BANKING
FCA investigates bank’s money-laundering controls
The Financial Conduct Authority (FCA) is investigating money laundering controls at Al Rayan, a Qatari-owned British bank, with the investigation believed to have been launched last year. Restrictions have been placed on its operation pending the outcome of the probe, with the bank required not to open new deposit accounts for anyone “categorised as high risk for the purposes of financial crime risk”. The FCA also said the bank, the UK’s oldest and largest Islamic bank, must reject any account applications from politically exposed persons – which the watchdog defines as “individuals whose prominent position in public life may make them vulnerable to corruption” – with applications from members of their family or their “known close associates” also to be turned down. The bank says it voluntarily agreed to place a “temporary restriction” on new deposit accounts for certain individuals following discussions with the FCA.
Court opens door to PPI claims extension
A major court victory leaves consumers potentially being able to earn Payment Protection Insurance compensation from their bank after the August 29 cut-off imposed by the Financial Conduct Authority. Azra Akhtar launched a legal challenge against Welcome Financial Services, a loan provider, in which she argued that it had been paid excessive levels of commission for selling her PPI, and Glyn Taylor, of APJ Solicitors, which represented Miss Akhtar, said: “The August 29 deadline is for PPI that was mis-sold by lenders, but this case argues that – if an unfair relationship is proven – then claimants can still recover the PPI premium after the FCA's deadline,” adding: “More importantly, if a broker arranged the loan then undisclosed commissions paid to the broker can also be recovered.”
The last man in European investment banking
The FT’s David Crow looks at Barclays' investment bank, saying that it is the only European investment bank looking to remain a global force after Deutsche Bank's retreat.
PRIVATE EQUITY
KKR explores sale of Epicor
KKR & Co is reportedly exploring a sale of Epicor Software that could value the software provider at close to $5bn, with sources revealing that KKR is working with an investment bank on an auction for Epicor.
Former exec urges ministers to block Cobham takeover
John Myers, a former senior executive at defence firm Cobham has urged ministers to block a £4bn takeover by private equity bidder Advent.
INTERNATIONAL
ECB extends timescale for banks to make bad loan provisions
The European Central Bank (ECB) will give banks three years rather that two to set aside funds to cover losses from bad loans, a move pushed for by EU lawmakers. Meanwhile, the FT reports that the ECB’s governing council suggested changing its key inflation target as part of a potential broader strategic review.
Germany considers rate rule
Germany is considering a move to block banks from imposing negative interest rates on savers, with the country said to be growing concerned by the European Central Bank and its policy of negative rates, which currently stand at -0.4%. Germany’s finance minister Olaf Scholz said of the plan: “I don't think it is a good idea for banks to charge penalties for depositors in checking accounts or money markets accounts.” The German Savings Bank Association says talk of a ban is well intentioned but would make matters worse.
Deutsche saves on redundancy costs by handing prime broker to BNP Paribas
Deutsche Bank’s retreat from investment banking could see it transfer up to 800 staff to BNP Paribas, according to sources familiar with the matter, with BNP taking over Deutsche's prime brokerage unit.
Banks urge peace in Hong Kong
HSBC and Standard Chartered have taken out newspaper adverts in Hong Kong condemning the violence in the Asian financial hub. In the adverts, the banks also called for a peaceful resolution after more than two months of political unrest. HSBC said maintaining the rule of law was "essential to Hong Kong's unique status as an international financial centre".
Warnings sounded over watered-down Volcker
Some commentators have voiced concern over loosening of the Volcker rules in the US which blocked proprietary trading, saying the move waters down regulatory protection and may see banks resorting to riskier behaviour.
Citigroup to cut jobs
Citigroup is preparing to cut hundreds of jobs in its trading unit, including about 80 posts in London. The US investment bank plans to cut staff across its fixed-income and stock-trading operations, including at least 100 jobs in the equities division.
AVIATION
Ryanair flies low in customer service rankings
Ryanair has been rated the worst firm for customer service out of 100 British brands in a study by Which?, who polled nearly 4,000 of its members. Ryanair scored a customer service rating of 45% and across the three categories customers were asked to judge - how companies make them feel, how helpful and knowledgeable their staff were, and how well they handled complaints – the airline scored a single star in each. The rankings also saw British Airways score 66% and come in 83rd, while easyJet was the highest ranking airline in 79th place, scoring 68%. Online bank First Direct, which is part of HSBC, took the top spot with 89%.
FINANCIAL SERVICES
Old Mutual tries again to dismiss chief
Old Mutual has handed chief executive Peter Moyo his notice for the second time, having initially fired him over a corporate governance dispute only to see a court reinstate him.
Investors urged to sell property funds
Sam Buckingham of wealth management firm Canaccord Genuity has urged investors with money locked in the suspended Woodford Equity Income fund to sell property funds, or risk more of their cash becoming trapped. He said that the chief reason for his scepticism is the increasing likelihood of a no-deal Brexit, and its consequent impact on the British economy.
Adyen profits soar
Dutch fintech Adyen has posted soaring profits for the first-half, with core earnings up 79% to €125.8m (£115m). The volume of payments it processed increased 49% to €104.6bn, compared to €70bn during the first half of 2018, while net revenue came in at €221m, up 42% on the same period last year. The payment processing firm made new deals with Apple Pay and Google Pay during the period, however over 80% of its increased payment volume came from existing customers.
HEALTHCARE
Astrazeneca pays $95m to fast-track drug
Astrazeneca has paid $95m to get a drug fast-tracked through the approval process in the US, buying a priority review voucher from a subsidiary of Swedish pharmaceutical company Orphan Biovitrum. It bumps Astrazeneca up the Food and Drug Administration’s (FDA) queue.
LEISURE AND HOSPITALITY
Bingo and casino owner welcoming fewer punters
Declining footfall at Mecca Bingo halls and Grosvenor Casinos have dented gambling group Rank's pre-tax profits, which came in at £34.6m for the full year, down 26% on last year. Overall revenue for the group did increase slightly however, up 1% to £695.1m.
easyGym flexing ahead of London openings
The easyGym budget fitness chain's IT systems and brand name have been sold to a consortium led by chief executive Paul Lorimer-Wing for an undisclosed sum. The gym outfit will be resurrected with plans for 50 new sites in London and many more overseas following the management buy-out.
MEDIA AND ENTERTAINMENT
Hasbro’s Pig deal
US toy firm Hasbro is set to buy Entertainment One – the maker of Peppa Pig - in a £3.3bn deal, with the firms saying they had agreed an all-cash sale that will see Entertainment One shareholders receive £5.60 in cash for each share. Hasbro will finance the deal with new debt and a stock sale, while Bank of America has agreed to provide a bridge loan.
RETAIL
Sales plunge at fastest rate since financial crisis
The Confederation of British Industry’s (CBI) latest health check on the retail industry has found that high street sales have slumped at their fastest pace since 2008 in August, leaving retailers’ confidence “crumbling”. Companies in the retail sector are also expecting further trouble in the months ahead, with industry sentiment falling to its lowest levels in more than a decade. The CBI said internet-based, non-store retailers posted a rise in sales, but volumes dropped across most other sectors, including in grocers, clothing and hardware and DIY. The report shows that 10% of respondents reported that sales volumes were up on a year ago, compared with 58% who said they were down, giving a balance of -49%. Just 2% of respondents expect the business situation to improve during the next three months.
Laura Ashley posts £10m loss
Laura Ashley has reported a £9.8m pre-tax loss for the 12 months to June 30, a significant reverse on the £5.6m profit it made in the previous fiscal year. Total revenue fell 9.6% to £232.5m, while like-for-like sales were down 3.5%. Comparable sales of beds, sofas, mirrors and cabinets were down 9%, and 13.7% in decorating. Online sales fell 14.2% to £51.2m. Consequently, the board has said it will not recommend a dividend for the year.
ECONOMY
Eurozone confidence at six-year low
Confidence in the eurozone has dipped to its lowest level in six years, with the purchasing managers’ index (PMI) showing that industrial output fell for a seventh consecutive month. The PMI inched up from 51.5 to 51.8 in August but businesses reported a “sizeable drop in confidence” and manufacturers cut jobs for a fourth consecutive month. Andrew Harker at IHS Markit commented: “It appears that companies are braced for a sustained period of weakness, and as a result are showing greater reluctance to take on additional staff.” Melanie Debono, Europe economist at Capital Economics, said the “trivial increase” in the composite PMI “still leaves it consistent with feeble GDP growth this quarter”.
OTHER
Apple's metal credit card is surprisingly delicate
Apple's Goldman Sachs-backed titanium credit card comes with some pretty specific cleaning instructions. To avoid problems, Apple recommends that users take special care when cleaning the card by “gently wiping with a soft, slightly damp, lint-free microfiber cloth” and storing in a “bag made of soft materials” to avoid scratching its surface.