British banks closing accounts of expats
The Times reports that British banks are withdrawing mortgages, savings accounts and credit cards from expats in Europe in anticipation of losing permission to operate on the Continent. Lloyds Banking Group has written to 13,000 current account and credit card customers who live in the EEA to tell them that their accounts will be closing on December 31, while Barclays has said that it will close all savings and investment products and current accounts for British expats living in Italy, Estonia, Slovakia and Belgium on December 31. NatWest said that it was "still hoping that we don't have to exit any accounts", while a spokesman confirmed that all EU-based customers of Coutts had been told their accounts and credit cards were being terminated. HSBC said it is "monitoring the situation closely". A spokesman for the Treasury commented: "We expect banks to treat their customers fairly and provide timely communications to enable them to make appropriate decisions."
Finance jobs stayed in London after Brexit vote
A survey of banks and asset managers by the FT has found that the feared shift of employment to the continent following the vote to leave the EU is yet to happen. The majority had in fact increased their London headcount over the past five years while a decline of about 6,000 in the headcount of twelve overseas-based banks was due to group-wide restructurings at three major banks. Nine of the world’s largest asset managers increased their combined hiring by 35% to more than 10,000 employees. Frédéric Oudéa, chief executive of Société Générale, commented: “There was a certain shift, but the magnitude has been relatively moderate.” The Sunday Telegraph says the findings will help to renew confidence that London will remain Europe’s dominant financial centre after Brexit.
Senior bank staff are CCP members
A number of senior staff at British banks HSBC and Standard Chartered have been members of the Chinese Communist Party (CCP), according to documents seen by the Daily Telegraph, with the paper saying the matter raises questions about the independence of institutions which operate in China. A leaked database of nearly 2m registered party members show that at least 335 HSBC employees were CCP members, with the senior vice president of HSBC China among current members, while Standard Chartered has employed at least 290 members. Two senior Deutsche Bank managers are also listed as party members, as are individuals in senior positions at JPMorgan Chase.
Lloyds joins NatWest and unblocks business account applications
Lloyds Bank and NatWest have opened up business account applications again after joining other big banks in blocking them due to high demand from customers seeking emergency bounce back loans and a massive rise in fraudulent applications. MPs on the Treasury committee will tomorrow grill senior bankers from NatWest, HSBC and Lloyds on why they blocked small firms.
Banks could be mandated to refund victims of fraud
The Payment Systems Regulator is expected to consult on plans to force banks to refund all fraud victims following complaints that the voluntary code signed up to by most banks was not working. An industry source told the Telegraph: "There is a big push from the Government to get this started before the end of the year. It's tired of banks wriggling out of their responsibilities. I believe the preferred option is that all victims get refunded." In a letter to the Sunday Times, TSB chairman Richard Meddings encourages other banks to follow TSB’s lead and refund all fraud scams.
UK ministers plan new state-backed loan scheme for SMEs
Treasury officials are planning state-backed guaranteed loans for SMEs, with the FT saying access to the initiative is expected to be much more stringent than to the bounce back loan scheme.
Calisen to go private less than a year after listing
A consortium including BlackRock, Goldman Sachs and Abu Dhabi's sovereign wealth fund Mubadala are buying UK energy meter provider Calisen for £1.43bn. KKR bought the group for a reported value of £1bn in 2016.
Goldman lays out diversity rules for IPOs
Richard Gnodde, boss of Goldman Sachs' London-headquartered international arm, told business associates in a Christmas letter that the bank will only help companies float on the stock market if they have at least two “diverse” board members. Mr Gnodde said: “I grew up in apartheid South Africa and am no stranger to racism and the deep-rooted damage that it inflicts upon society. As we all strive to become better listeners and better allies, I'm committed to ensuring that our firm is doing all we can to embed inclusion into all we do.”
Deutsche Bank raises prospect of moving half its New York staff
Christiana Riley, chief executive for Deutsche Bank in the Americas, says the firm could move up to half of its 4,600 New-York-based workforce to smaller US hubs in the next five years.
Firms build stockpiles amid no-deal fears
The Sunday Times profiles how car giants are looking to create stockpiles in case a no-deal Brexit severs supply chains. Bentley has amassed enough stock to last a month amid fears of customs delays at ports. The paper adds that the automotive industry is already being hit by shortages, with Honda and Jaguar Land Rover curtailing production last week.
Pandemic resurgence delays recovery at Rolls-Royce
The recovery of Rolls-Royce's civil aero-engine business has been delayed by the resurgent COVID-19 pandemic with the company now expecting cash flow to be negative to the tune of £4.2bn this year, up 5% on previous predictions in the summer. However, bosses plan cost savings of £1.3bn by 2022, including 5,500 job losses by the end of the year, as part of efforts to return to a positive cash position by the second half of next year.
Boeing’s 737 Max prepares for long haul to recovery
Prospects for Boeing have improved after Ryanair placed a $7bn order for the company’s 737 Max aircraft and regulators in the US began issuing airworthiness certificates to individual aircraft.
Brexit poses threat of ‘market volatility and disruption’, BoE warns
The Governor of the Bank of England, Andrew Bailey, has warned of the risk of volatility and disruption, particularly to EU-based clients, if there is no agreement on financial services at the end of the Brexit transition period. Brexit will not endanger the UK’s financial stability, however, and the Bank has “a very substantive array of responses that we will put to work,” Bailey said. On the economic fallout from the pandemic, the BoE’s latest Financial Stability Report warned of some “headwinds” to UK banks’ capital ratios next year but said they still have high levels of capital, allowing them to absorb “very big losses” and keep lending - even if outcomes were “considerably worse than currently expected”.
Mastercard back on the hook for fees
The Supreme Court has ruled that a landmark class action claim against Mastercard could be heard again after it was rejected three years ago. Mastercard is alleged to have forced shoppers to pay higher prices through fees that it charged merchants in the 16 years to 2008. If the company loses, it could be forced to pay consumers a total of £14bn. Rocio Concha, a director at the campaign group Which?, said: “This is a hugely important win for consumers.”
Zurich Insurance buys MetLife’s US property and casualty business for $3.9bn
Zurich is to spend $3.9bn buying MetLife's property and casualty insurance business. The Swiss insurer is teaming up with Farmers Exchanges, its existing US partner, to make the acquisition.
AstraZeneca to buy Alexion in $39bn immunology deal
AstraZeneca has acquired the rare disease specialist drug company Alexion Pharmaceuticals in a $39bn deal. Alexion’s drugs are used to treat debilitating conditions caused by rogue immune responses.
Sanofi/GSK delay vaccine rollout
Sanofi and GlaxoSmithKline have delayed the rollout of their COVID-19 vaccine after it failed to produce a strong immune response in the elderly.
Manufacturers fear no-deal impact
Research by manufacturing industry body Make suggests that a no-deal Brexit will cause "significant damage" to the sector. The trade body is predicting that the manufacturing sector will grow by just 2.7% next year, down from an earlier forecast of 5.5%. This means manufacturing – which has seen output fall 12% this year - would underperform the wider economy this year and next, with the Office for Budget Responsibility forecasting a fall in GDP of 11.3% this year before a bounceback of 5.4% in 2021.
Rightmove expects prices to climb 4% in 2021
Rightmove has forecast that house prices will climb 4% next year. The property platform said that while asking prices between November 8 and December 5 were 6.6% higher than a year earlier, it believes the rate of growth is unsustainable. Rightmove estimates that there is a "logjam" of 650,000 properties still trying to get through the system as buyers look to complete deals before the stamp duty holiday ends on March 31.
BoE looks to revise affordability criteria
The Bank of England is considering loosening mortgage rules amid concerns that first-time buyers have been locked out of the property market due to affordability tests which do not reflect the reality of long-term interest rates. The Bank said it was reviewing its mortgage market recommendations to take account of rates which are at a record low and likely to stay that way, making it easier for a homeowner to repay.
Potential bidders line up for retailers
The Times reports that 40 parties have registered an interest in the auction of retailer Arcadia’s brands. American fashion and investment group Authentic Brands is said to be interested, with Marks & Spencer, Next and Boohoo also named among potential bidders while Associated British Foods, the owner of Primark, is also understood to have received the information memorandum. The Times notes Frasers Group and Authentic Brands are believed to be interested in both Arcadia and Debenhams.
QE will soon lose its efficacy, economists warn
Economists are warning that further quantitative easing will struggle to further stimulate spending and investment with the Bank of England on track to own half of UK government debt by the end of 2021. Bank of America economist Robert Wood suggested that QE “at this stage is defensive”, a tool that can “prevent tightening but cannot add more stimulus”. The comments follow the assertion from BoE Governor Andrew Bailey that rate-setters have plenty of ammunition ahead of a possible no-deal Brexit. Overall, analysts expect further QE before the Bank resorts to negative interest rates.
Analysts expect stocks to fall as no-deal Brexit looms
Britain’s biggest banks saw their share price fall as much as 6% on Friday as analysts cut the odds of Brexit talks failing. Morgan Stanley warned they could fall further, perhaps by a fifth, in the event of no deal. The US bank told clients there was a “rising risk” of a no-deal Brexit which would lead the FTSE 250 to drop between 6 and 10%. JP Morgan cut the odds of a deal from 66% to 60%.