May promises to put banking at heart of Brexit trade deal
Theresa May told City leaders yesterday that financial services would be put at the heart of a Brexit trade deal. Mrs May reiterated her determination to achieve a bespoke deal and scoped out the financial sector bosses on ideas for protecting the size and influence of the City of London. Senior figures from HSBC, Prudential, Goldman Sachs and JPMorgan Chase attended the meeting where the Chancellor was also present. Lloyds of London, UBS, the London Stock Exchange, Aviva, Nomura, Santander and Blackrock were also represented. The meeting was “very positive” according to sources, with agreement reached on the fact that New York and Hong Kong would be the beneficiaries if London lost its status as financial capital of the world, not the EU. Barclays chief executive Jes Staley reportedly pressed the PM to adopt a more competitive tax regime and ease regulations in order for the UK to better compete with US rivals. In closing, Mrs May urged the leaders to “emphasise the benefits for Europe as a whole of the UK’s financial centre,” according to a Downing Street spokesman. Meanwhile, Downing Street has disputed a suggestion by the Chancellor that the UK could keep paying into the EU budget after Brexit in exchange for British banks getting privileged access to European markets. “We will not be paying for market access,” a spokesman said.
Borrowers wary amid rising inflation
The latest Bank of England Credit Conditions Survey has revealed Britons are cutting back on overdrafts and personal loans, the first such fall in demand since 2015. Banks also trimmed the availability of non-credit-card lending to consumers in every quarter of last year, the survey noted, as they tightened the criteria used to assess borrowers. However, household demand for remortgage loans surged as people looked to head off the Bank’s interest-rate hike last year.
Tandem targets 'massive' growth
Start-up digital bank Tandem has now completed its takeover of Harrods Bank, adding £80m of capital and more than doubling its customer base, to 21,000. Ricky Knox, chief executive of Tandem, said the tie-up would help the bank “accelerate our growth massively” and the deal means Tandem regains its banking licence. Former Barclays boss Bob Diamond's Atlas Merchant Capital is not part of a new funding round that includes new and existing investors, after engaging in talks leading up to the Harrods announcement.
Asia close to eclipsing US as world’s biggest VC market
New research shows Asia is closing in on the US as the biggest home for venture capital investment, with total funding of $70.8bn last year to America’s $71.9bn.
Czech central bank to split forex reserves
The Czech National Bank is splitting its foreign exchange reserves into two parts to better manage the portfolio after its foreign holdings soared during nearly four years of currency market interventions, Governor Jiri Rusnok said yesterday.
Investors flock to Monte dei Paschi’s first bond sale since bailout
Monte dei Paschi di Siena’s first debt sale since its bailout last year has drawn strong demand. MPS raised €750m of 10-year tier 2 bonds after investors placed €2.5bn for orders of its junk bonds.
JLR invests in autonomous car firm
Jaguar Land Rover’s venture capital arm, InMotion Ventures, has invested $3m in Voyage, which is trialling self-driving taxis in gated communities in California and has licences to test the cars on public roads this year.
Stansted in for long haul
Stansted Airport chief executive Ken O’Toole has said recent announcements that Emirates would be flying to Dubai from Stansted from June, and that PrimeraAir will fly to US cities, were “just the start” of Stansted’s long-haul ambitions.
Barratt positive on modest growth
Housebuilder Barratt Developments has reported a 2% increase in completions to 7,324 in the six months to 31 December. The average selling price jumped 6.5% to £281,000 from £263,800, while forward sales were up 2% to £2.4bn. Net cash at the half year stage was down to £165m from £200m a year ago, which the firm said reflected the purchase of 13,200 plots of land worth £641.2m over the past six months. The company said that given “good demand and (its) healthy forward order book we continue to expect to deliver modest growth in wholly owned completions” in the 2018 financial year.
Wall Street trader to launch cryptocurrency bank
Wall Street trader Michael Novogratz is launching a merchant bank dedicated to cryptocurrency ventures. Mr Novogratz said his new firm, named Galaxy Digital, will build a “best-in-class, full-service, institutional-quality merchant banking business in the cryptocurrency and blockchain space”. It will trade and invest in cryptocurrencies, as well as having asset management and financial advisory and consultancy wings. Meanwhile, Goldman Sachs has predicted that Bitcoin’s future is at risk as existing currencies will work with blockchain technology better than cryptocurrencies. Separately, plans by South Korea to ban cryptocurrency trading sent Bitcoin prices plummeting 13.5% yesterday. Justice minister Park Sang-ki said the government was preparing a bill to ban trading of the virtual currency on domestic exchanges. News of the ban came after the country’s police and tax authorities raided local virtual coin exchanges for alleged tax evasion.
Poor response to plans to relax insurance red tape
Bank of England plans to reduce EU regulatory reporting requirements on insurers have received only a lukewarm response from the ABI. The Prudential Regulation Authority yesterday issued a consultation paper setting out plans to lighten the load under the Solvency II rules to reduce the reporting burden for smaller firms. “Today’s move by the PRA proposing some reductions to this is another step in the right direction and will be particularly helpful to smaller firms in easing this disproportionate burden they are facing,” said ABI head of prudential regulation Steven Findlay.
Four Seasons talks stall
Discussions over the future of Four Seasons Healthcare have stalled after some minority bondholders claimed the care home provider's biggest lender, US investment firm H/2 Capital Partners, is seeking measures that are not in the company's best interest.
LEISURE AND HOSPITALITY
Record end to year for GVC
GVC saw record growth of 21% in its revenues for the final quarter, to $280m, meaning that its total revenue for the year should exceed $1bn. In December, GVC sealed a £4bn deal for the takeover of Ladbrokes Coral.
Duke Street acquires river cruise operator
Duke Street has bought Arosa, the German upmarket river cruise operator, from Waterland Private Equity, for an undisclosed sum.
Landlords reducing portfolios
The National Landlords Association (NLA) has revealed that 20% of its members are planning to reduce the number of homes they hold in their portfolio this year - the highest level of intended property sales in ten years. The NLA, which represents more than 80,000 landlords across the UK, is blaming regulatory changes and taxes introduced by the government. Separately, the Guardian looks at how mortgage borrowers are benefiting from intense competition on the high street following the biggest squeeze on profit margins for two years.
Tesco enjoys best Christmas in 8 years
Tesco has posted its best Christmas sales for eight years, despite its performance missing analyst forecasts. UK like-for-like sales in the six weeks to 6 January increased 1.9%, against analyst projections in a Reuters poll of growth up to 3.2%. The supermarket giant also reported data for the third quarter, with UK same-store sales up 2.3%, and total group sales up 0.9%. Food sales increased 3.4%.
Khan warns of Brexit 'lost decade'
Mayor of London Sadiq Khan has warned that a hard Brexit could lead to "a lost decade of lower growth" and that a no-deal outcome could cost the country half a million jobs and £50bn in lost investment by 2030. Research commissioned from analysts Cambridge Econometrics says that in a worst-case scenario London could lose 87,000 jobs by 2030 as a result of a hard Brexit. But the report has been slammed as more “Project Fear”, with critics noting that it was written by ardent Remainers including Jeremy Corbyn's economic guru Richard Murphy. The Times points out that under all scenarios posited in the report - including no deal with the EU - the UK economy would grow on average by at least 0.86% a year compared to a growth rate of 1.13% inside the EU. Employment would grow by 0.29% compared to 0.42% inside the bloc, while the population would rise by 0.34% compared to 0.5%. Liam Fox, the international trade secretary, said the report was "anything other than cataclysmic”.
Immigration status checks for bank accounts
The Home Office has announced that banks and building societies have started carrying out checks on the immigration status of all personal current account holders under government measures to encourage those in the UK illegally to leave. The checks will be done against the details of known illegal migrants which the Home Office is sharing with Cifas, an anti-fraud organisation.