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Daily News Roundup: Friday, 5th July 2019

Posted: 5th July 2019

BANKING

Barclays warned over small businesses

The Competition and Markets Authority has censured Barclays after the bank admitted it had broken rules designed to make it easier for SMEs to switch banks. The competition watchdog said the bank broke the rules on so-called bundling, whereby banks tell businesses they must open or maintain current accounts to access other products. The CMA said that 816 Barclays small business customers were affected over a period dating back to 2010, but the bank did not report the breach until August 2018. The CMA added that Barclays had taken steps to fix the problems and will pay £2,000 to refund customers for “payments they should not have had to make”. A Barclays spokeswoman said: “We've been working closely with the CMA and have corrected a mistake we made which affected a small number of business customers. We've taken steps to ensure that this does not happen again.”

FCA wants Libor evidence

The Financial Conduct Authority (FCA) says banks must provide concrete evidence to show that they are ending the use of the Libor interest rate benchmark as a price reference in financial contracts. Edwin Schooling Latter, director of markets and wholesale policy at the FCA, said banks must explain all the risks of entering into Libor-based contracts that mature after the end of 2021 to customers, with there no guarantee the interest rate benchmark will still be reliable after this point. He said: “We will be looking for confirmation that firms can do their business without a published Libor rate.”

Has Goldman Sachs gone soft?

Writing in the Standard, Simon English examines the change in direction at Goldman Sachs with the investment bank straying into areas it might previously have thought beneath it – taking deposits and offering savings accounts that you can open with £1. English contends that Goldman’s move to adopt “family-friendly” policies which include nannies for sick children and carers for elderly parents is a clear sign that, he believes, it has gone soft. He ends by asking rhetorically whether the newer, less edgy Goldman would survive a very serious economic downturn.

SocGen planning sale of UK private banking arm

Bloomberg reports that SocGen has started to gauge interest from potential buyers for its Kleinwort Hambros UK private banking business. The potential exit comes as SocGen’s CEO Frederic Oudea is cutting about 1,600 jobs across the bank and plans to slash annual costs by about €500m.

PRIVATE EQUITY

Private equity funds build firepower for property slump

Figures from Preqin show that private equity funds planning to invest in distressed property assets raised $8bn in the first quarter of 2019, more than the last two years put together.

INTERNATIONAL

Former Deutsche Bank trader cleared of rate rigging

Andreas Hauschild, a former Deutsche Bank executive, has been found not guilty of helping to manipulate Euribor. Hauschild was accused of conspiring to manipulate a benchmark that helps set rates on $180trn of financial contracts and loans worldwide, from 2005 to 2009. The FT says the acquittal is another blow to the SFO, which is attempting to convict bankers for alleged pre-crisis wrongdoing.

Deutsche Bank’s last throw of the dice

The FT examines whether Deutsche Bank’s latest radical overhaul under new boss Christian Sewing will revive the German lender’s fortunes. Tom Braithwaite adds in the same paper that Deutsche is having a Lehman Brothers moment but in a roaring bull market.

Danske Bank sought to discredit whistleblower, lawyer claims

The lawyer of Howard Wilkinson, who blew the whistle on a money-laundering scandal at Danske Bank, says the lender conducted an internal investigation designed to “discredit” and “blackmail him into silence”.

AUTOMOTIVE

Low-emission car registrations fall

Registrations of alternatively-fuelled cars in the UK fell last month for the first time since April 2017, according to the Society of Motor Manufacturers and Traders (SMMT), as a decline in buyer confidence dented the market, which blamed consumer confusion over low-emission zones and incentives. Overall, new car registrations in the UK fell for the fourth month in a row, down to 223,421 units.

CONSTRUCTION

Housebuilding in England slows as Brexit looms

The government’s target for new home construction looks to be in jeopardy as housebuilding in England has continued to slow amid political uncertainty and skills shortages. Throughout England construction starts fell by 7% in the quarter compared with the year before. In London, construction of only 2,940 homes was started in the first three months of the year, down by 50% on the same quarter a year before.

Persimmon reveals declining revenues

Despite higher average selling prices, of £216,950, revenues at Persimmon have declined 4.5% year-on-year - to £1.75bn. At 7,584, the housebuilder built almost 500 fewer homes over the six months, compared to the same period in 2018, and said in a trading update that it was focusing on improving customer service.

MJ Gleeson on track to double output

MJ Gleeson said it's “comfortably on track” to doubling its number of completed homes to 2,000 per year by 2022, as the housebuilder revealed a 25% jump in the number of completed homes for this financial year. MJ Gleeson built 1,529 homes for the year ending June 30, while its Gleeson Homes division upped its number of plots 5.6% year on year to hit 13,575 plots.

FINANCIAL SERVICES

European financial services leads charge on women directors

Women hold more than a third of positions on the boards of Europe’s largest banks and financial services companies, compared to a quarter in the US and 12% in Asia.

P2P industry in choppy waters

Having only emerged in the past decade, Vivek Jeswani, co-founder of Bridge Invest, warns that peer-to-peer (P2P) firms are in choppy waters at present. Largely not in existence during the 2007 crisis, he cautions, when the credit cycle turns no one will want to be holding the loans “when the music stops.”

AXA Investment to buy New York-listed Northstar Realty

AXA Investment Managers is to buy Northstar Realty. The New York-listed firm boasts a bumper €1.1bn prime European office portfolio.

LEISURE AND HOSPITALITY

William Hill to close hundreds of stores

William Hill plans to close around 700 UK stores over the government’s maximum £2 cap on fixed-odds betting terminals, putting 4,500 jobs at risk. The bookmaker was unable to confirm which of its stores will close until a consultation process was concluded. The move will see William Hill’s 2,282 shop estate decrease by close to one third. The industry's trade union described the closures as “devastating news” for workers and called on the Government to offer support.

C&C to move listing to London

Dublin-based C&C is planning to move its stock market listing to the London Stock Exchange, hailing the capital for its “deep pool” of investors. C&C’s boss Stephen Glancey said: “We think this will give us much more potential to attract new shareholders. There is a deep pool of investors looking for more opportunities, and we will get wider analyst coverage in London.”

MEDIA

Hammond urged to scrap digital tax

The Confederation of British Industry (CBI) has called on Chancellor Philip Hammond to scrap a tax on digital businesses that will see social networks, search engines and online marketplaces hit by a 2% levy on their revenues from April 2020. The business lobby group says the tax is not necessary, risks harming more companies than anticipated, will deter businesses from investing in the UK and make Britain look hostile to cutting-edge technology. The Treasury said the tax is a stop-gap until an international solution is agreed, with the OECD hoping to reach a consensus by the end of next year.

REAL ESTATE

Great Portland Estates welcomes more London tenants

London landlord Great Portland Estates has racked up more tenants in the City and West End - agreeing nine new lettings in the quarter to June 30 to generate a £1.9m share of annual rent. A further 12 lettings are under offer, totalling £3.7m of rent per year, and GPE also completed on £9.2m of residential sales.

European agency to sublet Canary Wharf HQ

The European Medicines Agency (EMA) has agreed to lease its Canary Wharf headquarters to flexible space provider WeWork. Earlier this year, the EMA lost a landmark Brexit case for the commercial property industry ahead of Britain’s departure from the EU, when it tried unsuccessfully to cancel on its £500m lease in favour of a move to Amsterdam.

RETAIL

Sainsbury’s shareholders back Coupe

Sainsbury’s chief executive Mike Coupe has been re-elected by 99.5% of the shareholders who voted at the supermarket’s annual general meeting. However, almost 10% voted against a pay package which saw Mr Coupe’s remuneration increase by 7%. Shareholder advisory group Glass Lewis advised shareholders not to back the pay plan, saying the retailer had failed to outline how a failed merger with Asda had affected executive bonuses.

ECONOMY

Hiring slow

Research by the Recruitment and Employment Confederation shows that the number of people placed in permanent jobs by recruitment agencies has fallen for four months in a row, while growth in vacancies for temporary jobs is "subdued”. There were also fewer candidates for jobs last month.

OTHER

One in 12 Brits would not notice rogue withdrawal

According to a new survey, one in 12 Britons would not notice a rogue £20 debit on their bank statement, potentially costing 5.4m banking customers a total of £108m. The survey found that one in seven people only check their bank account once a month or less, and 50% of people have not got their free credit report.

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