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Daily News Roundup: Monday, 11th June 2018

Posted: 11th June 2018

BANKING

TSB boss may have misled MPs

TSB chief executive Paul Pester faces increasing pressure to stand down after a report from technology firm IBM revealed the bank’s problems were broader than Mr Pester had said when he appeared before the Treasury Select Committee last month. Mr Pester told the committee that the problem was in the “middleware” of the bank, but the IBM report – which he had seen at the time – said the problems were related to “custom and package applications, middleware services and the network”. IBM’s report also questioned whether TSB carried out enough testing before the IT migration at the heart of the issue began. Meanwhile, the Times reports that TSB has so far only resolved a quarter of the 95,613 complaints it has received since it began its IT migration six weeks ago. TSB says it will try to compensate everyone as quickly as possible, offering: “We are looking at every customer's complaint individually to understand how they have been affected, so the amount of compensation customers receive will vary.” Compensation will include paying travel costs for online users who had to visit branches, reimbursing costs for calls to the bank, and covering any late fees if late payments incurred charges. A separate article in the Times notes that Sabadell, TSB's Spanish parent, handed out contracts worth tens of millions of pounds to third parties in the months before TSB’s bungled IT upgrade.

StanChart compliance head Barry leaves

Neil Barry, Standard Chartered's head of compliance, has quit after the bank found his management style, behaviour and language towards colleagues was "inappropriate". Tracey McDermott, who took interim charge of compliance after Mr Barry was put on leave, and Mark Smith, the chief risk officer, said his conduct was “not in line with our valued behaviours, although it fell short of warranting his dismissal.” The bank said that Mr Barry had expressed “regret if any of his interactions with his colleagues caused upset or offence - that was never his intention”.

NatWest tests cardless online payments

NatWest is to start trialling a new system of payment by bank transfer online rather than users having to type out their debit or credit card details. The bank is trialling the fast-track payment system with mobile phone chain Carphone Warehouse. Consumers who choose the option will be redirected to the NatWest website to validate payments, either by using fingerprint authorisation on a mobile phone if this is set up, or by inputting their online banking login details. The bank said a “secure token” passing between the bank and retailer would ensure the transaction could take place securely.

Halifax banks on biggest branch

Halifax has launched Britain's biggest bank branch. The branch, in central London, is spread across three floors, has more than 50 staff and is open seven days a week.

CYBG set for brand deal

Virgin Group is expected to give its blessing for the owner of Clydesdale and Yorkshire banks to use its name after the expected takeover of Virgin Money.

PRIVATE EQUITY

Foreign investment in UK tech firm doubles

Research by Dealroom and Tech Nation has revealed that British tech businesses attracted $7.8bn (£5.8bn) of funding last year, almost double the amount received in 2016. The research also showed that the UK's venture capital investment last year was higher than Germany's total of $3.2bn and France, which brought in $2.8bn.

Blackstone offers discounts on Saudi-backed infrastructure fund

The FT examines how Blackstone is using discounts to lure investors into its Saudi-backed infrastructure fund.

INTERNATIONAL

Capital flight from Italy surges, while German credits soar

The Bank of Italy’s debts to eurozone central banks - Target2 liabilities – leapt to an all-time high of €465bn (£408bn) in May as populist anti-EU parties rose to power. Analysts say foreign funds and banks are rotating money out of Italy and into accounts in northern Europe, with fears rising that Italian households could start withdrawing savings from local banks and join the exodus. Meanwhile, Germany’s Target2 credits are rapidly closing in on €1tn.

Swiss voters reject reforms

Voters in Switzerland have rejected a referendum that would have made sweeping changes to the country’s monetary and banking systems. Some 76% of the ballots cast opposed the so-called sovereign money referendum. The proposal would have barred banks from “creating” money when they grant loans, a measure supporters said would reduce the chances of a future financial crisis.

Backstop for EU bank fund imminent

Elke Koenig, the chairwoman of the Single Resolution Board, has said that EU member states will soon decide on a backstop for the EU bank rescue fund. Ms Koenig said she expected the backstop, needed to increase the financial stability of the bloc's Single Resolution Fund (SRF), to amount to €60bn (£52bn).

Top investment bank profits at pre-crisis levels

According to research by the FT, the world’s top investment banks made more money in 2017 than in the year before the collapse of Lehman Brothers.

Germany’s Olaf Scholz suggests euro clearing be moved to Frankfurt

Germany’s finance minister has suggested London’s euro clearing business should be relocated to Frankfurt after Brexit.

Small US banks are winners from deregulation, now they want more

The FT looks at how small US banks have benefitted since President Trump signed a new law to lighten the regulatory load on them.

AUTOMOTIVE

Apax in talks to buy BCA Marketplace

Apax Partners is considering a takeover bid for BCA Marketplace, the owner of the car-buying website WeBuyAnyCar. Rival investment house Clayton, Dubilier & Rice, which previously owned the business, is also said to be considering a bid.

AVIATION

Jet maker deal

Airbus has taken a controlling stake in Canadian rival Bombardier's flagship C-Series jetliner programme.

CONSTRUCTION

Treasury scrambles for investors for Carillion hospital project

The Treasury is seeking investors for the £353m Midland Metropolitan Hospital project after a consortium of banks pulled out of the deal in the wake of the collapse of Carillion.

FINANCIAL SERVICES

FCA changes listing rules to lure Saudi Aramco

The Financial Conduct Authority (FCA) has created a new premium listing category for sovereign-controlled companies to list in the UK. London has been vying for the Saudi Aramco listing with New York and Hong Kong, but current rules would have to be broken for the oil giant, which is only planning to sell 5% of its shares. In order to qualify for a "premium" listing the group would have to sell much more. The regulator said the new rules would bring “considerable benefit to investors” and would raise standards.

GDPR brings spike in recruitment

New data from Morgan McKinley has revealed that hiring in technology, compliance and legal departments across the City is booming because of the introduction of the GDPR. The research shows that although financial services jobs decreased by 6% month-on-month, GDPR kicked off a hiring spree in the sector that is expected to impact the industry for months ahead. The number of professionals seeking a new job decreased by 21% month-on-month in the same period, while job availability was down by 31% year-on-year.

Scottish borrowers feel unfairly misled

Research commissioned by Shawbrook Bank has suggested that Scottish borrowers believe they are being unfairly misled by APRs advertised for personal loans. Shawbrook has now called into question the practice of using “teaser” or “representative” APRs to entice consumers into applying for a loan only to find the actual rate they get at the end of the process is more expensive.

Pension funds plan to pile into index trackers

Create-Research estimates that assets held in passive funds by pension schemes will grow by around 6% a year over the rest of this decade.

HEALTHCARE

Takeda closer to Shire deal

Takeda, which is preparing to take over Shire, has secured up to $7.5bn through a loan agreement, entering a credit deal with a consortium of banks, including JP Morgan Chase and Sumitomo Mitsui Banking Corporation.

MANUFACTURING

Rolls-Royce refuses to confirm job cuts

Rolls-Royce has refused to confirm or deny claims that it is set to cut more than 4,000 jobs as part of efforts to cut costs and boost profits. The Sunday Times had reported that middle managers and back-office staff will be “culled”. However, the company said it would not comment on “current media speculation”.

MEDIA AND ENTERTAINMENT

Patterson to step down as BT boss

Gavin Patterson is to step down as chief executive of BT after the company said a change of leadership was needed. BT said a poor reaction to its latest results, in which the company set out plans to cut 13,000 jobs, had prompted the move. BT said Mr Patterson, who has led the firm for five years, would remain in his post until a successor is chosen later this year.

REAL ESTATE

Local homes cost a Lidl bit more

Analysis by Lloyds Bank suggests that living near a budget supermarket boosts house prices. The study found that the price of homes close to Lidl, Aldi, Morrisons and Asda branches have typically increased by 15% (£29,316) over the past four years. Despite this strong percentage increase, the analysis shows that the "Waitrose effect" still delivers the biggest house price premium in cash terms, with homes close to a Waitrose store costing £43,571 more than they did four years ago.

RETAIL

Sainsbury's boss handed 46% pay rise

Mike Coupe, the CEO of Sainsbury’s, has landed a £427,000 bonus ahead of the supermarket’s proposed merger with Asda. Mr Coupe’s total pay jumped by 46% to £3.4m in the last financial year, boosted by £1m worth of long-term share awards and a large cash bonus for hitting targets.

ECONOMY

Record uncertainty over rate rise

A BoE survey shows that a record number of Britons are unsure about whether interest rates will rise or fall in the coming year. It was found that 25% had no idea about the direction that rates would take over the next 12 months. The poll saw 51% of respondents say they expected rates to climb within a year, down on the 58% who foresaw an increase in a similar poll in February.

OTHER

Honours

Douglas Flint, the former chairman of HSBC, has been appointed a knight in the Queen's birthday honours. Brenda Trenowden, head of the financial institutions group at ANZ Bank and global chairman of the 30 Percent Club, is being awarded a CBE for services to exports in the financial sector and to gender equality. Emily Cox, director of public affairs at Virgin Money, has been awarded an MBE for promoting gender diversity in the financial services industry.

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