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Rishi Sunak promises to work for stability as Britain’s next PM – Industry roundup: 24 October

UK’s new Prime Minister aims for “stability and unity”

After ongoing upheaval in the United Kingdom’s leadership over the last couple of months, Rishi Sunak is now set to become Prime Minister. While the official handoff of power will take place in a few days, Sunak was the only candidate formally nominated to take the position. In his first address as Conservative Party leader, Sunak stated that the UK is facing “a profound economic challenge… We need stability and unity, and I will make it my utmost priority to bring our party and our country together.”

Saudi Arabia’s initiatives look to support global investments despite tensions

Saudi Arabia’s Global Supply Chain Resilience Initiative (GSCRI) has been launched to entice international industrial companies to Saudi Arabia, according to Saudi Crown Prince and Prime Minister Mohammed bin Salman bin Abdulaziz. The initiative aims to secure SAR40 billion ($10.6 billion) in investments in its first two years to support the growth of major sectors. It will use the country’s resources, infrastructure and location to aid economies and businesses in Europe, the Americas and Asia, help resolve global supply chain issues, and strengthen Saudi Arabia's position in the global economy, as stated by the Saudi Press Agency.

The GSCRI, one of the projects of Saudi Arabia's National Investment Strategy, aims to make the country an ideal area for all supply chain investors, from finding and developing investment opportunities to creating special economic zones and luring regional headquarters of foreign corporations to the country.

Meanwhile, the Future Investment Initiative conference, dubbed “Davos in the Desert”, is expected to commence on Tuesday in Riyadh to highlight investment opportunities in Pakistan. The Future Investment Initiative Institute, which is not officially affiliated with the Saudi government but operates under the patronage of Saudi Crown Prince Mohammed bin Salman, is hosting the conference. The organizers stated that they aim to focus solely on business topics despite the US-Saudi spat over OPEC's oil production cut. Nearly 400 top US business executives have confirmed their attendance for the event.

The theme of the conference is noted as "Investing in Humanity: Enabling a New Global Order." The three-day event will reportedly include 6,000 delegates from around the world, including top corporate executives from multinational corporations, policymakers, investors, entrepreneurs and young leaders.

NatWest offers VRP in collaboration with three additional payment providers

NatWest Group, a UK-based commercial bank, has entered into partnerships with Token, Tink and Yapily to provide variable recurring payments (VRP) as the latest payment method for businesses and consumers. After previously beginning partnerships with TrueLayer, GoCardless and Crezco, the NatWest Group now has agreements with six payment providers to offer VRP as a new payment method, said reports.

NatWest Group plans to test VRP as a payment option for NatWest Rapid Cash customers via Payit, its open banking payments proposition. Reports indicate that the NatWest Group is the first UK bank to go beyond the bank VRP for sweeping requirement, which is the automatic transfer of funds between two accounts owned by the same person.

In addition to current payment options such as direct debits and online card payments, the bank is providing VRP as a new and functional option for businesses and consumers. With the help of NatWest Group's VRP offering, payment processors can reportedly offer businesses a new way to manage customer payments for a variety of services, such as utility bills, subscriptions and charitable contributions.

Customers can expect to set up recurring payments through their bank app, set maximum payment limits, or completely cancel them with a click, providing a streamlined payment experience. Reports indicate that VRP also provides a smarter user experience for merchants as well, enabling faster, almost real-time payment collection. There is no paperwork necessary for VRP setup.

NatWest Group will reportedly be able to launch a broader range of use cases for VRP by collaborating with Token, a London-based open banking platform provider. Their partnership with Tink, a Visa-owned payments platform, will bring the speed and transparency of VRP to a variety of use cases, beginning with bill payments. Additionally, through the collaboration with Yapily, an open banking infrastructure platform, NatWest Group expects to offer VRP to merchant customers.

Yokoy opens office in Spain to expand AI-driven spend management solutions across Europe

Yokoy, a Switzerland-based fintech established in 2019, is reportedly extending its regional office to Madrid in order to offer spend management services to Southern Europe.

The company uses artificial intelligence (AI) to digitalize supplier invoices, corporate cards, and expenses, the three main pillars of business spending, in an effort to promote what it terms the “hyperautomation” of spend management.

Its entry into the Spanish market follows the establishment of the company's European hub in Amsterdam in February 2022, which was followed by the closing of its US $80 million Sequoia Capital-led series B a month later. The Madrid office is the company's sixth on the continent.

According to Yokoy's official statement, Spanish medium to large companies are particularly interested in implementing automated spend management solutions.

Philippe Sahli, CEO, Yokoy, commented that its goal is to use applied AI to help transform the way business spending is managed. Additionally, Yokoy’s platform is reportedly customisable and scalable, covering the entire enterprise spend management cycle, which would assist both global and regional companies in their efforts to modernize their current processes.

Barclays faces a £50 million penalty for a negligent capital raise in 2008

The UK regulator reportedly intends to fine Barclays £50 million for failing to inform the market and its shareholders about fees paid to certain Qatari investors totalling £322 million. The Financial Conduct Authority (FCA) stated that during the peak of the financial crisis, the bank failed to disclose arrangements made as part of capital raisings in June and October of 2008.

According to a Barclays spokesperson, the bank has asked the Upper Tribunal to reconsider the Regulatory Decisions Committee's conclusions. The Upper Tribunal will reportedly determine whether to enforce the FCA's ruling or take any additional measures beyond the multimillion-pound fine.

Mark Steward, Executive Director of Enforcement and Market Oversight for the UK regulator, commented that there was no justification for withholding this information. Financial markets are required to maintain proper transparency, especially when there is financial or market stress.

The news comes just a month after Barclays agreed to pay the Securities and Exchange Commission (SEC) $361 million in penalties for securities over-issuance. According to the US agency, the bank was charged in connection with the unregistered sale of an unprecedented number of securities because it neglected to implement internal controls to monitor these financial transactions in real time.

Deutsche Bank announces new carbon footprint reduction goals ahead of COP27

Deutsche Bank AG reportedly intends to meet its commitment to achieve net-zero financed emissions by 2050, reducing emissions associated with its oil and gas financing as it updates its carbon footprint targets.

Reports indicate that Germany's largest bank will significantly reduce its Scope 3 emissions, also known as financed emissions, by 2030, upstreaming oil and gas by 23% by 2030 and 90% by 2050. The bank also announced a set of emissions reduction targets for its 250 billion euro ($244 billion) corporate loan book. The bank plans to support a gradual and orderly phase-out of fossil-fuel use while also encourage the financing of lower-carbon-intensity technologies and clients with credible transition plans.

Deutsche Bank also plans to reduce financing for the automotive and steel industries, in addition to the reduction of its own physical emission intensity (which measures the amount of greenhouse gases emitted per unit of electricity used) by 69% by 2030 and 100% by 2050.

Reports state that Deutsche Bank made its announcement just ahead of the COP27 climate change conference, which will be held in Egypt next month.

Dubai Islamic Bank establishes a green financing guideline

Dubai Islamic Bank plans to finance social and environmental projects under a new Sustainable Finance Framework, enabling the lender to issue green and sustainability-related Islamic bonds and loans to finance projects in wastewater management, renewable energy, clean transportation, green buildings and wastewater management, along with supporting job growth.

Reports indicate that investor demand for ESG-linked financing has increased rapidly, as has interest in projects related to sustainability and energy transition in the Gulf and broader Middle East. Green bond issuance is expected to enable regional borrowers to diversify their investor base. Saudi Arabia's sovereign Public Investment Fund recently raised US $3 billion from green bonds, while First Abu Dhabi Bank raised $700 million earlier this month.

COP27 and COP28, the next two major climate change conferences, are expected to be held in Egypt and the United Arab Emirates, respectively.

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