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Daily News Roundup: Friday, 27th August 2021

Posted: 27th August 2021

BANKING

Barclays injects record £300m into India unit

Barclays has announced plans to invest almost £300m in its Indian investment banking business. Jaideep Khanna, Head of Barclays, Asia Pacific and Country CEO, India, said “As economic activity gathers momentum, there is increased demand for capital from clients. We are well placed to support their objectives and remain committed to working closely with them.”

Strategic review leads Virgin to close fundraising platform

Virgin Money is to close its fundraising arm at the end of November. Sources told Sky News that the lender decided that running the JustGiving platform was no longer sustainable because it was costing the bank millions of pounds each year to operate.

INTERNATIONAL

TCS raises guidance after 57% profit leap

Russian lender TCS Group Holding on Thursday reported a 57% rise in Q2 net profit year on year to 16.1bn roubles ($217.28m) while total revenue increased by 37% to 65bn roubles. The group, which runs Russia's largest online bank, Tinkoff, raised its 2021 profit guidance to at least 60bn roubles from 55bn roubles.

Executive who helped shape post-crisis Bank of America to retire

Bank of America’s chief operating officer Tom Montag is to leave the bank at the end of the year, along with vice-chair Anne Finucane. Succession plans are set to be announced in the coming weeks.

Lombard Odier cautiously optimistic

Lombard Odier saw net profit increase by 20% year-on-year in the first six months through June, leading the Swiss private bank to post a cautiously optimistic outlook for the remainder of 2021.

AVIATION

BA reveals budget airline plan

British Airways is considering plans for a short-haul flight operation at Gatwick Airport. The new budget unit would take on easyJet and Ryanair but could face a battle with unions if staff are put on less generous contracts.

FINANCIAL SERVICES

FCA warns P2P lenders over lack of plans for orderly closure

The Financial Conduct Authority has written to the boards of peer-to-peer lenders warning that none of the platforms it reviewed had “adequately identified the triggers that might realistically allow for a solvent wind-down to be invoked”. The companies were warned that if they did not improve their contingency plans for orderly closure, they could be banned from writing new loans. Uneven interpretation of and compliance with disclosure requirements related to loan forbearance was also identified, with platforms "reporting loan status and performance in different ways to lenders, markets and the FCA". Another issue was a lack of clarity for investors about platform fees and charges and the impact of these fees on the amount recovered from defaulted loans. The intervention follows a series of chaotic collapses in the sector which has led to the loss of tens of millions of pounds worth of retail investors’ money.

True Potential considers takeover offers

True Potential’s CEO Daniel Harrison has confirmed it is considering offers to buy the company but has said it has not put itself up for sale. Harrison said: “It almost sounds flippant but I would love to double the size of True Potential in the next couple of years. If we were to partner with anyone, it would have to help support that goal.” He added that True Potential is open to different options, such as a deal with a private equity firm or a deal involving floating on the stock market.

DWS shares slide after greenwashing claims prompt BaFin investigation

German asset manager DWS saw its shares fall more than 13% on Thursday following news the group is being investigated by US and German authorities over claims that it misled clients about its sustainable investing efforts.

ETF fee cuts fail to win over European investors

Exchange traded fund providers have not seen growth in market share in Europe despite steep cuts in fees, according to Matteo Andreetto, a senior executive at State Street Global Advisors.

LEISURE & HOSPITALITY

Pubs expected to serve '6m fewer' bank holiday pints

The British Beer & Pub Association (BBPA) has estimated that 6m fewer pints will be served by pubs this bank holiday than during the same period in 2019. The BBPA said its members expect to lose out on £25m in revenue from pint sales, down 10% on revenue for the same bank holiday in 2019 before Covid arrived.

PureGym works out IPO to fund global expansion

The UK’s largest gym chain, PureGym, has appointed Morgan Stanley and Barclays to advise on a potential IPO to back global expansion, with RBC, Jefferies and Berenberg lined up as bookrunners.

MANUFACTURING

Volex buys US rival defence supplier

Volex, the British manufacturer chaired by banking dynasty member Nat Rothschild, has bought California-based Irvine Electronics which supplies critical components to the US military.  

MEDIA & ENTERTAINMENT

Chinese broadcaster fined for 'serious breaches'

The UK broadcasting regulator has fined Star China Media £200,000 for "serious breaches" of its rules on fairness and privacy. Ofcom revoked the licence held by the company for the UK broadcast of CCTV, which is now called China Global Television Network (CGTN) in February after finding the channel was "ultimately controlled by the Chinese Communist Party", violating rules that require organisations to exercise editorial oversight and not be controlled by political bodies. Two penalties of £100,000 were issued for separate incidents of unfair treatment of individuals.

Axel Springer buys Politico for $1bn

German media group Axel Springer has bought Politico for a reported $1bn (£730m). Axel Springer was taken private in January last year in a KKR-led deal that valued the German company at €6.8bn. Meanwhile, Forbes has agreed to go public via a merger with a special purpose acquisition company that values the US business news outlet at $630m.

PROFESSIONAL SERVICES

Hays upbeat amid ‘dramatic’ jobs recovery

London-listed recruitment company Hays has forecast profits ahead of pre-pandemic levels following a “dramatic” recovery in the global jobs market. Its final-quarter fees jumped by nearly 40%, with fees in June reaching the highest levels seen since the start of the pandemic. Alistair Cox, chief executive, said: “Overall, the strength of the recovery has been dramatic. We now see a clear route back to, and then exceeding, pre-pandemic levels of profit, faster than we envisaged even six months ago.”

REAL ESTATE

House prices in Scotland expected to rise faster than anticipated

The average cost of buying a house in Scotland is predicted to reach £246,000 by 2027, according to the Scottish Fiscal Commission – far more that the £214,000 previously forecast. It has revised its estimates upwards amid strong demand and an expectation that wages will rise by 3-5% annually over the coming years.

RETAIL

EG Group profits from lifting of Covid restrictions

EG Group has reported a 57.7% rise in second-quarter revenue to $6.5bn as lockdown restrictions eased further. The company, which recently acquired Asda and Leon Restaurants, said earnings before interest, tax and other charges had risen by 23.7% to $380m in the three months to the end of June.

Watches of Switzerland appoints Rank Group's finance chief

Rank Group, the owner of Mecca Bingo and Grosvenor Casino, has confirmed its chief financial officer Bill Floydd is to join Watches of Switzerland to take up the same role.

ECONOMY

Quarter of all food and hospitality suffer low stock levels

Figures from the Office for National Statistics show 27% of food and hospitality firms have been hit by low stock levels in recent weeks. Low stock levels were also reported by 23% of manufacturers and 25% of firms in the wholesale and retail trade, repair of motor vehicles and motorcycles industry. The latest ONS fortnightly business poll revealed that firms across the UK have been struggling to get hold of materials, goods and services.

OTHER

Why haven’t UK banker bonus caps been scrapped post-Brexit?

The FT’s Philip Stafford suggests the reason why the Government hasn’t scrapped EU bank bonus cap rules is because it considers the move bad optics, especially for those voters who switched from Labour.

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