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Daily News Roundup: Friday, 27th September 2019

Posted: 27th September 2019

BANKING

Bank scammers stealing £1m a day

New figures from UK Finance show bank scam victims lost £207.5m in the first six months of this year to authorised push payment fraud – more than £1.1m a day. A total of 57,549 cases were recorded by banks – a 69% rise compared with the same period in 2018. However, UK Finance said the figures year-on-year were not directly comparable because more banks are reporting fraud figures. Katy Worobec, managing director of economic crime at UK Finance, said: “A new voluntary code was introduced in May that has significantly improved consumer protections from authorised push payment fraud, with signatory firms committed to reimbursing victims providing they have met certain standards. However, criminals are continuing to exploit vulnerabilities outside the financial sector to obtain customers’ data that is then used to commit fraud.”

Barclays bows to pressure adding two big names to board

Barclays has hired Dawn Fitzpatrick, the investment chief for billionaire George Soros’ fund management firm who oversees assets worth about $25bn, and Mohamed El-Erian, the chief economic adviser at Allianz and former boss of Pimco, as non-executive directors. The move by chairman Nigel Higgins comes after pressure from investors for change to the board. Separately, Barclays is advising its clients to shift to fixed income investments such as bonds and move out of stocks and shares.

PRIVATE EQUITY

Struggling Citymapper seeks new funding

Citymapper’s losses have risen to £21m as the travel start-up struggles to monetise its transport app. The firm has raised around $50m (£40m) from investors including the venture capital funds Index Ventures and Balderton Capital. The business is now seeking additional funding.

INTERNATIONAL

ABN Amro under investigation for money laundering

Dutch lender ABN Amro is being investigated by prosecutors in the Netherlands over potential money laundering and financing of terrorism. Prosecutors told Reuters that the bank is suspected of reporting suspicious transactions too late, or not at all. They are also looking into whether the bank properly investigated its clients and held on to suspicious customers for too long. The FT’s Lex says the latest case points to “systemic weaknesses” in Nordic banks.

Banks snap up $60bn in two-week loans from New York Fed

The $60bn of two-week loans on offer from the Fed were keenly taken on by banks on Thursday. The latest cash injection comes nearly two weeks after the repo market froze. The FT suggests the turmoil in the repo market raises concerns about the operations of the dollar funding market and the US banking system.

‘German problem’ at ECB exposed by Lautenschläger departure

The FT says the departure of Sabine Lautenschläger from the European Central Bank is the latest example of German dissatisfaction with the ECB’s loose monetary policy. Ms Lautenschläger, an executive member of the board representing Germany, resigned just over halfway through her eight-year term. The Telegraph says the move is a worrying sign for incoming ECB head Christine Lagarde.

Wells Fargo acting chief Parker likely to get job by default

Wells Fargo's interim boss Allen Parker, the bank's former general counsel, is likely to get the top job. Below-par pay and regulatory pressure appear to be putting applicants off.

Brexit prompts ESM to switch out of English bond law

The European Stability Mechanism (ESM), which provides loans to struggling EU member states, is to cease issuing bonds governed by English law - moving to Luxembourg law on October 1.

China’s shadow banking industry roars back

After regulators scaled back their 2018 crackdown on China’s $8.4tn shadow banking industry, it has made an unprecedented return in the second and third quarters of 2019.

AUTOMOTIVE

Jaguar Land Rover to halt production for a week in November

All of Jaguar Land Rover’s plants will be shut down for a week in November as the car maker tries to mitigate the impact of Brexit. CEO Ralf Speth said the requirement for just-in-time supplies meant he was forced to close the plants. He was speaking at the opening of the company’s £500m engineering and design centre in Gaydon, Warwickshire. Speth said the new hub would make processes leaner and said it showed the company was “not just participating in the development of the industry but actively shaping it.”

AVIATION

Pilot strikes cost IAG £120m

British Airways (BA) owner International Airlines Group (IAG) has warned that adjusted operating profit will fall €215m (£190m) below last year’s €3.49bn, after pilot strikes earlier this month lead to a total of 2,325 flights being cancelled. IAG estimates that Balpa’s strike action cost it €137m (£121m), while threatened strikes by Heathrow Airport staff cost BA €33m.

FINANCIAL SERVICES

P2P lenders given final warning by regulator

The Financial Conduct Authority has warned Britain’s peer-to-peer lending industry to “act now” to clean up poor practices or face a “strong and rapid” crackdown. In a letter sent to 65 firms the FCA highlighted problems including weaknesses in disclosure of information to clients, opaque charging structures, inadequate record keeping and suspect due diligence. Investors were not as aware of risks as they should be and platforms had changed their business models without informing the regulator; taking “additional, opportunistic risks” in areas beyond their expertise.

Rothesay Life signs UK’s biggest ever pension transfer deal

Rothesay Life has taken on the huge £4.7bn GEC pension scheme in the UK’s biggest ever pension transfer deal. Last month Rothesay raised £900m of fresh capital from investors to back new deals. Before the latest agreement, it had signed £4.4bn of deals so far this year. Telecoms firm Telent said the deal would secure payments to 39,000 members of the GEC 1972 plan, many of whom were hired by GEC and Marconi – Telent’s previous incarnations.

Fresh writedown causes Woodford Patient Capital share slump

The share price of Woodford Patient Capital Trust fell nearly 7% yesterday after the board announced three writedowns would cut the fund’s net asset value by 3.1p a share. Neil Woodford’s listed fund suffered a devaluation to another unnamed holding earlier this month. In its statement, WPCT said the devaluations “reflect the challenging fundraising environment for these businesses which may impact their ability to or the level at which they may be able to raise capital in the near-term.”

Shore Capital shares tank over proposed AIM de-listing

Shares in Shore Capital fell almost 30% on Thursday morning after the investment group indicated that it was seeking to remove its shares from London’s AIM market over a lack of liquidity and the “cost and management time” associated with maintaining the listing. In interim results, Shore reported a 46% drop in profit before tax, which fell to £1.3m, while reorganisation costs of £1.4m related to its acquisition of investment group Stockdale Securities hit hard.

Moneyfarm teams up with Poste Italiane

Digital wealth manager Moneyfarm has raised £36m in a series C funding round led by Poste Italiane and Allianz Asset Management, among others. A partnership with Poste Italiane, which manages over €514bn across its financial and insurance services, will integrate Moneyfarm’s services with its own digital platform. Moneyfarm posted revenue of £1.6m for 2018 - an increase of over 61%, while the group’s total AUM increased 83% year on year to £734m.

Gold app Glint collapses just months after fundraising

UK start-up Glint has collapsed in a blow to backers including MP Steve Baker and Dave Mortlock, global head of investment banking at Berenberg. The Glint app allowed customers to swap currencies into gold. They could then spend it via a debit card.

Hedge funds join the hunt for the ESG ‘factor’

Laurence Fletcher explores how funds are struggling to identify upcoming firms with "complementary" solid environmental, social and governance credentials amid a dearth of relevant data.

Windsor secures CFO role at Aviva

Jason Windsor has been formally appointed as chief financial officer of Aviva. He started the role on an interim basis in July.

LEISURE & HOSPITALITY

Cost of Thomas Cook collapse becomes clearer

Thomas Cook’s collapse could see Barclays, Morgan Stanley, UniCredit, Credit Suisse and RBS face writedowns of up to £1.8bn from the failure. The travel firm’s failure could land the government and the travel industry's insurance scheme with a bill of more than £500m, according to official estimates.

MEDIA & ENTERTAINMENT

Food market success boosts Time Out

Time Out's three new food markets took revenue up to £24.7m in the six months to the end of June, up 10% on last year. Pre-tax loss at the Aim-listed media firm narrowed to £12m, on the back of new openings in Miami, New York and Boston, ahead of plans to open new markets in the former Eurostar tunnels at Waterloo station and at a new site in Spitalfields.

Weak print sales hurt Pearson profit

Pearson’s share price fell by over 14% yesterday as it warned that profits will fall to the bottom of its guidance range this year. Adjusted operating profit will hit £590m, far off the £640m it had hoped for.

PROFESSIONAL SERVICES

Baker McKenzie appoints Hong Kong partner as new chair

Baker McKenzie has appointed Hong Kong managing partner Milton Cheng as its new chair, who takes the helm following the death of Paul Rawlinson.

REAL ESTATE

Softbank mulling extra $1bn in WeWork

Softbank is planning to invest an extra $1bn in WeWork. The heavyweight Japanese investor has already agreed to put $1.5bn into the flexible office co-working start-up, which is currently in talks for a $3bn to $4bn loan from a consortium of banks.

RETAIL

Ted Baker poaches Debenhams' finance chief

Debenhams’ finance chief Rachel Osborne is leaving after only a year to join Ted Baker. Debenhams’ Mike Hazell will step up to chief financial officer from group finance director.

DFS cautious while profits rise by a third

DFS Furniture has seen annual profits surge by nearly a third. The group posted pre-tax profits of £50.2m to June 30 against £38.3m a year earlier. However, the chain cautioned over "subdued" recent trading amid Brexit uncertainty and a slowdown in the housing market.

ECONOMY

Blanchflower: Bank has failed to spot the onset of recession

Former MPC member David Blanchflower suggests the Bank of England is “fiddling while Rome burns” as he claims survey data is showing the UK is probably already in a recession. Citing the latest MPC minutes, he accuses the Bank of complacency, adding: “It seems to me the Bank has failed to spot the onset of recession, just as it did in 2008.”

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