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Daily News Roundup: Friday, 24th August 2018

Posted: 24th August 2018

 

BANKING

OneSavings warns of weaker mortgage market

OneSavings Bank, which has an increasing focus on mortgage lending to professional landlords, has cautiously raised expectations for loan growth despite pressure on profit margins. The firm’s loan book grew 11% to £8.1bn during the first six months of 2018, with pre-tax profits of £91.8m, up 17% from the same period in the previous year. The firm warned that tax changes and regulation in the Buy-to-Let market was hampering demand for new purchase mortgages.

Goldman Sachs opens UK retail bank

Goldman Sachs will open its Marcus arm for retail depositors in the UK "in the next few weeks". The bank indicated that it planned to enter more EU countries, with Germany next.

Monzo eyeing unicorn status

Digital bank Monzo is planning to crowdfund £20m from its customers. As it is above the European Union’s €8m crowdfunding cap, Monzo, is which is also looking to raise around £100m to take it to £1bn unicorn status at its next traditional fundraising round at the end of this year, will be required to build a formal prospectus for the round.

Ex-Barclays boss says technology will replace bank jobs

Former Barclays chief executive Antony Jenkins has said that technology could replace over half of banking jobs. He told the BBC that: “We've already seen something like 25% of branches close between 2011 and 2015, my expectation is at least another 50% of branches will close over the next five to 10 years”. He went on: “Similarly I think we'll see something like a 50% or even greater reduction in the people employed in the industry.”

Barclays appoints head of markets innovation

Justin Brickwood has been appointed head of markets innovation at Barclays, reporting to John Stecher, chief innovation officer. Mr Brickwood will be “responsible for driving client focused innovation across markets' electronic offerings” and increasing internal platforms’ efficiency.

Two Credit Suisse bankers hired for BNP UK team

BNP Paribas has hired Lewis Burnett and Andrew Forrester from Credit Suisse, as it starts a new UK corporate broking team to strengthen its presence in the country.

RBS investors worried about claims

City AM reports that payments made between two separate action groups representing RBS shareholders and customers wronged by the firm have caused concern among investors.

PRIVATE EQUITY

Eastern European private equity investment increases

There was a year-on-year increase of 113% in private equity investment in central and eastern Europe last year, to a record high of €3.6bn (£3.23bn). Enterprise Investors managing partner Robert Manz remarked: "International investors are drawn to the region's attractive economic growth, strong consumer spending and private equity fund managers with proven ability to identify high-growth investment opportunities."

INTERNATIONAL

Fees bonanza denied to bankers

Fees worth up to £1bn expected by bankers, lawyers, accountants and consultants will not be paid out after Saudi Arabia abandoned plans to float Saudi Aramco, its state-owned oil group. The move would have represented the biggest stock market listing of all time, with stock markets in London, New York and Hong Kong competing to be chosen for the listing. Firms such as JPMorgan, Morgan Stanley, HSBC, Moelis & Co and Evercore are understood to have been involved.

Intesa to sell first senior bank bond since Italian sell off

Italy's largest domestic bank Intesa Sanpaolo is to become the first Italian lender to raise a senior bond since April, a five year senior unsecured bond.

AVIATION

Ryanair takes off, finally

Ryanair has confirmed that it has reached an agreement with its Irish pilots over the dispute about the airline's planned alterations to annual leave and promotions.

CONSTRUCTION

CRH bouncing back

CRH has seen earnings rise as the European construction market bounces back. The building materials supplier reported sales of €11.9bn for the first half of 2018, with underlying earnings of €1.1bn, both up 1% on the time last year.

FINANCIAL SERVICES

Government warns of no-deal Brexit hit to financial services

The government has released technical notices covering the possible effects of a no-deal Brexit, with a widespread collapse in cross-border trade predicted for financial services. The deputy director-general of the CBI noted that the papers showed “those who claim crashing out of the EU on World Trade Organization rules is acceptable live in a world of fantasy”. The financial services document also warns on credit card cost increases, stating: “The cost of card payments between the UK and EU will likely increase, and these cross-border payments will no longer be covered by the surcharging ban.”

Phoenix rising

Phoenix Group generated £349m of cash in the six months to June 30, comfortably beating its targets, while group operating profit came in at £216m, just ahead of the £215m in the same period last year. The insurer, which focuses on acquiring life insurance units that are closed for new business, said its acquisition of Standard Life Assurance for £3.2bn is expected to close on August 31. Phoenix, which completed its first bulk annuity purchase with a £470m transaction with the trustee of the Marks and Spencer pensions scheme, also said its integrations of acquisitions from Axa and Abbey Life has delivered cost synergies of £27m annually and cash generation of £768m.

AxiaFunder seeks new investors

Crowdfunding platform AxiaFunder is hoping to boost litigation finance in Britain, advertising high returns to private investors. Co-founder Cormac Leech said investors' money would be "put to work almost straightaway".

LEISURE & HOSPITALITY

Playtech chairman not feeling the pinch

Playtech has revealed a 34% fall in profits due to “disappointing” Asian markets. Revenue at its gaming division, which operates bingo and casino platforms, grew 53% however in regulated markets. Despite the tough climate, the firm awarded chairman Alan Jackson a £66,000-a-year secret pay rise, drawing criticism from shareholders.

Sales up at Brewdog

Craft brewer Brewdog has seen record sales growth as it continues to expand into the US, with a 55% increase in revenues to £78m during the six months to June 30. Sales from its pubs and bars rose 92% to £10m.

MEDIA & ENTERTAINMENT

Comcast extends Sky offer deadline

Sky shareholders now have until September 12 to accept Comcast's £26bn offer to buyout the company. Sky's shareholder base is currently waiting on 21st Century Fox to improve its £24.5bn bid, and both Fox and Comcast have until September 22 to potentially raise their offers.

REAL ESTATE

Asians lead London property splurge

Overseas investors have spent almost £7bn on London property this year, according to Knight Frank, with £5.6bn spent in the capital in the first half of the year, led by buyers in Hong Kong. The figures came as Goldman Sachs revealed the £1.2bn sale of its Plumtree Court scheme in London.

RETAIL

Sainsbury’s and Asda merger investigated

The Competition and Markets Authority has launched a formal investigation into whether a proposed £12bn merger between Sainsbury's and Asda could affect consumers and small suppliers. This follows business secretary Greg Clark’s writing to the regulator earlier this year urging it to consider the "possible impact on the supply chain".

Earnings estimates fall at Boohoo

Online fashion retailer Boohoo saw its shares fall by as much as 6.7% as Deutsche Bank reduced its earnings estimate for the first half of the year.

ECONOMY

Sterling down on no-deal Brexit report

Sterling fell 0.6% against the dollar, to $1.2835, and was down 0.3% against the euro, at €1.1103, after Brexit secretary Dominic Raab unveiled contingency plans for a no-deal Brexit.

ECB has strategy to wind down easing in eurozone

The European Central Bank believes the eurozone can be weaned off some of its crisis-era support without the region's economy being endangered, according to minutes from a recent meeting.

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