FCA steps up to Dunbar Bank claims
The Financial Conduct Authority has called for former customers of now-defunct Dunbar Bank to detail any alleged misdemeanours by the lender. An action group, which wants the regulator to probe Dunbar’s former owner Zurich, has claimed that over 100 former business customers, mostly property developers, went bust after the bank allegedly went back on its word over personal guarantees they had signed before the global financial crisis. Zurich said it would “strongly reject” any suggestion that Dunbar had treated its customers inappropriately, adding: “Following extensive legal scrutiny and disclosure, none of the cases brought against Dunbar have been upheld, and no evidence has been found of any wrongdoing.”
Banks stop Huawei services
HSBC and Standard Chartered have stopped offering banking services to Huawei, saying dealing with the Chinese telecoms firm, which is accused of bypassing US trade sanctions on Iran, is too risky.
UK Finance appoints mortgage chair
UK Finance has appointed Richard Rowntree, UK mortgages director at Bank of Ireland UK, as the new chair of its Mortgages Product and Service Board.
UK tech leads on VC investment
The UK’s tech sector out-performed the rest of Europe in 2018, attracting $7.9bn (£6.3bn) in venture capital investment, according to a report from Tech Nation and Dealroom. Germany and France came second and third, drawing in $4.6bn and $4.4bn of investment respectively. UK tech start-ups accounted for more than a third of sales, IPOs and mergers across Europe, with exits worth $40bn recorded over the last 12 months. Fintech has been the UK’s biggest vertical to date, the research indicated. The report also shows that the US achieved $136bn of deals and IPOs in 2018, while European sales and IPOs added up to $107bn.
M&A dives in Q4 as corporate confidence ebbs
The FT says Q4 is set to be the quietest quarter for mergers and acquisitions since Q3 2017. It notes that private equity groups are increasingly factoring a potential recession into forecasts when contemplating buyouts.
Stagecoach sells its US arm
Variant Equity Advisors has snapped up Stagecoach’s coach operations in the US in a £213m deal. It will pay $207m in cash and assume $64m of debt to acquire the division, which comprises Megabus, Coach USA and Coach Canada.
Banks accused in bond trading probe
Four banks have been accused of breaching anti-trust rules by European Union antitrust regulators, with it claimed that certain traders may have exchanged "commercially sensitive information". It is claimed that employees may have colluded to distort competition in US dollar denominated bonds in the secondary market, with the commission saying contact would have taken place mainly through online chatrooms. The European Commission did not name the banks involved in the investigation, however Deutsche Bank, Credit Suisse and Credit Agricole have released statements to say they are cooperating with the probe.
Danske Bank in profit warning
Danske Bank has cited challenging market conditions as it cut its 2018 outlook for the second time this year. The bank says it expects net profit for the year of around 15bn Danish crowns, having previously forecast profit in the region of 16-17bn crowns and, before that, 18-20bn crowns. "The revision to the outlook is mainly the result of worsening conditions during the fourth quarter in the financial markets," CFO Christian Baltzer said, adding that the “underlying business performance is still good.” Meanwhile, it has been revealed that Danske Bank's former head of international private banking in Estonia, Juri Kidjajev, is among 10 former employees who were this week arrested by authorities in relation to a €200bn money laundering scandal.
UK car manufacturing drops to lowest level in a decade
Figures from the Society of Motor Manufacturers and Traders show that November saw 129,030 cars made by UK plants, with the 19.6% decline the biggest fall since November 2008.
Heathrow warns on Brexit blow to profits
Heathrow Airport has warned that its profits will be lower next year. An original forecast of almost £1.9bn has been lowered to £1.8bn, due to the £114m it has set aside for Brexit contingency planning.
Kier investors shun new shares
Shares in debt-laden construction firm Kier have fallen to their lowest levels in almost 15 years after shareholders shunned an emergency cash call for £250m. When buyers claimed £99m of the stock - with just 38% of shareholders taking part in the fundraising rights issue - banks underwriting the rights issue were left with the remainder. The shares were taken by Numis Securities, Peel Hunt, HSBC, Citigroup and Santander, with the financial institutions taking 22.5% each, except Santander which takes 10%. The firms have found sub-underwriters for 12m of the shares, leaving them with 28.1m between them.
FCA could oversee cryptocurrencies
The Treasury could empower the Financial Conduct Authority to oversee all cryptocurrency assets, with the FCA currently regulating only some crypto-assets but not others, such as bitcoin. Responding to a Treasury Select Committee report calling for regulation, John Glen, economic secretary to the Treasury and City minister, wrote: “The government will consult early next year to explore whether other crypto-assets that have comparable features to specified investments but that fall outside the current perimeter should be captured in regulation.” Committee chair Nicky Morgan commented: “It is clear that the government and the FCA share the committee’s concerns on crypto-assets, including the lack of regulation, minimal consumer protection and anonymity aiding money laundering,” adding that the committee “will continue to press for regulation.”
Lloyd’s of London names team for Brussels hub
Lloyd’s of London has appointed a top team for its new post-Brexit EU base in Brussels, ending months of uncertainty over who would lead the business. Sonja Rottiers, former CFO at AXA Belgium, will become chief executive of Lloyd's Brussels. Michel Flamee, former board member of the National Bank of Belgium, will serve as chairman, while Delphine Marchessaux of AXA Corporate Solutions in France has been named chief underwriting officer. Christian Noyer, honorary governor of the Bank of France since 2015, joins as non-executive director.
Darren Newton, the boss of debt management company First Step, which was bought with client money and went into administration in 2014 with a £7.1m shortfall, has been banned permanently from working in the financial services sector by the Financial Conduct Authority.
LEISURE AND HOSPITALITY
Restaurant serves up bonuses
Wagamama staff are to receive a bonus on the back of the £559m sale of the chain to The Restaurant Group. The payments, granted by Wagamama’s private equity backer Duke Street and the chain’s management, will see waiting staff handed £1,000, while general managers and head chefs will receive £2,000. The bonuses, which will benefit around 3,600 members of staff, total £4m.
Firm eyes float
Café bar operator Loungers, which is backed by private equity firm Lion Capital, is planning a £250m listing, with it reported to have hired Numis, Peel Hunt, Berenberg and Liberum to handle a potential IPO.
Competition regulators lobby to halt Siemens-Alstom merger
The Competition and Markets Authority is lining up with other European regulators against the Siemens-Alstom merger. The UK watchdog has now written to Margrethe Vestager with its concerns.
Halifax predicts house price rises
Halifax says house prices will climb by between 2% and 4% in 2019, with a shortage of homes for sale and low levels of housebuilding set to support growth, although rising interest rates are likely to hold back steeper climbs. Russell Galley, Halifax's managing director, said: "Aside from the obvious political and economic uncertainty, the biggest issue for the housing market in 2019 will be the degree to which mortgage payment affordability changes".
Sales growth exceeds forecasts in November
Office for National Statistics figures show that retail sales in November rose 1.4% from the month before, exceeding economists' forecasts of a 0.3% increase as Black Friday and Cyber Monday drove a sharp rise in sales during the second half of the month. Household goods sales rose by 5.3%, the biggest increase since the end of 2013, while online sales as a proportion of all retailing exceeded 20% for the first time, hitting 21.5%. The ONS data shows sales growth of 0.4% in the three months to the end of November when compared to the previous quarter, marking the slowest quarterly climb since April. Year-on-year, growth hit 3.6% in November.
BoE cuts growth forecast
The Bank of England has cut its UK growth forecast and warned a lack of Brexit clarity is hitting the economy. The Bank said uncertainty over the UK's departure from the EU had "intensified considerably" over the past month. Against a backdrop of weaker global growth, the Monetary Policy Committee voted unanimously to keep interest rates at 0.75%. It said the economy was likely to grow by 0.2% in the final quarter of 2018, down from an earlier forecast of 0.3%.
Business confidence dips
The latest Bank of Scotland Business Barometer shows that confidence among UK firms has fallen seven points to 17% in the past month. The poll, which questions 1,200 firms each month, found that optimism about the economy has dipped 10 points to 7%. Fraser Sime, director of SME banking at Bank of Scotland commercial banking, said: "With greater clarity expected in the next quarter and beyond, we will, hopefully, see an increase in confidence levels as firms begin to operate in a more stable environment." Hann-Ju Ho, senior economist for Lloyds Bank commercial banking, commented: "The expected slowdown in economic growth in the fourth quarter could well be extended into early 2019, but there is potential for a rebound in sentiment should there be some respite in uncertainties that firms currently face."