BANKING
Natwest fined £265m for laundering drug gang cash

What’s going on?
Natwest has been fined £265m by the financial regulator after the high street bank pleaded guilty to failing to stop money laundering by suspected criminal gangs. 

Why is this important?

By law all financial firms have to follow strict rules to ensure they don’t help criminals turn their ill-gotten gains into legitimate funds.

Natwest failed to spot some blatant red flags of this sort of activity for years with a string of customers. 

A court heard that a Bradford jeweller, that was suspected as a front for a drug gang, deposited over £200m in cash at 50 branches during a period of five years. That's despite having less than £20m in revenue. 

Cash would arrive in black bin bags with branch managers running out of room to store it in safes but no alarm was raised. It was only after a police raid that the jeweller was shutdown.

Takeaway
Natwest is still 55% owned by the state following its taxpayer bailout during the financial crisis. So facilitating money laundering is doubly embarrassing for the government.

The bank said it “deeply regretted” its failures. It has invested £700m in preventing financial crime and has another £1bn planned until 2026.

ONLINE
Purplebricks left red-faced by multimillion pound blunder

Shares in online estate agency Purplebricks tumbled 21% after it revealed it could be forced to pay millions in compensation to tenants of its landlords.

It stems from an apparent blunder in its lettings management business that could cost the company up to £9m.

By law tenants are supposed to be notified with legal documents on how their rental deposit would be protected under government backed schemes within 30 days of paying. 

Failure to do this means that tenants can claim up to three times the value of the deposit. Purplebricks has allegedly been uncompliant with this rule since it was founded in 2012.

The company said it would delay the release of its half-year results, which had been due next week, to get more clarity on how bad the situation is.

The costly error comes just weeks after it warned that profits would be hit by more challenging market conditions as the supply of new properties on market dries up.

Purplebricks has failed to live up to the hype of an online disruptor to the estate agent industry. After going public in 2015 the company reached a peak valuation of £1.4bn but is now worth less than £80m.