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Daily News Roundup: Monday, 10th December 2018

Posted: 10th December 2018

BANKING

Sabadell denies TSB sale talk

Spain’s Sabadell has denied reports it is looking to sell TSB, saying its British unit is its “reason for being” and will look to snap up other assets. Talk of a sale came on the back of comments by chairman Josep Oliu, who said Sabadell would present a plan to turn around TSB in January, saying it aims to enter “process of consolidation in the future in Britain.” A spokesman said that Sabadell’s priority, once it had got beyond IT issues which plagued TSB earlier this year, was to “deploy more modern and efficient platforms in Britain, to be an important player in the small and medium-sized business market.”

RBS probes bullying claims

RBS has launched an investigation on the back of claims from a whistleblower that staff linked to its Amethyst project have been subjected to harassment amid a “culture of bullying”. An spokesman said: “RBS takes whistleblowing very seriously,” adding that “appropriate action will be taken if any of the allegations are substantiated.”

Building society Leeds the way on tax

Leeds Building Society has achieved the Fair Tax Mark, meaning it is committed to paying the right amount of corporation tax. Chief executive Richard Fearon commented: "We're proud to be the first national high street financial institution to achieve Fair Tax Mark."

HSBC bars third party paying in

HSBC has stopped accepting cash payments into personal bank and savings accounts from third parties, although cheque deposits from third parties are still permitted. The bank says the move, which does not affect those managing someone else’s account through a power of attorney, comes as “addressing financial crime and protecting our customers from it is an absolute priority.”

Mortgage lenders cut rates to meet end-of-year targets

Major mortgage lenders are cutting interest rates as they look to entice new customers as the end of the year approaches, the Telegraph reports. Data from Moneyfacts shows that interest rates for first-time buyer deals have dropped across the board, with the average rate for a two-year fixed mortgage with a 5% deposit now 3.33%, down from 4.02% a year ago.

80% of SME loans approved in Q3

UK Finance figures show that 69,980 new loans and overdrafts for SMEs, worth £7bn, were approved during the three months to September 30. The period saw 8 in 10 applications for SME finance approved by banks. The figures also reveal that outstanding amounts of lending to SMEs totalled £101bn at the end of Q3 2018, with deposits held by SMEs in business current and deposit accounts worth a total of £202bn as of the end of September.

Higgins highlights SNIB aims

The Sunday Times interviews Benny Higgins, the former chief executive of Tesco Bank and head of retail banking at HBOS who is working with the Scottish Government to establish the Scottish National Investment Bank. He says the £2bn project has two main goals: to help finance promising companies that "don't have conventional collateral, so they find it difficult to borrow in a traditional fashion", and to invest in "mission-led projects" such as the low-carbon economy.

The Mortgage Works eases rules for landlords

The Mortgage Works has offered buy-to-let landlords an easier route to securing a mortgage, by softening the financial tests it applies to assess whether they are capable of meeting repayments even if interest rates go up. Under the revised tests, borrowers have to show the rental income on the property will be at least 125% of the mortgage costs, or 145% for higher earners.

Tide doubles accounts

Business banking start-up Tide has doubled its number of account holders to 56,000 – a figure it says represents around 1% of the UK’s SME accounts.

PRIVATE EQUITY

Brexit dampens private equity appetite for UK deals

Dealogic data shows that $30bn of private equity transactions covering 40 deals have been agreed so far this year, far lower than the $50bn in acquisitions by buyout groups recorded in 2015.

Baring to buy electronics firm

Baring Private Equity Asia is to buy Japanese electronics firm Pioneer Corp for $900m in a two-stage investment.

Feelunique sale collapses

Palamon Capital Partners has reportedly pulled out of a deal to buy online beauty retailer Feelunique after refusing to meet the £200m valuation.

INTERNATIONAL

Danske Bank names new chairman

Danske Bank shareholders have voted Karsten Dybvad, head of the Confederation of Danish Industry for the past eight years, in as chairman at an extraordinary general meeting. He was proposed as the bank's new chairman by top shareholder A.P. Moller Holding, and replaces former chairman Ole Andersen who leaves the role following a money laundering scandal at the bank's Estonian branch. Mr Dybvad has vowed to “work full time” to restore trust and confidence in the bank, saying there is no existential crisis at the lender.

Deutsche Bank reports suspicious tax transactions

Deutsche Bank has reported suspicious transactions to German tax authorities, with an internal review suggesting clients may have been able to claim dividend tax credit on shares they did not hold.

Germany considers bank merger scenarios

Magazine Focus claims that the German government believes a merger between Deutsche Bank and Commerzbank could deliver a lender capable of backing its companies abroad. It says one option the finance ministry is examining would see the state take a stake in Deutsche and drive a merger through a share swap. Another avenue would see investors finance a takeover of Commerzbank by Deutsche, while a third option would see the creation of a holding company as a vehicle for a merger.

Julius Baer in Santander talks

Sources close to the matter claim that Swiss private bank Julius Baer is in talks about transferring its Venezuelan book of business to Spain's Banco Santander.

CONSTRUCTION

Interserve in rescue talks

Interserve has confirmed that it is seeking a rescue deal as it looks to cut its debt, saying it is "making good progress" on a long-term recovery plan. The outsourcing firm, which provides construction and other services to prisons, schools and hospitals, says it is looking to implement a debt-for-equity swap, with it noted that a deal could give banks including RBS, HSBC and BNP Paribas, as well Emerald Asset Management and Davidson Kempner Capital, control of the group.

FINANCIAL SERVICES

Brexit will cut thousands of jobs and forfeit billions in tax

Sir Mark Boleat, former chairman of the City of London policy and resources committee, says London will remain a major international financial centre after Brexit, although jobs and tax revenues will decline.

Crowdcube gives institutional funds the edge over investors

Crowdfunding platform Crowdcube’s latest funding includes clauses which give preferential treatment to institutional funds, protecting them in the event of an undervalued sale or a liquidation – with retail investors not afforded the same security. Crowdcube, which promises the “democratisation of finance”, commented: “The information about share classes was shown clearly and transparently in our pitch.”

BAE pension fund to boost small businesses

BAE Systems Pensions has announced a £200m programme that will see it lend to SMEs through ThinCats, a peer-to-peer lender.

Fidelity eyes robo-advice launch as banks pile in

Fidelity International is considering the launch of a robo-advice service in the UK for investors on its Fidelity Personal Investing platform, having rolled out a digital service in Germany in October.

MEDIA AND ENTERTAINMENT

O2 seeks outage damages

O2 is understood to be seeking millions in damages from its technology supplier Ericsson in the wake of a network collapse which left users unable to use their mobile data last Thursday, with the global compensation bill for the outage estimated to be as much as £100m. Meanwhile, O2 has confirmed its compensation plans for customers, with contracted users being given a refund for two days’ service and pay-as-you-go users given 10% extra when topping up.

REAL ESTATE

House price growth at six year low

Annual growth in UK house prices slowed to its lowest rate for six years with property values barely changed from a year ago, according to Halifax. It said prices rose by 0.3% in November compared with a year earlier. House prices fell by 1.4% compared with October, with the average home now valued at £224,578.

RETAIL

Debenhams misses bonus targets

Debenhams has reported the biggest loss in its 124-year history, meaning the retailer’s bosses miss out on multimillion-pound bonuses and share awards. Debenhams had set a minimum target of £85m pre-tax profits to pay out the lowest bonus award of 10% of salary, but reported underlying profit of just £33m, and was pushed into a loss of £491.5m by write downs of £512.4m. Debenhams has already said that it will close 50 shops in the new year and an over reliance on promotions has put pressure on profits.

ECONOMY

Next downturn will need ‘lower taxes or more spending’

Former Bank of England deputy governors Rachel Lomax and Sir Charles Bean have said the Government will need to cut taxes or boost spending when the next economic downturn arrives, with monetary policy only able to have a limited impact because interest rates are at historically low levels.

OTHER

FCA fines fall 88%

The Financial Conduct Authority has issued fines worth £27.6m in 2018 so far – 88% down on last year’s £229.5m. The dip is attributed in part to the fact that 2017 saw a number of record-breaking penalties. The data, from law firm Clyde & Co, shows fines levied against individuals in 2018 total £1.3m, while £26.3m were issued against companies.

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