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Daily News Roundup: Monday, 12th April 2021

Posted: 12th April 2021

BANKING

Barclays tells bankers to take Saturdays off

Barclays is the latest investment bank moving to improve junior bankers’ mental health by suggesting workers take a break between 9pm on Friday and 9am on Sunday. The bank said that analysts and associates should not be working on Saturday except when it cannot be avoided due to live deals. The edict comes after analysts at Goldman Sachs detailed 100-hour weeks and a culture of "workplace abuse" resulting in boss David Solomon promising to reinforce a rule banning junior bankers from the office on a Saturday. Bank of America followed by boosting pay for juniors while Jefferies offered staff free fitness tech.

Banks prepare to claw back billions in Covid loans

HSBC, NatWest, Barclays and Lloyds have begun writing to businesses warning them that repayments on emergency support loans will soon be expected. Banks have handed out more than £75bn to 1.6m firms under a number of schemes set up by Rishi Sunak, the Chancellor, and are expected to spend millions on recovery. One senior banker warned that lenders could go in hard to recover debts after a recent court case found banks do not have a duty of care to borrowers who fail to repay.

Banking hubs could offer basic services

The Mail on Sunday talks to Natalie Ceeney, who two years ago wrote a report on access to cash, and is now leading a pilot scheme to introduce shared banking hubs into communities as a way of ensuring access to cash and advice. Although some welcome the move, former banking executive Derek French is sceptical. He founded the Campaign for Community Banking Services in 1998 and championed shared bank branches but banks rejected the idea. He believes Ceeney’s pilots have been set up to fail and insists that banks must simply be mandated to provide free access to cash for both consumers and businesses across the country.

Revolut prepares to enter Chinese market

Revolut has revealed that it is looking for a “head of operations” for China who will work from either Shanghai or Beijing. The fintech said it is looking for an executive who has a network of people in China that work in regulatory and public affairs and will help the bank to launch in the country. Fintech executives believe that the Chinese government is ready to embrace Western banking businesses, with founders pointing to PayPal becoming the first Western business to gain a banking licence in 2019 as a key milestone.

PRIVATE EQUITY

Harwood targets superyacht maintenance firm

London-based Harwood Capital said it was considering a 92.5p per share bid for Spanish-based superyacht painting and repairs firm GYG. Lombard Odier, the leading investor with 26.2% of shares, had signalled its support for the deal.

INTERNATIONAL

Bidders circle Credit Suisse’s fund management arm

Credit Suisse has denied its asset management arm is up for sale following reports that BlackRock and Jean-Pierre Mustier's blank-check firm Pegasus Europe are among investors expressing interest. The speculation comes as Credit Suisse boss Thomas Gottstein is pressured to take action after the bank lost $4.7bn from the collapse of Archegos, an error that followed closely on the heels of the Greensill Capital debacle.

AUTOMOTIVE

Ellesmere Port will close without support to build electric cars

Vauxhall is calling on the UK Government to provide incentives for the company to continue making cars at Ellesmere Port in Cheshire otherwise it will cease production of the Astra there and close the plant completely in April next year. Vauxhall’s parent company Stellantis said it had planned to build a new car with an internal combustion engine car at the site but a UK ban on conventional engines from 2030 made this uneconomical and support would be needed to replicate production of electric vehicles being built elsewhere.

AVIATION

Regulator asked to probe price of Covid tests for travel

Global airline body Iata has called on the Competition and Markets Authority to investigate the price of Covid tests for travel, with the travel industry warning that the PCR tests required by government will in effect block most international holidays this year. Industry sources said there was suspicion of “profiteering” by testing firms – a term echoed by transport secretary Grant Shapps. He threatened to remove high-charging firms from the Government-approved list.

Boeing grounds 737 Max planes

Boeing has alerted some sixteen customers to a possible electrical issue with some of its 737 Max aircraft, leading to around 90 planes being grounded. Boeing is working with the Federal Aviation Administration on what it described as a “production issue” that affects a specific group of planes, rather than the entire fleet.

Boardroom split fears for Heathrow over plan to raise £2.8bn

A plan by Heathrow to increase airport prices as a means to raise billions of pounds from customers has been deemed “unreasonable” by Qatar Airways, which said the move would not be in the consumer interest and “should be rejected”.

CONSTRUCTION

Investors urge UK building sector to check for modern slavery in supply chains

UK-listed construction companies are being asked by major investors to check for modern slavery in their supply chains. Construction is said to be the second-highest risk sector for forced labour.

FINANCIAL SERVICES

Suspect Sanjeev Gupta invoices used in Greensill loans raise fraud concerns

Several European metals companies have denied doing business with Sanjeev Gupta’s Liberty Commodities, raising questions over invoices purporting sales to the businesses which formed the basis of funding from Greensill Capital. Meanwhile, the Mail’s Alex Brummer says the Treasury, the Bank of England and the Financial Conduct Authority should have acted sooner over the invoice finance business as he calls for a judge-led inquiry into the debacle.

London Whale lessons for Credit Suisse and Nomura

The FT reviews the losses suffered by Credit Suisse and Nomura from the collapse of Archegos, likening the failure to the $6.2bn loss JPMorgan Chase suffered in 2012 from betting with credit derivatives. The paper’s Tome Braithwaite asserts that a public airing of the banks’ internal controls is necessary. Elsewhere, Bloomberg considers whether the Securities and Exchange Commission will be able to spot the next family office failure after missing the Archegos collapse. It is noted that in 2011 the regulator bowed to lobbying from wealthy investors and effectively insulated family offices from SEC inspections. “That means the booming industry - at least half of the estimated 10,000 family offices were formed in the past two decades - is dodging routine oversight.”

Reforming listing rules critical to post-Brexit prosperity

Peter Harrison, group chief executive of Schroders, makes the case for reforming London’s listing rules in a piece for the Sunday Times, asserting that part of the reason for the FTSE falling so far behind the S&P over the last decade is because of the failure to make the City the “go-to market for technology entrepreneurs”. Mr Harrison urges the City to adopt Lord (Jonathan) Hill’s proposals which would pave a more prosperous path for the UK’s technology industries – something which “is critical in the post-Brexit world.”

ESG funds not as green as you think

The Securities and Exchange Commission on Friday released a report detailing how some US money managers are promoting their funds as environmental, social and governance (ESG) products when the reality is quite different. Certain mis-characterizations were so bad that the agency signalled firms could be violating securities laws.

Car cover falls to seven-year low

Figures from MoneySuperMarket show the cost of car insurance has dropped to an average of £417 - a seven-year low as the number of drivers on the road plummets during the pandemic.

Higgins heads to Markerstudy

Benny Higgins, the former chief executive of Tesco Bank, is becoming chairman of specialist insurer Markerstudy, one of Britain’s largest privately owned insurance groups.

HEALTHCARE

Investors slam Arix over board performance

Biotechnology investment company Arix Bioscience has been forced to halt two board appointments after American investor Acacia Research said in a public letter that the firm faced “seemingly uncontrollable board tumult” and was being led by a “woefully inadequate investment group” after 18 director departures in five years. Arix has since told investors that it is putting the appointments on hold while it reviews parts of the business including “the question of board composition”.

Edi Truell backs gene therapy start-up

Edi Truell is backing gene and cell therapy start-up Virocell Biologics with his foundation putting up 30% of a £100m financing round.

LEISURE & HOSPITALITY

Tui targets €400m fundraise ahead of summer season

Germany-based travel operator Tui is to raise up to €400m via a convertible bond as it manages the impact of the pandemic on its business. Becky Lane, an analyst at Jefferies, estimated the new convertible bonds would give the company six months of headroom on cash burn.

MEDIA & ENTERTAINMENT

Italian consortium to bid for National Lottery

The Sunday Telegraph reports that investment firm CVC Capital Partners is backing a bid to run the National Lottery led by portfolio company Sisal, the operator of Italy’s most popular lottery.

REAL ESTATE

House prices expected to continue rising

Figures from Halifax on Friday show house prices rose 1.1% during March, the biggest increase in six months. In annual terms, prices rose 6.5%, the strongest reading in four months and taking the average house price to a record high £254,606, Halifax said. The lender added that it expected the upturn to persist in the next few months as consumer confidence grows on the back of Britain's swift COVID-19 vaccine rollout.

Hammerson to sell retail parks to Brookfield

Canadian private equity firm Brookfield is to buy seven of Hammerson’s retail parks for about £350m in a boost for the company which has seen £2bn wiped form its portfolio since the pandemic began.

RETAIL

Frasers Group to take £200m Covid hit

Mike Ashley’s Frasers Group is anticipating a £200m write-down of its stores and other property assets due to coronavirus, warning that further restrictions on retail are “almost certain”.

ECONOMY

UK has best first quarter for IPOs in 14 years

A new report shows the UK had the strongest first quarter for initial public offerings in 14 years with 12 main market and eight Aim IPOs raising a total of £5.6bn. This is more than half of the £9.4bn raised in the whole of 2020. Other surveys reveal renewed optimism for SMEs, consumers and employment prospects.

Consumers chomping at the bit

Experts are predicting a spending spree next week as shops reopen on what is being dubbed as “Bounceback Monday”. Analysts predict £4.5bn could be spent in the first seven days of post-lockdown shopping.

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