BANKING
Lloyds asked to move to four-day week
Unions are urging Lloyds Bank to follow Atom Bank and shift to a four day working week without cutting salaries. The digital lender became one of the largest employers in Britain to introduce the policy. Lloyds, which has 65,000 employees, has been asked to follow suit after its chief executive Charlie Nunn pledged to support "families and work life balance". Accord and Unite have also argued it was the right time to consider a four-day working week because the Scottish Government said it would trial the policy.
High street banks to fund provision of local cash services
Lenders including Barclays, Lloyds Banking Group and NatWest Group have agreed to fund the joint provision of cash services in communities at risk of losing them. The new joint venture would involve LINK, Britain's biggest cash machine network, conducting an independent assessment of prospective branch and ATM closures in the context of a local community's cash needs. LINK is to be handed £4m in start-up funding by the banks, which also include HSBC and Santander UK, to get the project off the ground.
Goldmans starts trading floor apprenticeship scheme
Goldman Sachs will start training apprentices directly on its London trading floor for the first time next year. The move is part of efforts within the sector to improve social mobility. The programme comes nearly a year after the Treasury and business department launched an independent taskforce to address a lack of socioeconomic diversity across financial and professional services, after research found that just under half of senior City roles were held by white men who attended an independent or selective state school.
Profile: Bank of London’s Anthony Watson
The Times profiles Anthony Watson, the founder of the Bank of London, which launched two weeks ago and already has a valuation of $1.1bn, although the paper says the reason for this is unclear. Watson hopes the business will be a disruptive force in the world of payments, clearing, settlement and transaction banking. But the Financial Conduct Authority’s register shows the Bank of London can hold no more than £50,000 in customer deposits and is only allowed to provide payments services with an aggregate value of £1,000. Operations are clearly embryonic, with no HQ settled yet and no revenues.
Treasury prepares new task force to tackle fraud
The Treasury has asked Joe Garner – who is expected to step down as chief executive of Nationwide next year – to lead a new task force designed to combat financial crime. Ministers have come under pressure to act following a 70% rise in authorised push-payment fraud.
PRIVATE EQUITY
PE pursues investment advisers for returns and fresh capital
Data from Echelon Partners shows that private equity firms have been buying up companies that advise individuals on their wealth, including Griffin Capital by Apollo.
KKR co-chiefs could net $1bn each as part of stock incentive scheme
The co-chief executives of KKR, Joseph Bae and Scott Nuttall, have been granted incentive stock awards that could be worth more than $1bn each.
INTERNATIONAL
Santander told to pay €68m to Andrea Orcel
Santander must pay Andrea Orcel €68m after the bank withdrew an offer to make him chief executive. Mr Orcel left UBS in September 2018 after Santander’s executive chairwoman Ana Botín offered him the job, only for the Spanish bank to rescind the offer months later, leaving Orcel unemployed. Santander had balked at the cost of compensating Orcel for the deferred pay he would lose by leaving UBS. Orcel claimed breach of contract – he had received a letter offering him the job – and the court agreed. Santander said it would appeal.
Credit Suisse seeks access to personal staff mobiles
Credit Suisse is tightening rules on electronic communications demanding access to the personal mobile phones and other devices of staff if they use them to communicate with clients or colleagues.
CONSTRUCTION
Elliott calls for change at Taylor Wimpey
Activist investor Elliott has taken a stake in Taylor Wimpey demanding the housebuilder bring in an external CEO following the resignation of Pete Redfern earlier this week. “A series of operational and strategic missteps has resulted in persistent share-price underperformance, leaving [Taylor Wimpey] shareholders frustrated and lacking confidence in the company,” Elliott said in the letter. Following this, Rob Perrins, the CEO of Berkeley, warned that US activist funds such as Elliott were taking advantage of low valuations in the UK market to make “opportunistic” approaches, bringing questionable benefits.
UK construction groups call for green shake-up of public procurement
Major construction firms and contractors have urged the Government to factor environmental impact into procurement decisions on new-build and refurbishment projects, as opposed to focusing solely on costs.
FINANCIAL SERVICES
Zopa demonstrates difficulty of innovation in finance
The Observer and the Sunday Telegraph reflect on news that Zopa is closing the peer-to-peer side of its business to focus on banking. The Observer’s Rupert Jones points out that Zopa once hoped to make banks a thing of the past by cutting them out of the equation. Now it’s telling its 60,000 existing peer-to-peer investors it will be handing them back their money so it can focus on being a bank. Matthew Lynn says in the Sunday Telegraph that peer-to-peer finance was an interesting concept, but the reality is it hasn’t worked out, “and plenty of investors and savers have been burned along the way.” Lynn concludes: “The lesson of peer-to-peer is that it is a lot harder to come up with anything new in finance than it often looks - and the promises of even the most hyped-up revolutionaries will end up being broken.”
LV= fails to win member backing for Bain takeover
Members of Britain's oldest mutually-owned life insurer, LV=, have rejected a £530m takeover by private equity group Bain Capital with 69% voting in favour, short of the three-quarters required. Gareth Thomas MP, chair of the All-Party Parliamentary Group for Mutuals, said the result was a “victory for mutuality”. Chairman Alan Cook said that he will stand down next year after following the vote. LV= is now holding talks with rival Royal London about a tie-up instead.
Jupiter appoints investment bankers amid takeover talk
Jupiter Asset Management has appointed Robey Warshaw to bolster its defences against a potential takeover bid. The investment bank will reportedly be helping to devise a strategy to protect Jupiter from predators as bosses plan to improve the fund's performance. The move comes amid rising speculation about which City asset manager will be the next acquisition target after a flurry of activity in recent weeks. Last week, Liontrust revealed it had snapped up Majedie Asset Management for up to £120m in shares and cash.
LEISURE & HOSPITALITY
Guy Hands injects £38m into hotel chain run by his wife
Private equity tycoon Guy Hands has injected £38m into the hotel chain run by his wife Julia after it made a £19m loss last year. Turnover for Hand Picked Hotels, which operates 21 country house and spa hotels across the UK and the Channel Islands, fell by 60% to £22.6m over the year to November 26 last year due to Covid lockdown closures. Directors said demand had been 'buoyant' since Covid restrictions were lifted.
Johnson accused of bringing hospitality trade to 'halt'
A joint letter from 130 leading businesses has accused Boris Johnson of bringing the hospitality recovery to a "shuddering halt" after he reintroduced Covid restrictions. The companies said healthy businesses would be destroyed and thousands of jobs lost unless the Treasury provided support, which it has so far been unwilling to give.
Pub prices expected to rise
Hospitality leaders have warned that pub prices are set to rise in the New Year, with Clive Watson, the executive chairman of the City Pub Group, warning the price of a pint could increase by 10p. Mr Watson said the industry needs to offset losses after widespread Christmas party cancellations.
MANUFACTURING
Some 52% of manufacturers reporting higher prices
Over half (52%) of manufacturers are reporting higher prices for UK goods in the fourth quarter, according to the industry body Make UK. The figure is up from 50% in the third quarter and marks the highest balance since the survey began in 2000. A balance of 58% expected prices to increase further in the first quarter of 2022. Anecdotal evidence from companies suggested that price rises of 10% were common and not attracting a response from customers, suggesting such inflation is becoming built-in, said Make UK.
MEDIA & ENTERTAINMENT
McCartney invests in royalty firm Audoo
Sir Paul McCartney is among a group of investors behind a £7.2m funding round for Audoo. The music start-up is seeking to revolutionise the royalty payment system for musicians through its Audio Meter device.
Major employers shun work-from-home call
Two more major employers have told staff to ignore Government work-from-home advice, with magazine publisher Future and the Telegraph Media Group both making clear they needed staff to be in the office.
REAL ESTATE
Brookfield snaps up Canary Wharf office block
Private equity firm Brookfield has agreed to buy the Canary Wharf headquarters of investment firm State Street from owner M&G for around £250m.
RETAIL
Investors remain uneasy over Boohoo
The Times reports on how Boohoo is finding it difficult to shake off concerns about its ESG credentials since it was reported last year that workers for the fashion retailer in Leicester were being paid below the minimum wage. Barclays argued on Friday that despite “significant progress” by the company, Boohoo’s stock continued to trade “within an ESG discount to this day”. One factor that may explains it, says Julien Roch, an analyst at Barclays, is that co-founder Mahmud Kamani and his family own around 20% of the shares and Kamani is eligible for bonuses of £100m if the group’s market capitalisation hits £7.6bn by June 2023.
Dunelm secures new sustainability-linked loan
Dunelm has secured a £185m sustainability-linked loan facility from Barclays, Lloyds, NatWest, Banco Santander, and Credit Industriel et Commercial. Dependent on the homewares retailer’s performance against certain sustainability performance targets, the interest rate on the debt facility could go up or down by up to 2.5 basis points.
ECONOMY
UK economy barely grew in October
The UK economy grew by just 0.1% between September and October, according to the Office for National Statistics, meaning it remains 0.5% below pre-pandemic levels. This was down on the 0.4% predicted by economists and marked a sharp decline from the 0.6% expansion the previous month. Supply chain disruption hit activity, with construction and dining out in restaurants both down and no growth recorded in manufacturing. However, the health sector again grew strongly while second-hand car sales and employment agencies also boosted the economy.
OTHER
UK spy chief raises fears over China’s digital renminbi
Sir Jeremy Fleming, the director of GCHQ, has warned that digital currencies, although presenting a “great opportunity” to democratise payment systems, could be used by a hostile state to surveil users and manipulate global currency transactions.