Today’s need-to-know storiesAldermore put on sale as UK car finance redress charges reach £750mn
FirstRand is preparing to sell its UK challenger bank Aldermore, citing concerns over the Financial Conduct Authority’s proposed £9.1bn compensation scheme for car finance mis-selling.
The South African lender said the industry-wide redress plan was “deeply flawed” and no longer compatible with its risk appetite for UK consumer finance.
The FCA’s scheme has forced FirstRand to raise provisions for potential claims to £750mn and cut its earnings outlook, with full-year “normalised earnings” now expected to fall by up to 15 per cent.
The move marks the first exit by a bank from the UK car finance sector in response to the regulator’s plans.
FirstRand said it would work to ensure an orderly sale, adding it was “cognisant of protecting shareholder value and ensuring Aldermore’s future success”.
Meanwhile, Close Brothers, another lender heavily exposed to the scandal, said in a statement on Wednesday it will face redress costs of £320mn, slightly up from its £290mn provision made in January.
Global markets surge on US-Iran ceasefire
Oil prices fell and global equities rallied after the US and Iran agreed a temporary ceasefire easing fears over a long-term Iranian blockade of the Strait of Hormuz.
Brent crude dropped 15 per cent to below $95 a barrel after Tehran said it would allow vessels two weeks of “safe passage” through the key shipping route.
Europe’s Stoxx 600 rose nearly 4 per cent, with Germany’s Dax up 5 per cent and London’s FTSE 100 gaining 3 per cent, in early trading on Wednesday. Stock markets also rallied in Asia, with Japan’s Nikkei gaining 5.5 per cent. S&P 500 futures were trading up 2.5 per cent.
US President Donald Trump said he would “suspend the bombing and attack of Iran for a period of two weeks” provided the strait was reopened.
Iran’s foreign minister Abbas Araghchi said Tehran will agree to the end in fighting “if attacks against Iran are halted”.
Israeli Prime Minister Benjamin Netanyahu’s office said that it supports the ceasefire, but clarified that it “does not include Lebanon”.
Revolut picks Paris for western Europe HQ in €1bn regional push
Revolut has announced the signing of a 10-year lease for its new western Europe headquarters in Paris, due to open in early 2027 and expected to serve as a base for the digital lender’s regional operations covering more than 25mn customers.
The move forms part of Revolut’s €1bn investment in western Europe. The company also plans to hire more than 400 staff, building a workforce of more than 1,500 for its planned French banking arm and to acquire a banking licence in the country.
Revolut currently has more than 7mn customers in France and aims to expand that number to 10mn by the end of 2027.
Swiss lenders join forces to test first regulated franc stablecoin
UBS, alongside a group of five Swiss financial institutions including PostFinance, Sygnum, Raiffeisen, Zürcher Kantonalbank and BCV, have launched a joint sandbox to test a Swiss franc stablecoin, as part of efforts to bolster the country’s digital finance ecosystem.
The initiative, announced on Wednesday, will test use cases for a Swiss franc-pegged digital asset in a controlled live environment, with infrastructure provided by Swiss Stablecoin AG. There is currently no regulated Swiss franc stablecoin with broad domestic use.
The lenders aim to assess how blockchain-based applications could be integrated with the Swiss franc while improving efficiency of payment and settlement processes and building operational expertise in digital payments.
The sandbox will run through 2026 and is open to additional banks, companies and institutions interested in contributing to the development of a Swiss franc stablecoin.