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Daily News Roundup: Friday, 12th April 2019

Posted: 12th April 2019

BANKING

Barclays urges shareholders to ignore Bramson’s overtures

Barclays has advised its shareholders to snub activist investor Edward Bramson’s overtures, arguing that his analysis of the bank was “simplistic and flawed”. Earlier this week, Bramson urged shareholders to elect him on to the bank’s board next month. He said the problems facing Deutsche Bank were a “cautionary tale” for the UK bank as both have “similar strategic weaknesses”. In response Barclays said Bramson “does not possess the banking experience and skills” necessary for a board seat and “would be a disruptive and uncollaborative influence” if voted in. Writing in the Times, Alistair Osborne says that Bramson does not deserve a seat on the board but can keep the pressure on Barclays board by “sniping from the sidelines”.

HSBC shareholders urged to vote down bonus scheme

Shareholder advisory groups ISS and Pirc have recommended that HSBC shareholders vote against controversial “guaranteed bonuses” at the bank’s AGM today. Pirc the branded the guaranteed bonuses as “highly inappropriate”, while ISS said it could only give “qualified support” to the policy, asking for clearer guidelines. HSBC said guaranteed bonuses were only offered in "exceptional and limited circumstances", such as an executive being hired at the end of a financial year.

Public sentiment towards Metro Bank plunges

A new report into the sentiment of UK challenger banks by data firm Brands Eye found that negative sentiment towards Metro Bank surged in January and remained high in February, as it faced the impacts of a major accounting error and regulatory probes. Brands Eye, which analysed close to 9,000 tweets over three months, said February also saw a spike in customers threatening to leave the bank.

Coinbase launches cryptocurrency Visa debit card in UK

Cryptocurrency exchange Coinbase has partnered with Visa, Apto Payments and Paysafe to launch a debit card in the UK that users can spend cryptocurrencies on in retail stores and online.

PRIVATE EQUITY

US private equity activity slumps in first quarter

Private equity activity in the US slumped in the first quarter of this year, according to data from Pitchbook, with deal and exit values down 27.9% and 42.5% respectively in the three months to the end of March. However, private equity fundraising remained on track, with more than $40bn raised. The largest US deal in the quarter was the $6.9bn take-private of data and risk management company Dun & Bradstreet by a consortium of CC Capital, Thomas H. Lee Partners and Black Knight Holdings.

INTERNATIONAL

N26 urged to speed up fraud response times

The German banking regulator Bafin has urged digital bank N26 to improve its fraud response times after a customer complained that €80,000 was stolen from their account. CEO Valentin Stalf said that N26 sometimes took days to respond to other banks last year, but said the business now replies to requests within hours. He added that his business had failed to hire enough staff to communicate with other banks and its customers.

Officials ‘unconcerned’ by Deutsche Bank-Commerzbank merger risks

German policymakers have admitted that a merger between Deutsche Bank and Commerzbank would not put the national financial system in any more danger.

Citigroup investment bank head Jamie Forese to exit

Citigroup’s president and investment bank boss Jamie Forese is stepping down, and will be replaced by Paco Ybarra, who runs Citi’s global markets business from London.

Mediobanca buys 66% stake in finance group led by ex-Vivendi boss

Mediobanca has acquired a 66% stake in Messier Maris & Associes, a French corporate finance boutique led by Jean Marie Messier, the former boss of Vivendi.

AUTOMOTIVE

Uncertainty continues to hit car manufacturers

Mike Hawes, the boss of the Society of Motor Manufacturers and Traders, has said it is “utterly unacceptable” that, more than two years since Brexit negotiations started, the motoring industry still did not know what the UK's relationship with the EU was going to be. He said that uncertainty had already caused serious damage, with car plants on enforced shutdown, investment being cut and jobs being lost.

Uber warns over profits

Ride-hailing app Uber has warned it "may not achieve profitability" as it released details of its plan to float. It will list its shares on the New York Stock Exchange, in a deal likely to value the US firm at about $100bn (£76.5bn). Uber said that its most recent annual sales rose to $11.2bn and losses narrowed to $3bn. The firm also expects operating expenses to “increase significantly”.

AVIATION

JetBlue to launch flights to London

US airline JetBlue has announced that it will launch its first transatlantic services in 2021, with flights from New York and Boston to London. The airline says the transatlantic market suffers from poor competition and high fares, especially in the premium category.

CONSTRUCTION

Interserve accounts investigated

The Financial Reporting Council is set to investigate three years of accounts of Interserve. Last month the outsourcer, which has 45,000 UK staff, and 68,000 globally, was put into administration. The accounts being investigated are for the years 2015, 2016 and 2017.

FINANCIAL SERVICES

Takeover outfit eyeing more Lloyds insurance brokers

PIB Group, an insurance takeover vehicle backed by Carlyle, has hired advisers to help raise up to £200m for a fresh deal-making pot. PIB Group, which acquires small brokers in the Lloyd’s market, is one of biggest so-called “buy and build” consolidators in the broker market - with 19 takeovers since 2015.

Deutsche Börse in talks to buy some Refinitiv forex units

Deutsche Börse has said it is in concrete negotiations with Refinitiv, the data provider, to buy some of its foreign exchange businesses.

UK to lose £1tn of financial assets to Europe due to Brexit

According to new research, financial services companies have committed to moving about £1trn of assets out of the UK into Europe.

MEDIA AND ENTERTAINMENT

Murdoch wins backing to merge titles

The government has ruled that Rupert Murdoch’s Times and the Sunday Times should be free to merge editorial departments. Culture secretary Jeremy Wright said he was “minded” to allow News UK's request that the two newspapers should be allowed to share journalism resources.

REAL ESTATE

Goldman enters pre-fab investment

Goldman Sachs has announced an investment of £75m in a British company that constructs pre-fabricated homes. It is the first time the US investment bank has backed factory-built housing. Goldman is taking a stake in Top Hat, which was set up in 2016 and has a factory in Derbyshire. A spokesman for Goldman said: “Top Hat’s technology-driven approach has the potential to make a significant impact on the housing shortage.”

RETAIL

WH Smith strikes rent-free deals on some high street shops

WH Smith chief executive Stephen Clarke has revealed the chain is not paying rent on around 20 of its 578 UK stores. “The market is so distorted that in most cases our business rates are higher than the rent bill, so landlords have been happy for us to not pay rents rather than the shop be empty and them having to cough up instead”, he said. In a half-year trading update, the retailer also revealed a 21% decline in pre-tax profits, to £65m.

ECONOMY

Further Brexit delay will hinder growth

The head of the IMF, Christine Lagarde, has said that further uncertainty over Brexit will hinder growth in the UK economy. Speaking ahead of the agreement of an extension to Article 50, Ms Lagarde warned that businesses and investors will remain hesitant in the coming months. She said any prolonged uncertainty would have a “negative impact”. Ms Lagarde also expressed sympathy with the plight of British businesses. She highlighted that even with the contingency plans in place, they would face disruption in the event of a no-deal Brexit and may have to be resigned to taking a hit to their balance sheets and possibly market share.

OTHER

Scots see their savings fall by 60% over ten years

Household savings in Scotland have fallen by 60% since 2010, research figures reveal. In 2010 households had on average £3,840.41 in the bank, but by 2017 this was reduced to £1,517.31, analysis from Scottish Labour shows. James Kelly, Scottish Labour MSP for Glasgow and party finance spokesman, said the reduction in savings was "fuelled" by stagnant wages and debt.

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