BANKING
EU fines five banks €1bn over foreign exchange cartel
The EU’s competition watchdog has fined Barclays, Citigroup, Royal Bank of Scotland, JPMorgan and Japan’s MUFG more than €1bn, having identified cartels of traders who rigged the foreign exchange market. A sixth bank, UBS, was excused financial penalties for revealing the cartels' existence. Competition Commissioner Margrethe Vestager said the banks' behaviour "undermined the integrity of the sector at the expense of the European economy and consumers". RBS said its €249m share of the fines was "fully covered by existing provisions". Barclays also said it had set aside money to cover the fine.
Metro Bank raises £375m in three hours
Metro Bank has raised £375m from a fundraising call which it says will strengthen its balance sheet. The embattled bank had said it would raise about £350m after London markets closed to prop up its capital levels. However, it later increased the amount to £375m because of high demand. The new stock was priced at 500p a share – around 6% lower than Metro’s volume-weighted average share price over the past week. RBC Capital Markets, Jefferies and KBW managed the accelerated book-build, and shareholders will be asked to approve the transaction at a special general meeting on June 3rd. Writing in the Guardian, Nils Pratley says that Metro Bank’s chairman Vernon Hill should step down. He expresses concern about the lack of independence in the bank’s boardroom.
BoE’s Woods warns over weaker bank rules
Sam Woods, chief executive of the Bank of England’s Prudential Regulation Authority, says Britain could change its style of regulating after Brexit – but warned against weakening rules for banks and insurers. Speaking at a conference in Switzerland, he said that in regard to the “stringency of financial regulation”, the Bank has “a clear view of what would make sense for the UK in a post-Brexit environment: we should keep it calibrated roughly where it is now and have no desire whatsoever to weaken it”. He also suggested that it would be “undesirable” for Britain to be a “rule taker”, following a model that required sticking to EU rules. This is a similar position to that recently taken by Financial Conduct Authority chief executive Andrew Bailey, who has said that rule-taking would be “dangerous”.
Lloyds chairman defends executives’ pay
Norman Blackwell, chairman of Lloyds Banking Group, has defended generous pay policies for top executives, saying: “Not many people would do the arduous hours and arduous tasks they do for free.” He added that chief executive Antonio Horta-Osorio and other directors have “earned through their performance the rewards that they are entitled to”. This came as the bank’s remuneration report was passed, with 91.95% of votes in favour. All members of the board were also re-elected.
INTERNATIONAL
Goldman diversifies with $750m asset management deal
Goldman Sachs has agreed to buy boutique wealth-management firm United Capital Financial Advisers for $750m in cash. Joe Duran, CEO of United Capital, said now has the opportunity to double in size.
Hong Kong charges former JPMorgan banker over bribery
JPMorgan’s former Asia investment banking vice-chair Catherine Leung has been charged with two counts of bribery by Hong Kong’s anti-corruption watchdog.
Jail time sought for ex-Deutsche, Nomura staff over Monte Paschi scandal
Prosecutors in Milan are seeking jail sentences for former Deutsche Bank and Nomura bankers who were involved in the Monte dei Paschi di Siena scandal.
AVIATION
Boeing upgrades 737 Max software
Boeing has completed development of a software update for its 737 Max plane which was grounded following two fatal crashes within five months. The US firm announced that it had flown the 737 Max with the updated software on 207 flights. It added it would provide data to the Federal Aviation Administration (FAA) on how pilots interact with controls and displays in different scenarios.
FINANCIAL SERVICES
SFO freezes millions in LCF property assets
The Serious Fraud Office has frozen over £12m in property assets belonging to several people linked to the London Capital & Finance collapse. Under Section 41 of the Proceeds of Crime Act, LCF chief executive Andy Thomson and three others linked to the business have restraint orders on properties belonging to them or their spouses. Meanwhile, 15 politicians across the political spectrum have called on FCA boss Andrew Bailey to resign over issues including the collapse of LCF.
Investec to close robo-advice unit
Investec is to close its Click & Invest unit after robo-advice business accrued losses of nearly £13m during the year to March. Investec's digital efforts will now be re-routed towards its private banking platform, which offers transactional services to high net worth clients.
LEISURE AND HOSPITALITY
Thomas Cook warns of headwinds
Travel firm Thomas Cook has warned of “further headwinds” for the rest of the year after posting a £1.5bn loss for the first half of the year. The firm said there was “now little doubt” that Brexit had caused customers to delay their summer holiday plans. Thomas Cook added that it had received “multiple” bids for its airline.
Pret A Manger nears deal to acquire Eat
Pret a Manger is reportedly planning to buy rival Eat and turn the chain's 94 stores into vegetarian outlets. The Evening Standard reported that talks between the two chains were understood to be at an advanced stage, with Pret in line to buy the majority of Eat’s shops or the whole business.
MANUFACTURING
British Steel raises funds
British Steel says it has raised fresh funds from its backers as it seeks a “permanent solution” to its financial troubles. It comes after the firm admitted on Tuesday it needed further financial support from the government to help it address “Brexit-related issues”. Reports have suggested the steelmaker needs up to £75m or it could go bust.
MEDIA AND ENTERTAINMENT
TI Media names Weller as chairman
The magazine publisher TI Media has appointed Tim Weller as its new chairman. Weller will replace former Financial Times journalist and New Scientist owner Sir Bernard Gray.
REAL ESTATE
Homeowners cashing in on cheap loans
Figures from UK Finance show that the number of people remortgaging their homes with additional borrowing spiked in March. The figures showed that in March there were 16,180 new remortgages with additional borrowing, a 9.1% increase year on year. The average amount taken out on top of the remortgage money was £55,700. UK Finance also revealed that new first-time buyer mortgages reached 28,800 in March, 2.4% fewer than in the same month a year earlier. Keith Haggart, managing director of mortgage provider Responsible Lending, said: “The jump in remortgaging chimes with a market that is languishing on low supply of homes for sale.”
Global property boom is over
UBS has warned that the global property boom is over as slowing growth, high prices and rising risks point to the end of the long recovery from the financial crisis.
RETAIL
Walmart blames late Easter for Asda figures
Asda owner Walmart has blamed Easter dates and a "challenging" retail environment for a fall in first quarter like-for-like sales. Walmart chief financial officer, Brett Biggs said: “The Easter calendar shift negatively affected several of our markets, including Asda where comps declined 1.1%, but would have been positive without the Easter flip. Against a challenging backdrop in the UK, Asda comp sales declined with the Easter flip, but transactions were positive as customer experience continued to improve.”