BANKING
Banks fail to agree on scam victim fund
A proposal to set up a fund to compensate victims of bank scams has been rejected by payments group Pay.UK, which argued there was no industry consensus to finance a central fund. A voluntary code requiring banks to reimburse affected customers is funded to the end of December so from January it will be up to individual banks to decide on reimbursements. UK Finance said it was "disappointed a way forward has not yet been agreed". However, Paul Horlock, Pay.UK's chief executive, said: “With or without a central pot, payment providers have always had the power to compensate consumers.” Lloyds, Barclays, Royal Bank of Scotland, HSBC, Santander, Nationwide, Metro Bank and Starling signed up to the fund in May but several smaller banks including Monzo objected to the plan saying its fraud rates were five times lower than the industry average as it had invested in better technology.
RBS to open first cashless bank
The Royal Bank of Scotland will next week open the UK’s first cashless bank. The branch in Bishopsgate, London, will not have front-line cashier services nor an ATM but will be used for other banking needs, including appointments to open Isas and other savings accounts as well as applying for mortgages. Martyn James, of consumer rights group Resolver, called on consumers to “speak up if we feel our essential services are being reduced or removed”.
PRIVATE EQUITY
3i reports 10% increase on return
Private equity firm 3i has reported a total half-year return of £767m, a 10% increase on the previous year’s figure. The firm raised its first-half dividend to 17.5p per share, with chief executive Simon Borrows commenting: “Despite the uncertain macroeconomic environment, the majority of our investments have moved into the second half of the year with decent momentum.” Meanwhile, 3i has lifted its stake in the fast-growing continental discount chain Action to almost 50% at a cost of more than €600m.
Investors race to tech start-ups despite SoftBank stumbles
Blackstone, Tiger Global, Lightspeed and Founders Fund are among the investors planning to pour billions more dollars into later stage tech start-ups looking to take advantage of pre-IPO growth.
INTERNATIONAL
Goldman promotes record number of women to MD
Goldman Sachs’ bi-annual promotion round has seen the bank promote a record number of women to managing director level – 29% of executives promoted to MD worldwide were women, up from 25% in the last round. New CEO David Solomon has been pushing female-friendly policies hard, including paying for fertility treatment.
Ex-Deutsche Bank executive to pay $500,000 subprime settlement
Former Deutsche Bank executive Paul Mangione has agreed to pay $500,000 to settle civil claims brought by the US Department of Justice that he misled investors in 2007 into buying securities backed by defective mortgages.
Riksbank dumps Canadian and Australian debt in green push
Sveriges Riksbank, Sweden’s central bank, has sold debt issued by Australian and Canadian regions because their carbon emissions are too high, as it incorporates climate strategy in its policies.
EIB to phase out lending to fossil fuel projects by 2021
The European Investment Bank has agreed to phase out lending for all fossil fuel projects that emit carbon dioxide - including new gas plants, by the end of 2021.
AUTOMOTIVE
Daimler to cut jobs as electric vehicles costs mount
Daimler is to cut thousands of jobs as it attempts to save over €1bn (£860m) by the end of 2022. The Mercedes-Benz maker is grappling with the cost of its electric and self-driving vehicles programme, announcing that 10% of management positions will be lost following two profit warnings earlier this year.
FINANCIAL SERVICES
FCA warns directors who fail to challenge improper behaviour
The Financial Conduct Authority's director of supervision, Jonathan Davidson, has hit out at City bosses who fail to act on claims of improper behaviour. He said “non-executive directors feel that our concerns are political correctness gone mad”. But Davidson said the FCA deemed such a culture “unhealthy and we consider senior managers who commit or countenance such behaviour as not fit and proper.” His comments follow a string of scandals at insurers and banks including Coutts where a top banker was accused of sexual harassment involving lewd comments and unwanted touching, dating back to 2015. A recent survey of workers at the insurance market Lloyd's of London, which has been rocked by harassment claims, found that 500 of the respondents had either suffered or observed sexual harassment in the past 12 months alone.
Investment in G4S blocked by Norwegian sovereign wealth fund
Investment in the G4S security firm has been blacklisted by Norway’s £860bn sovereign wealth fund on the grounds that there is potential for human rights abuses to be committed against its workers in Qatar and the United Arab Emirates. The fund’s Council of Ethics noted that some staff had their passports confiscated and were paid less than had been agreed. It stated: “The council’s investigations also revealed long working days, a lack of overtime payment and examples of harassment.” G4S shares on the FTSE 250 were down as much as 3.6% on the news before recovering to 1.8% down, at 204.8p.
Oneconnect selects New York for IPO
Oneconnect is to launch its initial public offering (IPO) in New York rather than Hong Kong, with its filing listing a target raise of $100m (£78m). A funding round last year led by Softbank valued Oneconnect at $7.5bn, while the US offering is being led by Morgan Stanley, Goldman Sachs, JPMorgan and Ping An of China Securities.
EU prepares tweak to Mifid market rules after industry backlash
The EU is preparing to revise some of its Mifid II rules after investors and regulators criticised their effectiveness.
LEISURE & HOSPITALITY
Sales growth at Young’s thanks to rugby world cup
Patrick Dardis, chief executive of London pubs group Young’s, has said that while the recent Rugby World Cup lifted sales, the lack of rugby internationals this month will likely result in fewer customers. This comes as the firm reports revenue for the 26 weeks to September 30 up 7.3% to £168m, with a rise in comparable sales of 1.1%. Pre-tax profits fell 6.4% to £24.3m, with the firm increasing its interim dividend by 6% to 10.6p.
MANUFACTURING
UK's manufacturing sector struggling
A survey by the British Chambers of Commerce suggests most manufacturing exporters are reporting a "stark worsening" in sales and orders.
MEDIA & ENTERTAINMENT
Labour plans free full-fibre broadband by 2030
Shadow chancellor John McDonnell has announced plans to give every home and business in the UK free full-fibre broadband by 2030 if Labour wins the upcoming election. Mr McDonnell told the BBC that the party would nationalise BT’s digital network arm Openreach to create a government-owned, UK-wide network, with shareholders to be compensated by the issuing of government bonds. Funding for the plan would also come from a tax on tech giants like Apple and Google. The Tories said it was "fantasy plan" that would cost taxpayers billions.
Vodafone’s share price disconnected from €1bn earnings boost
Vodafone is being charged $4bn in back levies by the Indian government to use the country’s telecoms spectrum, resulting in a €1.9bn half-year loss for the firm.
SoftBank-backed Yahoo Japan in talks over merger with Line app
Yahoo Japan and messaging application Line are in talks over a merger that would create a broad-based internet group with $11bn in combined revenue.
REAL ESTATE
PM promises rate relief for neglected towns
Boris Johnson has pledged to cut business rates for shops and pubs as part of efforts to revitalise Britain’s high streets. The package will include extending the retail discount on business rates to 50% next year. For businesses with a rateable value of less than £51,000, this will increase the retail discount from 33% to 50% in 2020/21. Cinemas and music venues will qualify for the retail discount on business rates for the first time while pubs will get a new £1,000 business rate relief to help them stay as vital centres of their communities.
Home repossessions on the increase
UK Finance has released figures showing that the number of homes being repossessed has grown in the last 12 months, with 1,330 properties mortgaged by homeowners repossessed in the third quarter of this year, representing a rise of 19% on 2018. Meanwhile 800 buy-to-let mortgaged properties were repossessed during the period, in a 40% increase on the same period last year. The report by UK Finance stated however: “The proportion of homeowner mortgages in arrears remains at historically low levels, with the vast majority of borrowers continuing to repay their mortgages in full and on time each month.”
RETAIL
Burberry profits dented by protests
Burberry has revealed that its sales in Hong Kong have suffered following the violent protests in the territory. The luxury fashion house said its sales were down more than 10% and it had slashed £14m off the value of its 12 stores in the territory. Despite the disruption in Hong Kong, Burberry posted an 11% rise in pre-tax profits to £193m and a 17% rise in operating profits to £203m. Winning over new millennial and Chinese shoppers lifted total sales by 5% to £1.3bn.
Unexpected downturn in UK retail sales
According to the Office for National Statistics, retail sales last month were down 0.1% compared with the previous month. On a three-month basis, sales were up just 0.2%, marking the lowest growth since April last year. Sales fell in all main retail sectors apart from food stores. Once petrol and diesel sales were stripped out the drop was even more severe at 0.3%.