Investors question McEwan’s pension
Shareholders have railed against Royal Bank of Scotland for giving CEO Ross McEwan a pension top-up of 35% of salary compared with 10% for all other staff with rights group ShareSoc declaring it “nonsense” and evidence the board's method of engaging with investors “doesn't work”. ShareSoc chair Mark Northway said: “RBS, given its track record and consequent taxpayer support, should now be leading from the front in governance matters.” The criticism of RBS comes just a week after Lloyds and Standard Chartered also faced investor ire over pension payments for bosses.
FCA fines Goldman Sachs for reporting errors
The Financial Conduct Authority has fined Goldman Sachs in London £34.3m for reporting errors connected with 220m securities transactions over more than nine years. While Goldman said it had now improved its processes, Mark Steward, the FCA's executive director of enforcement, said: “The failings in this case demonstrate a failure over an extended period to manage and test controls that are vitally important to the integrity of our markets. These were serious and prolonged failures.” The FCA said that Goldman had been granted a 30% discount to the original fine of £49.1m for agreeing to resolve the issues.
Profits surge at Secure Trust
Secure Trust Bank has reported a 38.8% rise in pre-tax profits to £34.7m for 2018 after seeing customer numbers jump by 29% to 1.3m. Customer deposits rose by a quarter to £1.8bn and its overall loan book lifted to £2bn. CEO Paul Lynam said the specialist lender would likely benefit if fears of a hard Brexit receded and UK economic activity picked up. He added that the bank might look for acquisitions.
Strong showing from Arbuthnot
Arbuthnot Latham, the UK private bank, recorded pre-tax profits of £14.6m in 2018 - a 33% year-on-year increase. The results come on the back of parent company the Arbuthnot Banking Group's 2018 figures, which show a 172% rise in pre-tax profit. Chairman and CEO Sir Henry Angest said he was optimistic about the UK economy and the bank's ability to cope with a shock. He said: "Looking further ahead, the UK economy might surprise us. It has proved to be very resilient, despite all the doom and gloom, and with a strong government introducing the right economic policies to promote business, Brexit could well deliver a bright future.”
Fourth Euribor rigger convicted
A fourth banker has been convicted of rigging Euribor interest rates during the financial crisis in a case that represents a much-needed victory for the Serious Fraud Office. Colin Bermingham, a former Barclays banker, was convicted by a jury at Southwark Crown Court. The SFO’s director Lisa Osofsky said: “By manipulating Euribor, these bankers damaged trust in a critical system that supports $180trn worth of financial products, including personal loans, pension investments and mortgage repayments.”
Metro Bank shares slide
Shares in Metro Bank reached a new low yesterday after analysts at Barclays warned investors to expect weaker-than-expected earnings and further equity injections. The shares closed down 50p, or 6.1%, at 766.5p.
TSB brings IT in-house
The Telegraph reports that TSB is taking control of critical parts of its IT infrastructure from Spanish owner Sabadell. TSB, which suffered a disastrous update to its systems last year, plans to develop future technologies for its IT in-house and said its move would help it "innovate faster".
RBS to introduce fingerprint payments
RBS is piloting biometric fingerprint technology with 200 customers in an effort to improve security. Customers will use their fingerprint to verify transactions over £30, increasing security and making it easier for customers when paying for goods or services at the tills as no PIN is required.
Deutsche Bank fundraising mooted
Market watchers have suggested that Deutsche Bank could raise up to €10bn to increase its capital buffer ahead of any potential merger with Commerzbank. The German lender said it was “much too early” to assess whether there was any potential capital need before robustly denying media reports. Reports also emerged that the bank was on course for a weak first quarter after a slow start to 2019 in its trading business, with sources claiming that January was “catastrophic.”
JP Morgan announces job losses
JP Morgan is to cut hundreds of support roles from its asset and wealth management division as part of an annual review. Darin Oduyoye, a spokesperson for the bank, said: “We continue to invest in our business and talent, including hiring top advisers in key markets and expanding our product and service offering.”
Investment banks face Brexit and trade double whammy
European investment banks are preparing to report one of their toughest first quarters as concerns over Brexit and global trade tensions dampened investors trading appetite. “First quarter activity levels across the market have definitely been subdued, there’s a focus on the top quartile of companies with strong earnings growth and those that are not going to suffer too much from whatever Brexit outcome we get,” Jonathan Arrowsmith, head of advisory at Investec, commented.
Swedbank boss fired
Birgitte Bonnesen, Swedbank’s chief executive, has been sacked following the raft of recent money laundering allegations against the Swedish bank. Current finance chief Anders Karlsson will take over ahead of the firm's annual shareholder meeting and annual results. Shares in Swedbank dropped by 8%, meaning the bank has lost a third of its value in six weeks.
Standard Chartered reveals Hong Kong fintech drive
Standard Chartered is opening a new digital retail bank in Hong Kong, known as SC Digital Solution. The bank is a joint venture with IT firm PCCW, telecoms company HKT and online travel company Ctrip Finance.
Nomura plans job cuts
Japanese bank Nomura is planning to cuts dozens of jobs across its trading and investment-banking businesses in Europe and the US.
Tim Sloan steps down as Wells Fargo chief executive
Wells Fargo has announced that CEO Tim Sloan is stepping down from the role. He will be replaced on an interim basis by the bank’s general counsel, C Allen Parker.
Lyft valued at $24bn
Ride-hailing firm Lyft has priced its shares at $72 amid strong investor demand, valuing the firm at $24.3bn (£18.6bn). The shares are set to start trading on the tech-dominated Nasdaq index today.
Airlines face lawsuits over ‘toxic’ cabin air
Five of the UK’s largest airlines are facing legal action which claims pilots and cabin crew are regularly exposed to toxic fumes during flights. The Unite union said legal notice has been served in 51 cases, the majority of which are against British Airways. EasyJet, Thomas Cook, Jet2 and Virgin Atlantic are also subject to the legal action over "aerotoxic syndrome". The airlines said that previous studies found no proof of long-term ill-health arising from cabin air quality.
Wow Air failure strands thousands of passengers
Wow Air has ceased operations and cancelled all flights, stranding thousands of passengers. It said some airlines may offer flights at a reduced rate, so-called rescue fares, and that it would publish information on those when it becomes available. Norwegian Airlines said that repatriation fares would be available at a 25% discount, subject to availability, as long as passengers could show a valid Wow Air booking. These would be available until April 8th.
Boeing posts patch following international crashes
US aircraft giant Boeing has released a software patch for its 737 Max jet following the recent crashes in Indonesia and Ethiopia. The plane’s anti-stall system is being viewed by investigators as a possible factor in the crashes, the system reportedly forcing down the nose of the jet in response to data from a faulty sensor.
CMA opens inquiry into funeral services
The Competition and Markets Authority has opened a full investigation into funeral and crematorium services amid concerns that customers are being exploited by opaque pricing practices. The watchdog accused some funeral directors of taking advantage of consumers by charging high prices at a time when people are in a vulnerable state. Referring to the "vulnerability" of some customers, the CMA said: “This appears to have made it easier for some funeral directors to charge high prices.”
Mitie battling challenging market
Mitie has revealed that its order book has thinned by around 10% in the last year as it continues to battle headwinds from several major corporate failures over the last 18 months. Revenue is expected to grow up to 8% for the year ending March 31, Mitie said in a trading update on Thursday, while operating profit is expected to be between £84m and £87m, against £89.6m last year.
Debenhams to deliver £200m refinancing
Debenhams has been given the green light to press ahead with a £200m refinancing with the majority of its bondholders approving of the move. Debenhams is now expected to look at a debt-for-equity swap or a pre-pack administration. Both options would result in existing investors losing their holdings in the company.
UK economic confidence grows amid EU declines
Economic confidence in the UK jumped 1.6 points to 100.8 points this month, according to the European Commission’s latest business and consumer survey, while sentiment in the European Union and the eurozone fell by 0.7 points to 105.5. In the UK, consumer confidence was up 0.2 points, retail trade confidence up 1.5 points, construction confidence up 0.9 points, while financial services confidence soared by 9.2 points.
Corbyn’s nationalisation plans would fail those he wants to help
The CBI has warned that Labour’s nationalisation plans would harm public services, utilities and the railways. A lack of accountability is the main cause for their woes at the moment and shifting control to Whitehall would only make thing worse. The CBI’s director general Carolyn Fairbairn said Labour had tapped into “a sharp-edged sense of unfairness” but nationalisations “would do profound harm to our economy […] and to our country’s finances.” The answer, said Fairbairn, was more competition and better protection for consumers but Labour said such solutions are “clearly a last-ditch attempt to protect the interests of a narrow group of wealthy shareholders instead of creating genuine reform.”