BoE broadens bank stress tests
The Bank of England has announced that it will widen the scope of its bank stress tests to include buffers designed to protect the financial system. The Prudential Regulation Authority said the tests, which will take place near the end of 2018, will include systemic risk buffer. The PRA explained: “The calculation of minimum capital requirements incorporated in the hurdle rates will more accurately reflect how they would evolve in a real stress.” The Bank will also adjust how it accounts for the impact of extra “Pillar 2A” buffers in the stress tests.
FCA urges banks to bin Libor
The Financial Conduct Authority has urged banks to speed up their move away from the Libor rate to avoid risking the stability of the global financial system. The FCA’s boss Andrew Bailey warned that firms will be forced to demonstrate that they have plans to “reduce dependencies” on Libor and complained that the “pace of that transition is not yet fast enough”. The Sterling Overnight Index Average (Sonia), currently being pushed by the Bank of England, is based on an average of 370 transactions per day, compared to Libor’s average of just two during the last six months.
Former Barclays trader found guilty of rigging Euribor
Philippe Moryoussef, a former trader at Barclays, has been found guilty of rigging Euribor. He was convicted of conspiracy to defraud by manipulating the rate between 2005 and 2009. Achim Kraemer, who is still employed by Deutsche Bank, was found not guilty. The jury also said it had been unable to reach a verdict on three remaining defendants: Carlo Palombo, Sisse Bohart and Colin Bermingham, all formerly at Barclays.
Citrino joins Barclays
Mary Anne Citrino, who spent more than a decade at Blackstone, is joining the board of Barclays as a nonexecutive director.
UK regains top spot for venture capital funding in Europe
According to a new report, the UK has regained its place at the top spot in Europe for venture capital investment in the second quarter of 2018. A total of £1.55bn of venture capital money was invested into UK businesses, spanning 244 deals. The UK accounted for 60% of Europe’s top ten deals in the last three months.
MasterCard customers suffer outages around the world
MasterCard has said it has resolved issues that caused customers in some markets to experience outages in card transactions. The problems emerged just weeks after similar technical issues at Visa.
McLaren plans to double production
McLaren Automotive is planning to launch 18 new cars and almost double production by 2025 as part of a £1.2bn investment plan. The carmaker is aiming to increase annual production to 6,000 vehicles within seven years, having sold 3,340 last year.
Jet2 shares soar on back of results
Dart Group, the owner of the Jet2 travel and holiday brand, has reported a 38% jump in annual revenue to £2.39bn, with pre-tax profits up 49% at £134.6m. On the back of the update, shares in the company rose by 37% in early trading.
Norwegian flies in to profit
Norwegian Air has beaten expectations to post a £28m profit in the three months to June, compared with a £64.5m loss a year earlier. The carrier had been forecast to make a £50m loss.
Ryanair pilots announce two more one-day strikes
Ryanair is facing two more days of strike action by some pilots based in Ireland. A pilots union announced that the 24-hour strikes will take place on Friday 20 July and Tuesday 24 July.
Philip Hammond defends Brexit plan for financial services
The Chancellor has defended the Government’s watered down plan for financial services, telling the City that the proposals would allow the sector to “flourish”. He said the White Paper, which proposes more regulatory autonomy after Brexit on services in exchange for less market access, “works for the UK, works for the EU and works for business”. However, business leaders said the plan was “a real blow” and Conservative Eurosceptics said it was a sell-out that would leave Britain in the EU’s regulatory orbit. Meanwhile, the City of London Corporation and the CBI have called on the PM to provide more details on tax, customs and immigration.
Proposals will speed up departure of UK firms
Inga Beale, the CEO of Lloyd’s of London, has said that the government’s plan for relations with the EU after Brexit will speed up the departure of firms from the UK. Ms Beale said the White Paper would see the 300-year insurance market go “full speed ahead” to set up its subsidiary in Brussels – and push others on to do so as well. She said: “Professional and financial services are really not catered for at all and it's very disappointing. We make up basically 80% of the economy of the UK. Lloyd's is to open a subsidiary in Brussels so we will be full steam ahead, and many other banks, insurers and other financial services firms will be moving at pace now.”
EU should offer UK firms better access
Luxembourg’s finance minister, Pierre Gramegna, has said that the EU should offer enhanced access for financial companies from “third countries” outside the EU and the European Free Trade Association – something that City analysts have said is vital for the UK economy. He was
Charles Stanley joins SFE
Wealth manager Charles Stanley has joined trade organisation Scottish Financial Enterprise (SFE) as the firm looks to grow its presence in Scotland.
LEISURE AND HOSPITALITY
Thomas Cook seeks new chairman
Thomas Cook has started hunting for a new chairman to replace Frank Meysman, who has been chair since 2011. Current board members and outsiders are being considered for the role.
MEDIA AND ENTERTAINMENT
US appeals $80bn AT&T-Time Warner deal
The US government has decided to appeal against a landmark court ruling that cleared the way for telecoms giant AT&T to buy Time Warner. The ruling was a significant defeat for the US Justice Department, which had argued the deal would lead to less competition and higher consumer prices.
UK government gives all-clear for Fox to buy Sky
The UK government has agreed that Rupert Murdoch’s 21st Century Fox can acquire the remaining 61% of Sky it does not already own.
M&A activity and tougher regulation boost UK law firm profits
The UK’s leading law firms have shrugged off uncertainty over Brexit to post strong financial results for the year. Mid-tier and boutique firms also performed well, with some reporting double-digit growth. Amongst the magic circle, Clifford Chance and Allen & Overy each recorded profit per equity partner (PEP) figures above £1.6m, while Freshfields Bruckhaus Deringer bumped PEP above £1.7m. Linklaters’ has recorded PEP of £1.538m, a decline of 1.9%, although the firm saw revenue grow 5.8% to £1.523bn.
UK property value down £27bn in first half
The value of the UK property market has fallen by £27bn since the beginning of the year, according to new research from Zoopla, which attributed the drop to Brexit uncertainty. The average UK property decreased in value by £5.12 per day in the first six months of the year, bringing the total worth of the market down 0.33%, the study found. The North East of England was the best-performing region, with prices rising by 3.31%, followed by Wales, with growth of 1.4%, and London, where prices rose 0.75%. At the other end of the scale, the worst-performing region was the South West, with a 2.51% decline, followed by Yorkshire and the Humber and the East Midlands, with reductions of 2.12% and 1.22% respectively.
Asos struggling to sustain growth
Asos has warned that full-year sales growth would be “towards the lower end” of a 25%-30% range. Nevertheless, its retail sales for the four months to the end of June increased 22%, to £802.7m; UK sales increased 23% to £288m, while EU sales jumped 31%, boosted by favourable currency effects. Retail gross margins rose by 1.3 percentage points, although the rise for the full year will be closer to 1 point.
Lenders expect borrowing to increase
British lenders expect consumer borrowing to pick up in the third quarter, according to the Bank of England’s latest credit conditions survey. The report found “a significant increase in default rates on credit card loans” between April and June this year, indicating that consumer budgets could be coming under pressure. The Bank of England is likely to add to the burden on budgets as soon as next month with an interest rate rise that could take the official cost of borrowing to 0.75%.
Trump raises concerns over Brexit plan
President Donald Trump has warned that the UK will “probably not” get a trade deal with the US, if Theresa May’s Brexit plan goes ahead. He said the proposal would probably “kill the deal” as it would mean the US “would be dealing with the EU” rather than the UK. He was speaking after the UK government published its plan for its long-term relationship with the EU.