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Daily News Roundup: Friday 20th April 2018

Posted: 20th April 2018


Banking complaints data detailed

According to data from the Financial Conduct Authority, Nottingham Building Society was the best performer of any brand with a significant branch presence, recording only 0.5 complaints for every 1,000 accounts in the second half of last year. HSBC was the worst-performing of the high street banks with national reach, with 6.88 complaints per 1,000, while RBS recorded 6.69, Barclays Bank 6.51, Natwest 5.48, Santander UK 5.26, Lloyds Bank 5.23, Clydesdale Bank 4.7, TSB Bank 4.35, Metro Bank 4.18, The Co-operative Bank 3.09 and Virgin Money 2.68 claims for every 1,000 accounts. A 40% increase in PPI claims saw 3.76m complaints, 13% more than the first half of the year, though excluding PPI issues firms received 2.21m complaints in total, 13,000 fewer than the first half of last year. Christopher Woolard, the FCA's executive director of strategy and competition, commented: “When PPI is taken out of the mix, the numbers of complaints firms are receiving has remained stable. Firms should be doing all they can to reduce complaints and ensure they are treating customers fairly”.

New digital officer role at RBS

RBS has appointed Frans Woelders as chief digital officer, with Les Matheson, chief executive of personal and business banking, commenting: “These changes signal our intent to transform our business around the experiences and needs of our customers. We will do this by combining the mind-set, behaviours and approach of a fintech, with our competitive advantages; highly professional and caring colleagues, deep expertise in technology, a large existing customer base, and our great brands. The result will make banking with us effortless everyday and brilliant when it matters".

Mortgage market risks building, BoE warns

Alex Brazier, executive director for financial stability strategy and risk at the Bank of England, has warned that the UK’s mortgage market is showing increasing signs of risk. Speaking at Imperial College on Thursday, he said: “Developments in corporate credit, consumer credit and in the mortgage market could be signs of a more generalised pick-up in risk taking. And when risk taking increases, it must not be at the expense of the resilience of lenders to any future downturn in the economy”.

Climate change drive stepped up at HSBC

HSBC is to promise to stop financing many coal power stations, oil sands and Arctic offshore drilling projects, as pressure grows for lenders to do more to combat climate change.

Barclays trading arm sell-off plot

Sources claim that activist investor Edward Bramson wants to break up and sell Barclays' trading arm to boost profits. The reports come as Barclays prepares to announce first-quarter results next week.


Fall in profits at Blackstone

Blackstone profits have dropped more than 20% in the first quarter due to stock market turmoil triggered by concerns over a possible US-China trade war. The firm announced profit of $792m (£558m), down from $967.9m during the same quarter of 2017. Chairman and CEO Stephen Schwarzman said: “Amid declining global markets and a sharp increase in volatility, Blackstone continued to protect and grow our investors' capital in the first quarter, delivering strong outperformance across strategies. Investors in the institutional, retail and insurer channels are allocating more capital to our firm, resulting in more than $18bn of inflows during the quarter.”

Youngs Seafood on the market

Lion Capital, Bain Capital and HPS Investment Partners have hired Stamford Partners to handle the sale of Young's Seafood. A bidding war could value the group at up to £300m.


Wells Fargo could be fined $1bn

US regulators plan to fine Wells Fargo as much as $1bn as early as today for abuses tied to its auto lending and mortgage businesses, according to reports. The potential fine would be the largest ever imposed by the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau. Wells Fargo said last week that it was in negotiations with federal regulators to pay as much as $ 1bn in fines to settle various charges, but that negotiations were still ongoing.


Bovis speaks out over quality complaints

Bovis Homes has responded to a catalogue of claims, by the Times newspaper, over the quality of its houses. The housebuilder, which does not plan to increase the £10.5m it has set aside to tackle legacy issues, said the firm had “made huge changes to our build quality and customer service” over the past year with notified faults per property down by two-thirds, adding that almost 90% of its customers would recommend it.


BoE lowers Brexit job loss estimate

The Bank of England's deputy governor, Sam Woods, has cut his forecast for the number of Brexit-related job losses the City will endure, forecasting that just 1-2% of bank and insurance jobs will leave London, equivalent to around 5,000-10,000 people. Speaking before the House of Commons' Exiting the EU Select Committee, the Prudential Regulation Authority boss also said that around a fifth of these jobs would be newly-created in the E27, and not "lost" from Britain, and that he was confident a final Brexit deal would include financial services.

City 'will have seat at the table' under Labour - McDonnell

Shadow chancellor John McDonnell has claimed that the finance sector "will have a seat at the table" under a Labour government. Speaking at Bloomberg's European headquarters in London on Thursday, Mr McDonnell, who indicated that the next Labour government would be a "radical, intervening" government, said: "There are some policies that you will like and some of which you will be less enthusiastic about. I don’t expect some people to be overjoyed at having to pay a bit more in income tax or corporation tax or at the introduction of a financial transaction tax".


Shire rejects £42.4bn takeover bid from Takeda

Irish drugmaker Shire has rejected a £42.4bn takeover offer from Takeda in Japan, which is seeking companies developing drugs for cancer, gastrointestinal conditions and diseases of the central nervous system. Botox maker Allergan stepped into the race shortly afterwards, indicating that it is mulling its own bid for Shire.


Shareholder payoff of £5bn at Unilever

Unilever has promised shareholders £5bn, with analysts noting that the buyback, coming alongside an 8% rise in the dividend to 33.68p a share, would help the firm to win investors over to its decision to make Rotterdam its base instead of London.


Facebook tweaks T&Cs ahead of GDPR

Facebook has tweaked its terms and conditions to move more than 1.5bn users out of reach of European privacy law. The company is shifting the responsibility for all users outside the US, Canada and the EU from its international HQ in Ireland to its main offices in California, so that those users will now be on a site governed by US law. The move is due to come into effect shortly before General Data Protection Regulation comes into force in Europe on 25 May.

Lagarde urges increased scrutiny of Big Tech

Christine Lagarde, IMF managing director, has urged policymakers to increase scrutiny of technology companies’ market power, cautioning that innovation and productivity gains are under threat.


One in three homes offered at a discount

Figures from Zoopla show that 32% of properties currently on the market have seen asking prices dropped, with the average reduction £24,947 or 8.42%. The proportion offered at a reduced price is slightly lower than the 35.33% Zoopla research found in December. Twickenham has the largest proportion of properties selling for a discount at 41.57%, while at the opposite end on the scale, Glasgow has the fewest, with 17.27% available at a reduced price. In London, 34.61% of homes on the market have seen asking prices nudged down - a fall from the 39.45% recorded in December. Zoopla’s analysis looked at the 50 UK locations with the highest number of for-sale properties. Zoopla’s Lawrence Hall said the findings “should be welcome news” for prospective first-time buyers looking to get onto the property ladder.


High-street sales suffer under blizzards

With recent storms keeping shoppers at home, retail sales in Britain have recorded their biggest quarterly decrease in a year. Sales were down 1.2% in March, and 0.5% for the first quarter as a whole compared with the last quarter of last year. Meanwhile, Alan Parker, the chairman of Mothercare, is resigning as the firm struggles to cope with the retail downturn, while Debenhams unveiled a fall in half-year profits of 85%.

Dark clouds above House of Fraser

With Rothschild already overseeing a refinancing of its £390m debt package, House of Fraser is attempting to help drive down costs and shore up its financial performance. A potential company voluntary arrangement for House of Fraser could lead to a hefty drop in its 59-strong UK store network, which employs 6,000 people and around 11,500 concession staff.


Brexit uncertainty could delay interest rate rise

The governor of the Bank of England has said that an interest rate rise is "likely" this year, although he added any increases will be gradual. Mark Carney said major decisions had to be taken on Brexit, including on the detail of the implementation period and the shape of a final deal. Following Mr Carney's comments, the pound fell by nearly a cent against the dollar, as markets reacted to the idea that interest rate rises might not be as imminent as some had thought. Meanwhile, Richard Buxton, chief executive of Old Mutual Global Investors, has said that Britain’s economy will grow far faster than expected in 2018 in a positive assessment of the outlook ahead of Brexit. Mr Buxton said the economy will expand by 2% this year. Separately, Seneca Investment Managers predicts that Britain will face a recession in 2020. Chief investment officer Peter Elston commented: “Recessions are like death and taxes - they're guaranteed to happen”.

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