City minister suggests lenders sue BoE over Basel rules
Andrew Griffith, the City minister, has suggested to finance executives that they could sue the Bank of England over reforms to the Basel rules, which risk forcing British lenders to hold back billions of pounds more in cash than their rivals in the European Union. The BoE’s governor, Andrew Bailey, has pushed back against plans to loosen rules to improve London’s competitiveness, with its Prudential Regulation Authority (PRA) also telling lenders it was opposed to any significant watering down of the Basel rules, despite Brussels watering down its own regulations. Mr Griffith garnered support from Eurosceptic backbench Tory MP Jacob Rees-Mogg, who said: “I support the City minister. The PRA is an ineffective regulator that seeks increased capital at the wrong point in the cycle and is an obstacle to global competitiveness.” Meanwhile, Richard Davies, the chief executive of Allica Bank, has warned that the cost of borrowing for small businesses could increase by a third due to the UK’s approach to the latest round of Basel regulations.
Standard Chartered launches £830m share buyback
Standard Chartered chief executive Bill Winters said on Thursday that the bank was determined to forge its own path after it was again linked to First Abu Dhabi Bank. The London-based bank revealed that profits climbed by 28% to almost £3.6bn but missed analyst expectations of £3.9bn. The bank also launched an £830m share buyback, cheering investors.
Zopa acquires BNPL firm DivideBuy
Zopa is set to team up with buy-now pay-later firm DivideBuy just weeks after the digital lender raised a £75m to fund acquisitions. DivideBuy allows merchants to offer their customers interest free payment options at checkout. Shoppers can spread the cost of their purchases over a 2-12-month period with over 400 merchants.
Commerzbank lauds profit rise
Commerzbank has reported a better than expected 14% rise in net profit in the fourth quarter to €472m, helped by higher interest rates. For the full year, the German bank generated net profit of €1.435bn, up from €430m a year earlier. "Our turnaround is a success. Commerzbank is back," said CEO Manfred Knof.
EU banks fear regulatory impasse will force them out of India’s capital markets
A failure of EU and Indian regulators to come to an agreement over traders’ access to India’s securities and derivatives markets could see EU banks forced to exit from trading in the country.
Tesla recalls 363,000 cars over crash risk
Tesla is updating its self-driving software after US safety officials raised concerns that it could allow drivers to exceed speed limits or travel through intersections unsafely. The recall affects nearly 363,000 vehicles in the US, according to filings with the US government.
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British fintech accused of ‘systematic’ compliance failings
Railsr, the British fintech firm formerly known as Railsbank, has been accused of gross anti-terror finance and money laundering failings at its Lithuanian subsidiary, PayRNet. The entity has been under investigation by the Bank of Lithuania, which said in a statement: “There is reason to suspect that the institution is grossly and systematically violating the Law on the Prevention of Money Laundering and Terrorist Financing.”
LEISURE & HOSPITALITY
Third of London restaurants fear energy bills
A new study by Uswitch for Business has fund one in three London restaurants are concerned they may be unable to pay their bills if energy prices keep rising. One in four say capacity is down on last year with the average now standing at 54% - 6% lower than the UK average. UKHospitality chief executive Kate Nicholls, said her organisation is calling on the Chancellor to intervene in the Spring Budget to “tackle the outlandish behaviour of energy suppliers hiking prices for the sector”. She added: “Without action from the Government, we will lose hundreds of good businesses due to factors outside their control.”
Activist investor turns fire on TRG
The Restaurant Group has come under fire from Oasis Management Company, which has accused the company of presiding over "one of the worst-performing share prices of any UK leisure company" and argued it was "materially worse than its closest peers". The hedge fund said the board needed to focus on "long-term value creation" and that if it failed to do so, shareholders would be forced to "hold the board to account".
MEDIA & ENTERTAINMENT
YouTube chief Wojcicki to step down
YouTube boss Susan Wojcicki is resigning after nine years at the helm of the world’s largest online video platform. Neal Mohan, her deputy, will succeed Google veteran, who will go on to become an adviser to parent company Alphabet. In a statement, Wojcicki said she would “start a new chapter focused on my family, health and personal projects I’m passionate about.” The move comes just a day after U.S. House Judiciary Committee Chairman Jim Jordan subpoenaed the chief executives of Alphabet, Amazon, Apple, Meta and Microsoft for documents and communications related to alleged collusion between the government and the companies to stifle free speech.
BoE is about to make the house price slump even worse
Kallum Pickering asserts in the Telegraph that the Bank of England’s continued interest rate hikes are putting the property market in jeopardy. Pickering says policymakers should not put too much weight on wages as a driver of inflation. “If the Bank overdoes its tightening, the economic consequences would be a deeper recession, a sharper housing correction, higher unemployment and inflation that falls well below, instead of sufficiently close to, its 2% target.” With public confidence in the Bank’s strategy already low, Pickering hopes the Bank isn’t forced into another embarrassing U-turn.
Boohoo proposes new share incentive plan
Boohoo has launched a new performance plan for its senior management team after a dramatic fall in the value of the fashion brand’s shares, which are down 88.5% since June 2020. Boohoo said its existing incentive plan for management had “little or no value” as targets had become too hard to reach. In its 2020 plan, shares had to reach at least 500p for any incentives to be granted. Now, management can receive rewards if Boohoo shares hit 95p, with further incentives up to 395p. The maximum value of the plan will be £175m, with CEO John Lyttle receiving up to £50m worth of Boohoo shares. Iain MacDonald, the group's chairman, said: “In designing the plan, we recognised it needed to go deeper into the business than prior schemes while leaving headroom to attract the world-class talent that is essential to the execution of our strategy and growth ambitions.”
US bond market default looms
Analysis by the Congressional Budget Office has concluded that if the US debt ceiling is not raised the country could default on its bond repayments. The White House is pushing House Republicans to back down on their demands for spending cuts, with little success so far. Janet Yellen, the US Treasury secretary, warned in a speech on Tuesday: “In my assessment - and that of economists across the board - a default on our debt would produce an economic and financial catastrophe.”