are also understood to be trying to raise roughly £200m of loss-absorbing capital known as MREL.

Metro Bank needs to refinance £350m of existing MREL debt which is due to expire this time next year.

Another alternative being considered would involve the sale of billions of pounds of mortgage assets, a move that would reduce its earnings but also sharply reduce the amount of capital it is forced to hold.

Further options could entail a debt-for-equity swap or an outright sale of the company.

In a statement issued to Sky News, a Metro Bank spokesman said: “As previously stated, Metro Bank continues to consider how best to optimise its capital resources to allow it to take advantage of the deposit and asset origination platform that has been built.”

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Sky’s business presenter Ian King says Treasury plans aim to maintain access to cash for consumers and businesses.

On Wednesday evening, City insiders said that banking regulators and the Treasury were closely monitoring Metro Bank’s capital-raising plans.

While there is no suggestion that it is at risk of imminent collapse, rumours have circulated for years about its finances.

In 2019, customers formed sizeable queues at some of its branches after suggestions circulated on social media that it was in financial distress.

Days later, it unveiled a £350m share placing in a move designed to allay such concerns.

News of Metro Bank’s efforts to secure a new capital injection comes weeks after it was dealt a severe blow by the Prudential Regulation Authority (PRA), which supervises British banks’ capital and solvency.

In mid-September, it announced to the London stock market that the PRA had informed it that it would not gain approval this year for an internal ratings-based model allowing it to hold less capital against its mortgage assets.

Metro Bank has had a chequered history with City regulators, despite its relatively brief existence.

Last December, it was fined £10m by the Financial Conduct Authority for publishing incorrect information to investors, while the PRA slapped it with a £5.4m penalty for similar infringements a year earlier.

The lender was founded in 2009 by Anthony Thompson, a financial services entrepreneur, and Vernon Hill, an American who eventually left in controversial circumstances in 2019.

Metro Bank has been forced to sell assets in the past, announcing a deal in December 2020 to sell a portfolio of owner-occupied residential mortgages to NatWest Group for up to £3.1bn.

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Discord hack shows dangers of online age checks as internet policing hopes put to the test

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Discord hack shows dangers of online age checks as internet policing hopes put to the test

Messaging platform Discord has said the official ID photos of around 70,000 users have been stolen by hackers.

The app, which is popular with gamers and teenagers, said the hackers targeted a firm responsible for verifying the ages of its users. Discord said its own platform was not breached.

The stolen data could include personal information, partial credit card numbers and messages with Discord’s customer service agents, the firm said.

No full credit card details, passwords or messages and activity beyond conversations with Discord customer support were leaked, it added.

Discord said it had revoked the third-party service’s access and was continuing to investigate. It said all affected users have been contacted.

“Looking ahead, we recommend impacted users stay alert when receiving messages or other communication that may seem suspicious,” it said.

Until recently, a hack like this could not have happened, because companies had no need to process and collect proofs of age.

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Now, so many governments are following the UK and introducing age verification for unsuitable or pornographic content that a company like Discord has to roll out age checks for a decent portion of its 200 million active users.

It’s a bit like the way that shops have to check your age if you’re buying alcohol – only because it’s online, it comes with a lot of additional complications.

Pic: Shutterstock
Image:
Pic: Shutterstock

A shop, for instance, won’t keep a copy of your passport once they’ve checked your age.

And it definitely won’t keep it in a massive (yet strangely light) safe along with thousands of other passport photocopies, stored right by its front door, ready to be taken.

Online, it’s surprisingly easy to do just that.

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It’s worth noting that the age verification system used by Discord wasn’t hacked itself. That system asked people to take a photo of themselves, then used software to estimate their age. Once the check was complete, the image was immediately deleted.

The problem came with the appeals part of the process, which was supplied to Discord by an as-yet-unnamed third party.

If someone thought that the age verification system had wrongly barred them from Discord they could send in a picture of their ID to prove their age. This collection of images was hacked. As a result, Discord says, more than 70,000 IDs are now in the possession of hackers.

(The hackers themselves claim that the number is much bigger – 2,185,151 photos. Discord says this is wrong and the hackers are simply trying to extort money. It’s a messy situation.)

There are ways to make age verification safer. Companies could stop storing photo ID, for instance (although then it would be impossible to know for sure if their checks were correct).

And advocates of ID cards will point out that a proper government ID could avoid the need to send pictures of your passport simply to prove your age. You’d use your digital ID instead, which would stay safely on your device.

But the best way to stop data being hacked is not to collect it in the first place.

We’re at the start of a defining test – can governments actually police the internet? Or will the measures that are supposed to make us safer actually end up making us less secure?

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‘The time is now to stop Reform’ – Plaid Cymru calls on Labour voters to unite behind Welsh nationalists

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'The time is now to stop Reform' - Plaid Cymru calls on Labour voters to unite behind Welsh nationalists

One party has held court over Welsh politics for more than a century.

Welsh Labour MPs have been the largest group sent to Westminster in every general election since 1922 – and the party has been in government in the country for more than a quarter of a century.

But if the polls are accurate, Labour’s long-standing grip on politics in Wales is fading.

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Plaid Cymru and Reform UK are running almost neck and neck, while Labour trails significantly. A recent YouGov poll put Plaid Cymru on 30%, Reform UK on 29% and Labour at 14%.

Plaid Cymru, heading into its conference this weekend, can sense the mood for change in Wales – and intends to show it is ready for government.

Polling last month put Plaid Cymru and Reform UK almost neck and neck in Wales, with just one point between them - while Labour trails
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Polling last month put Plaid Cymru and Reform UK almost neck and neck in Wales, with just one point between them – while Labour trails

The party hopes to capitalise on disillusioned Labour voters feeling let down by their party under Sir Keir Starmer, and use this to tackle the rise of Reform – which is key to getting it into power.

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In his leader’s speech, Rhun ap Iorwerth is expected to position Plaid Cymru as Wales’s progressive force, and the only party capable of taking on Reform.

He will say: “We’re not here to act as Labour’s conscience. We are not here to repair Labour. We are here to replace them.

“If you’ve never voted for Plaid Cymru before, the time is now.

“The time is now to stop Reform and elect a government more radical, more ambitious, more impatient to bring about positive change than any which has gone before it. A government of progress and of progressive values.”

One in five Labour voters in Wales intend to back Plaid Cymru at the Senedd elections in 2026, according to YouGov. But almost a quarter of Labour voters remain undecided on who to endorse.

The topic of independence will no doubt be a contentious issue for voters who are angry about decisions made by Labour in Wales and Westminster, but do not want an independent Wales.

Plaid Cymru supporters outside the Senedd on 8 October
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Plaid Cymru supporters outside the Senedd on 8 October

Mr ap Iorwerth has ruled out an independence referendum if Plaid Cymru wins next year’s elections, signalling that he doesn’t want the campaign to centre on independence.

Throughout the conference, Plaid Cymru will position itself as ready to govern. But voters will expect clear plans for the NHS, education, and the economy. The question for the party, both during this conference and over the coming months, will be whether its proposals can win over Labour voters in its quest to beat Reform.

But Plaid Cymru’s challenge to Nigel Farage’s party faces a critical test sooner than May. Instead, its next battle will be in the Caerphilly Senedd by-election on 23 October.

Historically a Labour stronghold at both Senedd and Westminster levels, Caerphilly has consistently returned Labour representatives, with Plaid Cymru as the main opposition at Senedd elections.

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However, this election introduces a new dynamic, as Reform has emerged as a credible challenger, poised to disrupt the traditional two-party contest.

Coming second at this election won’t be a total loss for Plaid Cymru.

If it can come second at the by-election, it will prove the point Mr ap Iorwerth will be making at the conference in Swansea: that his party is the only credible anti-Reform vote.

The full list of candidates standing at the Caerphilly by-election:

  • Labour – Richard Tunnicliffe

  • Plaid Cymru – Lindsay Whittle

  • Reform UK – Llŷr Powell

  • Conservative – Gareth Potter

  • Green Party – Gareth Hughes

  • Gwlad – Anthony Cook

  • UKIP – Roger Quilliam

  • Liberal Democrats – Steve Aicheler

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Starmer’s found new enthusiasm for his digital ID project – but will he be able to sell it?

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Starmer's found new enthusiasm for his digital ID project - but will he be able to sell it?

One metric for the rise and fall of this government might end up being the progress of the rollout of digital ID.

The lack of a clear plan – despite the high profile announcement by the PM – means the destination still remains slightly opaque, and some cabinet ministers are sceptical.

However, the PM’s India trip suggests that there might just be a path to success, if things fall in Keir Starmer’s favour.

During his visit, Starmer met the boss of Infosys, Nandan Nilekani, who is behind the rollout of digital ID to more than 1.4 billion Indian citizens.

Afterwards, when I asked about it at the closing press conference of the India trip, he was infused by a fresh enthusiasm for the plan, not evident at the Labour gathering in Liverpool in the days after he first unveiled it.

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Digital ID cards for everyone?

Below is what he said to me, transcribed in full.

But as you read it, notice how the PM’s explanation and justification for this scheme – which will be one of the biggest projects this government undertakes if it does happen – centres around convenience for citizens and makes no mention of the case originally used for it – to combat illegal migration.

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Starmer told me: “We did discuss [digital ID] yesterday. And in particular, the benefits that it has brought in India.

“We’ve obviously also looked at other countries – Estonia, for example. The speed with which it allows citizens here to access services, particularly financial services, is something that was recognised in our discussions yesterday and actually at the fintech discussion that we had today, as well.

“So, we’re looking at those examples of how digital ID helps individuals, with the processes that sometimes take too long and are too cumbersome, and makes it easier for them.”

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Who opposes BritCard?

The answer is clear: the prime minister now puts personal convenience as the top justification.

While Starmer was locked in the Fintech summit, we visited Mumbai University to gauge opinion on digital ID, which has rolled out across India over the past 10 to 15 years.

We asked students as they could traditionally have been thought to be one of the more cautious groups in society towards a project which involves state intrusion into the lives of individuals.

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Sky’s Sam Coates reports from India

Among all the people that we talked to – and you can watch our video at the top of this page – there was a recognition of privacy concerns, worries about data leaks, and uncertainty about how some of the information might be used.

But every single person we stopped and talked to about it was nevertheless enthusiastically in favour – and said it had made their lives simpler and more efficient.

The net benefits of this scheme had landed with the Indian citizens we spoke to.

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Is this the end of digital privacy for UK citizens, or a tech solution to illegal immigration?

The engagement from Infosys is also significant after the boss of Palantir, a rival tech company, gave the idea of a UK digital ID scheme a comprehensive shellacking last week.

For a moment, it looked like the corporate world might be pulling back from the scheme – so the engagement of a massive multinational corporation has come at just the right moment.

None of which is to downplay the obstacles.

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Who is going to implement Labour’s new policy on digital ID cards?

In a bizarre move, the Home Office appears to have been allowed to swerve responsibility for the project, which has gone instead to Liz Kendall’s Department of Science, Innovation and Technology (DSIT), which does not yet have any track record of major delivery.

One DSIT aide said that the young average age of staff at the newly formed department is an advantage, a claim which seems somewhat doubtful.

So, Whitehall may tie itself up in knots over this project. Or, it might turn out that India’s cultural norms simply make it an easier place to roll out a scheme like this.

But on the basis of our enquiries, there is the potential case for a scheme that can be sold to a willing public.

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