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Daily News Roundup: Friday, 24th December 2021

Posted: 24th December 2021

BANKING

Amazon partners with Barclays to launch BNPL in Britain

Amazon customers will have the option of using a buy now, pay later service after the online retailer teamed up with Barclays to launch a new flexible payment method. Instalments by Barclays will enable Amazon shoppers to finance purchases of £100 of more via their account. “The Barclays deal is like having an online Amazon store card with a pre-agreed interest rate and credit limit agreed at the outset,” said Andrew Hagger, personal finance expert and founder of Moneycomms. “We may see similar tie-ups next year as BNPL seems to be becoming an increasing threat to established credit card businesses.”

Monzo Bank goes down, Halifax and Lloyds see outages

Several banks were having technical difficulties yesterday with customers at Monzo, Halifax and Lloyds experiencing issues accessing services due to outages. Lloyds users were unable to log into their online accounts for around an hour. All difficulties appear to have been resolved.

INTERNATIONAL

HSBC buys India L&T's mutual fund arm

HSBC is to acquire the investment management business of India's L&T Finance for $425m. HSBC will merge the business with its existing India wealth management arm, which has assets of $1.6bn. "Combining LTIM with our existing Indian asset management business gives us the scale, reach and capabilities to capture some of the 15-20% annual asset management market growth expected in India over the next five years," HSBC CEO Noel Quinn said.

BBVA's custody business attracts offers

BNP Paribas and State Street Corp have both made indicative bids for the custody business of Spanish lender BBVA. The sale of the unit was launched during the summer and BBVA working to draw a shortlist of bidders to be admitted to the final stages of the auction early next year. The sale has also drawn interest from Credit Agricole, Royal Bank of Canada and BNY Mellon.

Europe’s over-complex bank rules increase risk, watchdogs warn

Supervisory chiefs in Denmark and Norway have warned that the highly prescriptive nature of Europe’s banking rules make it harder for regulators to see the real risks building in their financial systems.

CONSTRUCTION

Balfour Beatty admits to defrauding US military

Balfour Beatty has admitted to defrauding the US military following a two-and-half year investigation. Britain’s largest construction company has for almost a decade been the landlord and maintenance provider to dozens of military complexes around the US housing tens of thousands of army, navy and air force personnel. Special agents of the armed forces and the FBI accused Balfour Beatty of misappropriating funds linked to those contracts, which the company admitted to on Wednesday. It has agreed to pay back $31.8m in restitution and has further agreed to pay $33.6m in penalties. The FBI and one of America’s top federal prosecutors said the company had been greedy and that fraud and lying in the division in question was widespread.

FINANCIAL SERVICES

Third Point fund chair quits after ‘personal threats’ in escalating activist spat

Steve Bates has resigned as chair of Third Point Investors, a £650m closed-ended feeder-fund to Daniel Loeb’s Third Point hedge fund, due to an escalating fight with rebel investors. Bates resigned after pressure in private meetings with representatives of Asset Value Investors and Staude Capital with one of the activists making personal threats against Bates, according to Third Point. Loeb said Bates’s resignation was a “loss for all shareholders” and the “behaviour by these so-called ‘activists’ is a stain on institutional investors who attempt to engage constructively with boards and management teams”.

ESG-focused funds enjoy record inflows

Funds focused on environmental, social and corporate governance (ESG) issues saw record inflows in 2021 as investors increasingly pushed for change. Some $649bn poured into ESG-focused funds worldwide through November 30th, up from the $542bn and $285bn that flowed into these funds in 2020 and 2019, respectively, according to the latest data from Refinitiv Lipper. Catherine Winner, global head of stewardship at Goldman Sachs' asset management division, said investors are no longer satisfied with companies delivering shareholder returns without doing more for the environment and society. "It's not just about shareholders; it's about all stakeholders" she said.

Hanbury cements reputation as top fund manager

It is understood that James Hanbury has been paid £15.6m for his work at Odey Asset Management this year, giving the 42-year-old fund manager a bigger slice of the profits than founder Crispin Odey. The firm’s profits jumped to £39.7m in the 12 months to April 5, from £8.3m a year earlier.

Shake-up of UK motor and home insurance promises £4bn in savings

New pricing rules for the personal insurance market take effect next month and the Financial Conduct Authority estimates the clamp down on price walking could save customers £4bn over a decade.  

HEALTHCARE

Ministers prefer bank’s Omicron modelling

Lawmakers in the UK are looking to Covid modelling provided by JP Morgan rather than the gloomier forecasts coming out of SAGE - the Scientific Advisory Group for Emergencies. The investment bank’s analysis is thought to be more accurate while Cabinet ministers are said to have grown frustrated with the narrow and pessimistic views coming out of the Government's public health advisers.

LEISURE & HOSPITALITY

Flutter buys Italian National Lottery contender

Flutter Entertainment has agreed to buy Sisal from CVC Partners in a deal worth £1.6bn. The Italian group is one of four operators in the running for the next National Lottery licence, but Flutter boss Peter Jackson insisted Sisal’s bid was not part of the rationale for the deal.

MEDIA & ENTERTAINMENT

Meta to challenge CMA over Giphy order

A decision last month by the Competition and Markets Authority to block Facebook’s acquisition of Giphy is being challenged by Meta, the owner of the social media giant. The watchdog found the deal could harm the social network's rivals and allow it to control more of the digital advertising market. In its appeal, Meta stated: "The decision to block the deal is wrong on the law and the facts, and the evidence does not support the CMA's conclusions or remedy." Observers say CMA’s decision betrayed a determination on the part of chief Andrea Coscelli to push the boundaries of the regulator’s jurisdiction and reasoning as the CMA sought to rectify a historic under-enforcement in digital markets.

RETAIL

Selfridges sold to Thai and Austrian buyers

The Selfridges department store chain has been sold to Central Group, a Thai conglomerate, and the Austrian property group Signa Holding for just under £4bn. The price tag is understood to be slightly less than the sum sought by the Weston family, which has owned the retailer since 2003.

SPORT

Kirchner pulls out of bid to buy Derby

American businessman Chris Kirchner has pulled out of the race to buy Derby County after administrators missed a deadline to accept his bid. Kirchner warned that unless a buyer was found soon the club’s problems would only get worse. Kirchner reserved most of his criticism for former Derby boss Mel Morris, who walked away with the club badly in debt.

ECONOMY

Omicron and fresh restrictions weaken consumer confidence

Consumer confidence has been weakened by the Government’s reaction to Omicron, leading to restaurants suffering their worst week since the middle of May. The number of seated diners fell to 88% of the level in the same week in 2019 following advice to work from home where possible. Transactions at Pret A Manger locations in the City fell 29 percentage points to the lowest level since the week ending September 2 while retail shopper numbers in the week to December 18 were down 81%, according to data from Springboard. Andrew Goodwin, chief UK economist at Oxford Economics, said that although the Government had opted to defer a decision on introducing further restrictions until after Christmas, “it seems likely that a mix of greater consumer caution and reduced mobility will ensure that the UK’s GDP falls in December”.

OTHER

Former TSB chair brought in to oversee shake-up of NHS England

Richard Meddings, a former chairman of TSB Bank, is the Government’s preferred candidate to become the new chairman of NHS England. A non-executive director at the Treasury and at Credit Suisse, Mr Meddings is understood to have personally impressed Sajid Javid during the selection process.

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