BAME

 Shawbrook Bank adds its name to Race at Work charter

Challenger Shawbrook Bank, a provider of asset finance, has signed up to the Race at Work Charter, an initiative designed to improve outcomes for black, Asian and minority ethnic (BAME) employees in the UK.

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The charter is an initiative of Business in the Community (BITC), a corporate social responsibility charity under the charitable umbrella of Prince Charles, the Prince of Wales. 

BITC said the specialist bank joins a growing list of more than 200 public, private and charitable organisations in signing up to the Charter which builds on the work of the 2017 McGregor-Smith Review, ‘Race in the workplace’. 

The review found that people from BAME backgrounds were still underemployed, underpromoted and under-represented at senior levels.

The Race at Work Charter is designed to foster a public commitment to improving outcomes of BAME employees in the workplace. 

It consists of five principles to ensure organisations address the barriers to BAME recruitment and progression. 

Organisations that sign up to the charter, such as Shawbrook, are publicly committing to:

  • Appointing an Executive Sponsor for race
  • Capturing data and publicising progress
  • Ensuring zero tolerance of harassment and bullying
  • Making equality in the workplace the responsibility of all leaders and managers
  • Taking action that supports ethnic minority career progression

BITC’s 2018 Race at Work Scorecard report showed that:

  • There has been an increase in the number of workers from BAME background who report that they have witnessed or experienced racist harassment or bullying from customers or service users.
  • Despite being ambitious, over half of BAME employees still believe they will have to leave their current organisation to progress their career.
  • The proportion of managers who report that they have a performance objective to promote equality at work has fallen from 41% in 2015 to 32% in 2018.
  • Most significantly, employees have not reported any increase in the number of leaders demonstrating commitment and taking action since 2015.

Sandra Kerr CBE, race equality director at Business in the Community, said: “We would like to thank Shawbrook Bank for setting out their commitment to being an inclusive and responsible employer. By signing up to the charter they are showing that they aspire to have one of the most inclusive workplaces in the country. Together we can break down barriers in the workplace, raise the aspirations and achievements of talented individuals, and deliver an enormous boost to the long-term economic position of the UK.”

Shawbrook Bank

Julian Hynd, Shawbrook’s chief operating officer, has been appointed as the Bank’s Exec Sponsor for the RAWC. He will help drive actions through the Bank’s Diversity & Inclusion Working Group and employee inclusion network. 

He said: “I am extremely pleased that Shawbrook is now an official signatory of the Business in the Community Race at Work Charter.

“As an organisation, we’ve always firmly stood against any form of discrimination, victimisation and harassment but we want to go further and ensure we are positively tackling barriers and making sure our organisation is representative of our community.

“We believe each and every one of our colleagues brings unique talents and perspectives, and we want to ensure they feel supported, respected, have a voice and are able to develop skills and talents in line with our culture and values.

“Our aim is to foster a culture where Shawbrook employees can feel confident in bringing their whole self to work, feel included and see their talents nurtured so they can fully contribute when at work.

“As a Race at Work Charter signatory, we believe that this further shows our commitment to achieving that goal.”

Race at Work Charter signatories

Close Brothers

Fitch said the fallout from the pandemic “has heightened risks to the group given its above-average exposure to SME lending through asset and invoice finance, to retail customers potentially affected by employment disruptions in motor finance, and to property lending that will suffer delays in completion and sales.”

It said the ratings of Close Brothers Group and Close Brothers Limited “reflect a strong record of performance through economic cycles, which has historically compensated their appetite for higher-risk lending” but added that in the current crisis, “we expect pressure on earnings through rising credit impairments and lower volumes.”

Investec Bank

Fitch said its action on Investec Bank plc (IBP) reflects the fallout from the pandemic crisis “represents a near-term risk to its ratings”.

It said: “The risks stem from the bank’s above-average exposure (as a proportion of gross loans) to sectors we consider as particularly vulnerable to disruption, such as small-ticket asset finance, aviation finance, corporate and acquisition finance.”

Metro Bank

The rating action taken by Fitch reflects heightened challenges to Metro Bank’s business model, earnings and ability to deliver its strategy, which the pandemic has added to. 

It said: “The coronavirus disruptions make execution on Metro Bank’s strategy more difficult in the near-term because of weaker prospects for growth, lower interest rates, and slower demand for loans. 

“The bank has been undergoing significant organisational changes, and its earnings were expected to be depressed by restructuring charges and a slowdown in lending. 

“The pandemic also poses an operational challenge for Metro Bank given its small size, staff capacity and management turnover.

“Metro Bank’s earnings are very weak (£53m operating loss in 2019, excluding the impairment of tangible and intangible assets). 

“Fitch expects that a return to profitability will be made more difficult by the coronavirus disruptions. Lower lending volumes, interest rates and transaction fees, and larger credit losses (from small amounts) will weigh on the 2020 loss.”

Paragon Bank

Fitch said Paragon had “a good record in maintaining sound asset quality and profitability, but we expect its businesses, particularly its SME and development finance business, but also buy-to-let (BTL) mortgage lending, to be at risk from asset non-performance and reduced profitability in the downturn. 

“We also believe that funding growth at Paragon Bank will be harder to achieve, given possible pressures on saving rates if unemployment increases, and that the bank will find it harder to execute its strategy.”

The Co-op Bank

Fitch said the downgrades of the Co-operative Bank “reflect our view that the economic disruption in the UK poses a material risk to the bank’s capitalisation and earnings, as well as to the stability of the business model and to management’s ability to execute on its strategy to grow revenue and return to profitability, relative to when we last reviewed the ratings.”

“The bank enters the economic downturn from a position of relative weakness given its structurally loss-making profile. The bank is vulnerable to greater-than-expected losses and continues to face challenges in its ability to execute its future strategic initiatives. 

“We also see a heightened risk of asset-quality deterioration, although this is partly mitigated by the secured nature of its loan book.

Virgin Money

Fitch the fallout from the pandemic “results in heightened risks to Virgin Money UK’s ratings since the bank enters the economic downturn from a position of relative weakness given its weak profitability compared with peers’ as the business continues to undergo restructuring following its 2018 merger.” 

“We have reflected the highly likely impact of the economic and financial market fallout from the pandemic in a weaker assessment of earnings relative to when we last reviewed the bank’s ratings. 

“We also see an increased likelihood of future asset-quality deterioration, particularly in SME lending and credit cards, as well as weaker capital generation,” the agency reported

Banks’ asset finance business operations  

  • Investec Bank has a subsidiary, Investec Asset Finance plc
  • CYBG-owned Virgin Money plc runs an asset finance division 
  • Close Brothers Group plc operates an asset finance division 
  • Metro Bank plc operates two subsidiaries: SME Asset Finance Limited and SME Invoice Finance Limited 
  • The Co-Operative Bank plc runs its leasing through various subsidiaries (Second, Third and Fourth Roodhill Leasing Limited)
  • Paragon Bank plc runs an asset finance division 

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