FCA proposes overhaul of cash savings products
The Financial Conduct Authority (FCA) is consulting on plans that would force banks to set a single easy access interest rate (SEAR) across all easy access accounts. The regulator in concerned that savers are getting a bad deal as banks often pay a high interest rate for a year which then falls to a lower "reversion" rate. The FCA is proposing providers are given the chance to offer consumers multiple introductory rates for up to 12 months but must then choose one SEAR across all their easy access cash savings accounts, and one for their easy access cash savings ISAs. The move could mean savers earn up to £381m more every year. Christopher Woolard, FCA executive director of strategy and competition, said the measures would “prevent firms from gradually reducing interest rates over time and make them compete for all their customers”. However, banks are warning that mortgage rates could rise to compensate. Eric Leenders at UK Finance said: "Regulatory intervention that increases the overall cost of deposit funding for providers will, in general, result in providers having to raise the cost of loans they make available to house purchasers and other borrowers".
Central banks need to refresh their armouries
The FT calls for central banks to set out how they plan to act in the next recession considering, as Mark Carney has said, they are running out of ammunition to tackle the next crisis.
Smart meter firm considers £300m London listing
Smart meter company Calisen, which is owned by KKR, yesterday said it is considering a London float that could raise up to £300m and value the company at between £1.3bn and £1.5bn.
The great vampire squid comes out into the light
The Standard’s Simon English says Goldman Sachs’ reputation as the “great vampire squid” is steadily fading with it now deemed “just another very big, very successful bank”. Goldmans is having its first ever investor day at the end of January and next week’s results will see it disclose more information than ever before.
Santander to repay capital bond one year after spooking market
Santander is preparing to repay a €1.5bn AT1 bond that it had opted not to pay when it first had the chance in February 2019. The bank said it will now pay off the bond in March.
Dutch bank ABN Amro names new chief executive amid money-laundering probe
ABN Amro has chosen Robert Swaak to succeed Kees van Dijkhuizen as chief executive and a money laundering probe by Dutch authorities will be first on his to-do list, the FT says.
JPMorgan seeks control of China futures venture
JPMorgan Chase has applied for approval to take control of its futures joint venture in China, Guangdong-based JPMorgan Futures.
Walsh to step down as IAG CEO
Willie Walsh is to step down as CEO of International Airlines Group (IAG) in March. He will be replaced by Luis Gallego, chief executive of Spanish carrier Iberia, whose merger with British Airways formed parent company IAG.
Airbus: "great potential to expand" post Brexit
Airbus has said it is committed to its British wing plants and could expand operations in the UK despite previous warnings over Brexit. Addressing industry figures, CEO Guillaume Faury said Airbus hoped to be a key partner to the UK in “an ambitious industrial strategy, a strategy which supports an innovative and robust UK industrial base underpinned by R&D.”
Galliford Try boasts new contract wins
Galliford Try, which completed the £1.1bn sale of its residential arm to Vistry Group, previously known as Bovis Homes, last week, has asserted a raft of contract wins. The Cowley-based firm won work with Sheffield Council, Yorkshire Water and Southern Water, as well the Portman Estate and a number of road maintenance jobs. Galliford said its current order book stands at £3.2bn and chief executive Bill Hocking predicted that average month-end cash balances for the second half of the financial year would be more than £100m.
Profit warning sends SIG shares down
Shares in building materials supplier SIG fell 20% yesterday after the firm issued a profit warning and announced that sales had fallen towards the end of the year. SIG said measures taken earlier in the year to offset a weakening economic outlook in Britain and Germany would deliver benefits in 2020, not 2019 as previously expected.
City calls on London to distance itself from Brussels
City of London heavyweights have rowed in behind Mark Carney and the former Chancellor George Osborne by calling on the UK to distance itself from Brussels after Brexit. Nigel Wilson, CEO of Legal & General, said the UK should “move as far away as we can” from EU rules without losing access to European markets. Meanwhile, Paul Feeney, the boss of Quilter, backed comments by Mr Carney, who said there was no point in the UK aligning its financial rulebook entirely with the EU after Brexit. Mr Feeney said: “Future changes to UK financial regulation should uphold the UK's position as a competitive and leading global investment centre, while ensuring that it works for both consumers and the industry.” Gerard Lyons, an economist at Netwealth Investments, added that there was a need to focus on maintaining London’s competitiveness on the international stage. “It makes sense for London to not be constrained and become a rule taker,” said Mr Lyons.
Inflows slump at Rathbones
Rathbone Brothers has reported a sharp drop in inflows during 2019, despite strong growth in its funds under management. At the end of the year, Rathbone had £50.4bn funds under management and administration, up 14% on the previous year. Net inflows were £600m in 2019, down on the £8.5bn the investment manager reported in 2018. Back in October, Rathbones warned that its profit margins would narrow over the next two or three years as it sought to grow organically, sending its shares sliding.
Scotland becomes global fintech hub
Scotland is now home to 119 fintech firms, up from 72 last year, according to FinTech Scotland. It said the growth has been driven by start-ups such as Visible Capital, SecureTheFile, Open Banking Research, Contract2Pay and Digital Future Capital. Firms also relocated to the country from Australia, Hong Kong, Norway and the US.
3,500 Woodford investors sign up for legal action
The Telegraph reports that almost 3,500 investors are preparing to take legal action to recover losses inflicted by the collapse of Neil Woodford’s investment empire. Hargreaves Lansdown, which plugged the Equity Income fund until its suspension in June, and Link Fund Solutions, which served as supervisor of the fund and was meant to ensure it followed the rules, could also face litigation.
Vanguard plans to launch UK investment service
The Financial Conduct Authority has given US fund management group Vanguard the green light to begin providing investment advice in the UK. Vanguard has offered professional investment products in the UK since 2009, where it manages a total of £87bn.
LCF investors lose bid for compensation
The Financial Services Compensation Scheme (FSCS) has said just 159 of the 11,600 investors who bought minibonds through London Capital & Finance (LCF) will definitely be able to claim their money back. Bonds worth £237m were bought from LCF, which fell into administration last January.
Newday set to buy retail finance platform Deko
Newday has agreed to acquire retail finance platform Deko as the credit card issuer seeks to diversify its business away from traditional credit card revenues. The deal to buy Deko for up to £40m depending on its performance
Voya Financial held talks over sale to insurance groups
US retirement plan provider Voya Financial held talks late last year with AIG, Principal Financial Group and Prudential Financial about a sale, according to reports.
LEISURE & HOSPITALITY
Mitchells & Butlers posts rise in Christmas sales
All Bar One owner Mitchells & Butlers had comparable sales growth of 5.6% over the three-week Christmas period. Over the year to date total sales have risen 2.7 per cent compared to last year.
Liberty House to cut 355 jobs in UK steelmaking plants
Liberty Steel has announced plans to slash 355 jobs from its South Yorkshire and south Wales plants amid “challenging conditions” in the UK. CEO Cornelius Louwrens said it was unfortunate but “we have made the difficult decision that there is a need to reduce the workforce at a handful of locations, in order to make them sustainable for the long-term.”
MEDIA & ENTERTAINMENT
DCMS “minded” to intervene in takeover of the i
The Department for Digital, Culture, Media and Sport (DCMS) has warned that the takeover of the i newspaper by Daily Mail and General Trust could raise public interest concerns and that the government was “minded” to intervene due to concerns over a loss of “sufficient plurality of views in newspapers”.
Robert Walters hit by political uncertainty
UK profits were down 23% at Robert Walters after the recruiter was hurt by political uncertainty throughout 2019. UK gross profit fell from £26.8m in the fourth quarter of 2018 to £20.7m in Q4 2019 while overall group profit fell 8% year on year to £94.2m as the firm saw declines in every market save Europe, where earnings rose 1% to £27.7m.
Football Association's streaming deal puts funding at risk
UK sports minister Nigel Adams has told sporting bodies they risk losing taxpayer funding if they continue to allow betting firms to stream sports events on their websites.
Business confidence hits record high
Business sentiment among finance chiefs has risen sharply following the Conservatives' election victory, according a new survey. Over half (53%) of respondents were more optimistic than three months earlier, up from 9% in the previous quarter. The figures represent the biggest jump in confidence since for 11 years. Some 38% said they expected UK businesses to increase capital expenditure over the next year, up from just 6% during the previous period, and 27% said they expect hiring to rise next year, up from 3% during the last quarter.
Mark Carney hints of upcoming rate cut
The Bank of England’s outgoing chief, Mark Carney, has suggested that UK interest rates could soon be cut in order to bolster the economy amid slow growth. His comments sent the pound falling 0.6% against the dollar to $1.3016 in early London trading on Thursday. Mr Carney also said it was not for the BoE to attempt to finance a green revolution saying the institution should stick to its main job of setting interest rates to keep inflation at or around 2%.
BlackRock joins climate action group after ‘greenwash’ criticism
The world’s top fund manager, Blackrock, has signed up to the Climate Action 100+ initiative after being criticised for not applying sufficient pressure on corporate boards regarding climate change.
M&A deal value rises by £15bn in 2019
Financial firms completed £39.8bn worth of deals last year, up from £24.9bn in 2018, according to new data. The £15bn increase in M&A deals came despite the number of deals falling from 236 to 211.