Britain’s biggest banks have been placed on alert over hundreds of ‘rogue’ filings which appear to have been lodged at Companies House, the UK’s central corporate register.
Sky News has obtained a note issued by UK Finance, the banking trade association, which warned its members that approximately 800 forms relating to the discharging of financial liabilities were submitted at Companies House late last month.
In the notice to banks – marked as “Urgent” when it was circulated last week – UK Finance said it had alerted both Companies House and the Department for Business and Trade to the issue.
Industry executives pointed to the possibility of an attempted fraud or hacking of the Companies House register, although the circumstances remained unclear on Sunday.
UK Finance said in its memo that a number of members and law firms had “flagged an issue regarding the apparently erroneous satisfaction of security (registered charges) on Companies House relating to a number of live business clients”.
In a further update issued on Friday, it said it had been informed that roughly 800 rogue filings related to 190 companies had been submitted, adding: “Companies House have emphasised that an incorrect entry in the register – saying a charge has been satisfied – does not invalidate or cancel that charge.
“It remains valid and enforceable.
“However, there will likely be other consequences for lenders that will need to be resolved.”
Companies House, which is owned by the government, is responsible for incorporating and limiting millions of limited companies.
One source described the situation as “deeply alarming” and said it was disappointing that Companies House had also outlined plans to increase its fees in May “when it was susceptible to rogue corporate filings in this way”.
Responding to an enquiry from Sky News, a Companies House spokesperson said: “We are aware of this matter and we are looking into it.”
Europe’s biggest bank has credited rising interest rates for a 240% lift to its latest quarterly profits but expressed worries about the UK’s economic outlook.
HSBC, which is London based and listed but largely Asia-focused, said that pre-tax profits for its July to September third quarter came in at $7.7bn (£6.4bn).
Higher interest rates, on the back of central bank hikes to tackle stubborn inflation, boosted the bank’s profitability and helped it fund a fresh $3bn share buyback.
HSBC also revealed a third interim dividend payout this year of 10 cents per share, bringing the total to 30 cents per share in the year to date.
But a 0.5% share price gain when the London market opened was tempered by several factors.
Analysts suggested there was a reaction to the profit number missing expectations.
It was partly explained by a rise in costs for new technology but also a $500m impairment charge relating to the bank’s exposure to China’s troubled commercial real estate sector.
It was announced on Monday that the chief problem, China Evergrande, is facing a winding-up petition in a Hong Kong court in December over its debt mountain of more than $300bn.
Image: Evergrande, like many big state real estate entities in China, are facing significant pressure over their debt piles
Another worry for HSBC investors is a decline in the bank’s net interest margin – a key measure of lending profitability.
That fell by two basis points compared to the previous quarter to 1.70%, reflecting an increase in customers migrating their deposits to term products, particularly in Asia, HSBC explained.
“We continue to monitor risks related to our exposures in mainland China’s commercial real estate sector closely, and there remains a degree of uncertainty in the forward economic outlook, particularly in the UK,” the company said.
Its latest results were published just days before the Bank of England is due to reveal its latest interest rate decision.
Financial markets widely expect no change from the 5.25% figure that policymakers stuck with at their last meeting back in September.
The forecasts are largely based on the fact that inflationary pressures have continued to ease while the economy continues to flatline.
At Batchley Support Group in Redditch, I meet Tony.
He’s 59 and one of a higher-than-average number of people in the town who have a mortgage.
That’s despite the area having the fifth-lowest average salaries in England and Wales.
It means he, like others, may be disproportionately affected by interest rate rises.
Image: Tony has struggled to make payments on his tracker mortgage
It turns out, for Tony, it’s much more than that.
He’s just been told his flat may be repossessed.
Tony’s circumstances are complicated. He bought the property 19 years ago when he had a job as a lorry driver.
He subsequently became disabled, suffering brain damage, after a street attack.
In recent years his disability benefit changed to a “limited capacity” one.
It has meant he has struggled to make payments on his tracker mortgage and the recent interest rate rises have pushed him over the edge.
Read more: Military personnel using food banks down to ‘personal decisions around budgeting’ Food banks distribute record emergency food parcels
Intimidating and impossible figures
He takes us into his top-floor flat and shows us his papers in a darkened living room.
One letter clearly states his interest rate is rising by another 0.5% from 1 August and he may be losing his home.
The letter states how he is now £7,000 in arrears with £29,000 left to pay on his mortgage.
These are intimidating and impossible figures for Tony.
He doesn’t use heating and limited electricity.
He can’t afford to buy a single piece of food.
He’s been making £150 payments every month but it’s not even half of what he needs to.
‘I’d be dead’ without food bank
“I’ve been here for 20 years. It is my home,” he tells me. “You know, I’m disabled, I need heat and everything else. Where am I going to go? I have got nowhere, no house to go. That’s it.”
I ask him if he didn’t have the nearby food bank, what he would do?
He replies simply: “I’d be knackered, I’d be dead.”
Image: Single mother Sarah is holding down three jobs but is still unable to feed her family
Single mother reliant on food bank
At the Batchley Support Group Centre – a hub in the middle of this community which offers advice and help for all issues – I also meet single mother Sarah.
She’s holding down three jobs, including an NHS technician role, an online teaching job and acting.
It’s still not enough to help feed her and her family.
She lives with her 13-year-old boy, and her 19-year-old son when he’s back from university.
She’s lucky her landlord hasn’t put her rent up, but she describes how everything else has increased.
“You can’t change the rent, you can’t change your gas, your electric, your water, your TV licence….
“So you can only change the way that you spend the money you have.”
She can pick up as much food as she needs from the food bank here for just £1.
But she’s also worried about interest rates on her credit card.
She describes being reliant on it to pay for fuel for her car to get to work.
‘More working people are struggling’
Mark Barron runs the Support Group, and has had to order an extra load of food each week recently to cope with demand.
He says the service is also seeing a rise in employed people seeking help: “We see more working people who are struggling.
“And that tells us it’s really about disposable income, what’s left once you pay the bills, if anything, what’s left to live on? And that’s, that’s a real leveller for people.”
Redditch isn’t unique in this.
Disposable incomes are being stretched if not annihilated across the country.
Interest rate rises mean that standards of living, in general, are being swept away.
And with them, people like Tony, who are becoming collateral damage.
Some military personnel and their families have been forced to use food banks as high inflation and rising costs tip members of the Armed Forces into crisis, Sky News can reveal.
An unofficial food bank even exists at a large Royal Air Force base in Lincolnshire, a defence source said.
The voluntary facility at RAF Coningsby – home to Typhoon fast jet squadrons – was set up by an aviator to collect food donations from servicemen and women to support civilians in their local community. But the source claimed it is now being used by RAF personnel too.
Image: The food bank serves civilians in the local community. Pic: Destiny Outreach Coningsby
Internal RAF documents seen by Sky News – as well as interviews with military sources and charities – offer a sense of the wider impact of the cost of living crisis on defence, including:
• The need for a number of service personnel to choose between “food or fuel”, with some unable to afford to drive home from their base to see family
• One aviator, a single mother, was forced to go without a hot meal for four days because she had spent her last money on baby milk formula
• The volume of enquiries to a key charity from or on behalf of military personnel seeking financial support has more than doubled
• There are individuals who can no longer even afford the price of the subsidised meals at their mess
• A sense of “discontent” at covering for striking public sector workers on better pay deals when the Armed Forces are not permitted to take industrial action themselves
While the documents referred to the situation inside the RAF, a Royal Navy source and an Army source said personnel in their respective services were also experiencing hardships.
The Royal Navy source said the Ministry of Defence was trying to do more to help, such as support with childcare costs.
“But I suspect more needs to be done,” the source said.
“I’m hearing … stories of sailors unable to head home at weekends or over leave periods due to travel costs, also service personnel using food banks or contacting service charities for assistance with debt management.”
Image: The RAF says the food bank was not set up for its personnel. Pic: Destiny Outreach Coningsby
‘The food bank is popular’
The UK provides its Armed Forces with a range of specific benefits such as access to subsidised housing and meals – as well as fuel grants in a bid to keep the offer to join the Army, Navy and RAF attractive and to retain talent.
The support is also in recognition of the particular hardships and inconveniences of military life, and the fact that anyone who serves has to be prepared to make the ultimate sacrifice.
Yet analysis of morale across the whole of the RAF last year by military chaplains revealed that a limited number of personnel were resorting to food banks in the local areas.
An anonymous quote in the report read: “The food bank is popular.”
This was qualified with a footnote that warned: “Food bank use is reported across a majority of units, but nowhere is yet reporting widespread use”.
It continued: “Single figures per unit of families utilising food banks is a working estimate.”
The airbases RAF Benson in South Oxfordshire and RAF Brize Norton in Oxfordshire “are reporting the highest use of food banks”, according to the footnote in the report, which was entitled Chaplaincy Analysis of Whole Force Morale 2022 and dated 12 January 2023.
Overall, the report found that cost of living pressures as well as failings with military accommodation – such as faulty heating and vermin – were the biggest factors “adversely impacting” morale.
Image: Drop-off points for donations have been set up at RAF Coningsby. Pic: Destiny Outreach Coningsby
Separately, the defence source with knowledge of the food bank at RAF Coningsby claimed that service personnel had been using the facility “extensively”.
Asked how they felt about this, the source said: “Incredibly angry and frustrated that we had got to the point where service personnel had to rely on charitable agencies just to exist.”
A junior non-commissioned officer established the food bank – which has its own Facebook page – a couple of years ago to support the local civilian community, having been involved with this kind of charitable activity while posted overseas in the US.
According to the Facebook page, the food bank is run by a Christian group called Destiny Outreach Coningsby. It says it offers support to people living in the town of Coningsby and the surrounding villages.
“With the cost of living rising, please look out for one another. If you are in need of a food parcel then please contact us,” it said.
An RAF spokesperson made clear that the food bank was not set up by the RAF for its personnel. However, the spokesperson did not offer a comment on the record about the claim that serving aviators were using the facility.
The Ministry of Defence is understood to regard any use of food banks by military personnel as a “private life matter” and does not have any data to support claims of their alleged use.
However, officials at RAF Coningsby raised concern with Air Command last July about “a worrying increase in personnel seeking assistance and support across all welfare pillars as a direct result of the cost of living crisis”.
The warning was contained in a report, dated 22 July 2022, which was entitled Cost of Living Crisis – RAF Coningsby.
It mentioned the establishment of the food bank.
The report drew on information gathered from the experiences of four focus groups of about 150 personnel and families over a one-week period.
It listed several trends, including “pers [personnel] struggling to afford fuel to drive to work; … pers unable to travel home each week and having to stay on unit, reducing morale and wellbeing; real concern for the winter months where electricity and gas costs will further exacerbate the current situation”.
The paper suggested ways the military could offer relief, such as by increasing the rate paid for fuel use. It noted: “Personnel were having to decide whether to buy food or fuel.”
Armed Forces pay ‘an annual gamble’
The documents and defence sources said pay is another factor creating pressure for the military, especially given soaring inflation.
The chaplaincy analysis talked about a “sense of looming discontent” as service personnel may be called upon to fill in for public sector workers who are striking for better wages.
The Armed Forces Pay Review Body, an independent entity, makes a recommendation each year to the government on any pay increases for the military, which the Ministry of Defence draws upon before making its announcement on what the amount will be.
This should happen before the start of each financial year but is often delayed and any increase in salary is backdated to the beginning of April.
The Ministry of Defence has yet to announce this year’s settlement, though the pay review body has submitted its recommendations and an announcement is expected soon.
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0:59
‘If my economic policies fail it’s on me’
One RAF aviator described the process as “an annual gamble on what we may or may not receive”.
Asked what message they had for the government, the aviator said: “Understand that your military deserves to be fairly compensated for the role they play in support of the UK on all fronts … We see through the words and false promises and expect to be treated fairly in return for our commitment to the crown and our country.”
Sarah Atherton MP, an Army veteran and member of the Commons Defence Select Committee, said the government should give the military a 10% pay rise in line with inflation.
“We’ve never had such an unstable global security situation, and we need our Armed Forces to protect us when we want them to protect us,” she told Sky News in an interview.
“We need to make sure they are valued and they feel valued.”
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1:51
Do we have an inflation problem?
Stepping in to fill the void are military charities like the RAF Benevolent Fund.
It said enquiries about financial assistance from or on behalf of serving personnel more than doubled last year to 539 cases compared with 2021.
In response to questions about the cost of living and food banks, the RAF spokesman said: “The food bank at RAF Coningsby was not set up by the RAF for its personnel, and the RAF offers a range of support, such as welfare officers who can offer financial advice and access to fuel grants and hardship funds provided by the RAF, and supporting charities and associations.
“More widely, defence has created a comprehensive package of support that includes the biggest pay increase in 20 years, freezing daily food costs, providing accommodation subsidies and saving up to £3,400 per child per year by extending wraparound childcare – this is in addition to wider cost of living support provided by the government.”
Last financial year, the government awarded service personnel up to the rank of one-star a 3.75% pay rise – described as the biggest percentage uplift in two decades. But inflation has since rocketed, with consumer prices in February jumping 10.4% from a year earlier.
DCI Banks star Stephen Tompkinson’s talent made him “convincing in putting across a story”, the prosecution told jurors before they retired to consider their verdict.
Tompkinson is accused of punching a man who was drunk and making “strange noises” outside the actor’s home in Whitley Bay, North Tyneside, around 5.30am on 30 May, 2021.
The 57-year-old allegedly “snapped” and “lashed out” at the complainant, Karl Poole, causing him to suffer a fractured skull when he fell and hit his head on the pavement, Newcastle Crown Court heard.
The Ballykissangel star came out of his home dressed in pyjamas and a dressing gown after discovering Mr Poole and his friend, Andrew Hall, drinking at the bottom of his driveway.
A neighbour who watched the incident from her bedroom window told the court she saw Tompkinson slap and punch Mr Poole.
But the actor said he simply pushed the man away in self defence.
Prosecutor Michael Bunch reminded the court how Tompkinson said punching a man would have been “career suicide”.
‘Expert playing a part’
Mr Bunch said Tompkinson’s “obvious talent makes him convincing in putting across a story,” adding: “He is an expert in playing a part – a man tormented by a pair of drunks.
“He can deliver a line,” Mr Bunch told the court.
Tompkinson said he was “disgusted” by Mr Poole and Mr Hall – describing their behaviour as “disgraceful” and “pure self-indulgence by grown men who should be behaving better”, jurors heard.
However Nicholas Lumley KC, defending Tompkinson, said he was “sought out by producers because of his calmness”.
“Why would he risk throwing away that hard-earned reputation?” he asked the jury.
Image: Karl Poole seen outside Newcastle Crown Court
Punch ‘not enough to knock a sober man off his feet’
Mr Poole and Mr Hall had been drinking since midnight on 30 May and had gone to the beach before passing Tompkinson’s home on the way back.
The actor, who at the time was living with his partner and her seven-year-old son, went out to challenge the “heavily intoxicated” men – one of whom was wearing nothing but his underpants.
He called 999 after the men tried and failed to stand up while drinking from a bottle of Jagermeister, the court heard.
While waiting to be connected, he went outside to tell the men he was calling the police.
Image: Actor Stephen Tompkinson
The actor said the pair “took great objection” to him complaining and began to move towards him.
He said he put his hand out to stop Mr Poole coming closer, making contact with his face – but it “wasn’t enough to knock a sober man off his feet”, the actor told jurors.
The judge, Paul Sloan KC, sent the jury out to consider their verdicts at 3.20pm on Wednesday.
They were sent home for the day an hour later and will resume their deliberations on Thursday.
Tompkinson denies a single charge of inflicting grievous bodily harm.
Banking stocks are enduring fresh, steep losses on Wednesday as concern over the health of US banks crosses the Atlantic.
Credit Suisse shares plunged to new record lows following comments by its largest investor that it could not provide the Swiss bank with more financial assistance.
Switzerland’s second-largest bank, no stranger to crisis over the past few years, has seen concerns for its financial health come into sharper focus since the collapse of Silicon Valley Bank last week.
The attention of investors has mostly been on the ability of lenders to absorb the aggressive tightening of interest rates since last year, which has soured their bond holdings.
Adding to the selling mood was speculation that the European Central Bank (ECB) planned to raise its core deposit rate by 0.5 percentage points this Thursday.
A source close to the ECB Governing Council, the Reuters news agency reported, had said that the ECB was unlikely to ditch plans for a big rate move this week because that would damage its credibility.
Analysts backed that assessment.
Investors took to the hills, with the European banking index down by almost 6%, leaving it on course for €120bn of losses since the crisis of confidence began last week.
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2:36
Markets react to SVB collapse
Read more: How Silicon Valley Bank chaos has had a bearing on us all – and why we’re in for a bumpy few months
Credit Suisse shares were more than 20% lower.
In London, the FTSE 100 was trading 2.5% down by late morning, blow the level it had started 2023.
Financial stocks were again enduring the worst of the pain.
US equity futures were sharply lower.
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4:41
Silicon Valley Bank – what happened?
Attention, however, was firmly focused on Credit Suisse.
Its largest shareholder, Saudi National Bank (SNB), said it would not buy more shares on regulatory grounds as it would take its stake above 10%.
A string of scandals have undermined the confidence of its investors and clients, with Credit Suisse customer outflows in the fourth quarter rising to more than 110 billion Swiss francs (£100bn)
SNB said it was happy with Credit Suisse’s turnaround plan and did not think it would need more money.
That was despite its annual report for 2022, released earlier this week, admitting that “material weaknesses” in controls over financial reporting had been identified and customer outflows had not yet been stemmed.
Britain’s biggest high street banks have been given a 24-hour deadline to rescue Silicon Valley Bank UK (SVB UK) from collapse as the Bank of England prepares to place it into an insolvency process.
Sky News has learnt that major UK lenders including Barclays and Lloyds Banking Group are among the parties to have been approached by the board of SVB UK over the weekend to see if an emergency takeover deal can be struck.
City sources said that a number of parties, including The Bank of London, were interested in finalising a deal.
A number of the biggest high street banks are expected to examine the prospects for a deal, although the chances of one of them intervening appeared remote.
An executive at one large UK bank said they had been given access to a data room over the weekend.
Rothschild, the investment bank, has been asked to handle the quickfire process with the permission of the Bank of England, according to one source.
Speaking to Sky News’ Sophy Ridge On Sunday programme, Chancellor Jeremy Hunt said “there is no systemic risk to our financial system” – but added “there is a serious risk to our technology and life sciences sectors”.
More on Silicon Valley Bank
“We are working at pace on a solution we will bring forward very soon plans to make sure people are able to meet their cashflow requirements, pay their staff.”
“But obviously what we want to do is to find a longer-term solution that minimises or even avoids completely losses to some of our most promising companies.”
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1:15
‘Serious risk to tech sector’ after Silicon Valley Bank collapse
The Treasury said in a statement on Sunday: “The UK has a world leading tech sector, with a dynamic start-up and scale-up ecosystem.
“The government recognises that, given the importance of Silicon Valley Bank to its customers, its failure could have a significant impact on the liquidity of the tech ecosystem.
“The government is treating this issue as a high priority, with discussions between the governor of the Bank of England, the prime minister and the chancellor taking place over the weekend.”
Image: Silicon Valley Bank’s headquarters are based in California
Read more: UK tech firms at ‘serious risk’ from SVB failure, warns chancellor Bank of London weighs rescue bid for UK arm of Silicon Valley Bank Biggest failure since 2008 financial crisis as US regulators close bank and seize assets
The implosion of SVB’s US-listed parent company, which has been taken into government control, represents one of the biggest global banking collapses since the financial crisis of 2008.
UK depositors stand to receive up to £85,000 as part of the resolution of the British arm of SVB, sparking fears about the fate of substantial amounts of funding in the start-up community.
On Saturday, dozens of early-stage companies wrote to Mr Hunt, to warn of “an existential threat to the UK tech sector”.
In a letter seen by Sky News, founders including those from Adzuna, Curve and Thriva called on Mr Hunt to intervene.
“The majority of the most exciting and dynamic tech businesses bank with SVB and have no or limited diversity in where their deposits are held,” the draft letter said.
“This weekend the majority of us as tech founders are running numbers to see if we are potentially technically insolvent.
“The impact of this is far greater than our individual businesses.
“The Bank of England’s assessment that SVB going into administration would have limited impact on the UK economy displays a dangerous lack of understanding of the sector and the role it plays in the wider economy, both today and in the future.”
The founders warned Mr Hunt, who will deliver his Budget statement on Wednesday, that the collapse of SVB UK would “cripple the sector and set the ecosystem back 20 years”.
“Many businesses will be sent into involuntary liquidation overnight,” they wrote.
“Many other businesses, both in the tech sector and the wider economy – the customers and suppliers of these businesses – will be negatively impacted by these businesses going bankrupt.”
Interpath Advisory is being lined up to handle the insolvency process in the UK.
