BANKING
Emergency lending to small firms doubles
Figures from UK Finance show lending to small businesses has almost doubled on a week ago with banks now committing £2.8bn in emergency government-backed loans to British firms. Royal Bank of Scotland has approved £1.2bn, Lloyds has lent £335m, Barclays £586m and HSBC £480.5m. UK Finance said banks had so far approved 46% of 36,000 applications. However, businesses are still reporting difficulties in accessing loans with the British Chambers of Commerce calling for the process to be simplified ahead of a “crunch week”. Mike Cherry, of the Federation of Small Businesses, welcomed the improvement but said more disclosure was needed on why businesses were being turned down by banks. Mel Stride, chairman of the Treasury committee, has also called on banks to provide detailed information about the loans, including the number of customers being rejected, or encouraged not to continue with an application.
Sunak bends to pressure for 100% guarantees on small business loans
Chancellor Rishi Sunak is on the verge of agreeing to provide 100% guarantees on loans of up to £25,000 to Britain’s smallest businesses, with a scheme possibly up and running next week. The change in stance comes after intense lobbying by Tory MPs, the CBI and the Bank of England.
Shareholders will not be able to question HSBC bosses at AGM
HSBC is risking a shareholder backlash over a refusal to permit investors to question top bosses directly at today’s AGM. Investors have been asked to submit questions ahead of time and the bank has said that, where appropriate, the board will endeavour to answer questions by publishing responses online. Meanwhile, Pirc, the influential shareholder advisory group, has urged investors to vote against HSBC's pay report due to the "unacceptable" ratio of chief executive pay compared with other staff.
Zero per cent credit card deals fall to lowest level in three years
The number of credit cards offering interest-free deals has fallen to a three-year low, while the length of time for which the 0% rate applies before interest begins to be charged has also shortened.
PRIVATE EQUITY
Blackstone suffers performance fee blow
Blackstone has reported that asset values across most of its business segments plunged in the first three months of this year as the coronavirus spread. Yesterday it reported a first-quarter loss of $1.1bn as it marked down the value of its private equity investment portfolio by nearly 22%. However, President Jon Gray said current dislocations in structured credit and liquid markets had already provided the investment group with actionable opportunities.
INTERNATIONAL
Tax boost lifts Credit Suisse
On the back of new tax rules in Switzerland to help banks weather low interest rates, Credit Suisse has posted a 13% rise in pre-tax profit, to 1.2bn Swiss francs (£1bn), in the first three months of the year, with net profit up 75% to 1.3bn francs. Net revenue rose 7% to 5.8bn francs over the period, while return on tangible equity was up 13.1%. The Swiss bank however put aside a 568m franc provision for potential loan losses amid concerns about the economic impact of the coronavirus pandemic.
Eurozone bank stress starts to show in funding markets
The coronavirus crisis has pushed up borrowing costs for banks in the eurozone, with analysts describing the rise in Euribor as a worrying sign of “fragmentation” of the region’s money markets.
AUTOMOTIVE
Car makers get back to work
Jaguar Land Rover and Aston Martin have both said they are to resume production at UK factories in early May, gradually increasing operations across their plants. The news comes a day after Nissan said it would test safe working practices at its Sunderland plant this week while Bentley last week said it would resume production, albeit at a low rate, on May 11th.
AVIATION
Aviation shutdown prompts job cuts at Meggitt
UK defence firm Meggitt is to cut 1,800 jobs - which equate to 15% of the engineer’s workforce - as part of a major cost-cutting programme to help deal with the shutdown of the global aviation market. Meggitt will also embark on a hiring freeze and suspend all salary increases for its employees, as well as cutting operational expenditure, as it moves to reduce expenditure by £400-£450m this year.
CONSTRUCTION
Housebuilders urge greater clarity over restarting work
Britain’s housebuilders are calling for greater clarity from the government over when they can safely restart construction work. While Taylor Wimpey and Bovis Homes owner Vistry have both sketched out reopening plans, Crest Nicholson’s Peter Truscott asserts: "Clear, holistic communication is needed to incorporate all aspects of the process including tradesmen, materials, utility providers, building inspectors, mortgage valuation services, solicitors and removal firms. A ‘piece by piece’ approach will not work.”
FINANCIAL SERVICES
Coronavirus infects Chinese Insurance giant's earnings
Ping An Insurance, the country’s largest insurer by market value, acknowledged a 42.7% drop in first-quarter profit on Thursday - its biggest fall in quarterly profits in more than eight years. As the coronavirus outbreak disrupted its businesses significantly, net profit fell to 26.063bn yuan ($3.68bn) in the January-March quarter - from 45.52bn a year earlier.
Feared Elliott activist exits hedge fund after two decades
Veteran activist investor Franck Tuil has left US hedge fund Elliott Management after nearly two decades in the firm’s London office. Mr Tuil is credited with driving Elliott’s push in Europe where many countries are hostile to shareholder activism.
LEISURE & HOSPITALITY
Pret A Manger to raise €100m emergency loan
UK fast-food chain Pret A Manger is in talks to raise a €100m urgent loan from global banks to help fund its recovery after the COVID-19 lockdown is lifted
MEDIA & ENTERTAINMENT
Play it again, Mark
Music royalties investment firm Hipgnosis has acquired 70% of songwriter and producer Mark Ronson's 315-song portfolio, which includes more than 83 number one hits and two songs that have been streamed more than 1bn times on Spotify.
REAL ESTATE
Retail landlords banned from aggressive rent collection
The UK government has temporarily banned landlords from using winding-up orders and aggressive debt recovery tactics against retailers and restaurateurs while the COVID-19 crisis continues. Business Secretary Alok Sharma said: "In this exceptional time for the UK, it is vital that we ensure businesses are kept afloat so that they can continue to provide the jobs our economy needs beyond the coronavirus pandemic.” Helen Dickinson, chief executive of the British Retail Consortium said: "We thank Alok Sharma for his swift action, which will give retailers some vital relief and help safeguard millions of jobs all across the country.”
RETAIL
Orion fails to complete Hammerson retail parks acquisition
Private equity firm Orion Capital Management has failed to complete the £400m acquisition, as agreed, of Hammerson's seven retail parks by April 23. The British shopping centre operator said it would serve a notice to Orion and terminate the sale agreement if does not complete by May 6th, costing Orion its £21m deposit.
Just Eat takeover approved
The Competition and Markets Authority (CMA) has backed the £6.2bn takeover of Just Eat by Takeaway.com, with “no competition concerns” over the merger. It had investigated whether the deal would have prevented Takeaway.com re-entering the UK market, which could have reduced future competition.
ECONOMY
Business activity collapses amid lockdown
Business activity has collapsed at its fastest rate on record, according to fresh data from IHS Markit and the CIPS, a rate “previously thought unimaginable” amid the widespread shutdowns in response to the coronavirus outbreak. The composite reading fell from 36 last month to 12.9 for April, with services taking a particularly big hit, prompting Gertjan Vlieghe, a member of the Bank of England's Monetary Policy Committee, to warn that the UK economy is experiencing the fastest and deepest contraction in “the past century or possibly several centuries.” However, Mr Vlieghe said the central bank was in control of monetary policy and could take steps to control inflation, adding that the priority “is to return the economy to that pre-virus trajectory as soon as possible”.