The Financials Unshackled Weekender | Issue 64 (6th Oct 2025) - Close Brothers Transformation, Fresh Irish Deposits Competition and Much More
The independent voice on banking developments - No stockbroking, no politics, no nonsense!
The material below does NOT constitute investment research or advice - please scroll to the end of this publication for the full Disclaimer
Welcome to Issue 64 | ‘The Financials Unshackled Weekender (6th Oct 2025)’ - your weekly pack for critique and curation of key banking developments.
The main focus of this week’s note is on Close Brothers’ FY25 results and the news that MoCo (Bawag) has launched an overnight instant access deposit account in Ireland offering a market-leading rate of 2.00% AER. The note also includes a sprinkling of select snippets on other important news developments.
To unshackle your understanding of the last week’s banking developments please read on to explore critiques, curated insights, your calendar for the week ahead, and to finish with some light entertainment!
🔎 The Critique 🔎
🇬🇧 Close Brothers FY25 results reflect on strategic transformation 🇬🇧
What Happened?: Close Brothers Group (CBG) published full year results for the 12 months to 31st July 2025 on Tuesday 30th September.
Key Detail:
FY25 results: Adjusted operating profit of £144m came in above consensus* for £125m though the beat was predominantly a function of above-the-line adjusted operating expenses coming in well below consensus (adjusted revenue was well behind consensus on the other hand) and a swathe of adjusting items totalling £267m saw CBG report a statutory loss before tax from continuing operations of £122m, which was worse than the consensus for £92m. Net loans (incl. operating lease assets) of £9.63bn were below consensus for £9.85bn. The CET1 capital ratio print of 13.8% (c.14.3% pro forma post-Winterflood disposal) was ahead of consensus for 13.4% though the footnotes to the company-compiled consensus document indicate that the beat was mainly driven by the firm’s decision to maintain the motor finance redress provision at £165m (though a further separate £33m provision was taken to account for a proactive customer remediation programme in relation to early settlement of loans in Motor Finance).
* Based on company-compiled consensus as at 29th September
Strategy / Outlook: CEO Mike Morgan set out a strong message around CBG transitioning to a specialist bank - away from its diversified business model, with three key pillars to the strategy being: i) Simplify (largely complete now according to Morgan); ii) Optimise (major focus now on delivering efficiency gains with the company expecting to deliver at least c.£20m of annualised savings p.a. in each of the next three years); and iii) Grow (focusing on segments where CBG sees mid to high single-digit growth potential through-the-cycle) - in a bid to deliver a double-digit RoTE by FY28, which is expected to rise thereafter.
Unshackled Perspectives:
Lots of moving parts in the numbers; significant new information: Lots of adjusting expenses as well as a split between continuing and discontinued operations make for a convoluted set of numbers. Indeed, the wide variability in pre-results consensus estimates highlights the challenge and the miss on revenues / beat on above-the-line opex were both significant. It was also somewhat scrappy seeking to disentangle the fresh guidance relative to consensus expectations. Indeed, Tuesday was a choppy trading day with a sharp reduction in the share price initially that largely reversed as the day progressed - and my take is that the positives and negatives set out below largely offset each other.
Key positives: 1) Clear focus on efficiencies over the coming years with the aforementioned £20m+ of annualised cost savings p.a. in each of the next three years (encouraging examples of existing efficiencies capture in AI context cited on the call). CFO clear that the ambition is higher but that this is what seems realistic and it was somewhat reassuring to hear Morgan talk of taking personal accountability for delivery with a transformation hire to oversee the project reporting directly into him (his willingness to put himself out there taking personal responsibility on this front rather than deflecting to the CFO / new transformation hire / divisional heads is confidence-inspiring but I also think that’s an element of his management style). Bottom line here is there is clear upside to above-the-line consensus FY26/27 opex expectations - and it is likely that many will have faith that CBG will deliver as promised. 2) The mid to high single-digit loan growth opportunity through-the-cycle messaging was upbeat. 3) Committing to a double-digit RoTE by FY28, noting that it is expected to rise from there was likely helpful at the margin but it is far out. 4) CET1 capital ratio print and confirmation that CBG expects to maintain its CET1 capital ratio above its medium-term target range of 12-13% in the near-term (though the corollary of this is that the reason for this decision is most likely due to the danger of material further motor finance-related provisions) - as well as the news that Basel 3.1 implementation is expected to have a less significant impact on capital headroom than initially estimated.
Key negatives: 1) FY25 revenues outturn versus guidance means there is clear downside to FY26/27 income expectations (with the loan growth - noting as well that NIM guidance of “slightly lower than 7%” for FY26 is below where consensus is perched (7.0%). 2) Scale of the adjusting expenses in FY25 (though some compensatory effects here given above-the-line opex significantly below consensus - and, within this, annualised cost savings of £25m delivered by end-FY25 was ahead of plan), particularly the disappointing news of a further (isolated) £33m provision. It feels like FY26/27 consensus below-the-line of expenses (excl. motor finance provisioning) of £4m/nil will move up a bit. 3) While the loan growth messaging was upbeat, the market is likely to remain sceptical on this point given a disappointing experience in FY25 relative to expectations, current market conditions, nervousness in relation to the economic outlook, and the fact that the loan growth opportunity is “through the cycle” (though the CEO’s comments in relation to reluctantly turning away £700m of “new new” business will give some sceptics pause for thought in my view). 4) On the motor finance provisioning, the CEO wouldn’t be drawn on whether, in the wake of the 1st August Supreme Court judgment, expectations for the total hit are better or worse than expected at the stage of calibration of the £165m provision - though the CFO did comment that it narrows the range of potential outcomes and “removes one of the more outlier worst case scenarios that we included in the initial modelling” (same message as LLOY basically), going on to note that a model recalibration has been completed (which approaches the modelling in a different way) which still supports the £165m provision. This is not the first time that the £165m provision has come under significant scrutiny and there will likely remain a significant degree of nervousness around where the costs end up.
All in all: Management has been proactive in taking action to build capital in the wake of the motor finance debacle and is presenting the group’s more focused image in a positive context, i.e., a transformed specialist bank which has the opportunity to capture significant efficiencies and growth. Executing as well as possible for now it seems though the market will remain fixated on what the implications of the impending FCA redress scheme will be (with the design and scope likely to be clarified in the coming days) and it is difficult to see how sentiment will evolve meaningfully until more is known.
🇮🇪 Fresh Irish deposits competition 🇮🇪
What Happened?: The Irish Times reported here on Friday morning that MoCo, the Irish unit of Austria’s Bawag, has launched a new instant access demand account offering an AER of 2.00% to retail customers. MoCo already provides mortgage product in Ireland - having started distributing mortgages through brokers in early 2024 following a soft launch in 2023.
Key Detail: This rate is far superior to the rates on most demand products available to retail customers from the three listed players (see AIBG’s rates here, BIRG’s rates here, and PTSB’s rates here). PTSB’s are the lowest of the pack by far. Based on the rate information available on the banks’ websites, only BIRG’s offering comes close with a 2.00% AER rate available on balances up to €29,999 but, for amounts above that threshold, the best rate in the market (until now) is just 0.50% (again, with BIRG). The article in The Irish Times noted that a spokeswoman for MoCo has said there are no restrictions on the volume that can be deposited per month in the case of its own product and a quick review of the FAQs on the MoCo website here seems to confirm this.
Unshackled Perspectives:
This is a highly significant development in my view. I previously wrote in Financials Unshackled Issue 39, in relation to Bankinter’s Avant Money business, that “surely currently ultra-low-priced easy access / demand deposit product will be a key point of attack for Avant?” given that “The Irish market appears ripe for disruption – with almost 90 per cent of customer funds parked in current accounts and other overnight products” (as I wrote in Business Post on 10th February here). While Irish savers are notoriously inert there is a possibility, if MoCo gets its marketing right (and depending on its funding targets both within - and, potentially, outside of Ireland), that this could drive quite substantial inflows given it is a premium rate on overnight product that carries the benefit of a guarantee up to €100k by the Austrian Government pursuant to the Austrian Deposit Guarantee Scheme (surely likely to be better received by potential customers than the equivalent Lithuanian deposit guarantee scheme - from a bank that doesn’t regularly top the tables for fraud complaints in my understanding).
Indeed, the low rates offered by the Irish banks on demand accounts mean that switching between current and demand accounts is likely negligible - meaning that all of their overnight product is theoretically susceptible to outflows, i.e., not just existing demand account balances. Ireland is an anomaly in this respect - the UK has a highly competitive active instant access deposit-gathering market, for instance. What’s more, ask anyone who has tried to open some of the higher-priced accounts with the Irish banks and all sorts of obstacles are put in their way - in some cases you have to visit a physical branch, for example. The MoCo account can be opened online in just a few minutes.
It is important not to confuse this product with the term product offered by the banks which do offer higher rates than 2.00% in some cases. But flow to term has been de minimis in the Irish market - exemplified by the fact that almost 90% of Irish listed banks’ deposit funding (across household and business deposits) sits in overnight accounts. As an aside, to the trained eye, all this talk of ‘deposit beta’ as official rates have been coming down is utter nonsense and pretty much academic (just look at the volumes for heaven’s sake!) - which the bank executives are savvy at playing into. For anyone looking to get a read into the Irish psyche and the irrational fear that ‘the world might end tomorrow so I need instant access to my money’ attitude that prevails here I suggest this article from the Irish Independent of 2nd October (which is focused on Irish households’ reluctance to invest in the context of potential changes in the upcoming Budget). But this new account from MoCo is an overnight product, not a term product which may well see savvy financially-aware households (who one could reasonably expect to have larger average outstanding balances) move to take advantage. The fact that MoCo is not a well-known brand will be an inhibitor for many but it is a welcome - and much-needed effort at improved competition - in my view. It will be welcomed by consumers who check it out but few others.
More broadly, could this signal meaningful growth ambition in Ireland on the part of Bawag? Maybe. Maybe not. As an aside, I previously gathered that Bawag acquired some Irish RMBS residuals a while back. It’s easy to get carried away but Bawag has an incredibly strong reputation with investors and there will be some fear amongst the Irish executives I suspect (though don’t expect them to emphasise that in investor meetings!). Bawag was already on their radar anyway it must be said as it has been active in the mortgage market for a while. But it does beg the question - again, without getting carried away - if Bawag were to seek to scale up here, would they do it organically or inorganically? Food for thought.
It might not get traction and it may be just a low-key attempt by Bawag to fund its small book of Irish loan assets. But it brings into focus again that the Irish deposit market is ripe for disruption - and we await Bankinter’s next steps in this respect too.
📌 The Curation 📌
🇬🇧 UK Unfiltered - My Top Picks 🇬🇧
1️⃣ BoE data points to positive lending and deposit market conditions:
The Bank of England (BoE) published Money and Credit Statistics for August 2025 here on Monday 29th September.
Key points to flag:
Net mortgage approvals down m/m: Net mortgage approvals for house purchases were -500 m/m to 64,700 in July (note that remortgaging approvals were -900 m/m to 37,900). Notably net mortgage approvals were up m/m in August 2024 but this latest print does follow a consensus-beating outturn in July.
Net borrowing a mixed bag: Net borrowing growth across mortgages (annual growth rate in net mortgage lending +3.0%), unsecured credit (annual growth rate in unsecured credit +7.1%), and business lending (annual growth rate in large business lending +8.6% and +1.2% for SMEs - the highest growth rate reported since August 2021 in the case of SMEs) all in positive territory in August.
Rates data: i) Mortgages (stock 3.89%, +1bp m/m; August flow 4.26%, -2bps m/m); ii) Interest-charging credit cards (21.42%, -23bps m/m), interest-charging overdrafts (21.53%, +6bps m/m), new personal loans to individuals (8.32%, +4bps m/m); iii) Business loans (August flow 5.68%, -12bps m/m) - and within this were SME loans (August flow 6.35%, -6bps m/m).
Deposits: Household deposits +£5.4bn in the month (following an increase of £7.1bn in August) with rates broken down as follows: i) new time deposits 3.79%, -5bps m/m; ii) stock of time deposits -4bps m/m to 3.49%; and iii) stock of sight deposits 1.84%, -5bps m/m. Business deposits -£2.8bn in August with rates broken down as follows: i) new time deposits 3.54%, -16bps m/m; and ii) stock of sight deposits 2.12%, -13bps m/m.
All in all the data continues (as for the July data) to be broadly consistent with the findings of the recent BoE Credit Conditions Survey and Bank Liabilities Survey, which indicated: i) structural hedge income impacts aside, some marginal front book net interest margin (NIM) accretion (note that deposit pricing movements vs loan pricing movements in the month are constructive in this vein); ii) further growth in retail deposit volumes; and iii) moderate growth in new lending in the three months to end-August (covered in Financials Unshackled Issue 52 here).
2️⃣ Quick Sector Snippets:
Sky News reported on Saturday 4th October here that the Chancellor Rachel Reeves is “seeking a heavyweight outsider to run Britain’s main banking watchdog”, with a senior Barclays (BARC) executive, Katharine Braddick, expected to be among the top contenders - with an ad for the PRA CEO post reported to be coming within days. I’m sure that Braddick and other ‘heavyweight outsiders’ would be a fine choice but it worries me that Reeves might be on a mission to get someone in who will play to her tune and drive a significant deregulatory agenda. Now, there is a valid point that the UK is becoming disadvantaged to the US in a bank regulation context (see below reports) - and maybe, just maybe, Reeves is thinking more regulatory reprieve could be a quid pro quo for higher bank taxes but one fears of a race to the bottom. Meanwhile, Europe will inevitably just become increasingly uncompetitive...
David Bailey, Executive Director of Prudential Policy at the PRA, issued a Dear CFO letter to banks and building societies on Tuesday 30th September here on the subject of IFRS 9 ECLs in which he sets out “narrowed areas of focus for the timely capture of changes in credit risk” - though the letter is clear that PMAs will remain a significant focus topic.
BoE Governor Andrew Bailey appears, at first glance, to soften his stance on stablecoins in this opinion piece he penned for the FT on Wednesday 1st October. However, his view that the backing assets / reserves underpinning stablecoins should be free of financial risk serves as an enormous constraint to their development. It’s also worth consulting this FT piece on the Governor’s op-ed penned by Martin Arnold as well as this letter to the FT from the Chief Legal Officer of an aspiring issuer of GBP stablecoins which picks holes in the Governor’s arguments. The comments on Bailey’s op-ed are a great read too. Indeed, Bailey’s speech on Friday 3rd October (transcript here) is well worth a read to get more colour on his thinking - and he (rightly in my view) seems determined to preserve the existing monetary transmission regime: “The distinctive feature of banks is that their liabilities are typically substantially in the form of money deposits. In the regulatory world, it is deposit taking that is unique to banks. Most of the stock of money in our systems is commercial bank deposits. These deposits underpin the functions of money – its role as store of value, unit of account and means of exchange or payment. The critical property of money is trust in its nominal value.”. It was also interesting to read Nobel Laureat Jean Tirole’s views in The Economist here where he points out that stablecoins can collapse under pressure - my fear too; as Tirole says “full backing is not a sure thing” and it seems that we will undoubtedly see a ‘blow-up’ at some point as the coins gain prominence. The Economist podcast of 7th August on stablecoins here is well worth a listen if you haven’t already tuned in.
Lucy Castledine, Director of Consumer Investments at the FCA, spoke on Tuesday 30th September (transcript here) on consumer regulations in what has been widely seen as a speech that set out a ‘watering down’ of Consumer Duty regulations.
UK Green Party leader Zack Polanski has chimed in on the reserves remuneration debate, arguing that the BoE should stop paying interest on reserves held by lenders, noting that “We don’t actually need to be paying that interest, we could be putting it straight back into our economy” - according to this FT article on Friday 3rd October. While it’s a hot topic since the IPPR report it seems unlikely to me that Polanksi’s comments will carry much weight in the debate.
3️⃣Quick Company Snippets:
I wrote last week that Aldermore priced a £300m 10NC5 Tier 2 instrument in late September (>9x oversubscribed), which marks its first external subordinated debt issuance since 2016. The coupon on the instrument is 6.0% per the Final Terms here.
The FT reported here on Thursday 2nd October that Lloyds Banking Group (LLOY) is set to take ownership of Schroders’ 49.9% shareholding in the two entities’ Schroders Personal Wealth JV. This would be congruent with the latest soundings of LLOY CEO Charlie Nunn who has been very clear about LLOY’s mass market wealth management ambitions, particularly in the context of the AGBR.
The FT reported on Sunday 5th October here that Monzo is considering a fresh US banking licence application. My gut is that this is a sensible line to have out in the public domain but, given the time it would take to secure a licence organically, it seems far more likely that Monzo’s base case plan is to acquire to buy its way in. But, given the recent spate of articles on how UK neos are thinking of buying US banks as an entry mechanism, there might be some concern that the US authorities could become cynical and/or obstructive.
Nationwide Building Society announced changes to the composition of the Virgin Money and Clydesdale Bank Boards here on Tuesday 30th September.
NatWest Group (NWG) issued a press release on Wednesday 1st October here noting that it has appointed James Holian to the new role of Chief Customer and Operations Officer. Group COO Jen Tippin has decided to leave the organisation.
Interview in The Intermediary here on Tuesday 30th September with Tristan Mahoney CFO at Recognise Bank in which he discusses how the specialist lender is building momentum in the procurement of savings and loan product for SMEs.
Santander UK announced on Friday 3rd October here that CEO Mike Regnier has confirmed his intentions to step down as CEO by 1Q26. This follows the successful agreement to acquire TSB. The company also announced earlier on Friday here that Mahesh Aditya (Santander Group CRO) has been appointed NED of Santander UK - replacing Dirk Marzluf who stepped down on Tuesday 30th September.
The FT reported on Wednesday 1st October here that Shawbrook could imminently issue an ‘Intention to Float’ announcement. Let’s see if anything comes this week.
4️⃣Shareholding Changes of Note:
NatWest Group (NWG) RNS of 3rd October: Some disposals of shares by PDMRs under the irrevocable Trading Plans entered into (that were announced on 1st September). On the disposals: i) CEO Paul Thwaite sold 147,000 shares at a price of 529.5p per share on 2nd October for gross proceeds of c.£778k; ii) CFO Katie Murray sold 63,000 shares at a price of 529.5p per share on 2nd October for gross proceeds of c.£334k; iii) CEO of Retail Banking Solange Chamberlain sold 12,000 shares at a price of 529.5p per share on 2nd October for gross proceeds of c.£64k; and iv) Group CRO Keiran Ford sold 37,000 shares at a price of 529.5p per share on 2nd October for gross proceeds of c.£196k.
Paragon Banking Group (PAG) RNS of 3rd October: JPM AM now 5.10% (previously disclosed shareholding: 5.20%) following a transaction on 1st October.
🇮🇪 Ireland Unvarnished - My Top Picks 🇮🇪
1️⃣ Quick Sector Snippets:
The Central Bank of Ireland (CBI) published its Money and Banking Statistics for August 2025 here on Tuesday 30th September. Key points to flag: 1) Loan Volumes: Mortgages for house purchases were +€301m in August 2025, continuing the positive trend observed since May 2024. Annual growth in lending to households to end-August was €4.7bn, +4.5% y/y. Net lending to non-financial corporates (NFCs) was +€281m in August following negative flow of -€390m in July and positive flow of +€274m in June (the data ebb and flow quite a bit) - annual growth to end-August was +€404m, +1.4% y/y. 2) Deposits: Household deposits were +€1.0bn in August to €168.1bn - with the growth mostly attributable to overnight deposits (good for liability margins). Annual growth in household deposits to end-August was €10.7bn (€5.2bn term, €5.0bn overnight. €0.5bn notice), +6.8% y/y. NFC deposits were +€2.6bn in August - with the increase mostly attributable to increased overnight deposits (good for liability margins but the data ebb and flow quite a bit). Annual growth in NFC deposits to end-August was +€1.8bn (+€1.9bn term, -€0.2bn overnight). All in all the data is broadly as expected and points to continued strongly positive conditions in both a loan growth and a deposit funding build context for the banking industry.
The Department of Finance published the Consumer Banking Sentiment Survey 2025 on Thursday 2nd October here. The findings are that consumers are broadly satisfied with banking services. It was interesting to note that 69% of 18-24 year-olds surveyed use Revolut at least occasionally while that figure dips to just 14% in the case of those who are 65 and older (though that was up from just 7% in 2024).
Laura Noonan of Bloomberg posted an excerpt of a Bloomberg Terminal article on X on Friday here which notes that Junior Finance Minister Robert Troy has said that he “is open to introducing a competitiveness mandate on the central bank, despite the country’s past financial crisis”. I discussed this point in some depth in Financials Unshackled Issue 60 of 7th September here. My view is that while Troy might be open to it, the ‘play it safe’ powers that be lack the vision for a bold move like this - despite the fact that the UK went and did it a couple of years ago.
I wrote in the Business Post on Friday here on how reforms are needed to see fintechs (and young high potential growth firms more broadly) elect to remain in Ireland as they scale.
2️⃣ Quick Company Snippets:
The Irish Times reported here on Monday 29th September that Cerberus is one of the bidders seeking to acquire a portfolio of NPLs with a nominal value of €500m (as the sale was being prepared earlier this year) from AIB Group (AIBG). NPEs stood at 2.8%/2.6%/1.8% of gross loans for AIBG/BIRG/PTSB at 30th June and it makes sense for AIBG (and others) to continue to pursue NPE divestment processes.
The Business Post updated its article on Revolut’s interest in joining Zippay here following further clarifications from Béatrice Cossa-Dumurgier, CEO of Revolut’s new Western European hub, to the effect that “…we do not presently have any plans to join Zippay”. Ian Guider at the Business Post wrote here on Friday 3rd October that “Zippay will be sold as progress, but in reality, it is little more than the banks conceding ground they lost years ago” and that “The real question for AIB, Bank of Ireland and PTSB is whether they are willing to reimagine themselves for the future”.
🇪🇺 Europe Unbound - My Top Pick 🇪🇺
1️⃣ Quick Snippets:
Bloomberg reported on Wednesday 1st October here that officials at the US Fed are seeking to repeal a BCBS decision to treat the EZ as a single domestic market when assessing banks’ cross-border exposures. This comes at a time when the US is understood to be diluting the impacts of Basel 3.1 for the benefit of its own lenders - with six regulatory sources indicating to Reuters last week (see here) that the largest lenders are optimistic that the combined changes will see their capital levels remain flat or fall. Following this, we saw the BIS report on Friday here that there has been good further progress in a Basel 3.1 implementation context over the last 12 months. Notably, Deutsche Bank’s CFO called last week for Europe to water down its new capital rules for banks by making some temporary exemptions permanent, which seem to be very sensible suggestions - as reported by Bloomberg here. Unsurprisingly the developments have been followed by European policymakers standing up for tough regulation in speeches on Friday - with Christine Lagarde’s speech here and Isabel Schnabel’s speech here both worth a skim. Sharon Donnery also spoke on simplification initiatives and risks on the ECB Podcast on Wednesday here. Surely there’s a halfway house somewhere between vision and regulation? We seem to live in a world of extremes these days.
The EBA published its 2026 Work Programme on Wednesday 1st October here - which it positions as a project for a more efficient regulatory and supervisory framework in the EU.
Pedro Machada, Member of the ECB Supervisory Board, spoke on Tuesday 30th September (transcript here) on the benefits and risks associated with securitisations, zoning in specifically on SRTs and taking an accommodating stance towards them on balance. It was also interesting to read on Bloomberg on Thursday 2nd October here about Santander’s work on a fund to invest in SRTs.
Frank Elderson, ECB Executive Board Member, spoke on Wednesday 1st October on how the ECB is staying the course on climate and nature risk supervision (transcript here). This is sensible in principle but this appears to me to be Elderson’s pet project and I am of the view that governments, rather than central banks (or the banks themselves) are the ones responsible for policy here. That being said, it is nuanced and there are real risks to the banking sector from climate change (e.g., the impact of floods on loan portfolios et al.). Interesting that Elderson’s speech came during the week in which the Net Zero Banking Alliance essentially disintegrated which you can read about here. My own sense is there will be a subtle ‘watering down’ of requirements in response to likely ‘behind the scenes’ pushback from European banks if the ECB’s requirements become overly burdensome.
Further to the above report on stablecoins (in the ‘UK Unfiltered’ section), Pierre Cipollone (ECB Executive Board Member) spoke on Monday 29th September (transcript here) on how the digital euro “will bolster Europe’s unity, safeguard our autonomy and strengthen our resilience in the face of ever-evolving challenges”. It seems increasingly clear that EZ policymakers are going to hinge their ‘innovation bets’ on the digital euro and are likely to make life as difficult as possible for stablecoin and cryptoasset issuers (indeed, a major issue is the multi-issuance loophole, with Bloomberg reporting here on Tuesday 30th September that the ECB is moving at pace to address this). Regardless, banks will worry about costs and deposits displacement (the latter more than the former, perhaps - though costs are likely to be what will bite harder I suspect) - though my sense is that NCBs will find a way of containing the damage through limiting digital euro holdings (basically meaning the whole project would effectively be a ‘fudge’) and, potentially, recycling digital euro savings back to the banking system if necessary.
🌎 Global Unpacked - My Top Pick 🌎
1️⃣ Quick Snippets:
Great opinion piece from Robert Armstrong in the FT on Thursday 2nd October here on the linkages between NBFIs (shadow banks) and the banking system which focuses on the relatively paltry disclosures of banks’ exposures to NBFIs, which are not particularly informative. This follows a piece in the FT earlier in the week here which reported that lending to NDFIs accounted for all of the growth in US bank lending in 2025 to date. Interestingly, Bloomberg reported here on Friday 3rd October that the US Government Accountability Office is assessing the risks presented by private credit following a request from US Senators Elizabeth Warren and Jack Reed to the Comptroller General.
Bloomberg reported on Wednesday 1st October here that a Bloomberg index of AT1 bonds has now surged more than 57% from the low in the wake of the Credit Suisse AT1s wipeout in the Spring of 2023. I covered AT1 performance in some detail in Financials Unshackled Issue 58 of 17th August last here.
📆 The Calendar 📆
Look out for these in the week ahead:
🇪🇺 Tue 7th Oct (09:00 BST): European Central Bank (ECB) Households and non-financial corporations in the euro area - Q2 2025
🇮🇪 Tue 7th Oct: Ireland Budget 2026
🇬🇧 Wed 8th Oct (10:30 BST): Bank of England (BoE) Financial Policy Committee (FPC) Record - Aug 2025
🇮🇪 Wed 8th Oct (11:00 BST): Central Bank of Ireland (CBI) Retail Interest Rates - Aug 2025
🇬🇧 Thu 9th Oct (07:00 BST): S&U 1H25 Results (for the six months to 31st Jul 2025)
🍺 The Closer 🍺
🇬🇧 It seems that Revolut still has much ‘tidying up’ to do in the context of its global banking ambitions. Which?, the consumer information service that is a wholly owned subsidiary of the Consumers’ Association, reported here on Wednesday 1st October that Revolut has - once again - recorded the highest number of fraud and scam complaints escalated to the Financial Ombudsman Service (FOS) in 2024 and YTD 2025. It is top of the charts from both an APP fraud complaints perspective and from an ‘Other fraud and scam complaints’ perspective. BoE Governor Andrew Bailey has come under severe criticism for not granting Revolut a full banking licence of late (given the passing of 12M since AWR was granted). However, as this article from Bloomberg on Wednesday 1st October notes, given that Revolut is adding one million new customers every 17 days, information that it procures to the regulator in the context of the licence application is inevitably quickly outdated. And, Sid Jajodia, Revolut’s Chief Banking Officer also acknowledges the challenge that the PRA faces in these comments, included in the article: “It’s a more robust process given our size and scale, and given our global scale because the PRA is our global consolidated regulator” - with the same article noting that sources have indicated to the news agency that regulators in the US, Australia, New Zealand and Switzerland have told Revolut executives that they would like to see the firm receive its full banking licence in the UK as they work to sign off on other licences. One has to have serious sympathy for Bailey here in my view (especially when considering this Sky News article of Sunday 5th October which reports that the Chancellor is planning to pitch to LSE IPO candidates alongside Goldman Sachs this week - with Revolut surely in mind!) - the approval process is entirely incomparable to the granting of a licence to the likes of a Metro Bank or a Monument Bank in all fairness. And, while one can visualise how Revolut could disrupt the business of fractional reserve banking on a long-term view, a lot of things need to go right - and, as the Which? article implies, building the trust of customers and regulators feels a long way off still. Indeed, according to my LinkedIn poll (which is probably biased given my connection base is concentrated amongst mainstream banking-focused types), opinions are split down the middle on the question ‘Will Revolut truly disrupt banking markets and eventually deliver the profitability that justifies the latest reported valuation?’ - with 37% of respondents so far saying yes, 38% saying no, and 25% saying possibly. There’s still time to vote at this link. Don’t be shy!
Have a great week! 🍨
⚠️ Disclaimer ⚠️
The contents of this newsletter and the materials above (“communication”) do NOT constitute investment advice or investment research and the author is not an investment advisor. All content in this communication and correspondence from its author is for informational and educational purposes only and is not in any circumstance, whether express or implied, intended to be investment advice, legal advice or advice of any other nature and should not be relied upon as such. Please carry out your own research and due diligence and take specific investment advice and relevant legal advice about your circumstances before taking any action.
Additionally, please note that while the author has taken due care to ensure the factual accuracy of all content within this publication, errors and omissions may arise. To the extent that the author becomes aware of any errors and/or omissions he will endeavour to amend the online publication without undue delay, which may, at the author’s discretion, include clarification / correction in relation to any such amendment.
Finally, for clarity purposes, communications from Seapoint Insights Limited (SeaPoint Insights) do NOT constitute investment advice or investment research or advice of any nature – and the company is not engaged in the provision of investment advice or investment research or advice of any nature.
Trade republic have offered the full ecb rate on demand accounts for 2 years now and savers still haven't switched (Albeit on a max of €50k)