BANKING
Mark Tucker accused of attack on democracy over Hong Kong
HSBC chairman Mark Tucker has been accused by MPs of affronting “the democratic values which underpin our free societies” after he refused to meet for talks if discussions included calls for the bank to unfreeze the assets of Hong Kong activists. The co-chairmen of the Inter-Parliamentary Alliance on China (IPAC), Sir Iain Duncan Smith and Uffe Elbaek, a member of the Danish parliament for the Independent Greens, wrote to Tucker saying HSBC’s practices suggest “a disturbing pattern of behaviour whereby HSBC prioritises profit-seeking over honouring its commitments to its clients and upholding the international law on which its success depends.”
FCA fines Lloyds over renewal letter pledge
The Financial Conduct Authority has fined Lloyds Bank’s insurance arm £90m for sending insurance renewal letters to customers suggesting they were getting a “competitive price” without backing up the claim. The FCA said there was a “risk of harm” to customers because it was likely that the renewal premium was higher than had been the case in previous years.
Bankers in talks with No 10 over cladding crisis
The bosses of banks including Lloyds and NatWest met with Government officials this week to discuss the cladding crisis triggered by the Grenfell Tower fire, which has left millions of people unable to move from their properties. Talks revolved around possible government guarantees on some mortgages and liability issues if there is a fire at a building with cladding.
Lutnick: Long hours are part of the deal
Cantor Fitzgerald boss Howard Lutnick has said junior bankers who complain about being burned out by long hours in the office should stop moaning and think about changing career. "Young bankers who decide they’re working too hard - choose another living is my view," Mr Lutnick told Bloomberg TV. "These are hard jobs."
Santander to block payments by UK banking customers to Binance
Santander has joined Barclays in blocking retail customers from sending money to Binance following the Financial Conduct Authority's warning to consumers over the crypto exchange.
PRIVATE EQUITY
Don’t blame PE, unshackle our public companies
Ben Wright in the Telegraph reports on how listed company bosses are fleeing to private equity – not for huge pay-outs - but to be free from “all the performative nonsense associated with running a public company.” Headhunters say it’s actually turned into a brain drain but executives want to actually run a business rather than jump through hoops. Wright cites William Wright from the think tank New Financial who points out there have been more reports and codes on corporate governance for listed companies in the last 25 years than there have been prime ministers. In turn this has cemented the unhealthy fixation on quarterly reporting; leaving private equity’s three to five-year investment horizons increasingly viewed as long-term money.
Private equity’s buying spree examined
The Guardian takes an in-depth look at private equity and its current swoop on British companies. The paper lays out the pros and cons but with concerns over the private equity approach to profit-making making waves, peer and accounting professor Prem Sikka says political pressure could see reliefs which benefit buyout firms tweaked as a means to “clip private equity’s wings.”
BC Partners launches sale of industrial ceramics group
BC Partners has hired Bank of America and Morgan Stanley to help with the sale of German industrial ceramics company Ceramtec in a deal that could value the operation at about €3.5bn.
INTERNATIONAL
US banks expected to see big jump in 2Q profits
Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co, are among the US banks expected to report a stunning rebound in second-quarter profits next wek, according to analyst estimates compiled by Refinitiv. The expected loan losses from the pandemic have not yet materialised and although core businesses are predicted to have slumped, Wall Street banks should make up some of the shortfall thanks to a record-breaking takeover boom.
Global banks consolidate grip on FX market
JP Morgan, UBS and Deutsche Bank took the top 3 positions in the global foreign exchange market last year with their success driven by investment into electronic trading and algorithmic tools. New entrants ceded market share amid the rise in electronic and algorithmic trading.
Brussels plans new regulator after dirty money scandals
The European Banking Authority could be stripped of its anti-money laundering powers amid concerns that it has failed to block a string of scandals. If the move goes ahead it will lead to the creation of a new anti-money laundering watchdog with a board that is independent from EU countries.
Turkey's banks set for capital injection
Authorities in Turkey are considering a fresh capital injection for state banks after resources were depleted battling the pandemic and hopes for a recovery grow. The issue is particularly pressing with bad loans stemming from the 2018 currency crisis needing to be tackled soon.
Dutch challenger bank Bunq boosted
Pollen Street Capital has taken a 10% stake in Netherlands-based challenger bank Bunq for about €193m, with the majority of the capital set aside to acquire Capitalflow Group of Ireland.
Danske Bank lifts net profit guidance to $1.9bn
Danske Bank has today lifted its net profit guidance to $1.9bn for this year based on lower-than-expected loan impairment charges – due to a faster than anticipated macroeconomic recovery – as well as higher customer activity.
Central bankers see limited role for crypto in reserve operations
A survey by UBS of 30 leading central banks has found that nearly 85% of reserve managers do not expect cryptocurrencies to replace precious metals held in foreign currency reserves.
AUTOMOTIVE
Massanet to join Aston Martin board
Aston Martin has hired the founder of the luxury fashion website Net-a-Porter as part of a shake-up designed to help restore the carmaker’s upmarket credentials. Dame Natalie Massanet will be joined on the board by another fashion and luxury expert, Marigay McKee, who had a career with cosmetics brand Estée Lauder before joining Harrods. The appointments mean Aston meets recommended levels for listed companies to have women making up a third of their board.
VW and BMW fined for operating cartel
VW Group and BMW have been jointly fined €875m (£750m) by the European Commission for operating a cartel to hold back development of pollution-reducing engine technology. The Commission said the car manufacturers had technology that could reduce emissions but agreed not to implement any more than the minimum required to meet EU standards.
Stellantis: Subsidies not needed to cut cost of EVs
Vauxhall owner Stellantis, which also owns Peugeot, Citroen and Fiat, has claimed that the cost of electric cars will soon be on a par with petrol and diesel motors without the need for government subsidies. The prediction comes as the company outlined a €30bn (£26bn) plan to electrify its vehicle range.
AVIATION
Jet2 confident holidays will lift off
Jet2 has told its investors "bookings for summer 2022 are encouraging". This comes as the company reports a £378m loss for the year to the end of March.
China’s rival to Boeing and Airbus set to join battle for the skies
The first Chinese-built passenger jet is nearing state approval to begin operating commercial flights, in a direct challenge to Europe’s Airbus and US rival Boeing.
CONSTRUCTION
Countryside Properties completes strategic review
Countryside Properties has announced plans to focus on working with housing associations and other bodies, following a strategic review into its business. Numis Securities analyst Chris Millington commented: “In our view this is a sensible conclusion to the strategic review, as it enables Countryside to retain its key people, grow its partnerships business and also return substantial cash to shareholders.”
Persimmon in shareholder update
Persimmon has announced that it expects to return 110p per share of surplus capital to shareholders as an additional interim dividend in August, having sold 7,406 homes in the first six months of the year, with revenue for the first half up 53% year-on-year to £1.84bn.
FINANCIAL SERVICES
Diamond to take crypto firm Circle public in Spac deal
Bob Diamond, the former Barclays boss, is set to take cryptocurrency firm Circle public through a merger with blank-cheque listing firm Concord Acquisition Corp. The merger is expected to raise $691m for the new company, Circle said.
Four key questions central banks must answer about digital currencies
An article in the FT comments on the likely effects of central bank decisions to issue currencies in digital form, noting concerns about anonymity and privacy, among other factors.
LEISURE & HOSPITALITY
Fuller's to scrap dividend after annual losses
Pub group Fuller, Smith & Turner is scrapping its full-year dividend, after reporting an annual loss thanks to pandemic-led restrictions. The group said like-for-like sales at venues directly managed by the company were at 76% of pre-pandemic levels for the 12 weeks to 3 July, pointing to an improvement in net debt levels after the easing of some restrictions. Fuller's said adjusted pre-tax loss stood at £48.7m for the 52 weeks to 27 March, compared to a profit of £19.4m in the previous year.
Pizza Express seals £335m refinancing
Pizza Express has confirmed it has concluded its £335m long-term financing plan, consisting of five-year bonds, and is now a “fitter” company after emerging from Covid lockdowns.
William Hill auction draws private equity rivals
Advent International is reportedly vying with rival Apollo Global Management and 888 Holdings, the online gambling operator, in a bid to gain control of William Hill’s European operations.
MANUFACTURING
Sheffield Forgemasters nears nationalisation
Troubled steelmaker Sheffield Forgemasters is close to being nationalised in a deal that will safeguard its defence work and help the UK deliver a new generation of mini nuclear power stations. The MoD confirmed that Forgemasters is a “strategic supplier” but declined to comment further.
MEDIA & ENTERTAINMENT
BT strikes deal with CWU over restructuring
The Communications Workers Union and BT have struck a deal that will avoid strike action and ensure the rollout of superfast broadband is not interrupted. The agreement means workers will get a pay rise next year with details yet to be determined and BT will also review the planned closure of some sites. A BT spokesman said: “Reaching this agreement is the culmination of intensive negotiations between BT and the CWU and it also recognises their role as a critical stakeholder as BT moves forward with its modernisation plans.” Andy Kerr, deputy general secretary of the CWU, called the deal “a huge turnaround from where we were 18 months ago”.
REAL ESTATE
HSBC announces cheapest mortgage rate ever
HSBC has reduced its two-year fixed rate to 0.94%, with Lansdown Financial Services director Doug Miller noting that: “Banks appear to be entering a rate war following the end of the Stamp Duty madness.” Altura Mortgage Finance broker Rob Gill added: “The bun fight for low loan-to-value mortgages continues with this latest salvo."
EU house prices rise at fastest pace since 2007
Low interest rates and high household savings have seen EU house prices increase at the fastest pace since the third quarter of 2007, notes a report in the FT.
RETAIL
Watches of Switzerland reports rise in revenue
Luxury watch group Watches of Switzerland has reported that total revenue grew 13.3% to £905.1m in the 53 weeks to 2 May. Revenue in the UK alone lifted 3.6% to £606.5m, while the group also recorded a statutory profit before tax of £63.7m, up from £1.5m last year. The group shaved its net debt from £129.7m last year to £43.9m this year.