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Daily News Roundup: Friday, 14th June 2019

Posted: 14th June 2019

BANKING

Monzo makes US debut

Challenger bank Monzo has fired the starting gun on its expansion in the US. The banking app, used by more than 2m customers in the UK, will set up shop in Los Angeles as it targets US consumers. It will initially partner with Ohio-based Sutton Bank, enabling it to launch with its debit card in a similar way to its UK launch. Tom Blomfield, chief executive, said: "We want to understand how US consumers think and feel about money." Fellow fintech Revolut has also been eyeing a US launch for the last year. The company had said it was aiming for a US launch in a “few months” in 2018, but now says it plans to launch there in the summer. Elsewhere, the German online-only bank N26 is also preparing for its US debut in the coming weeks, while Israel’s Pepper hopes to launch in the US in mid-2020.

Bonuses lower for women at HSBC unit

Bonuses paid to women in HSBC’s British investment bank were 69.3% lower than for men on a median basis for the 12 months to April 5, according to gender pay gap data released by the bank. The median hourly pay gap at the business was 50.8%.

Profits dip at Tesco Bank

Tesco Bank saw a 1.9% drop in revenues in the first quarter of 2019, to £270m. With regards to its decision to put its mortgage business up for sale, which will affect 23,000 customers who collect Tesco Clubcard points through the home loans, Tesco said the process was still ongoing.

Millions of Britons are victims of financial scams

Research by Lloyds Bank and YouGov suggests more than five million Britons may have fallen victim to a financial scam at some point in their lives. The survey revealed 10% of adults have been scammed while a quarter said they knew someone who had conned. It also found that emails (36%) and phone calls (35%) are the main ways scammers approach their victims.

PRIVATE EQUITY

Equity investment in small businesses hits record level

The British Business Bank's Small Business Equity Tracker report shows a record £6.7bn in equity investment went to small businesses in 2018. Growth was particularly significant outside London, where the value of equity finance investment increased by 29%, to £2.8bn. Keith Morgan, the bank's chief, said the report's findings showed "a clear sign of investor confidence in British smaller businesses and their potential for growth."

INTERNATIONAL

ECB pushes euro in move against dollar’s dominance

The European Central Bank has backed the European Commission’s push to promote the euro internationally, in a bid to counter the US-led retreat from globalisation and free markets.

Swiss National Bank unveils its own policy rate to replace Libor

Switzerland’s central bank plans to replace Libor with the Swiss average rate overnight, or Saron, which has been jointly developed by the SNB and the Swiss stock exchange.

Latvia passes anti-money laundering reform

Latvia is preparing to remove the chairman of its main bank regulator, the Financial and Capital Market Commission, after introducing an anti-money laundering reform following months of intense international pressure.

CONSTRUCTION

Kier Group set to sell housebuilding unit

Kier Group is preparing to sell its housebuilding unit amid increasing evidence of financial pressure on the group. The contractor is said to have sounded out advisers about the potential to sell the division, which is understood to be valued at between £100m and £150m.

FINANCIAL SERVICES

BoE official warns on blocking investment funds

A senior Bank of England official has said that freezing investor withdrawals from funds can stop a fire-sale of assets, but may also incentivise investors to pull out their money ahead of a potential suspension. Alex Brazier, executive director for financial stability strategy and risk at the BoE, also warned that if enough funds run into trouble in an “economic earthquake” it raises the risk of funding for businesses drying up. His comments come in the wake of Neil Woodford’s equity income fund suspending redemptions. Mr Woodford has sold shares worth almost £100m from the suspended fund in the past 10 days as he looks to rebalance the portfolio before opening it back up to investors. Meanwhile, Hargreaves Lansdown has confirmed it has ditched its £45m holding in the smaller Woodford Income Focus fund after dropping it, as well as the equity income fund, from its Wealth 50 buy list.

Bad debt insurance claims at ten-year high

The number of insurance claims made this year by UK businesses facing bad debts has reached its highest level in 10 years, according to data from the Association of British Insurers. The ABI’s figures show that in the first quarter, 57 firms every day were helped by trade credit insurers.

Augmentum steps up investment

Augmentum Fintech has made £8.5m of further investments across three technology companies in its portfolio. The investment trust has put a further £5m into challenger bank Tide, a further £2.5m into mobile-only current account provider Monese and an extra £1m into information platform Duedil.

Insurer Just Group’s shares jump as chairman says all options open

Shares in insurer Just Group surged by 15% after chairman Chris Gibson-Smith said he wanted to increase shareholder value “with no options excluded.”

MANUFACTURING

British Steel inquiry delayed

MPs have delayed an inquiry into the collapse of British Steel, amid fears the findings could hamper efforts to find a new owner. The Business, Energy and Industrial Strategy Committee was set to question Marc Meyohas, a partner at British Steel’s former owner Greybull Capital, on 26 June. But they have now pushed the hearing back to September.

MEDIA AND ENTERTAINMENT

Axel Springer to merge US businesses

Axel Springer is to combine Business Insider and Emarketer under plans to expand its digital operations worldwide. The German publisher said it would merge the two American businesses at the start of next year to create a “next generation digital research company”.

Daniel Loeb calls on Sony to spin off sensors business

US activist investor Daniel Loeb has called on Sony to spin off its “crown jewel” image sensor business, arguing that its shares remain heavily undervalued despite a recent turnaround.

REAL ESTATE

Mortgages boosted by first-time buyers

Figures from UK Finance show the number of loans issued to first-time buyers rose by 7.9% in April compared to the same month last year. There were 27,000 first-time buyer mortgages completed in the month, with a total value of £4.6bn. Mortgage approvals for existing homeowners also increased. There were 25,450 new home-mover mortgages completed, 6.4% more than last year. UK Finance also noted that mortgage approvals for the buy-to-let sector — which has been in decline since the introduction of a stamp duty surcharge in 2016 — had steadied, with 5,100 new ones completed.

RETAIL

Morrisons to expand Amazon partnership

Morrisons is rolling out its Morrisons at Amazon online delivery service, which allows Prime customers to receive online same day grocery deliveries, to more UK cities this year - including Glasgow, Newcastle, Liverpool, Sheffield and Portsmouth. The expansion will see Morrisons becoming a retailer on Amazon’s Prime Now website and app, selling directly to customers, while Morrisons will continue as a wholesaler for all Amazon’s other UK grocery offers to customers.

ECONOMY

Businesses urged to step up no-deal preparations

The Institute of Directors has called on businesses to step up their preparations for a no-deal Brexit amid signs that Theresa May’s successor could be prepared to leave the EU without a deal at the end of October. The employers’ group said its members had so far failed to take advantage of the seven-month delay to Brexit. The IoD produced figures that showed less than half of businesses had Brexit plans, and said firms should be considering all reasonable preparations for no-deal.

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