BANKING
JPMorgan Chase agrees to buy Nutmeg
JPMorgan Chase has entered into an agreement to acquire Nutmeg, subject to regulatory approval. The US investment bank said the acquisition will complement its digital bank that is planned for launch in the UK later this year. The bank explained Nutmeg has become one of the most successful digital challengers in the wealth management market. JPMorgan Chase CEO of international consumer Sanoke Viswanathan said: “We are building Chase in the UK from scratch using the very latest technology and putting the customer’s experience at the heart of our offering, principles that Nutmeg shares with us.” JPMorgan said Nutmeg customers would be unaffected by the deal, adding that it will decide whether to rebrand the robo-adviser under the JPMorgan or Chase brands. The Mail notes that former Lloyds Bank chairman Sir Victor Blank was an early backer of Nutmeg and is set to see “a generous return”, while venture capital firms including Balderton Capital and Pentech Ventures, asset manager Schroders, Taiwanese bank Taipei Fubon, the investment arm of Goldman Sachs, and Hong Kong's Convoy “will also cash in”.
HSBC unveils sub 1% mortgage
HSBC is launching a sub 1% mortgage for the first time in nearly five years. The bank has also cut the rates on various deals across its range, including those offered for people with 5% deposits under the Government-backed mortgage guarantee scheme. The new deals include a two-year fixed-rate deal at 0.99%. Borrowers will need a 40% deposit and the mortgage has a £999 fee. Nationwide Building Society also announced that it is cutting rates in its range from today. The lender is offering a 0.99% mortgage fixed for two years for borrowers with a 40% deposit. This deal carries a £1,499 fee.
Tesco Bank trails prepaid debit card
Tesco Bank is trialling a new prepaid debit card giving users extra Clubcard points and rewarding spending at other shops. Clubcard Pay is available to current and new customers of Tesco's loyalty scheme.
INTERNATIONAL
HSBC set to announce French sell off
HSBC is reportedly set to announce the sale of its retail banking operations in France to private equity group Cerberus. The bank entered final negotiations with Cerberus several months ago and HSBC is expected to put around €1bn into the business as part of the deal. HSBC's French retail business has 230 branches and employs some 3,900 staff. Lazard is advising on the sale.
BoA plots autumn return to offices
Bank of America (BoA) expects all its vaccinated staff to have returned to their desks by the autumn, with chairman and chief executive Brian Moynihan saying that after Labor Day in early September “our view is all the vaccinated teammates will be back and we’ll be able to operate fairly normally”. He added that the bank will “then start to make provisions for the other teammates”. Mr Moynihan also noted that more than a third of BoA’s 210,000 worldwide staff had volunteered their vaccination status.
Norway’s central bank sets out plan to start raising rates in September
Norway could become one of the first countries to increase the official cost of borrowing post-pandemic, with Norges Bank saying it is likely to raise interest rates in September.
AVIATION
New EasyJet routes launch
EasyJet is to announce 12 new routes, with the budget carrier to fly five times a week between Manchester and Edinburgh, as well as launching new services to Newquay from Inverness and Liverpool.
Rolls-Royce electric aircraft plans proceed
Rolls-Royce has announced an £80m investment in energy storage systems aimed at vertical take-off and landing "urban mobility" vehicles. The firm is collaborating with airframe maker Tecnam and Norwegian regional carrier Widerøe to deliver an all-electric passenger aircraft expected to be ready for flights within five years.
FINANCIAL SERVICES
FCA in cryptoassets warning
The Financial Conduct Authority has reported a rise in ownership of cryptoassets and used this an opportunity to repeat a warning that consumers should “be prepared to lose all their money” and highlight that such assets are “largely unregulated”. Analysis from the City watchdog estimates that 2.3m people hold cryptoassets, up from 1.9m last year. It was also found that 78% of adults have heard of cryptoassets, whereas a year ago the proportion was 73%. Of those who had heard of cryptoassets, just one in ten were aware of consumer warnings from the FCA, with 43% of that group saying they had been discouraged from investing. For those who have bought cryptocurrencies, 53% said they have had a positive experience so far. Just 11% regret buying them, down from 15% a year ago, while the number that regard such assets as a gamble has fallen to 38% from 47%. Sheldon Mills, the FCA’s executive director, consumers and competition, reminded consumers that as “products are largely unregulated” if something goes wrong “they are unlikely to have access to the FSCS or the Financial Ombudsman Service”.
Wise to go public
Wise, the fintech company previously known as TransferWise, has announced its intention to go public in London through a direct listing, a process that “allows us a cheaper and more transparent way to broaden Wise’s ownership” than a traditional stock market launch, according to co-founder and chief executive Kristo Käärmann. Founded in 2010, Wise says it has 10m customers who use its money transfer service to send £5bn each month. The company competes with incumbents including Western Union and MoneyGram, as well as new players such as Revolut and WorldRemit.
Lloyd’s takes out cover to protect fallback fund
Insurer Lloyd’s of London has taken out £650m worth of cover to protect its backup central fund in the event of future pandemics, financial crises or other events causing extreme losses. The five-year cover is financed by JPMorgan as well as other reinsurers including Berkshire Hathaway and Swiss Re. Lloyd’s CFO Burkhard Keese said: “In the event that something really, really big happens, this makes it much more safe for our policyholders that we will basically pay out the claims they are entitled to receive some money for”.
US sues to block Aon’s $30bn takeover of Willis
Aon’s $30bn takeover of Willis Towers Watson is being challenged by the US Department of Justice, citing the potential effects on prices and innovation in the sector.
HEALTHCARE
Biogen's Japan partner calls for action on Alzheimer's
The head of Biogen's Japanese development partner Eisa has urged the creation of a framework for testing and treating Alzheimer's, which he described as a "secret pandemic."
Children’s care triggers bumper returns for private equity owners
The UK Local Government Association’s Children and Young People Board has warned that children’s care providers are paying bumper returns to private equity investors amid care funding shortages.
LEISURE & HOSPITALITY
Shareholder's protest at Whitbread pay report
Investors in Premier Inn parent company Whitbread have protested against the company’s pay report, with 35.8% of votes rejecting it. This came after the firm awarded £1.5m of performance payouts despite having posted a £1bn loss, claiming £250m of taxpayer support, making 1,500 staff redundant and cutting the dividend to zero. Chief executive Alison Brittain is in line for a £729,000 annual bonus, while finance chief Nicholas Cadbury could pick up £492,000. The vote had drawn a red top warning from the Investment Association.
ECONOMY
Starmer: Economic model left UK ‘exposed to pandemic’
Labour leader Keir Starmer has criticised the Government’s plans for the economic recovery, saying the Conservatives “want to go back to the economic model that weakened Britain's foundation and left us exposed to the pandemic”. Speaking at the British Chambers of Commerce’s annual conference, he called for a “new partnership between an active state and enterprising business”. He added that Labour wants to work with businesses to "deliver the fundamental change we need," pointing to a need for investment in skills and more support for business start-ups.
OTHER
£1bn of furlough money paid back
Businesses have paid back more than £1bn in previously claimed furlough payments to the Government. Figures show that £709m of money claimed through the Coronavirus Job Retention Scheme has been repaid to HM Revenue and Customs, while £319m has been paid back to HMRC after accounting errors led to some companies claiming too much. Between its launch in April 2020 until mid-May 2021, the furlough scheme, which will run until September, has seen £64bn handed to firms to subsidise workers’ wages. HMRC has not yet disclosed how much of the job retention scheme had been misused or stolen through fraud, saying an assessment of this would be included in its 2020/21 annual report.