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Daily News Roundup: Monday, 13th May 2019

Posted: 13th May 2019


Metro Bank cash injection talks 'well advanced'

Metro Bank has said its plans to raise £350m to strengthen its finances are "well advanced" as it tries to quell questions over its financial health. The bank's shares have fallen around 75% since January, when it announced it needed the money to plug a funding gap left by an accounting error. It had been suggested the bank was struggling to raise the cash, but Metro says it is now in "final discussions" with shareholders and new investors over its plans. Last week, US investment firm Fidelity Management and Research cut its 7.55% stake in the challenger bank to 5.37%. In another blow, the Investment Association has put Metro on “amber alert”, its second-highest warning, amid concerns over excessive pay. However, Metro has been handed a boost after some investors stepped back from the threat of legal action over the accounting blunder. The FT reports that Metro Bank has drawn up plans to sell more than £1bn worth of loans at the centre of the misreporting scandal.

Government may force banks to save high street branches

A report by the Treasury Committee due out today will say that face-to-face banking facilities must be preserved to prevent large sections of society being cut off from vital financial services. MPs say banks should consider sharing premises and operating mobile branches to maintain a physical presence around the country, as branch closures have left many small towns and rural areas with no high street banking facilities. If banks fail to prevent closures voluntarily then the government or a regulator may need to intervene “to force banks to provide a physical network for consumers”, the committee warns. Nicky Morgan, chair of the committee, said: "The financial inclusion of vulnerable consumers… should be of the utmost priority for financial services providers, the Government and financial regulators."

TSB walks away from challenger bank fund

TSB has walked away from the government’s £775m scheme to improve competition in business banking, ahead of the next awards being distributed on Tuesday. Pots of £50m and two of £15m, from Royal Bank of Scotland as part of the terms of its 2008 government bailout, are available for challenger banks. Some commentators have suggested TSB didn’t want to risk the embarrassment of losing out to much smaller banks again. But many banks have also said privately that the process has been chaotic and a waste of executive time.

Concerns over banking misconduct victims’ representation

The co-chairman of the All Party Parliamentary Group (APPG) on Fair Business Banking has warned that victims of banking misconduct could be denied equal status with financial services firms on a new regulatory working group. Kevin Hollinrake MP said that small business groups and alleged victims are underrepresented on groups that have been established to support the new dispute resolution service implementation steering group. Separately, Heather Buchanan, executive director of the APPG, has asked the Financial Conduct Authority to explain whether it would have acted against Royal Bank of Scotland bosses over the bank’s small business lending scandal if the Senior Managers Regime had been in place at the time.

Over-60s struggle to put finger on thumbprint cards

Researchers have warned that credit cards which allow users to authorise payments using only a fingerprint may be unusable for older people. A study shows that when people reach the age of 62, there is a noticeable decline in the number of fingerprints that can be easily read. The warning comes after the piloted launch last month of a Royal Bank of Scotland credit card that allows people to authorise a transaction with a thumbprint.

Lloyds calls on staff to back vote for pension deal

Lloyds Banking Group has urged employees to vote at its annual meeting in an attempt to reduce the backlash over its top executives’ pay packets. The bank has produced a video to tell staff why it is important to exercise their vote on Thursday, amid criticism of the pay and pension package for chief executive António Horta-Osório.

Executives vie for top RBS role

Outgoing Royal Bank of Scotland chief executive Ross McEwan has said the group is considering two internal candidates to succeed him, including NatWest deputy chief executive Alison Rose.

UK’s smaller banks navigate competition and tepid economic growth

The FT looks at how the fortunes of small and mid-sized lenders such as Metro Bank, Secure Trust and Arbuthnot have diverged radically in recent months.


The Brexit effect: private equity firms shun UK for Europe

The FT examines how political uncertainty is affecting PE investment. The value of dealmaking in Europe, excluding the UK, rose to €63.9bn in 2018, but in the UK it fell to €16.7bn.

Why female founders are tapping female investors for cash

The FT looks at how women experienced in venture capital are setting up networks and encouraging peers to learn about angel investing on order to support female entrepreneurs.


Banks brace for closure of EU currency manipulation probe

The EU will this month reveal the conclusions of its investigation into claims that traders manipulated major currency benchmarks and exchange rates - allegations that first surfaced in 2013.

European investment banks face existential question

The Sunday Times’ Emma Dunkley says European investment banks are facing an existential question: Whether to scale up to fight their larger US rivals, or throw in the towel and exit completely.

Denmark’s former top regulator charged over money laundering

Henrik Ramlau-Hansen, the former chair of Denmark’s financial regulator and former finance director of Danske Bank, has been charged in connection with a €200bn money laundering scandal.

Goldman nears deal for wealth management group

Goldman Sachs is nearing a deal to buy investment management group United Capital Financial Partners as it accelerates its push into mass market wealth management.


Uber shares sink on stock market debut

Uber shares fell 7% on their first day of trading last week, as the highly anticipated share market listing failed to win over investors.


IAG profits halved

British Airways owner IAG has reported operating profits of €135m in the first quarter, 60% lower than the €340m reported in the same period last year, following a rise in fuel costs.


LCF investors given hope of redress

Thousands of small-scale investors who lost their savings by investing with London Capital & Finance (LCF) have been given fresh hope they may qualify for compensation. Nearly 12,000 people put £236m into the firm which collapsed in January. The Financial Services Compensation Scheme said it would "explore whether there are grounds for compensation," having earlier said investors wouldn't be able to lodge claims as the scheme was unregulated.

Lloyd’s calls in BSB for cultural review

Lloyd’s of London has called in the Banking Standards Board to launch the biggest cultural review of the insurance sector, following allegations of sexual harassment and bullying. The aim is to stamp out bad behaviour and the image of a boozy, “laddish” culture. The BSB will survey employees about whether they feel able to report cases of inappropriate behaviour, and whether they have wanted to raise concerns over sexual harassment in the past 12 months.

Brewin Dolphin agrees to buy Investec’s Irish wealth unit

Brewin Dolphin has agreed to buy Investec’s Irish wealth management business for €44m. Brewin Dolphin revealed it was in discussions with Investec last month and on Friday said it would tap investors for an extra £60m to help fund its growth. The wealth manager denied the swoop was a defensive move to counter the impact of Brexit.

Lendy hit by Barclays IT glitch

Peer-to-peer company Lendy has suffered a setback after an IT glitch at Barclays stalled payments to its customers. The firm has told customers it is working through a backlog of payments after Barclays “inadvertently deleted” its ability to process those payments.

Poor pensions advice comes under regulator’s scrutiny

John Glen, economic secretary to the Treasury, has revealed the Financial Conduct Authority is investigating 30 individuals and firms over poor pension transfer advice and scams.

Coltrane rejects NSF’s Provident bid

American hedge fund Coltrane Asset Management has become the second big investor in Provident Financial to reject Non-Standard Finance’s £1.1bn hostile takeover of the doorstep lender.

Goldman bidding for UK broker

Goldman Sachs is in the running to buy British insurance broker Aston Lark for up to £350m. The firm was put up for sale by Bowmark Capital late last year.

Softbank eyes Greensill

SoftBank is said to be in negotiations with former Morgan Stanley and Citigroup banker Lex Greensill over investing about £500m in his fintech firm Greensill.


Thomas Cook to update shareholders on sale plans

Thomas Cook will provide an update on plans to sell its airline this week when it reports what are expected to be lacklustre results. The travel company has courted bids for its airline from rivals including Virgin and Lufthansa.

Cavendish Hotel owner eyes £250m sale

CapitaLand, owner of London’s Cavendish hotel, has appointed Jones Lang LaSalle to offload the property for a reported £250m.


Brexit stockpiling accelerates manufacturing growth

The UK economy picked up in the first three months of the year after manufacturers' stockpiling ahead of Brexit helped to boost growth. Growth was 0.5% in the quarter, up from 0.2% in the previous three months, the ONS said. The manufacturing sector grew at its fastest rate since 1988 in the period, driven by manufacturers rushing to deliver orders before the original Brexit deadline of 29 March.


BoE warns of Brexit impact on investment

Bank of England deputy governor Ben Broadbent has warned about the damaging impact of further Brexit delays. He said business investment has already been "feeling the consequences" and cautioned that delaying Brexit further means prolonging the uncertainty for companies and risks hitting the wider economy.

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