Lloyds offers £100 to switch
Switching offers appear to be back after a dearth of sweeteners over the last eighteen months. Lloyds is now offering savers £100 to switch to a new Club Lloyds current account or new Club Lloyds Platinum account and receive an attractive 1.5% interest rate. Rachel Springall, a finance expert at Moneyfacts.co.uk said: “It's encouraging to see Lloyds Bank launching a free cash offer for switches at a time where many brands no longer offer an up-front perk to entice new business. It will be interesting to see whether this incites other banks to follow suit to compete.”
UK regulators tell banks to improve trade finance oversight
Britain’s top banks have been told by the Financial Conduct Authority and the Prudential Regulation Authority to improve oversight of their trade finance businesses and conduct a full financial crime risk assessment of their processes.
Banks reject Biden's snooping plans
A proposal from the Biden administration would require banks to report every deposit and withdrawal from an account to the IRS, including transactions from Venmo, PayPal, crypto exchanges and the like in an effort to fight tax evasion. But in a letter to the Senate Subcommittee on Finance, the American Bankers Association, the Bank Policy Institute, the Consumer Bankers Association and others argued that the “new reporting requirements for financial institutions would impose cost and complexity that are not justified by the potential, and highly uncertain, benefits.”
ECB to slow bond-buying as Europe’s economy improves
The European Central Bank is to begin cutting asset purchases, making it the first major central bank to do so and bringing a sign of confidence in the eurozone’s economic recovery. ECB president Christine Lagarde insisted she wasn’t “tapering” but would reduce the pace of its bond purchases from the €80bn-a-month level it has run at since March.
Italian bank lending to businesses slows to 16-month low
New data shows Italian bank lending to businesses in July grew at its slowest pace since March 2020. A monthly Bank of Italy report on the balance sheets of domestic banks showed loans to non-financial companies grew by 1.7% year-on-year in July, down from a 3.8% rise in June.
Wells Fargo hit with new penalty
The Office of the Comptroller of the Currency has fined Wells Fargo $250m and placed new restrictions on the bank's business after finding shortcomings in its earlier efforts to pay back customers it had previously harmed.
Varo Bank raises fresh capital
Warburg Pincus-backed Varo Bank has raised $510m in a funding round led by new investor Lone Pine Capital. The funding round takes the U.S. digital bank's valuation to $2.5bn.
Ford to cease carmaking in India
Ford has said it will stop making cars in India from the end of next June after making around $2bn in losses in the past 10 years in the country. The move follows General Motors and Harley Davidson, which have also stopped production in India in recent years.
EasyJet rejects takeover bid, announces fundraising
EasyJet has revealed it has rejected a takeover approach and announced plans to raise £1.2bn from shareholders to help its recovery from the pandemic. The budget carrier said the unsolicited approach, reportedly from rival Wizz Air, undervalued the company and the suitor was now no longer interested. EasyJet CEO Johan Lundgren said the fundraising would allow the firm "to accelerate our post‐COVID‐19 recovery plan" instead. The carrier has already raised emergency funds during the crisis, having been affected by Covid-related travel restrictions. EasyJet also plans to raise $400m (£290m) in debt.
Lloyd's of London returns to profit
A stronger underwriting performance saw Lloyd's of London return to profit in the first half of 2021. The commercial insurance market's results indicate its recovery after it incurred significant losses during the pandemic last year. In the same period a year ago Lloyd's suffered a total loss of £400m across its syndicate members. However, Lloyd's said that in first half of the year premium rates rose 9.9%. The city insurance market said it was paying £9.4bn worth of claims, including those of customers affected by the pandemic, and that 80% of COVID-related claims notified to date have been paid.
Funding Circle co-founder Samir Desai to step down
Samir Desai, the co-founder and chief executive of Funding Circle, is leaving the company at the end of the year at which time he will hand over to Lisa Jacobs. The small business lender also reported an operating profit of £35.5mn, beating its previous guidance and marking an improvement from losses last time of £113.5m.
PayPal introduces new fees between UK and EU
PayPal is increasing the fees paid by businesses trading between the UK and the European Economic Area from 0.5% to 1.29% due to extra costs incurred by the company including the rising interchange fees between the UK and EEA. The new fee level is still lower than PayPal’s standard 1.99% fee for the rest of the world.
Mastercard to buy CipherTrace as bet on crypto deepens
As Mastercard moves further into cryptocurrencies the payments giant has bought blockchain analytics company CipherTrace, which sells cryptocurrency anti-money laundering services.
BMGF funds AI drug development in UK
Oxford-based pharmatech company Exscientia has signed a four-year contract with the Bill and Melinda Gates Foundation (BMGF) that will provide £25m to help fund research into "small molecule therapeutics". The company's collaboration with the Gates Foundation will focus initially on the SARS-CoV-2 virus but will later utilise its AI-driven platform to “accelerate the creation of better, more effective therapeutics that can address some of the world’s most critical and emerging health risks."
Oxford Nanopore to launch IPO in London after COVID-19 success
British genomics company Oxford Nanopore, whose DNA sequencing devices have been used around the world during the pandemic, has unveiled plans for an IPO that could value it at about £4bn.
LEISURE & HOSPITALITY
888 takes punt on William Hill
888 Holdings is to acquire William Hill International's European arm for £2.2bn. The gaming group said it expected the deal to deliver at least £100m of annual cost synergies, creating a company with proforma underlying earnings last year of $464m and revenues of $2.5bn. The deal, which will be part-funded by a £500 million equity raise, represented “a transformational opportunity for 888 to significantly increase its scale, further diversify its product mix and accelerate the upward shift of its revenue-growth profile.” William Hill was taken over in April by the Las Vegas casino operator Caesars Entertainment in a £2.9bn deal, but Caesars had made it clear that it only wanted the British group’s US operations and would sell the rest at the earliest opportunity. In the final round of bidding 888 saw off Apollo Global Management.
Morrisons aims to mitigate expected food price rises
Morrisons has said it expects to see food price inflation in the second half of its financial year, but will aim to mitigate this rather than pass it on to consumers. The Bradford-based supermarket chain said profit before tax and exceptional items in the six months to August 1st fell 37% to £105m, impacted by £41m of COVID-related costs and £80m of foregone profit in fuel, in-store cafés and food-to-go. Total revenue including fuel increased 3.7% to £9.05bn, with like-for-likes excluding fuel and VAT down 0.3%. Morrisons, the target of competing takeover offers from Fortress Investment Group and Clayton, Dubilier and Rice, also maintained its profit guidance for the full 2021-20 year, and expects to make more than 2020-21's £431m.
Sterling shrugs off UK tax hike worries
Sterling rebounded on Thursday after hitting a two-week low against the dollar on Wednesday following the announcement of a UK tax hike to fund health spending and social care. Kallum Pickering, a senior economist at Berenberg, commented: "It seems to me the market isn't viewing it as a big deal and I don't think it's a big deal either", he said, noting yields on UK government bonds had risen slightly and that, given the strength of the recovery, UK consumers would likely be able to cope.