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Daily News Roundup: Friday, 28th September 2018

Posted: 28th September 2018

BANKING

Banks look to tackle scams

Proposals from within the banking industry have urged banks to crack down on transfers scams. A code compiled by a group of regulators, consumer groups and industry figures suggests banks should use data analysis to identify malicious actors and delay suspicious payments from online accounts. The group has also said customers should be given greater clarity over the circumstances in which they can expect compensation. Ruth Evans, chairwoman of the authorised push payments steering group, said the code, which will be consulted on until November and implemented in 2019, could “really help those people who’ve become victims of these devastating crimes”. It has been suggested that banks could charge customers for large transfers in an effort to tackle fraud, with the money utilised to reimburse victims of scams. Other suggestions include an insurance against banking fraud, using cash from forgotten accounts to help fund repayments and a Government-run compensation scheme. Meanwhile, Santander has launched a payment process it hopes will help protect customers from fraud. The bank’s online banking system will ask customers questions to verify they are confident over payments before reminding them they may not be paying a legitimate source.

Big banks to bid for RBS fund awards

Godfrey Cromwell, executive chair of Banking Competition Remedies (BCR), has confirmed that large lenders are in the running for awards as part of a scheme to pay out £775m from Royal Bank of Scotland to boost competition in the banking sector. With the Treasury-designed scheme drawing criticism for allowing large banks to bid, Mr Cromwell commented: “We come to this with an open mind. Every case will be judged on its merits." This comes with Santander and Nationwide saying they will bid for awards. Anne Boden, chief executive of Starling Bank, believes BCR should choose "new entrants that embrace the latest technology, as opposed to traditional players". Analysts expect CYBG, Aldermore, Metro Bank, Shawbrook and Starling to challenge for payouts. Representatives from Co-operative Bank, Habib Bank Zurich, AIB, OakNorth, Investec, ClearBank and Handelsbanken were among those attending a BCR event yesterday that saw its directors take questions on the fund.

RBS planning digital bank

Royal Bank of Scotland is looking to launch a standalone digital-only bank called Bo, with it believed that it will be pitched as a rival to challenger banks such as Monzo, Revolut and Starling. It is expected to launch in 2019, with the aim of migrating 1m NatWest customers to the mobile platform. Bo is expected to utilise artificial intelligence to help customers manage their financial affairs. While not confirming the reports, a RBS spokesperson said: “As part of the bank's wider investment in digital and innovation, RBS is working on a range of projects to better serve our customers in the era of digital and open banking."

World Bank sells bond with Sonia benchmark

The World Bank has sold a £1.25bn bond using the Sterling Overnight Index Average (Sonia) rate, the Bank of England's preferred Libor replacement, as regulators ramp up pressure on financial markets to move away from the battered benchmark. The bond deal is the biggest yet to use the Sonia benchmark. Andrea Dore, head of funding at the World Bank, said the sale had “surpassed our expectations,” while Kerr Finlayson, a director at RBC Capital Markets, called the deal “another important milestone in the evolution of risk-free rates”.

£4bn is the price of loyalty

A report from Citizens Advice shows that loyalty to providers of essential services - including banking, insurance and telecoms - is costing consumers more than £4bn a year, with the charity raising the issue with the Government's Competition & Markets Authority. Eric Leenders, of UK Finance, commented: "The industry has already implemented a number of measures to further improve competition in the mortgages and savings market. We would always encourage customers to shop around."

PRIVATE EQUITY

BC Partners takes majority ownership of cable firm

BC Partners is to become the majority owner of European cable and pay-TV operator United Group in a deal that is expected to value the Netherlands-based company at around €2.6bn. While BC Partners will take a majority holding, KKR will retain a substantial minority stake. It is believed that Cinven, Apax and CVC Capital Partners had also been eyeing United Group.

INTERNATIONAL

Turkish bank clinches crucial loan agreement

Akbank, Turkey's second largest private bank, has agreed to new $980m syndicated loan with a foreign institution, which it said indicated confidence in the country's changing fortunes.

IMF agrees to increase Argentina bailout

The International Monetary Fund has agreed to increase a £38bn lending package to Argentina by £5.3bn. Guido Sandleris, chief executive of the Argentine Central Bank, said the increased loan will enable Argentina to “reduce inflation and recover the stability and predictability in prices” that the country “so badly needs”.

Spanish bank enters Irish market

Spanish bank Bankinter is to enter the Irish market and could look to enter the country’s mortgage market.

JPMorgan boss: Imbalance an issue

JP Morgan Chase chief executive Jamie Dimon says it is an issue that only 30% of its vice presidents are female and that 10 of the 12 board members are men, although he insists the bank has made progress with promoting women into senior roles. Speaking at a female leadership event in New York, he said it could be between 10 to 15 years until a wave of female CEOs improve the gender balance across large businesses.

Danske Bank whistleblower seeks Danish and Estonian authorities’ protection

Lawyers for Howard Wilkinson, the whistleblower who flagged concerns over money laundering at Danske Bank, say the bank breached his human rights and have urged authorities to protect him from retaliation.

AUTOMOTIVE

UK car production falls

Car production fell 13% in August, its third consecutive monthly decline, the Society of Motor Manufacturers and Traders (SMMT) has said, due to model changes and maintenance shutdowns. Around 89,254 cars were produced last month, with exports down by 3.8% to 72,983 cars.

AVIATION

Tui rides out turbulence

Tui has successfully weathered the UK heatwave, with customer volumes up 4% for 2018, with revenue up 5%. In a trading update, the travel group re-iterated its 10% growth guidance on the back of the return in demand for holidays in Turkey, North Africa and Greece.

FINANCIAL SERVICES

Rothesay Life buys Ukar's mortgage loans

Rothesay Life, a pension buyout business founded by Goldman Sachs, has bought an £860m equity release portfolio from UK Asset Resolution (Ukar), the Government's holding company for the closed mortgage books of Northern Rock, Bradford & Bingley and Mortgage Express. The insurance firm's purchase will be used to pay down the national debt, the Treasury said.

Specialist lenders look north of the Border

The Scottish specialist lending market is set to double in size next year due to the influx of new lenders with much improved criteria, product choice and rates, predicts Your Expert Group. The specialist finance broker said that, due to a saturated specialist lending sector in England, challenger banks and alternative finance providers were looking at new markets.

Saga boss confident of recovery

Saga has asserted that it is making strong progress on its recovery despite underlying profit falling 3.7% to £106.8m. The retirement insurance and travel firm's chief executive, Lance Batchelor, stressed that Saga was investing heavily in its business and marketing, and said that the firm had attracted 19% more new customers so was in a position to better drive growth.

IG boss steps down amid regulatory headwinds

With a nod towards increasing European regulations, Peter Hetherington, chief executive of online trading platform IG, has announced that he is to step down after three years in the role. “There is a great deal of change underway in the retail trading industry and I have every confidence that this team will continue to drive the business forward successfully in the future,” he said in a statement.

Ardonagh to buy Swinton

Independent insurer Ardonagh has revealed a £165m deal to buy motor and home insurance specialist Swinton from France-based Covéa. Ardonagh will sell some Swinton assets to fund the deal.

HEALTHCARE

Indivior lowers sales expectations

Addiction treatment firm Indivior has indicated that full-year sales have been revised down to between £755m and £780m as the rollout of its new opioid drug treatment Sublocade had been hit by "inefficiencies".

LEISURE & HOSPITALITY

Shares in 888 fall 8% on UK sales drop

Gambling operator 888’s UK revenues fell 18% to $87m in H1 2018 compared to H1 2017, although total sales were up 1% to $273m. Share prices dipped 8% following the report.

MANUFACTURING

UK can drive a manufacturing revolution

Juergen Maier, chief executive of Siemens UK, says the government’s launch of the Made Smarter Commission heralds an important landmark for the UK’s industrial strategy. Mr Maier, who led the Made Smarter review, says the commission can develop the UK as a leader in industrial digitalisation technologies.

MEDIA & ENTERTAINMENT

Sorrell makes market return

Shares in Sir Martin Sorrell's new advertising venture begin trading on the stock market today under the name S4 Capital. Shareholders at shell company Derriston Capital yesterday voted through the reverse takeover of S4 and its acquisition of Dutch agency MediaMonks.

REAL ESTATE

Bubble trouble a capital concern

London is among the global cities most at risk of a housing bubble, according to UBS’ global real estate bubble index, ranking sixth behind Hong Kong, Munich, Toronto, Vancouver and Amsterdam. London came second only to Hong Kong in a price-to-income comparison for those looking to get on the ladder, with a skilled service worker in the capital having to work 15 years to afford a 60 sq m flat near the city centre. UBS' Mark Haefele said rising interest rates leave global financial centres especially at risk.

RETAIL

Sainsbury's-Asda merger will impact over 450 locations

The Competition and Markets Authority (CMA) has said that the merger between Asda and Sainsbury's could present a "realistic prospect of a substantial lessening of competition" in 463 separate UK locations. "The parties are an important competitive constraint on each other," the regulator said. As Sainsbury's has 606 supermarkets, and Asda has 584, the new business may have to sell off some overlapping stores.

OTHER

British stocks better off in no-deal Brexit

British stocks would be better off than European equities if the UK leaves the EU without a deal, according to Deutsche Bank. Analysts at the bank predict that UK equities would outperform European shares by 4% in a no-deal scenario, citing the defensive nature of the UK market, and weaker growth in continental Europe after a hard Brexit.

BoE economist calls for board reform

The Bank of England’s chief economist has suggested that putting workers on company boards could improve corporate decision-making by bringing new views to the table. Andy Haldane told an audience at the Institute for Government: “We know that plural and diverse boards tend to perform better than non-plural, non-diverse boards.”

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