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Daily News Roundup: Friday, 25th January 2019

Posted: 25th January 2019


Santander drops out of race for RBS business banking cash

Santander has pulled out of the race for a chunk of a £775m cash pool being stumped up by the Royal Bank of Scotland. The Spanish-owned bank was preparing to bid for some of the money last year but has now decided not to throw its name into the ring due to "political uncertainty" in the UK. One insider said the lender would not put in a bid for the £425m being distributed by RBS to encourage competition in business banking because it would leave it with little wiggle room "if circumstances alter". However, Santander is still bidding for the remaining pot of cash being made available by RBS - a £350m competition scheme aimed at encouraging RBS customers to switch banks.

Barclays was 'dead' without help of Qatari money

Jurors have heard that Barclays' bosses were so desperate for cash at the height of the financial crisis that they felt they were "basically dead" without the money from Qatari investors. Opening the second day of the trial into four ex-Barclays executives, prosecutors said the defendants kept extra commission paid to Qatar in return for £4bn in financial support under wraps to avoid creating an image of "desperation and panic" at the bank during the crash.

Metro blunder prompts shake-up call

The ICAEW has called for an overhaul of the way lenders assess their loan books after an error that wiped more than £800m off the value of Metro Bank in one day. Metro’s shares fell by 39% on Wednesday when it disclosed it had mistakenly assigned risk weightings that were too low on some commercial property and buy-to-let loans. The ICAEW said the decisions that banks make about how much risk they should assign to loans should be subject to independent scrutiny by external auditors.

Scammers target NatWest and RBS customers

NatWest and Royal Bank of Scotland customers are the main targets of fraudsters who have stolen £350,000 from victims. In 18 of the 19 cases where the scammers have pretended to be a bank, victims were customers of NatWest or RBS. Consumer watchdog Which? said: "While this is only a snapshot, we're concerned it points to an unusual level of fraud activity aimed at these customers."

Bramson yet to reveal Barclays strategy

Barclays chief executive Jes Staley says activist investor Edward Bramson has still not laid out his strategy for the bank. Mr Staley also said he had a "reasonable engagement" with Mr Bramson.

Coutts banker sues over sex discrimination

A female banker at Coutts is suing the private bank for age and sex discrimination, claiming she failed to gain promotion because of “unspoken sexism”.

Goldman warns UK investment could take Brexit hit

The chief executive of Goldman Sachs, David Solomon, has said that a "difficult" Brexit will negatively affect its investment plans in the UK.


RLAM objects to Apollo’s RPC takeover

A second big investor in RPC Group has protested against the £3.3bn takeover of the packaging business by Apollo Global Management. Royal London Asset Management said it was “very surprised and somewhat disappointed” with the 782p-per-share cash offer from Apollo that RPC recommended to shareholders earlier this week.


Fed may not be able to save world finance again

The International Monetary Fund has warned another deep recession could cause the system of global cooperation that saved world finance in the 2008 crisis to break down. David Lipton, the IMF’s second-highest official, said it is unclear whether the US Federal Reserve would again be able to extend $1trn of dollar "swap lines" to fellow central banks.

US House questions Deutsche Bank over Trump links

The US House of Representatives has sent questions to Deutsche Bank as part of an investigation into the bank’s longstanding business relationship with President Donald Trump. Separately, Deutsche chief executive Christian Sewing has warned that global trade fears are pushing business leaders to postpone or even re-evaluate investment decisions.

Cerberus sinks its teeth into German banking

Cerberus Capital Management is competing with US buyout rivals Centerbridge and Apollo to secure a minority stake in NordLB, the ailing state-owned Landesbank based in Hanover.

ECB warns eurozone at risk of further slowdown

The ECB has warned that a slowdown in the eurozone economy is showing signs of becoming long-lasting because of global trade tensions, Brexit and financial market volatility.

Intercontinental Exchange working on interest rate benchmark to replace Libor

Intercontinental Exchange is planning to launch an alternative rate to replace Libor, according to a white paper published yesterday.


JLR extends shutdown

Jaguar Land Rover is to extend its annual April shutdown in car production because of uncertainties around Brexit. The carmaker will be idle for an extra week because of fears of disruption at its car and engine plants at Liverpool, Birmingham and Wolverhampton.


No-deal could see Airbus investments re-directed

Airbus has warned that it could move wing-building out of the UK in the future if there is a no-deal Brexit. Backed by Business Minister Richard Harrington, who said Airbus was correct to warn of the dangers of a no-deal scenario, the company’s chief executive Tom Enders said it was a "disgrace" that firms could still not plan for Brexit.

Flybe gets £10m cash injection

Flybe has received the first £10m of its credit facility as part of its takeover by the Virgin Atlantic and Stobart Group consortium.


MPs examine Brexit’s impact on financial services

The Treasury select committee has begun an investigation into the impact Brexit could have on financial services. Nicky Morgan, chair of the committee, said a key area of focus will be on whether the City should "align closely with EU financial rules, or to forgo financial services trade with the European Union". She also said the UK should be able to strike financial services “passporting” deals beyond Europe to offset lost access to the EU single market. Miles Celic, head of TheCityUK, warned there is "no appetite to take a bulldozer" to banking rules after Brexit. And UK Finance chief Stephen Jones said it is crucial that the Government, Parliament, regulators and the industry work closely together to preserve the UK's position as a world-leading financial centre.


UK biotech doubles investment but offers few IPOs

Investors ploughed £2.2bn into the UK biotech sector in 2018, up from about £1.2bn the year before. However, just five companies went public in 2018.


M&G acquires site for new £203m Paddington hotel

M&G Investments has acquired the long leasehold interest on a site in Paddington, West London, from an unnamed vendor, and will invest in the construction of a £203m, 620-bedroom hotel.


Manufacturers increase stockpiling

Research from Lloyds Bank shows UK manufacturers have increased stockpiling efforts over recent months due to the threat of shortages and disruption posed by Brexit. The UK Manufacturing PMI Index for purchases of stocks rose to 53.7 for the month of December, from 51.1 in the previous month.


DMGT's digital offering offsets print declines

Daily Mail and General Trust (DMGT) is maintaining its full-year guidance on the back of revenue rises in its online and TV offerings. As circulation revenue fell 3%, advertising revenues for Mail Online increased by 11%.


Gordon Dadds raises quick £11m

Gordon Dadds has raised £11.5m through a surprise placing of new shares that led to its stock price falling by almost 25%. The law firm closed the “oversubscribed” placing after four hours, having raised the cash from institutional investors.


Wealthy buyers snap up London bargains

Sales of homes priced above £15m rose by 43% last year, according to Savills. In total 73 properties in that price bracket changed hands, with a total value of almost £2bn. The estate agent found that US dollar buyers purchasing so-called “prime” central London properties costing £5m or more can now expect to pay 36% less than in June 2014.


Household spend at highest level since 2005

The amount households spent each week in 2018 climbed to £572.60, the highest level since 2005, according to the latest Family Spending Survey from the ONS. Households' saving ratio fell to 3.9%, the lowest seen since records of that measure began in 1963.


Carney could stay on if Brexit extended

Mark Carney has indicated that he could stay on as governor of the Bank of England beyond January 2020 if Article 50 is pushed back beyond the end of February. Mr Carney has also said interest rates will not automatically go up or down if Britain leaves the EU without a deal.

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