Banks urged to keep lending
UK lenders have been urged by the Bank of England to continue supporting households and businesses during the pandemic or risk a "costly" impact on the economy and the banking sector. The Bank's Financial Policy Committee (FPC) said it would be damaging to the economy if banks looked to avoid running down their capital buffers. The FPC predicted insolvencies would rise as corporate borrowing costs increased when government loan guarantee schemes end. Brexit could also pose a risk to the economy if a deal with the European Union is not reached by triggering sharp swings on the markets, it added. The FPC stated: “Some market volatility and disruption to financial services, particularly to EU-based clients, could arise," but most threats have already been mitigated by authorities and firms.
Bank staff told to deactivate NHS app
Lloyds and TSB have been accused by employees of telling staff to keep their phones in lockers during office hours, and advising them to deactivate the NHS COVID-19 contact tracing app while at work. Lloyds guidance states that “Colleagues who have downloaded the app to their own smart phone should not use the app while you are at work.” BTU union general secretary Mark Brown commented: “We know that in normal circumstances people will put their phones away, but obviously we’re not in normal circumstances now and the track and trace is there for a reason.” A spokesperson for NatWest said staff were encouraged to use the app but that it should be paused at work.
Start-ups stifled as banks reject account applications
The BBC talks to entrepreneurs who are being denied business accounts by banks with major lenders either closed to new applications or warning of long delays. Mike Cherry, national chairman of the Federation of Small Businesses, said: "We appreciate banks were swamped with bounce-back applications, but refusing to open business accounts for new customers will stifle start-ups just at the moment we need them most.”
Morgan Stanley to buy Eaton Vance in $7bn deal
Morgan Stanley is set to almost double in size with the $7bn acquisition of Eaton Vance; leaving it better positioned to compete with the likes of BlackRock and Vanguard. The deal follows Morgan Stanley's acquisition of the discount broker E-Trade Financial, completed last week for $13bn.
Danske Bank cuts 1,600 jobs to reduce costs
Some 7% of jobs at Danske Bank are to be lost as the lender implements cost-cutting measures in the wake of a money-laundering scandal, citing also negative interest rates.
EasyJet reports full-year loss of between £815m and £845m
EasyJet has announced its first full-year loss, with a headline pre-tax loss of between £815m and £845m, and another £440m of non-headline charges linked to its restructuring programme and fuel hedges, expected to weigh the carrier down. The budget airline said 50% fewer passengers were flown in the year to the end of September, with 38% of its previously planned schedule operated between July and September. Revenues of £620m for the final three months of the firm’s financial year were reported, nearly 75% lower than the year earlier period.
Hargreaves Lansdown hails ‘pleasing’ flat inflows
Hargreaves Lansdown has reported £800m worth of net new business in the three months to 30 September 2020, down from £1.7bn the year before. Hargreaves also reported it had gained 31,000 clients in the three months to September. Chief executive Chris Hill stated: “This is a pleasing result given the period has seen weakening investor sentiment arising from COVID-19 and the re-emergence of Brexit uncertainty.” Hargreaves also said that National Savings & Investments’ reductions to its accounts’ interest rates led to a “marked impact on flows” to its investor savings portal.
WPC chairman says transfer rules ‘must be changed’
Stephen Timms MP, chairman of the Work and Pensions committee, has warned transfer rules must be changed if the industry wants to put a stop to pension scams. At the second reading of the Pension Schemes Bill this week, Mr Timms told the House of Commons savers should not be entitled to their right of transfer in cases where the receiving scheme or destination is listed on the Financial Conduct Authority’s warning list.
LSE Group close to €4bn Milan bourse sale
The London Stock Exchange Group is hoping the sale of the Milan stock exchange to rival Euronext will smooth the way for regulators to approve its $27bn acquisition of Refinitiv, with an announcement expected imminently.
MEDIA & ENTERTAINMENT
Regulatory fight between EU and UK over Virgin-O2 merger
The Competition and Markets Authority (CMA) has requested that the European Commission transfer a probe into the merger between Virgin Media and O2 to Britain. Liberty Global, which owns Virgin Media, sought European Commission approval for the transaction last week. O2 is owned by Telefonica. Andrea Coscelli, the CMA's CEO, said: “As the merger will only impact UK consumers - and any effects would only be felt after the end of the transition period - it is only right for the CMA to request it back.” However, Liberty Global and Telefonica say transferring the case will only delay approval.
JPI Media attracts bids for regional papers
Takeover offers from Norwich-headquartered Archant and media executive David Montgomery have reportedly been received by local newspaper firm JPI Media. This comes after JPI put its regional publications up for sale in 2019. A bidding deadline is expected to expire this week.
TalkTalk surges on takeover offer
TalkTalk shares surged 16% yesterday after it agreed to consider a takeover bid from investment firm Toscafund that values it at £1.1bn.
City firms look to cut office space
A survey by the CBI has found that 74% of financial services firms are reviewing their office space needs amid an increase in remote working during the pandemic. Of the 133 firms polled, 88% said there had been a shift to remote working, with half saying most of their staff could work from home. More than two-thirds of the firms were investing in their IT infrastructure, but overall, jobs were tipped to be cut back.
Very Group boosted by online shoppers
Very Group has benefitted from a boom in online shopping during the pandemic, with sales growing 34% in the quarter to June 30 as customers moved online. The business, which owns Littlewoods.com and Very.co.uk, reported a pre-tax profit of £48m for the year to June 30 - compared with a £185.5m loss the previous year - after revenues rose by 2.9% to £2.05bn. Very.co.uk reported a 10.5% jump in sales to £1.23bn while Littlewoods sales slid 8.8% to £460.9m. Henry Birch, chief executive, said that the company is optimistic about trading over Black Friday and the Christmas period, commenting: "This year we are expecting both to be bigger than ever before. We think the cause of that will be because Covid is likely to impact people going to the high street and that people will be able get everything in one place from visiting our site."
Bailout terms risk Six Nations deal
CVC Capital’s £300m investment in the Six Nations could be jeopardised by the home unions seeking Government bailout funds, which would be expected to be paid back promptly should an investor such as CVC inject cash.
Bailey says Bank still has firepower
Andrew Bailey has said policy makers are not "out of firepower" and will take prompt action to support the economy should a second or third wave of coronavirus materialise. Speaking at a virtual conference on banking stability, the Bank of England Governor warned that the risks to the UK economy were "very much to the downside" due to rising numbers of COVID-19 cases and measures to bring it under control.
Risks ahead for Scotland’s economy
The Scottish Chambers of Commerce (SCC) has said in its latest quarterly economic indicator that the outlook was looking "grim in all sectors", particularly for businesses in retail and tourism. Employment levels were found to be negative across all sectors with significant risk of these rising further over the winter. The SCC also reported that the number of financial and business services companies reporting concern about rising taxation was the highest on record.