Post-Brexit clarity called for
Nicky Morgan, Treasury Select Committee chairman, has criticised the Government over its post-Brexit plans for financial services, claiming that businesses were “none the wiser about the Government's desired end-state” for the industry. She commented: “By publishing a position paper on financial services, the Government could articulate a clear sense of direction and provide some much-needed clarity.” City of London Corporation policy chairman Catherine McGuinness described the lack of a financial services paper as “disappointing”. Meanwhile, The City UK has hit back at comments from Deutsche Bundesbank member Andreas Dombret who said financial services will likely be left out of a UK-EU trade deal. The lobby group’s CEO Miles Celic said: “Given the strong links that already exist between the UK and the EU, it should not simply be dismissed as impossible or avoided because it would involve substantial effort.” Separately, data from Morgan McKinley shows that the number of City jobs vacancies fell by 35% in the past 12 months, as financial firms await clarity on transitional arrangements on Brexit.
McDonnell assures City there’ll be “no surprises”
Shadow chancellor John McDonnell has tried to convince the City that the financial services industry would be safe with Jeremy Corbyn’s Labour. He insisted during a speech at the London Chamber of Commerce and Industry that there was “nothing up his sleeve” and that there would be “no surprises”. A City of London Corporation spokesperson said: "We welcome the engagement from Labour with the City, however, we still have firm views on ideas like a muted financial transaction tax which would harm our competitiveness and come at the expense of jobs and growth."
Docklands and City merger predicted
Sir George Iacobescu, chairman and chief executive of Canary Wharf Group, has said in an interview with the Evening Standard: “Despite all the uncertainty there is now, I am convinced London will continue to grow and it is our duty to make it happen. Ultimately, if you cast your eyes into the future, the City and Canary Wharf will become one.” He made the comments at a presentation on the economic impact of the development of Canary Wharf, three decades after the start of work on the site.
US tax changes dent SocGen profits
Societe Generale said profits fell in the fourth quarter of 2017 after a big tax hit from US and French changes. Net income at the bank fell to €69m (£61m). US tax changes dented profits by €253m, while the French effect was €163m. The bank's global markets unit performed better than many international rivals, with its €5.7bn income falling only 4.3% during 2017. Fixed income, commodities and currencies revenues fell by 6.5% in the quarter.
Credit Suisse fined for regulatory failings
Credit Suisse has been fined HK$39.3m (£3.6m) for regulatory failings in Hong Kong, over internal control failures during a 14-year period. HK$7.6m was also paid in compensation to clients involved in a number of unsuitable or inconclusive transactions.
Insurance division boosts AA
The AA has reported a solid performance from its insurance services division and scheduled an earlier than expected update on its strategic review. The company said its insurance services business “continues to perform well”, having seen the volume of motor policies jump 6% to 629,000, which helped offset a 5% drop in home policies to 818,000. New members for its roadside assistance arm increased 7% though retention was largely flat at 82% - after passing on insurance premium tax increases and costs related to changes in regulation to customers.
Bellway revenue up 14%
Bellway expects half-year housing revenues to jump 14% to £1.3bn. The firm said the number of completions lifted 6% to 4,741 for the six months ending in January, with the average selling price climbing almost 8% to a record £276,000. The firm’s forward order book increased 16% to £1.3bn – or 4,629 homes. Bellway added that “significant investment” in land has seen it snap up 6,736 plots. Executive chairman John Watson said Bellway is “continuing to make a sizeable contribution to the supply of much needed new homes”.
Call for virtual currencies to be ring-fenced
Yves Mersch, a member of the ECB's executive board, has joined calls for more regulation of virtual currencies such as Bitcoin, because of their perceived threat to financial stability. Speaking at the Official Monetary and Financial Institutions Forum in London, he said: “Resolute ring-fencing measures might be needed.” Separately, India’s tax authority revealed it has issued 100,000 tax notices to cryptocurrency investors suspected of concealing profits. The move follows promises by the finance minister to stamp out illicit use of digital coin.
Volatility derivatives have become tail that wags the dog, says Vix futures co-inventor
Sandy Rattray, one of the inventors of Vix futures contracts, has warned that products that allowed investors to trade volatility could be creating a “circular system” of measuring risk in financial markets.
SoftBank woos Swiss Re
Analysts and bankers have been confused by SoftBank’s attempt to take a minority stake in Swiss Re, with Vontobel’s Stefan Schürmann commenting: “I find it difficult to see the attraction”.
Alibaba and Tencent fined
Alibaba and Tencent have been being handed fines in China for breaches of cross-border foreign exchange payments rules at their financial services units.
Goldmans Sachs phone finance talks
Goldman Sachs is in talks with Apple about offering loans to prospective iPhone customers.
MEDIA & ENTERTAINMENT
TalkTalk tanks on profit warning
Shares in TalkTalk tumbled on Thursday after the firm warned that profits would be significantly lower this year, between £230m and £245m, than previously expected. TalkTalk also slashed its dividend and announced plans to raise £200m by selling shares.
Samsung chair to face new tax evasion charges
Lee Kun-hee is suspected of evading tax worth $7.5m. The Samsung chairman is also thought to have used bank accounts in another person’s name that held more than $350m.
Home-owner repossessions at 36-year low
UK Finance figures reveal that the number of home-owners’ properties being repossessed fell to a 36-year low last year. Over 2017, 4,700 owner-occupied mortgaged properties were repossessed – down from 5,300 in 2016. Meanwhile, the number of landlords behind on mortgage payments has risen by 20%, with 1,200 buy-to-let mortgages in “significant arrears” in the last quarter of 2017.
Sellers accept big discounts on top-end London property
LonRes research shows homes in central London sold at an average discount of 10% or more on their initial asking price in 2017, while transaction volumes were down 3.6% over the year.
Sofology sales leave DFS sitting comfortably
Group sales at DFS increased 4% over the 26 weeks to January 27, boosted by its acquisition of Sofology at the end of last November. Excluding Sofology, sales were 3.5% lower, although they were 3.3% higher when measured over two years, the retailer said in a trading update. DFS opened four new UK showrooms over the period, plus one in the Netherlands.
Bids for TV football rights due today
The latest deal for rights to show Premier League Football is to be decided today. Bidders such as Sky and BT will submit bids for the multi-million-pound contract rights to show 200 out of the 380 season games, with the league seeking to improve on the current £5.14bn deal expiring in 2019. Most analysts believe Sky and BT will remain the major players in UK television sporting rights, with Facebook, Google and Netflix not submitting bids for the next round.
Bank of England indicates rate rises
The Bank of England's MPC has voted unanimously to keep interest rates on hold, at 0.5%, and raised this year's UK economy growth forecast to 1.7%, up from the 1.5% forecast made in November. The Bank nevertheless gave a hawkish signal to markets, with Mark Carney saying monetary policy will “need to be tightened somewhat earlier and by a somewhat greater extent over the forecast period than anticipated”. Analysts expect another rate rise as early as May.