BANKING
Banks could be forced to refund all fraud victims
Britain's high street banks could be forced to reimburse all scam victims under rules proposed by the Payment Systems Regulator. The new regulations would also see banks forced to publish figures showing how often they pay back blameless fraud victims. Gareth Shaw, the head of money at consumer group Which?, said: “It's clear consumer protections for bank transfer scams under the [voluntary] code aren't working. Reimbursement rates are far too low, customers are being treated inconsistently and there is no transparency about which banks are turning down reimbursement in the vast majority of cases.”
Huawei takes HSBC to court over extradition
The Chinese telecoms giant Huawei is taking HSBC to court in the UK as part of its attempt to prevent the extradition of its chief financial officer from Canada to the US. Meng Wanzhou was arrested in Canada on a US request over claims she misled HSBC in a 2013 meeting. Huawei now hopes to gain access to HSBC documents that could help it undermine the US case for her extradition. The bank told the BBC the application for disclosure was "without merit".
HSBC urged to do more to combat climate change
Lawyers for the charity ClientEarth have written to HSBC to remind it of its legal duties with regard to climate risk. The bank is considering supporting a resolution brought by ShareAction last month which called on HSBC to take urgent action to scale back its exposure to fossil fuel assets, in line with a timeline set out by the Paris climate agreement. The charity is now urging HSBC board members to vote in favour of the resolution.
PRIVATE EQUITY
Private equity firm withdraws bid for Australia’s scandal-hit AMP
Australian wealth manager AMP saw its shares fall yesterday after US private equity group Ares Management scrapped a A$6bn bid for the company.
INTERNATIONAL
Commerzbank posts record Q4 loss
Commerzbank has posted a record fourth-quarter loss of $3.3bn. The German bank said it would swiftly introduce plans to cut 10,000 jobs and close hundreds of branches in a bid to strive for profit in 2021. While one in three jobs will be lost in Germany, the bank will add 2,500 roles outside the country to cut costs, mainly in Eastern Europe. Commerzbank said that depending on the behaviour of the pandemic, it expects provisions of between €800m and €1.2bn in 2021, compared to €1.75bn in 2020.
US banks push Fed for extension of Covid capital relief
US banks are pressing the Federal Reserve to extend concessions that loosened capital requirements when the pandemic struck. They argue financial markets would be at risk if the relief expires as planned next month.
Rabobank to cut 5,000 jobs
Rabobank has announced that it will cut 1,000 jobs each year for the next five years in a move to cut costs. The Dutch lender said COVID-19 had "significantly affected the financial performance" of its operations, with net profit down 50% year on year.
AUTOMOTIVE
EV manufacturer looking for UK factory site
Rivian, which produces electric pick-up trucks and SUVs, is understood to be looking at potential locations in the UK to build a new factory. The electric vehicle maker will first manufacture a delivery van for Amazon before moving on to producing Rivian models for consumers. The US firm is also looking at sites for the factory beyond Europe, according to reports.
AVIATION
Passenger and cargo volume down at Heathrow
Heathrow Airport has said that passenger volumes were down 89% in January compared to a year ago as blanket quarantine and compulsory testing put people off travelling. The lack of long haul aviation meant freight traffic plunged, with cargo volume down 21% in January.
CONSTRUCTION
MJ Gleeson builds sales
MJ Gleeson has reported a jump in homes sold in the first half due to demand from key workers and first time buyers. The affordable housing developer said revenue was up 35.8% to £142.6m and profit before tax increased 52.6% to £20.3m. Earnings per share in the six months ended 30 December were up 43.9% to 28.1p and the firm announced it will resume dividends with a 5p per share payout. Homes sold during the period jumped 17.3% to 951 and the average selling price was also up 9.1% to £140,600.
FINANCIAL SERVICES
Barnier: British firms using shell companies to circumvent EU rules
The EU’s chief Brexit negotiator has accused British financial services firms of using letterbox companies to gain access to the EU’s Single Market. Michel Barnier told the European Business Summit in Brussels: “Needless to say national authorities of the EU in each and every country and the EU authorities themselves will be very, very vigilant.” He went on to say that Brussels would not grant access to firms in 28 financial sectors until the British government gave details of any plans it had to diverge from EU rules. Mr Barnier’s comments come after Bank of England Governor Andrew Bailey on Wednesday said Brussels was trying to force the City to be a “rule-taker” and is likely to block EU companies from doing business with UK financial institutions. But senior City figures have their eye on expanding in the Asian markets and maintaining London’s competitive edge with New York; driving growth in fintech and other areas of innovation. Emma Reynolds, of industry group TheCityUK, said: “When we talk to EU counterparts, we do stress there is a bigger world out there beyond the UK and EU.”
EU’s attacks on the City of London could be self-defeating
The proportion of euro-denominated swap trading done in London fell from about 40% last July to 10% in January, according to IHS Markit. Trading of euro swaps at EU venues rose to 25% of the market from 10% while trading on US marketplaces more than doubled to 20%. The news comes after data showed that Amsterdam overtook London as Europe's biggest share trading hub in January. Some experts argue that the trading shift is largely symbolic considering the relatively small profits involved and that the EU’s intransigence over passporting for financial services will ultimately damage the EU, cutting itself off from access to one of the world’s deepest capital markets, potentially leaving Europe’s banks more vulnerable.
Accounting watchdog told Wirecard it did ‘not want’ to investigate fraud
The FT reports that Wirecard was told in 2016 by Germany’s accounting watchdog that it did “not want” to formally investigate fraud allegations raised by short sellers.
HEALTHCARE
Novartis snaps up GSK antibiotics business
Novartis's generics unit Sandoz is buying a GlaxoSmithKline antibiotics business for up to $500m. Glaxo is splitting itself into two companies, one focusing on over-the-counter products and the other on prescription drugs and vaccines.
LEISURE & HOSPITALITY
US PE group pulls out of Marston’s bid
Platinum Equity Advisors is pulling out of its bid to buy Marston’s. The brewer and pub chain rejected a £690m takeover offer from the US private equity firm last month, claiming that the bid undervalued the company. Marston’s has seen shares rise and fall intermittently throughout negotiations with Platinum, but the California-based private equity firm will not make a revised offer.
Entain doubles down on bid for Swedish rival
Entain has doubled down on its £250m cash bid for Swedish rival Enlabs despite complaints from one of the company’s largest shareholders. The Ladbrokes owner said it was extending the deadline for its offer of 40 Swedish krona per share until 18 March. It comes despite a revolt led by US hedge fund Alta Fox, which is one of Enlabs’ largest shareholders.
MEDIA & ENTERTAINMENT
Relx to lift FY dividend
Relx is planning to lift its full-year dividend by 3% after growth in its core analytics business offset a sharp decline in exhibitions. The FTSE 100 group said it had enjoyed continued growth in its science, legal and risk divisions, which make up 95% of its revenue. Overall, the media group posted revenue of £7.1bn, a 10% decline on 2019, while pre-tax profit fell 13% to £1.9bn.
Vodafone appoints for EE CEO as NED
Vodafone has appointed Olaf Swantee as non-executive director. Mr Swantee was chief executive at EE, Vodafone’s biggest UK competitor.
RETAIL
Ted Baker sales hit by closures, weaker Christmas demand
Ted Baker said sales fell 47% in the fourth quarter, impacted by coronavirus-led store closures in Britain along with weak demand during Christmas. Retail sales for the 13 weeks to January 30th fell 47% due to the closure of many stores and a material decline in footfall, while directly-operated e-commerce sales rose 2%. Group e-commerce sales fell 1% and represented 63% of total retail sales for the year from 33% in fiscal 2020. The London-listed company added that it has a strong balance sheet and cash position, which it notes leaves the company well placed for the future despite assuming negative effects across both channels from store closures until the end of May.
ECONOMY
Haldane predicts double-digit growth next year
The Bank of England’s chief economist Andy Haldane believes British households will embark on a massive spending spree once they are liberated from the coronavirus lockdown. With an estimated £250bn saved up due to the restrictions, Mr Haldane is predicting a recovery “to remember”. He believes that a year from now, “annual growth could be in double-digits.” In an article for the Daily Mail, he contends that the public are “desperate to get their lives back” and the rollout of the vaccines means we’re on the cusp of “enormous amounts of pent-up financial energy” being released.
OTHER
FCA issues personal debt warning
The Financial Conduct Authority (FCA) has reported that the Covid crisis has left a quarter of adults in the UK financially vulnerable. The City regulator’s Financial Lives survey shows that during October, 27.7m adults indicated signs of vulnerability including poor health, low financial resilience or recent negative life events - up 15% since March. The survey also reveals a higher than average number of younger adults, and those from black, Asian and minority ethnic (BAME) backgrounds, have become more vulnerable since the pandemic struck.