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Daily News Roundup: Friday, 3rd September 2021

Posted: 3rd September 2021

BANKING

UBS: Staff who opt against vaccines can work from home

UBS chief executive Ralph Hamers has said that employees who do not want to receive the coronavirus vaccine can apply to work from home. Mr Hamers commented: “The pandemic has delivered solutions to manage the risk of carrying the virus and passing it to your colleagues, and that is to work from home.” His comments come two months after UBS committed to offering most of its employees hybrid working options, dependent on their role, tasks and location. He added yesterday: “We have already identified two thirds of our jobs can continue to work from home and therefore we are developing a model of hybrid working”. The stance set out by Mr Hamers contrasts to policies at some other banks, with Deutsche BankMorgan Stanley and Goldman Sachs having mandated vaccines for staff returning to their desks in some locations. 

Challenger banks raise deposit rates in funding drive

Analysis by financial advice site Savings Champion shows that savers can score the best rates in more than 15 months as challenger banks offer market-leading rates to increase deposits.

PRIVATE EQUITY

Bridgepoint keeps lid on executive rewards

The FT says private equity firm Bridgepoint keeps shareholders “in the dark” about senior managers’ total pay, noting that its complicated structure does not appear to contravene Financial Conduct Authority rules.

INTERNATIONAL

Project to test cross border central bank digital payments

Central banks in Australia, Singapore, Malaysia and South Africa will conduct a cross border payments trial using different central bank digital currencies (CBDC) to assess if this allows transactions to be settled more cheaply and easily. A statement from the Reserve Bank of Australia, Bank Negara Malaysia, the Monetary Authority of Singapore, the South African Reserve Bank, and the Bank of International Settlement's Innovation Hub, which is leading the scheme, said that the project aims to develop prototype shared platforms for cross-border transactions using multiple CBDCs.

JPMorgan settles French tax fraud investigation

JPMorgan Chase has agreed to pay €25m to settle a long-running criminal investigation into allegations it helped French investment bank Wendel commit tax fraud. Under the terms of the settlement deal with the French Financial prosecutors office, JPMorgan did not plead guilty and avoids having to go to trial.

Deutsche Bank wins back ability to sponsor IPOs in HK

Deutsche Bank has reportedly regained its ability to sponsor IPOs in Hong Kong after it temporarily lost the right in June when two employees left without replacements lined up. The German bank hired three new senior staff and added Derek Chung, Ian Long and Albert Chang to the sponsor list, according to the Hong Kong's Securities & Futures Commission website.

BNP Paribas in talks with AgBank on wealth management venture

BNP Paribas' asset management arm is in talks to form a wealth management venture with a unit of Agricultural Bank of China (AgBank), according to reports. It is understood that the investment management arm of BNP Paribas will hold a majority stake in the planned venture with AgBank's wealth management subsidiary.

CONSTRUCTION

Barratt builds profits as housing market rebounds

Barratt Developments has reported profits before tax of £810m for the year to the end of June, compared with £490m in the previous year, and said a strong forward sales book was encouraging for the year ahead. The housebuilder's revenues for the financial year at £4.8bn were only 1% lower than the equivalent in 2019, before the effects of the pandemic. It completed 17,200 houses, only 600 behind 2019 and 4,600 ahead of the 2020 financial year, which included the first national lockdown.

FINANCIAL SERVICES

Financial services exports to Europe rise

Financial service exports to the EU rose in the quarter after Britain left the EU, Office for National Statistics (ONS) figures show. The bloc imported 1.4% more from UK banks, insurers and other finance firms in the first three months of the year compared with the same period of 2019 – with 2020’s figures omitted due to pandemic-driven distortions. The data also shows that financial services exports from the EU to the UK fell by more than a third. During the same period, exports of legal, accounting, management, consulting and public relations services to non-EU countries rose by more than a third, while sales to the EU slipped by 1%. It is noted that financial services exports are worth £56bn annually and just over a third go to the EU, according to industry body TheCityUK.

Acquisitions of SMEs up 60% in H1

Data from Dealsuite suggests interest in acquiring SMEs surged in the first half of this year, with buyout firms and large companies looking to capitalise on undervalued high-growth businesses. The report reveals that the number of SMEs with revenue between £1m and £200m sold in the UK and Ireland was up 59% in H1 compared with the first six months of 2020. The research, which polled 318 mergers and acquisitions advisory firms found that UK and Irish SMEs were sold for 5.5 times their gross profit, on average.

CMC Markets in profit warning

CMC Markets has warned it expects net operating income for the 12 months to March 2022 to be between £250m and £280m if current market conditions continue for the rest of the year - down from a figure of “in excess of £330m."

MEDIA & ENTERTAINMENT

Barclays tasked with finding partner for Virgin Media O2 fibre rollout

Telefonica, Virgin Media O2's Spanish co-owner, has appointed investment banks Barclays and LionTree to seek a partner to finance its fibre network rollout across the UK in Britain, according to reports. Virgin Media O2 plans to upgrade it entire network to full fibre by 2028.

REAL ESTATE

Sipp commercial property queries surge

The pandemic has seen a surge in interest in commercial property from self-invested personal pension (SIPP) advisers and clients, according to adviser Curtis Banks. The firm has seen a 56% increase in commercial property queries in the first half of 2021 compared with H1 2020. It noted an increase in queries regarding connected party purchases – deals where a person uses a pension to purchase a property they already own, such as business premises. This, it suggests, stems from owners looking to release cash back into their business. Curtis Banks says commercial property is a popular investment due to the tax efficiency of the investment, including rent being paid tax free directly to a Sipp, and there being no capital gains tax on disposal.

RETAIL

CMA: Concerns remain over JD Sports-Footasylum deal

The Competition and Markets Authority (CMA) says concerns remain over JD Sports’ takeover of Footasylum. The CMA blocked the £90m takeover last year but has had to look at the merger again after JD Sports lodged an appeal. With the watchdog having now gathered extra evidence, it said Footasylum being bought by its closest competitor could see shoppers face “higher prices, less choice and a worse shopping experience overall”. JD Sports may now have to sell Footasylum to address the concerns.

Retail sales climb in August

Data shows that retail sales continued a sustained rebound last month, with this driven by a continued boom in online shopping. Figures show that same store and online sales rose by 20.1% in August.

ECONOMY

Food and drink exports to EU plummet

Data from the Food and Drink Federation (FDF) shows food and drink exports from the UK have seen a steep decline, with a sharp drop in trade with the EU after Brexit a factor. While producers saw increased sales to non-EU countries, there was a £2bn fall in sales to the EU in H1 2021 compared to the first six months of 2019. Dominic Goudie, head of international trade at the FDF, described this decline as “disastrous”, adding that it “clearly demonstrates the serious difficulties manufacturers in our industry continue to face and the urgent need for additional specialist support.” Analysis of the figures by product category show beef was the hardest hit, with exports down 37%, while cheese was down 34% and milk and cream fell by 19%. The report shows that food and drink exports to Ireland fell by more than £500m in the first half of the year.

OTHER

Half of firms unable to run at full capacity

Half of all UK businesses are currently unable to run at full operational capacity, according to research commissioned by logistics firm One World Express. The poll of more than 350 decision-makers found that 50% have seen no improvement in business performance since lockdown restrictions began to ease in April. It was found that half of all businesses have experienced staff shortages as a result of employees being asked to isolate. This left 81% of small businesses understaffed, while the rate among firms with 250 or more employees was lower, at 54%. While half of UK firms have been unable to return to full operational capacity, among micro businesses – those with two to nine employees – the proportion is 71%. Close to two-thirds (63%) of respondents believe the Government should be clearer on long term financial support for businesses. Despite the impact of the pandemic and resulting lockdowns, 56% of those polled remain confident about the future.

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