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Daily News Roundup: Friday, 16th March 2018

Posted: 16th March 2018


HSBC reveals gender pay gap

HSBC has reported a 29% median gender pay gap for its UK banking operations and a 59% gap on the mean measure for hourly pay for 2017. The bank has a median gap of 61% for bonus payments between its male and female employees but, across the whole organisation, employs more women than men. The 29% figure is more than double the 14.2% reported by Barclays for its UK retail banking operations for 2017, but lower than Lloyds Banking Group (42.7%) and Royal Bank of Scotland (36.5%). The bank said it wants women to hold 30% of senior roles by 2020, up from the current 27% and it would request gender diverse shortlists when hiring new leaders.

OneSavings Bank boss bemoans GDPR costs

OneSavings Bank has revealed a 21% rise in annual profit to £167.7m in 2017. The property-focused lender expects to deliver net loan book growth in the mid-teens in terms of percentages this year, with a net interest margin of around 3%. OneSavings expects to spend £7m on regulatory projects in 2018, around double the total in 2017 and CEO Andy Golding said: “Things like the GDPR, for a business with many hundreds of thousands of customers, that's an open heart surgery project.” The Times’ Tempus examines the outlook for OneSavings and suggests that the shares are a buy. Tempus believes the valuation is undemanding and growth at the business still looks good. Lex in the FT also looks at the shares. It notes that compared with rival Paragon, the shares look cheap judged on earnings but more expensive versus book value.

Former Deutsche Bank trader pleads guilty in Euribor rigging case

Christian Bittar, a former trader for Deutsche Bank, has pleaded guilty in the Serious Fraud Office’s investigation into the manipulation of Euribor. Bittar entered his plea earlier this month, pleading guilty to conspiracy to defraud. The SFO opened its investigation into allegations of Euribor rigging in June 2012, when it undertook similar probes in allegations of fixing around the UK's benchmark, Libor.


EU watchdog seeks review of Barroso’s role

The European Ombudsman has rebuked the European Commission for failing to prevent potential lobbying by Jose Manuel Barroso who took a job at Goldman Sachs. Emily O'Reilly, the European ombudsman who acts as the EU’s public administration watchdog, said the commission had committed “maladministration” by not taking any decision after an ethics inquiry into Mr Barroso, its former president.

Citi boss paid 369 times more than average employee

New figures have revealed that Citigroup boss Michael Corbat was paid 369 times more than the average employee at the bank in 2017. He was paid $17.8m (£12.77m) last year compared to the median pay of all Citi employees which was $48,249.


Aviation deal could be agreed within weeks

Nick Calio, the chief executive of Airlines for America, whose members represent more than 90% of US airline passenger and cargo traffic, has suggested that an Anglo-American deal to keep airlines’ transatlantic routes operating smoothly after Brexit could be agreed as soon as this month. “Reports that the US is trying to make it difficult for the UK to strike an aviation deal with it are very misleading,” Mr Calio said. “The US has not been trying to make it more difficult to strike an agreement.”


FCA warns over household debt

The Financial Conduct Authority has warned that a worrying number of borrowers may be “in too deep” with their borrowing. Jonathan Davidson from the FCA said consumer credit levels are close to a 2008 peak, adding that it was “far from certain” that customers who could just manage loans now would be able to do so in the future. He also warned lenders that the FCA would come down on firms whose businesses were based on people being unable to clear debts. Research by BBC News found last month that the value of outstanding personal loans in Great Britain has grown four times faster than wages.

French regulator seeks information from UK funds

The Autorité des Marches Financiers, the French financial markets regulator, has written to UK-based investment firms active in France and French firms with UK clients to ask about their preparations for Brexit. The regulator said it wanted UK-based firms to clarify the status of their operations in France, how they were preparing for the loss of an EU financial ‘passport’ and offered them a “direct discussion” over the issue. “We are one year before Brexit. We want to anticipate the impact of the Brexit on the French market,” Xavier Parain, Managing Director in charge of the Asset Management Directorate of the AMF, said.

Big insurer deals part of “tectonic” shift

Standard Life Aberdeen and Prudential’s recent deals are two examples of a £1tn “tectonic” sector shift, according to Clive Bannister, chief executive of fund giant Phoenix. This week Prudential agreed to sell £12bn of annuity liabilities to Rothesay Life, which followed Phoenix’s £3.2bn deal to buy Standard Life’s insurance arm last month. “We have said for many years that tectonic plates inside the UK’s insurance business are moving and changing. Where capital is being reallocated and we think there will be further consolidation in the UK market,” said Mr Bannister.

Old Mutual Wealth caps exit penalties

Old Mutual Wealth has agreed to limit “early exit” penalties for customers under the age of 55 - setting aside £69m to cover the cost of capping early encashment charges at 5% and refunding exit penalties over that amount levied since January 1 2009. Previously, under-55s faced potentially limitless fees while those aged 55 and over were protected by the 1% “pensions freedoms” cap imposed by the Government.

Nex receives takeover approach

Electronic trading firm Nex Group has confirmed that it has received a takeover approach from US based derivatives trader CME. According to stock market rules CME must announce whether it intends to make an offer for Nex by April 12. Nex's shares were up by more than 2% by close of trading yesterday, while CME's shares rose by 1.5%.

Blackrock appoints new executives

Blackrock has appointed three new independent directors to its board. The three are: Bill Ford, the chief executive of General Atlantic, Peggy Johnson, the executive vice president of business development at Microsoft, and Aviva's chief executive Mark Wilson.

Insurers pay out as supply chain strains increase

Trade credit insurers paid out £4.3m a week last year, up 7% on 2016 and the highest level since 2009, according to figures from the Association of British Insurers.


Rare disease firm reveals gene therapy tie-up

Rare disease specialist Amryt Pharma has announced a major in-licence agreement for a new gene therapy platform with University College Dublin, offering treatment for patients with epidermolysis bullosa - a rare skin disorder which is currently untreatable. In the year to December, Amryt said revenues had risen to €12.8m from €1.48m the year before, largely due to increased sales of Lojuxta, a drug that treats a life-threatening disorder that causes abnormally high levels of bad cholesterol.


Cineworld boosted by Star Wars

Blockbusters like Star Wars and Dunkirk helped to boost sales and profits at Cineworld last year, with sales up 12% to £890.7m and profits up 23% to £120.5m. Revenues at its screens in the UK and Ireland rose 6.2% to £525m.


Airbus warns over GKN takeover bid

Airbus has warned that it could not give any new business to UK engineering firm GKN if it were taken over by turnaround specialist Melrose. Airbus’s Tom Williams said: “The nature of our industry is one that requires a commitment to long-term investment and strategic vision.”


Google, Facebook and Apple face ‘digital tax’ on EU turnover

The European Commission will next week unveil a three-pronged digital tax, likely set at 3%, targeting the revenues rather than profits of big tech firms like Google, Facebook and Apple.


Property market performing better than expected

UBS has said that fears that commercial property transactions in the UK would slump following the EU referendum vote in 2016 seem not to have played out, with the market performing “better than expected”, as occupiers and investors took a more “realistic” view on Brexit risks. However, analysts at the bank agreed that property markets in 2018 are expected to be more subdued.


Almost £1bn lost to financial fraudsters in UK last year

Nearly £1bn was conned out of UK consumers and businesses by financial fraudsters in 2017, according to data from UK Finance, which found sharp increases in fraud using both mobile and online banking. Total losses fell 5% to £731.8m but an additional £236m was lost to “authorised push payment” scams.

'Striking weaknesses' in adult financial skills

A quarter of adults struggle to work out how much change they should get in a shop and half cannot read a simple financial line graph, according to a study from Cambridge University and University College London, which found “striking weaknesses” in adults' financial skills across 31 countries, with England among the worst. The report points to a need for “urgent policy intervention”.

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