BoE to relax regulation after Brexit
The Bank of England’s deputy governor for prudential regulation, Sam Woods, has said that the Bank would relax regulations on small banks after the Brexit transition ends this year to ensure a "strong and simple" framework for challenger banks to cut costs and improve their competitiveness against the eight dominant high street lenders. Mr Woods said in a speech at Mansion House that regulators in London and Brussels would no longer be "shackled in lockstep". The Mail’s Alex Brummer says Woods’ move to bolster dynamism illustrates a view within the Bank that “if some business does drift off to the Continent, there will be no shortage of new activities to pick up the slack.”
NatWest eyes takeover of Sainsbury's Bank
NatWest has been considering a takeover of Sainsbury's Bank but has not yet made a formal offer, according to Sky News. It was reported last month that Sainsbury's boss Simon Roberts had asked the company's financial adviser UBS to look at its options. Since then a number of suiters have shown interest.
Recognise granted approval to become a bank
Recognise Financial Services, a new SME bank for the UK, has been granted regulatory approval to become Recognise Bank. It will now begin selective lending, on an unregulated basis, before gearing up to full operational activity in the first half of 2021.
Carlyle invests in third-party reseller
Carlyle has invested $250m in US e-commerce firm Pharmapacks, one of Amazon’s largest third-party resellers. Since its launch as a pharmacy shop in 2020, Pharmapacks has grown into an online retailer focused on health, personal care and beauty products. The investment, which values Pharmapacks at approximately $1.1bn, came from Carlyle Partners VII, a $18.5bn buyout fund the firm recently used to acquire a stake in healthtech firm Grand Rounds.
3i defies expectations with strong returns
A high quality and diverse portfolio helped 3i to a gross investment return of just under £1.25bn, almost twice what was achieved last year. News of the performance sent shares up 27p, or 2.5% to £11.11 yesterday.
Almost half of Goldman Sachs’ new partners are women or minorities
Goldman Sachs has promoted 60 staff to partner level as the bank continues to shrink the number of partners while increasing the perks they enjoy. Women and ethnic minorities make up almost half of the new crop reducing the dominance of white men at the top of the bank.
BNP Paribas faces anti-corruption questions over Deutsche prime brokerage deal
France’s anti-corruption regulator is looking to question BNP Paribas over its use of an introducer as part of a deal to buy Deutsche Bank’s prime brokerage business last year.
Emirates Group posts first loss in 30 years
Emirates Group has posted its first loss in over 30 years after the COVID-19 pandemic hit demand for air travel. Emirates said that the 14.1bn dirham (£2.8bn) loss for the state-owned company came alongside a 24% reduction in headcount over the six months to September. Revenue fell 74% as an increase in cargo traffic failed to offset the decline of commercial flights.
Rolls-Royce raises £2bn through rights issue
Rolls-Royce raised £2bn from a rights issue on Thursday to bolster its finances. The equity raise unlocks new debt options for the company including £2bn from a bond issued in October and a bank loan worth £1bn, as part of a total £5bn liquidity package.
BAE wins role in £1.3bn contract to build Eurofighter jets for Germany
BAE Systems has been awarded a major role in a £1.3bn contract to construct 38 Eurofighter Typhoon aircraft for the German Air Force.
Vistry to reinstate dividend on back of strong sales
Vistry Group has stated it is on course to report full-year profit before tax at the top end of its expected range of £130m to £140m. The housebuilder, formerly known as Bovis Homes, said the company is “well positioned” to increase profit before tax to £310m in 2021, “assuming stable market conditions”.
UK regulators prepared to intervene if Brexit disrupts markets
Nausicaa Delfas, head of international at the Financial Conduct Authority, has said that British regulators are prepared to intervene if the UK’s full departure from the EU on 31 December risks disrupting financial markets. “We should not assume, even if a deal is agreed, that it will mitigate outstanding risks in financial services,” said Ms Delfas, warning that issues with derivatives trading, the transfer of personal data and offering services to customers in the EU remained a real possibility after January 1. “With passporting ending… and there is a patchwork of solutions on the EU side, which means that we need to be vigilant to ensure we are prepared and able to address any issues arising over that period,” she added. Meanwhile, FCA chief executive Nikhil Rathi has said the FCA is committed to maintaining open financial markets following the end of the Brexit transition period. In an address to city regulators at Mansion House, he said: “We continue to operate in an open, co-operative way, providing technical support to the Government in negotiations and deepening our relationships with international regulators, and adapting to our new relationship with EU counterparts.”
Standard Life Aberdeen CEO: Offices remain essential
Standard Life Aberdeen’s new CEO Stephen Bird has spoken out against full-time home working, warning of the importance of office life for generating new ideas and training the next generation. The Times reports on a change in strategy at the top of Standard Life Aberdeen with Mr Bird telling Bloomberg he would like to treble exposure to index-following fund management.
Brookfield launches Bermuda reinsurer to fuel growth
Canadian investment group Brookfield Asset Management is launching a Bermuda-based reinsurance company that will look after billions of dollars of payments owed to American annuity holders.
L&G announces flat dividend for year
In an update to investors yesterday, Legal & General announced that it would keep its full-year dividend unchanged this year, sending shares down 1.9%. The insurer added that it would increase it for the following five years by a percentage of “low to mid-single digits”.
LEISURE & HOSPITALITY
GVC makes move to shed bad reputation
Ladbrokes and Coral owner GVC yesterday sought to wipe the slate clean following a spate of scandals - with a name change, to Entain, and a pledge to implement the kind of corporate governance that “befit our status as a FTSE 100 company.” Bonuses will be partly determined by how well GVC cares for vulnerable gamblers. It also announced that customers in countries where gambling is unregulated - and often untaxed - will no longer be able to bet on its websites.
More than 90% of holidays cancelled due to COVID-19
New figures show over 90% of holidays in July and August were cancelled this year due to the coronavirus pandemic, despite the opening of travel corridors. As a result of the slew of cancellations – as well as new restrictions – travel businesses expect to end the year 93% down on bookings, according to ABTA.
Young’s posts record loss
Pub chain Young’s posted a record loss before tax of £21.8m for the 26 weeks ended 28 September, compared to profit of £24.3m last year.
Second lockdown puts Caffe Nero on brink of ruin
Caffe Nero has entered into a CVA with the move triggered by the second lockdown, according to founder Gerry Ford.
QinetiQ raises FY guidance
QinetiQ has raised its guidance for the full year after it reported a strong increase in orders. The defence and security firm posted revenue of £603.2m in the six months to the end of September, up 24% on last year. Statutory operating profit fell 10% from £68.5m to £61.6m. Earnings per share increased from 11p to 13p. QinetiQ said it will hold its dividend at 2.2p.
Rishi Sunak extends investment relief for manufacturing firms
The Chancellor is to extend a temporary £1m cap on tax relief for manufacturing firms on investments in plant and machinery until January 2022. The annual investment allowance break had been due to end on January 1 when the cap would have reverted to £200,000.
MEDIA & ENTERTAINMENT
ITV ad spend down in Q3
ITV said total advertising spend was down 7% in the third quarter, a sharp improvement on the 43% crash posted in the previous three months. The broadcaster said the key fourth quarter - known as the golden quarter due to increased advertising in the run-up to Christmas - is expected to be up roughly 6% on the same period in 2019, subject to the current lockdown in England ending on 2 December as planned. In the first nine months of the year ITV booked a 2% increase in total viewing. However, online viewing was down 6%. Overall revenue to September dropped 16% to £1.9bn, with broadcast and production revenues down 13% and 19% respectively.
Deutsche Telekom ups guidance
Deutsche Telekom has increased guidance for core profit to €35bn ($41.2bn) this year, saying recently merged T-Mobile was ahead of plan on network integration while it added the most German broadband customers since 2017. The group raised its forecast for EBITDA AL for the year by €1bn, while nudging up its forecast for free cash flow by half a billion to €6bn.
CGT plan would spark second-home fire sale
Following recommendations from the Office of Tax Simplification that the Chancellor equalise capital gains tax and income tax as part of efforts to pay for the Government’s response to the pandemic, experts have warned the move could crash the property market by sparking a fire sale of second homes and investment properties. Jonathan Schuman of Luton landlord Magnet Properties said small buy-to-let landlords would be hit hardest after already enduring stamp duty hikes and the loss of mortgage interest relief. Mr Schuman said: "It will massively distort the market. Landlords will be rushing to sell before the capital gains tax (CGT) rise, but after, higher taxes would be a big incentive to hold on to properties."
Economy grows by record 15.5%
Official data shows that the UK economy grew at a record pace in the third quarter of the year. The country’s emergence from the first lockdown saw GDP rise by 15.5% between July and September. However, growth was weaker in September than in the preceding months, while the country's economy is still 8.2% smaller than before the virus struck. Despite the rebound in July to September, analysts warned that the economy was likely to shrink again in the final three months of the year because of the impact of renewed lockdowns in different parts of the country.