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Daily News Roundup: Monday, 11th November 2019

Posted: 11th November 2019

BANKING

TSB planning 100 branch closures, union claims

A trade union is claiming TSB is considering closing up to 100 branches as it seeks to find £100m in cost savings following its IT meltdown last year. The move will reportedly put 400 jobs at risk. Mark Brown, the general secretary for the Affinity trade union, said the bank will unveil the closures when it outlines its strategic review on November 25th. Mr Brown claims TSB CEO Debbie Crosbie “was brought in by Sabadell to cut costs, increase income and sort out the IT system before TSB is sold to the highest bidder in a few years’ time.” Meanwhile, City AM reports that the Financial Conduct Authority and Prudential Regulation Authority are set to carry out a joint investigation into TSB’s failure to prepare for a systems migration after City law firm Slaughter and May submitted its final report on the debacle.

Bank switching incentives rejected

The Treasury could intervene in the process to shift small businesses away from Royal Bank of Scotland after the scheme saw a slump in interest from small business customers to switch to rival lenders. RBS was ordered to transfer 120,000 small business customers by the European Commission after receiving a £46bn taxpayer funded bailout in 2008. Small banks including Metro, Starling, Santander, Co-operative and TSB, have signed up to the switching scheme but many say their efforts have been met with apathy, owing to the bureaucracy involved in changing bank and the incentives not being strong enough.

Standard Chartered promises clarity as CEO sees pension allowance halved

Standard Chartered CEO Bill Winters has agreed to halve the £474,000 cash payment he had been due to receive as an pension allowance. Andy Halford, finance chief, had his allowance halved to £147,000 from £294,000. The moves come after investors voiced the anger at the way the lender defined executives’ salaries for the purpose of calculating their pension benefits at its annual meeting in May. Standard Chartered said that it would “improve the disclosure” of executive pay in its next annual report.

Banking salaries jump amid talent shortage

Data released today by recruitment software provider Broadbean shows the average salary for financial workers climbed to £53,000 in the second quarter, up from £48,500 in Q1, as applications continue to fall despite an increase in roles advertised. Broadbean said some applicants were worried jobs could be moved abroad because of Brexit or lost altogether.

RBS issues social bond to tackle inequality

The Royal Bank of Scotland has issued its first "social bond", which backs lending to small businesses in the areas of the UK with the highest levels of unemployment and lowest job creation, raising about £650m. CEO Alison Rose said it showed the bank's "commitment to addressing regional inequality and promoting economic growth".

HSBC plans to double the size of its UK bank

HSBC has drawn up plans to double the size of its British bank. CEO Ian Stuart tells the Mail on Sunday that HSBC will invest heavily in mortgages and state-of-the-art digital technology to impress customers and woo top corporate clients from other big banks.

Tide hunts for new chairman

Eileen Burbidge, founding partner at Passion Capital and the chairman of Tide, is stepping down after a £44m funding round saw the challenger bank appoint two new investment directors. Ms Burbidge and current investor Creandum lost board seats in the reshuffle.

Goldman Sachs teams up with Nutmeg to offer Isas in UK

The retail banking arm of investment bank Goldman Sachs, Marcus, is set to launch a stocks and shares Isa with UK online wealth manager Nutmeg.

Competition drives mortgage rates close to 1%

The Times reports on the 1.05% mortgage launched by Halifax last week, predicting the move will lead to even cheaper mortgages as lenders compete in a sluggish market.

London races farther ahead as renminbi trading hub

Trading in renminbi in London was up 23% in Q2 compared with the same period last year, cementing the capital’s status as the world’s dominant foreign-exchange hub.

PRIVATE EQUITY

Thyssenkrupp to attract at least 4 bidders for lifts business

Two rival consortiums of some of the world’s largest private equity groups are preparing to bid for Thyssenkrupp's lifts business in a deal that could potentially be worth as much as $20bn.

Financial Times, Page: 14

We need to create our own tech-funding ecosystem

Alastair Kilgour, CIO at Parkwalk Advisors, says the UK needs to develop an investment system with different funds for different levels of risk to make it easier to scale businesses.

Financial Times, Page: 22

INTERNATIONAL

Sewing told to end dual role

Deutsche Bank CEO Christian Sewing is under pressure from shareholders to relinquish his oversight of the investment banking division over concerns it could distract him from his main job steering a turnaround.

Jail terms for 13 bankers over Monte Paschi scandal

Thirteen former Monte dei Paschi di Siena, Nomura and Deutsche Bank bankers have been jailed after being found guilty of helping Monte dei Paschi hide hundreds of millions of euros in losses using complex derivatives contracts.

Deutsche tech failings hit payments

The FT reports that the BoE has been in discussions with Deutsche Bank over its poor reliability with regard to its role in the UK’s CHAPS payment system

AUTOMOTIVE

Honda posts weaker earnings

Honda has said its profit in the July-September period fell 6.7% from a year earlier to 196.5bn yen (£1.4bn) as vehicle and motorcycle sales slipped.

AVIATION

Budget airlines buy Thomas Cook slots

Easyjet and Jet2.com have bought prime take-off and landing slots at London Gatwick and Manchester airports from Thomas Cook, which was placed into liquidation at the end of September after failing to secure a £1.1bn rescue deal with lenders and shareholders.

CONSTRUCTION

Private equity fund circles Kier’s property business

US private equity firm Lone Star is understood to be among the bidders stalking Kier’s property unit as the company fights against the weight of a £500m debt pile and turmoil in the construction industry.

FINANCIAL SERVICES

Labour politician calls for inquiry into FCA over payday lenders

Labour politician Stella Creasy has called for an investigation into the Financial Conduct Authority in relation to the two collapsed payday lenders, Wonga and CashEuroNet. In both cases the FCA installed a “skilled person” at the companies in order to overhaul processes and make sure the companies stuck to its rules. But Ms Creasy said the compensation claims that brought the lenders down indicated their bad lending practices had continued after the regulator’s intervention.

Woodford heir apologises over fund performance

Mark Barnett is preparing to apologise to investors after Morningstar raised concerns over the liquidity and performance of his High Income and Income funds at Invesco. Mr Barnett said he disagreed with the assessments but acknowledged “disappointing” returns. Meanwhile, Invesco’s core range of investment funds have seen outflows of more than $1bn a week over the past 12 months.

Anger as scammers go unchallenged

An investigation by the Times reveals that Google is making tens of millions from scammers who are using its search engine to lure savers to invest in high-risk or potentially fraudulent schemes. The Financial Conduct Authority has issued warnings over six savings websites reported by the newspaper, which is calling for more action to protect the public from web predators.

Vitality to push into banking sector

Vitality Health is set to expand into banking in the UK by offering products through tie-ups with lenders. The insurer is renowned for rewarding healthier people with perks and cheaper cover.

HEALTHCARE

Care home investor targets growth

Target Healthcare has spent £81.3m on nearly 40 properties as the real estate investment trust expands following its £80m share placing in September.

MEDIA & ENTERTAINMENT

Blackstone buys Bumble and Badoo dating apps

Blackstone has agreed to buy a majority stake in MagicLab, which owns dating apps Bumble and Badoo along with Lumen and Chappy. The deal values the company at $3bn (£2.3bn).

REAL ESTATE

Southwark dual carriageway is millionaires row

Blackfriars Road in Southwark, south London, has emerged as the new millionaires’ row, recording more sales of homes at over £5m than any other address in the country. Analysis by law firm Boodle Hatfield shows that in the past year there have been 16 sales above that figure on the street, also known as the A201. All were apartments in One Blackfriars, which sits by Blackfriars Bridge. In the past year 416 sales of properties for £5m or more were recorded by the Land Registry, of which 262 were in Westminster and Kensington & Chelsea, 107 elsewhere in London and 47 outside London.

RETAIL

Mamas & Papas bought back in pre-pack deal

Bluegem Capital has bought back the assets of Mamas & Papas through a pre-pack administration deal after the maternity chain failed. Six unprofitable stores will be closed affecting 73 staff while operations at its Huddersfield head office are set to be reviewed. Its remaining 21 stores will continue to trade as normal.

ECONOMY

UK economy dodges recession

The Office for National Statistics is expected to say today that third quarter GDP grew by 0.4% dispelling fears Britain was about to sink into recession for the first time since 2008. On Tuesday, the ONS is expected to say the jobs market is slowing, with the number in work falling by 90,000 over the three months to the end of September; but the unemployment rate is expected to stay at 3.9%.

OTHER

BoE delays stress test results

The Bank of England has delayed the publication of its Financial Stability Report and the full results of its annual stress tests of British banks until after the general election.

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