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Daily News Roundup: Friday, 6th July 2018

Posted: 6th July 2018


Watchdogs push City to shore up cyber defences

The Bank of England (BoE), Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have partnered to publish a document urging senior City managers to plan for failure amid a surge in IT incidents. The regulators revealed that they themselves utilise an “Authorities Response Framework” to respond to such incidents and suggest that firms set themselves “impact tolerances” on the assumption that disruption will occur. “The financial sector needs an approach to operational risk management that includes preventative measures and capabilities - in terms of people, processes and organisational culture - to adapt and recover when things go wrong,” said regulator leaders Sir Jon Cunliffe, Sam Woods and Andrew Bailey.

HSBC's banking jobs of the future

As the industry increasingly focuses on digital evolution, a new report commissioned by HSBC has suggested six new potential key banking jobs of the future. The roles are; 'mixed reality experience designer' - to work with augmented reality platforms; 'algorithm mechanic' - which the report claimed will be a much sought-after skill; 'conversational interface designer' - IE teaching chatbots to communicate effectively; 'universal service adviser' - a highly skilled service agent who can help customers navigate a range of products; 'digital process engineer' - which will require an understanding of large, interconnected workflows to diagnose issues; and finally the 'partnership gateway enabler', who will manage digital relationships with partners like fintechs to ensure regulatory compliance and effective risk management.

Barclays investment scheme for small businesses

Barclays seeks to encourage investment with a new scheme to lift small businesses. Jamie Grant, head of corporate banking for Barclays in Scotland, noted: "We want to help Scottish SMEs grow more quickly.” He went on: “By collaborating with the British Business Bank we can now offer cashback to clients, boosting their cashflow and encouraging them to invest in assets that will drive their business forward."


US fines for Credit Suisse over hiring claims

US authorities have fined Credit Suisse $77m over a scheme to win banking business by hiring friends and family of Chinese government officials. Richard Donoghue, US Attorney for the eastern district of New York, commented: "Credit Suisse Hong Kong's practice of employing friends and family members of Chinese government officials as a quid pro quo for lucrative business opportunities was both profitable and corrupt, and now the company will pay the price for that corruption".

Brexit move for JP Morgan staff

JP Morgan has requested that “several dozen” staff move from Britain to elsewhere in Europe as it begins to prepare for the UK’s departure from the EU. A memo from the firm noted that it expects to move or add “a few hundred roles” to its workforce on the continent. It said the size of the workforce will be “entirely dependent on whether an agreed transition arrangement is finally confirmed”, noting: “We want to avoid affecting the lives of employees and their families with changes that could prove to be unnecessary or premature, as long as political negotiations and regulatory outcomes remain unclear.”

Bank system vulnerable to sudden rise in interest rates

The Bank for International Settlements has warned that a prolonged period of low interest rates could bring about another market crisis by creating vulnerabilities in the financial system. Philip Lowe, governor of the Reserve Bank of Australia and chairman of the BIS committee on the global financial system, cautioned: "While a low-for-long scenario presents considerable solvency risk for insurance companies and pension funds and limited risk for banks, a snapback would alter the balance of vulnerabilities.”

Russia fraud case for Danske

As money laundering claims continue to dog Danske Bank, an investigator of an alleged $230m Russian fraud is set to file a criminal complaint against it in Denmark.


‘Brexit threatens £80bn UK investment’ - Jaguar Land Rover

Jaguar Land Rover chief executive Ralf Speth has issued a Brexit warning, noting that: "A bad Brexit deal would cost Jaguar Land Rover more than £1.2bn profit each year. As a result, we would have to drastically adjust our spending profile.” He went on: “We have spent around £50bn in the UK in the past five years - with plans for a further £80bn more in the next five. This would be in jeopardy should we be faced with the wrong outcome."

Drivers shun diesels as new car sales slip

Uncertainty in the market affected new car sales last month, with just 234,945 new car registrations made in June, despite a 12.3% increase in petrol car sales. The diesel market declined by 28.2% last month.


Rolls-Royce calls for clarity

Rolls-Royce is urging clarity on Brexit policy as it presses on with plans to "ensure there is no interruption in our service to customers as a result of Brexit", moving design approval for large jet engines out of Britain to Germany. A spokesman for the firm remarked: "This is a precautionary and reversible technical action which could be halted if and when a binding Brexit transition deal covering this issue is completed. We do not anticipate such a move would lead to the transfer of any jobs from the UK.”

Ryanair urges crew talks over planned strike

Ryanair has urged Forsa to help avoid air cabin crew joining pilots' proposed industrial action next week. The trade union, along with the International Transport Workers' Federation, has voted for a day of strike action on July 12 unless Ryanair meets demands relating to pay, culture and rostering.


Bovis builds sales rise

Bovis has revealed that sales volumes in the first half of this year rose 4% after the housebuilder delivered a total of 1,580 property completions, exceeding the 1,512 completions recorded in the first six months of 2017. The average selling price increased over the period, climbing to £335,000. The firm expects to meet medium-term targets of 23.5% gross margin following a series of cost-cutting measures. Chief executive Greg Fitzgerald said: "We expect to deliver a significant step up in profitability for the half year as we start to see the financial benefits from the strategic direction, changes implemented, and specific margin initiatives launched over the past 18 months."

Government champions decade-high construction investment

The government has announced that £420m has been injected into construction technology to tackle the housing shortage. In what is the largest public and private investment into construction for at least a decade, the government will contribute £170m while industry will invest £250m.

Persimmon sees revenue growth

In a trading update ahead of half-year results next month, Persimmon said revenues grew 5% to £1.8bn over the six months to June. The housebuilder said it completed 4% more new homes than in the same period last year, while its average sale price rose 1.2% to £215,800. The value of forward sales is 5% up on the same time last year. The firm said: “Consumer confidence remains resilient in our markets and attractive mortgage products provide compelling support to purchasers of new homes.”


Financial services jobs growth strongest in regions

TheCityUK lobby group has found that the strongest growth in finance sector jobs is presently coming from regional areas outside London. Miles Celic, chief executive, remarked: "One in every 14 British jobs are in financial and related professional services. These 'City jobs' aren't just confined to London, they're in financial clusters all across the UK, in cities such as Bristol, Cardiff, Edinburgh and Manchester."

Life unit share sale for Generali

A group owned by private equity group Cinven and reinsurer Hannover has bought a large stake in the German life insurance business of Generali, Italy's largest insurer, for almost €1bn.


Brewdog profits down

Craft beer firm Brewdog has seen profits fall to less than £1m in 2017 after it opened a brewery in the US, as well as a vodka and gin distillery.


WPP warns Sorrell off Dutch deal

WPP lawyer Slaughter and May has written to Sir Martin Sorrell reminding him that he risks losing £20m worth of share awards in the company over his rival bid to acquire Dutch digital agency MediaMonks.

Sales slowdown for Sophos

Shares in Sophos were down 21% after it warned of a significant drop in sales of its cybersecurity software.


International expansion hits Purplebricks

Purplebricks has revealed £26.1m in pre-tax losses for the year to April. While UK operating profit rose to £6.5m from £1.1m in the past financial year, the losses, accelerated by investment in overseas markets, are more than four times larger than last year’s £6.1m. Total revenue rose to £93.6m from £46.7m in the previous 12 months.

City could see second Cheesegrater

City of London planning officials have recommended plans for a 56-storey tower on Leadenhall Street should be given the green light. Lai Sun Development Company is hoping to redevelop 100 Leadenhall Street and has put forward plans for a tower dubbed "Cheesegrater 2" due to its similarity to the skyscraper situated at 122 Leadenhall Street.


Primark boosted by sales increase

Primark says sales were up 6% for the 40 weeks to June 23, with same-store sales rising. “April was tough but then May and June have been really good for us,” said John Bason, finance director at Associated British Foods (ABF), Primark’s owner. Primark says it expects profits to be higher this year. Meanwhile, ABF says it expects lower annual profits at its sugar business on the back of disappointing prices in Europe, although Primark’s performance will offset the decline and see overall profit forecasts met.


August interest rate rise preparations made

Mark Carney, Governor of the Bank of England, has argued that the first quarter growth slump was caused by the "Beast from the East" storm, preparing the ground for an August interest rate hike.

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