RBS ring-fencing to take effect this month
RBS has said the ring-fencing of its retail banking operations will take effect at the end of this month. The changes will involve separating its retail customers that are members of banking brands including RBS, NatWest and Ulster Bank. It will also mean ring-fencing some members of Coutts, and other RBS brands like Lombard, Drummonds, RBS Invoice Finance, Adam & Company and Holt’s Military Banking. Meanwhile, Moody’s has cut Barclays’ credit rating over concerns relating to the bank’s decision to ring-fence its high-risk trading from its retail operations. The ratings agency cut Barclays’ overall debt rating to just one level above junk, warning that the bank will face “ongoing profitability challenges” and the impact of ring-fencing. Moody’s said that credit ratings for some of the biggest UK banks could be affected by the post-crisis ‘ring-fencing’ rules.
SBI launches UK subsidiary
State Bank of India (SBI) has launched its UK subsidiary after an initial £225m commitment from its parent bank. The move sees SBI become the first foreign bank in the UK to ringfence its retail division from its wholesale business. The Indian bank said the move would offer its UK customers greater confidence amid continuing uncertainty around the country's departure from the EU.
Carlyle to acquire Australia's biggest winemaker
Carlyle is to acquire Australia's biggest winemaker, Accolade Wines. The private equity group has agreed to buy the maker of Hardys wine from Australia's Champ Private Equity for A$1bn (£546m). John Haddock, Champ chief executive, said Accolade would generate around A$900m in sales and A$100m in earnings this year: "Our sales in China grew about 80% last year, although off a small base. There is a big opportunity for the new owners in that market”.
Danske Bank ousts head of business banking
Danske Bank has ousted Lars Morch, its head of business banking, after finding there should have been a more thorough investigation into money laundering allegations at its Estonian branch. The Danish bank has been criticised for failing to take appropriate measures after a whistleblower who, according to reports, alerted the bank in December 2013 about money laundering linked to Russia through its Estonian branch. The departure of Mr Morch, who had been responsible for the bank's Baltic operations since 2012, comes during an internal investigation due to be completed by September.
Dimon eyes growth opportunities
Despite already pledging a wage hike and a $20bn (£14bn) investment for JP Morgan’s investment bank, chief executive Jamie Dimon has said that he still sees growth opportunities "almost everywhere". In a letter to shareholders, Mr Dimon said he plans to push the boundaries both in areas where JP Morgan has been a dominant player, and in those where it has previously held little market share.
New car market stalls
Figures from the Society of Motor Manufacturers and Traders show the UK new car market shrank by 15.7% last month compared with 2017. Demand for diesel vehicles fell 37%, and was flat for petrol models, but increased 5.7% for alternative fuel vehicles. New car sales fell for the first time in six years in 2017, with a 5.7% decrease to about 2.5m vehicles.
RBS takeover nears for FreeAgent, with trading on-track
Cloud accounting specialist FreeAgent, which is being acquired by Royal Bank of Scotland, is on track for around £10m in full-year sales. The company advised in a brief trading update yesterday that revenues were expected to exceed £9.8m for the year to the end of March. Chief executive Ed Molyneux commented: “Overall progress has been strong, particularly in our banking channel, despite headwinds in the practice channel - courtesy of the turmoil surrounding the IR35 changes. The RBS partnership has continued to prosper and we were pleased on 27 March to announce the terms of a recommended cash offer for FreeAgent by a wholly-owned indirect subsidiary of RBS.”
Fidessa bidders revealed
Fidessa has named the two bidders entering the race alongside Swiss software group Temenos, after it made a £1.4bn offer for the business. Fidessa investors were told yesterday that financial technology companies SS&C Technologies and Ion Investment had recently approached the City software firm about a takeover. Shares in Fidessa closed up 1.2% at £40.75 yesterday.
Business finance plan to be extended by Worldpay
Worldpay is to extend a business finance scheme which allows company owners to access a "cash advance" based on their future credit and debit card sales. The Worldpay scheme, launched in 2015 in partnership with Liberis, has already arranged more than £50m in funding for UK businesses.
School shootings lead BlackRock funds to avoid gun shares
Asset manager BlackRock is to launch a range of new funds excluding firearms makers and suppliers, after the Florida school shooting prompted an outcry about gun violence.
FCA announces rules to improve asset management industry
The FCA has told asset managers that they will have to improve governance on fund boards, as well as move investors into the cheaper versions of funds over the next 12 to 18 months.
Indivior protects opioid addiction treatment
British drugmaker Indivior has expanded its legal front to protect patents on its top-selling US treatment for opioid addiction. Indivior has filed against five rivals, Dr Reddy's, Actavis, Par, Alvogen and Teva, for infringements of patents on its medicine Suboxone, a dissolvable film used to wean opioid users off drugs including high-strength painkillers and heroin, which accounts for the bulk of its $1.1bn (£780m) annual sales.
Shire takeover bid expected from Takeda
Takeda executives are understood to be talking to top shareholders about a £30bn takeover of Shire. Shares in the latter firm rose by nearly 6% to £38.12½p at one point in London as expectations of an offer from Takeda grew.
Tencent to offer Babylon technology on social media
British digital health start-up Babylon has struck a deal with China’s Tencent, which will see Babylon’s technology offered on the popular WeChat social messaging platform.
LEISURE AND HOSPITALITY
Blackstone bids for Spanish hotel group
Blackstone is to make a full takeover bid for Hispania via investment vehicle Alzette Investment, in a deal valuing the Spanish hotel group at around €1.9bn. Blackstone has agreed to buy 16.65% of Hispania at €17.45 per share for a total of €315.4m, from funds QP Capital Holdings Ltd and QPB Holdings Ltd.
Rank Group shares tumble after profit warning
A profit warning has been issued by Rank Group, which blamed poor weather for falling numbers of visits at Mecca bingo halls and a “negative contribution” from high spenders at its Grosvenor Casinos.
MEDIA AND ENTERTAINMENT
Ofcom raises £1.36bn from bandwidth auction
Ofcom has revealed that an auction for the next generation of mobile phone networks has raised £1.36bn. Vodafone, EE, O2 and Three all won the bandwidth needed for the future 5G mobile internet services, which are not expected to be launched until 2020. Telefónica, which owns O2, also bought additional frequency for its 4G coverage, which will improve existing connectivity for customers. Margot James, digital minister, commented: "This spectrum will be instrumental in further improving 4G mobile services now, while helping the UK to lead the 5G revolution and build a Britain that is fit for the future. We hope that it can now be deployed as soon as possible for the benefit of consumers right across the UK."
Land Registry details first-ever digital mortgage
The Land Registry has processed the first-ever digitally signed mortgage deed. On Thursday, it announced that Coventry Building Society and Enact Conveyancing had signed a digital mortgage for a property in Rotherhithe, South East London. To do this, the organisations used the "Sign your mortgage deed" service from HM Land Registry, which requires the mortgage applicant to have an account with the government's identity service, Gov.UK Verify. Peter Frost, chief operating officer at Coventry Building Society said: "Although this initiative has started with re-mortgages we’re excited about the potential for it to be extended to purchases in the future."
Service sector sees activity slowdown
The purchasing managers' index for the services sector fell from 54.5 in February to 51.7 last month, the lowest score since July 2016, just after the Brexit referendum. Economists noted that the reading was likely to mean that the economy slowed overall in the first quarter, and that GDP growth is now expected to come in at 0.3% for the first three months of the year.