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Daily News Roundup: Friday, 21st June 2019

Posted: 21st June 2019

BANKING

NatWest launches new selfie service accounts

NatWest has become the first major high street bank to use AI to match up selfies taken with a smartphone with a valid form of photographic ID, such as a driving licence. The technology removes the need to provide ID documents by post or in branch. Once identity has been verified, the process can take as little as four minutes, NatWest claimed. The system was built in partnership with ID verification company HooYu, and had been previously successfully piloted with 60,000 customers.

Banks sweetening mortgage offers to retain customers

Lenders are extending their offer periods for homeowners, who are now enjoying increasing flexibility in the mortgage market. Aaron Strutt of mortgage broker Trinity Financial said several lenders had increased their “offer validity” periods, with those from Nationwide, NatWest, Santander and Virgin Money all now lasting six months, while Barclays has also extended its offer period - from 90 to 150 days for certain existing customers. Mark Harris of broker SPF Private Clients says he has even seen examples of lenders allowing existing customers to move to a cheaper deal immediately.

Analysts expect bank shares to fall in event of no-deal

Analysts at RBC Capital Markets have said they expect bank shares to trade down to the levels they fell to after the EU referendum in 2016 if the UK leaves with a no-deal Brexit. The traders said that there were signs of Brexit having a negative impact on the economy and banks, with corporate loan growth slowing and companies hoarding more cash. Meanwhile, shares in Paragon Banking Group fell by more than 3% after RBC said the shares had failed to price in the Brexit risk more than any other British bank stock.

Start Up Loans lends £500m

Data from Start Up Loans, part of British Business Bank, has shown that it has lent £500m to nearly 70,000 firms since 2012. In London, 14,000 firms were loaned £118m.

INTERNATIONAL

Deutsche Bank faces US money laundering probe

US authorities are investigating whether Deutsche Bank complied with laws intended to stop money laundering and other crimes. The probe includes a review into the bank’s handling of alleged suspicious activity reports, including some involving legal entities controlled by US President Donald Trump.

Natixis shares tumble as concern grows about H2O illiquid bonds

Shares in Natixis have fallen by more than 11% after it emerged that H2O Asset Management, one of its subsidiaries, has large holdings of illiquid bonds linked to a controversial German financier.

China banks face liquidity squeeze in wake of Baoshang takeover

Chinese banks are facing a squeeze on liquidity after the government takeover of Baoshang Bank has disrupted the willingness of larger banks to lend to smaller ones.

AUTOMOTIVE

Renault and Nissan end standoff

Renault says it has settled a dispute with Nissan, with the firms having clashed over a Nissan plan designed to strengthen corporate governance after the arrest of Carlos Ghosn, the former head of the Nissan-Renault-Mitsubishi alliance. Renault chairman Jean-Dominique Senard had said his firm, which owns 43% of Nissan, would refuse to back the changes at a shareholder meeting unless Renault was given more representation on three committees being established to tighten oversight at Nissan. The request has been accommodated by Nissan, with Mr Senard to sit on one of the panels and Thierry Bolloré, Renault’s chief executive, to sit on another of the committees.

TDR Capital launches bid for BCA Marketplace

BCA Marketplace, the owner of WeBuyAnyCar, has confirmed it is the subject of a £1.9bn takeover bid from TDR Capital. The move comes a year after the company rejected a £1.6bn takeover bid from Apax Partners. BCA said that, should TDR make a firm offer, the board will unanimously recommend that shareholders accept the deal.

Banks warn about demand for Tesla 3

Goldman Sachs has warned that long-term demand for the Tesla Model 3 will be about half of what the company is projecting. David Tamberrino, an analyst at Goldman Sachs, estimated that the Model 3 would take about 10% of the market for luxury saloons priced in the $35,000 to $55,000 range.

FINANCIAL SERVICES

Carney keeps open mind on Libra

The Governor of the Bank of England, Mark Carney, has said that Facebook’s Libra cryptocurrency should be approached with “an open mind, but not an open door”. He said that if Libra was successful it would become “systemically important” and would need to be regulated. Facebook has said it plans for the digital currency to be fully regulated, although it has refused to comment on discussions with regulators. Caroline Binham in the FT says there are four questions that regulators will want answered including on matters of risk and whether it will be used for crime. Meanwhile, Mr Carney was speaking as the Bank of England revealed it would open its vaults to payment technology companies for the first time. Historically, only commercial banks have been able to hold interest-bearing deposits or reserves at the Bank.

Morgan criticises FCA over access to financial services

Nicky Morgan, the chair of the Treasury Committee, has criticised the FCA for “lacking in desire” to improve consumer access to financial services. The committee made a series of recommendations on how consumer access to financial services could be improved last month. These included a requirement that firms act in customers’ best interests, suggestions for the preservation of bank branches, and enforcement of banks’ compliance with the equality act being moved to the FCA. Ms Morgan said the FCA’s response to the report was lacking and she said the watchdog should have “another go” at replying.

Hargreaves Lansdown chief ‘angered’ by Woodford affair

Hargreaves Lansdown boss Chris Hill has moved to reassure customers that he is “angered over the lack of resolution” over the Neil Woodford fund saga, which has affected 291,520 customers. Mr Hill also said he has urged Woodford to consider alternative ways to release capital so that investors can get access to their money as soon as possible. Alex Brummer in the Mail comments that the fiasco has left small-time savers who placed their trust in Woodford and Hargreaves Lansdown have been badly let down. He also believes it leaves the industry vulnerable to punishment if a Corbyn government is elected.

NS&I pulls in £10.8bn

NS&I pulled in a net £10.8bn of savers’ cash, above the target figure of £9bn but within the limit of £12bn, according to its annual report. The bank has been reducing its accounts popular with older, wealthier savers and developing products that appeal to younger savers with less money.

HEALTHCARE

GSK kicks of sale of consumer health brands

GlaxoSmithKline has fired the starting gun on the sale of some consumer health brands as it seeks to raise about £1bn. The pharmaceutical group has bundled the non-core drugs into three different portfolios and has hired Greenhill to market the products to separate bidders, according to reports.

China’s WeDoctor shelves overseas listing over data concerns

The FT reports that Chinese healthtech group WeDoctor is backtracking on plans to list overseas as international disclosure requirements start to weigh on data-heavy companies.

LEISURE AND HOSPITALITY

Hotel group seeks sale

Macdonald Hotels, the Scottish operator, is understood to be in exclusive talks over the sale of 27 of its properties, including the Randolph in Oxford and the Rusacks in St Andrews, to Centerbridge Partners, a New York-based private equity and real estate business. Gordon Fraser, group managing director of Macdonald Hotels, declined to name the buyer but said: “The preferred bidder fits superbly with our ongoing aspirations for the hotels and they will bring significant investment and expansion.”

REAL ESTATE

European cities demand powers over Airbnb expansion

Ten European cities – Amsterdam, Barcelona, ​​Berlin, Bordeaux, Brussels, Krakow, Munich, Paris, Valencia and Vienna – are demanding more help from the EU to tackle Airbnb and other holiday rental websites, which they argue are locking locals out of housing and changing their neighbourhoods. In a joint letter, they argue that local authorities must be able to counter the adverse effects of the boom in short-term holiday lets by “introducing their own regulations depending on the local situation”.

RETAIL

Poor weather hits UK sales

The Office for National Statistics has revealed that retail sales fell by 0.5% in May from a month earlier, after an unseasonably cold May prompted a sharp decline in summer clothing sales. In the three months to May, retail sales expanded 1.6% compared with the previous three-month period, the smallest annual rise since October. The downturn was led by a slide in Department stores sales with sales falling by 0.9% in the three months to May, while clothing and footwear sales fell by 4.5%, the biggest drop since July 2015. Rhian Murphy head of retail sales at the ONS, said: “Retail sales continued to grow in the latest three months despite two consecutive monthly falls, with clothing sales declining considerably in May, due to unseasonably cold weather.”

ECONOMY

Bank freezes rates and cuts growth outlook

The Bank of England has kept interest rates on hold at 0.75% amid heightened no-deal Brexit fears and as UK growth falters. The MPC voted unanimously to keep rates unchanged as it cautioned the “downside risks” to growth had increased since its last set of forecasts in May. The Bank also trimmed its expectations for second quarter growth, predicting GDP will remain flat against a previous forecast for 0.2% expansion, after official data showed the economy dipped by a worse-than-feared 0.4% in April. However, the Bank reiterated that “gradual” rate hikes would be needed over the next three years to keep inflation to its two per cent target.

OTHER

Johnson and Hunt to fight for leadership

Boris Johnson will compete with Jeremy Hunt in the final round of the battle to become the next Conservative leader and Prime Minister. Mr Johnson said he was "honoured" to get the backing of 160 MPs in the final ballot of the party's MPs, while Mr Hunt, the Foreign Secretary, promised him “the fight of his life”. Mr Johnson’s tally of 160 in the fifth round of voting at Westminster amounted to more than half of the 313 Conservative MPs, while Environment Secretary Mr Gove - who had briefly moved into second place earlier in the day - was edged out by Mr Hunt by two votes (77-75). Mr Johnson has insisted that Britain must leave the EU on the rescheduled date of October 31 with or without a deal, while Mr Hunt, who voted to remain in the EU in the 2016 referendum but now backs Brexit, is open to delaying exit day if it helps deliver a deal and an orderly departure.

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