RBS takes £900m mis-selling hit
A late surge in complaints about payment protection insurance forced Royal Bank of Scotland to set aside £900m, leading to a quarterly pre-tax loss of £8m. Despite a “particularly challenging quarter” for investment banking unit NatWest Markets, chief financial officer Katie Murray said the firm displayed a “solid underlying performance in a tough operating environment”. Total revenues were down 20% year on year to £2.9bn, while net interest income fell 7% to £2bn. The FT’s Lombard suggests when Alison Rose takes over as CEO next month “her decisions have to include: balancing risk and growth in UK personal lending, and fixing, trimming or selling the capital-intensive NatWest Markets.”
Barclays reverses decision on Post Office withdrawals
Barclays has rowed back on plans to stop customers from making cash withdrawals from the Post Office just two weeks after it announced the move. The bank now says it will continue to allow customers to use their debit cards to take cash out over Post Office counters "for the next three years". In a statement Barclays said: "Ultimately we have been persuaded to rethink our proposals by the argument that our full participation in the Post Office Banking Framework is crucial at this point to the viability of the Post Office network."
Security fears lead banks to remove apps from Google Play store
A security flaw relating to the fingerprint scanner on some Samsung mobile phones has put mobile banking customers at risk, banks have said. NatWest, HSBC, Nationwide, Santander and Bank of Scotland, among others, have temporarily removed their apps from the Google Play store – which is available on Samsung phones – until the issue has been rectified. The issue reportedly revolves around screen protectors for Samsung S10 phones, which enable the devices to be opened with any finger.
Rothschild agrees deal for Livingstone’s UK business
Rothschild & Co has agreed to buy Livingstone’s UK business, in its latest move to expand its City operations in the wake of Mifid II and as Brexit approaches. Livingstone partner Patrick Groarke tells the FT’s Lombard that one reason for the move is that growth companies in the UK are increasingly private and growing through private deal-making, rather than joining public markets.
Boden hits out at big banks
Anne Boden has criticised the “unfair” practices of traditional banks as the Starling bank boss called for them to be “driven out” of the industry. Speaking at The Telegraph's “Tech For Good” event, Ms Boden said: "Starling has created a movement of people and a movement of companies that are changing the industry, and the rest of the incumbents are reacting by making banking fairer for everyone.”
Barclays warns Metro Bank will be loss-making for foreseeable future
After Metro Bank reported underlying losses before tax of £3.6m for the first nine months of the year, with a major accountancy error resulting in the drop from £25.1m last year, Barclays analysts said profits are unlikely to return for at least 12 months, citing a “challenged medium term operating outlook”.
Mortgage approvals steady in September
Mortgage approvals fell by 0.5% during September, reflecting broad stability in demand for credit from British households, according to UK Finance. The figures are 9% higher than a year ago. The number of approvals for remortgaging rose to the highest level since November 2017.
BlackRock and Vanguard push for clearing reforms
BlackRock and Vanguard have joined calls for clearing houses to build higher safety buffers and tougher standards to prevent trading losses. The FT’s Gillian Tett comments on the demands for central counterparty clearing groups (CCPs) to be reformed, seeking better default buffers, disclosure and corporate governance.
Mario Draghi ends ECB tenure
Mario Draghi issued a warning for the eurozone economy as he bowed out as president of the European Central Bank. Draghi said the ECB was concerned that the economy of the 19-member currency bloc, which has slowed this year along with much of the global economy, faced “protracted weakness” going into 2020. In what the ECB chief termed a unanimous decision, policymakers kept monetary stimulus unchanged on Thursday, six weeks after cutting interest rates and restarting bond purchases. Mr Draghi’s successor Christine Lagarde takes over late next week.
‘Unbridled global expansion’ over for banks, says Deutsche US boss
Christiana Riley, the new head of Deutsche Bank’s US operations, has said peak globalisation is in the past as she predicted international banks may become more regional in nature.
J. Safra Sarasin probed over corruption links
Swiss federal prosecutors have opened an investigation into private bank J. Safra Sarasin as part of a corruption probe surrounding Brazilian state oil company Petrobras and construction firm Odebrecht.
Citigroup’s consumer banking chief to leave
Stephen Bird, Citigroup’s head of consumer banking, is set to be replaced by Jane Fraser, currently chief executive of Citi’s Latin American operations as part of a leadership shake-up.
Nissan ponders sale of Sunderland and Spanish plants
Nissan is considering the sale of its factories in the UK and Spain as the Japanese carmaker looks to cut 12,500 jobs worldwide. Professor David Bailey, a car industry expert at Birmingham University, said: “With Nissan’s low profits, absolutely everything is being considered at the moment. Selling its European plants could definitely be an option.”
Volvo Cars warns of margin squeeze even as profits jump
Volvo Cars has announced net income of SKr2.4bn (£190m) for the three months to September, and a 14% rise in revenue to SKr64.8bn, with car sales up 7.7% to 166,878.
Norwegian Air enter in joint venture with Chinese bank
Norwegian Air Shuttle has agreed to a joint venture with a subsidiary of China Construction Bank in a deal which will add 27 Airbus aircraft to the airline’s fleet, with the Chinese firm to own 70% of the venture.
Schroders appointed by Woodford Patient Capital to manage fund
Schroders has been appointed by Woodford Patient Capital Trust to replace stockpicker Neil Woodford as manager of its fund which is to renamed Schroder UK Public Private Trust. Susan Searle, Patient Capital's chairman, cited Schroders’ "careful and considered long-term approach to investment, backed by its substantial research resources in both public and private assets". Schroders will not receive a management fee for three months after its appointment and will then be paid 1% of the market value of the fund up to £600m, as well as a further 0.8% on amounts exceeding that. The firm will also become eligible for a 15% performance fee if net asset value per share exceeds 77p per share, from 2022. Alan Brierley, an analyst at Investec, commented: "Schroders will inherit a highly geared, highly illiquid and concentrated portfolio, predominantly consisting of venture capital investments."
FCA deserved criticism over consumer scandals, admits Bailey
Andrew Bailey has conceded criticism of the FCA over recent personal finance scandals was justified but argued the regulator is not required to prevent risk taking. The watchdog has faced criticism for its response to the collapse of London Capital & Finance and more recently the collapse of former star fund manager Neil Woodford’s investment empire. Mr Bailey pledged to invest more in the FCA’s data analytics team to help spot problems sooner.
Customers and assets under administration up at AJ Bell
AJ Bell has issued a trading update reporting customer numbers had increased 17% during the year to 30 September, reaching 232,066, while total assets under administration were up 13% to £52.3bn. Chief executive Andy Bell commented: “Our first full year trading update since the initial public offering demonstrates the resilience of our business model.”
AstraZeneca sales guidance up on Chinese demand
AstraZeneca is seeing an increase in Chinese demand, with that and new cancer drugs driving a 16% increase in sales to $6.1bn (£4.7bn) in the three months to October. Pascal Soriot, chief executive, noted: “The performance reinforces our confidence in delivering sustainable earnings growth.”
Four Seasons future thrown into doubt
A £350m deal to sell 185 Four Seasons care homes to H/2 Capital collapsed on Thursday night leaving the future of Britain’s second-largest care home provider in doubt.
New WeWork chairman promises comeback
Marcelo Claure, new chairman of WeWork has said there is “zero risk of the company going bankrupt” after a $9.5bn (£7.3bn) bail-out package from SoftBank was accepted. The firm’s valuation was reduced to $8bn from $47bn after the financing was accepted, with WeWork’s decision to pull out of a planned float resulting in the loss of a $6bn loan agreed with banks that hinged on its going public by the end of the year.
UK rises up World Bank business rankings
The UK has climbed to eighth place in the World Bank’s annual rankings, up from ninth a year ago. The report tracks regulations, administration and barriers to establishing and running businesses. The UK has made it easier to start a business, with it now quicker and cheaper for a business to get connected to electricity supply, for example. However, business costs have increased due to a more onerous pensions regime and the extra time required to administer taxes. International trade secretary Liz Truss said the report showed the UK is one of the best places to do business in the world and was why Britain continued to be the number one destination for attracting foreign direct investment in Europe, and third globally after the USA and China.