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Daily News Roundup: Monday, 14th May 2018

Posted: 14th May 2018

BANKING

Banks seek special exemptions for foreign staff after Brexit

Banks have called for a special work visa arrangement that would allow them to bring foreign staff into Britain after Brexit next year. The proposal is a core recommendation in a report by The City UK which will be shared with the Home Office and Treasury. Under the proposals the Home Office would allow international banking staff posted to Britain for less than six months to move in and out of the country without having to apply for a work visa. The report argues that the finance sector must be able to continue to hire top talent after Brexit because the industry contributed 14% of corporate tax revenue raised in Britain.

Santander plans stand-alone digital bank for UK

Santander is working on plans to launch a stand-alone digital bank in the UK within months, amid growing competition in the market. The lender is also considering whether to bring its digital lending service Openbank to the UK, which already has some 1.3m customers in Spain. It comes as smaller banks compete for a share of the £833m RBS fund to boost competition in business banking, which Santander has controversially also been allowed to bid for.

McEwan looks to stay on at RBS

RBS chief executive Ross McEwan has dismissed reports he is preparing to step down, instead saying he planned to remain at the helm until 2020. In an interview with LBC Radio, Mr McEwan added that he wants to see the bank returned to private hands. He also hinted that RBS could pursue further rounds of branch closures. Earlier this month the bank unveiled plans to axe 162 branches and 792 jobs, just five months after announcing it would slash 259 branches and 1,003 jobs. “We'll have to wait until the end of the year to see what - footfall disappears when we move these customers out,” he said.

Staley fined for attempting to unmask whistleblower

Barclays CEO Jes Staley has been fined more than £640,000 by the Financial Conduct Authority for attempting to uncover the identity of a whistleblower. Mr Staley was fined by the FCA and the Prudential Regulation Authority (PRA), which said that he failed to “act with due skill, care and diligence”. Nicky Morgan MP, chair of the Treasury committee, said she planned to question the FCA on whether the fines were appropriate at its next evidence session.

Lloyds offers cut-price lending for sustainability

Lloyds Banking Group has put £2bn into green initiatives by offering companies cut-price finance to invest in electric cars and low-carbon energy. The Clean Growth Finance scheme is for firms that are looking to invest in improving energy efficiency, recycling rates and cutting water usage. HSBC and JP Morgan have similar larger schemes.

Paragon hires new chairman

Challenger bank Paragon has announced the appointment of new chairman Fiona Clutterbuck, after the previous incumbent was poached by the Co-operative Bank. Ms Clutterbuck replaces former Barclays banker Bob Dench. The lender initially specialised in buy-to-let mortgages, but has been pushing into mainstream banking since a restructuring last September.

HSBC claims first trade-finance deal with blockchain

HSBC has pioneered the world’s first commercially viable trade-finance deal using blockchain, paving the way for mass adoption of the technology in the $9tn market for trade finance.

UK banks debt sales near decade high as regulations tighten and cheap funding ends

UK banks are raising debt at the fastest rate since the period following the financial crisis, as lenders scramble to replace cheap funding that was previously supplied by the BoE.

INTERNATIONAL

Deutsche Bank shakes up leadership at its biggest unit

Deutsche Bank has named two co-presidents of its corporate and investment-banking division, Ram Nayak and Mark Fedorcik, as CEO Christian Sewing shakes up management to turn around the firm’s fortunes.

Russian bank head sees bailout costs rising

Mikhail Zadornov, the man responsible for resolving Russia's largest-ever banking failure, has warned that the costs of saving Otkritie and B&N may rise higher than the $27bn so far budgeted.

French banks must limit exposure to corporate debt

France's financial stability council has ordered the country’s six biggest banks to limit their exposure to highly indebted French companies under a new rule effective from July. The HCFS has been concerned about surging corporate debt levels.

ECB head Draghi backs France’s call to complete banking union

Mario Draghi has backed Emmanuel Macron’s demands to complete the eurozone’s banking union and create a contingency fund for member states, as he sought to boost momentum for reform.

JPMorgan eyes return to China securities market

JPMorgan Chase has applied to re-enter China's securities market with a controlling stake in a joint venture with a Chinese firm, having exited the sector just two years ago.

Commonwealth Bank of Australia’s CFO resigns

Rob Jesudason, the CFO of Commonwealth Bank, has become the latest departure from Australia’s largest bank by assets as it deals with fallout from a string of regulatory scandals.

AUTOMOTIVE

Volvo Cars hires Wall St trio to weigh up options for listing

Volvo Cars has appointed Goldman Sachs, Morgan Stanley and Citigroup to explore the possibility of the carmaker embarking on an initial public offering, according to people close to the deal.

CONSTRUCTION

Crossrail needs bailout

The Sunday Times reports that an estimated £500m bailout of the Crossrail train line project is expected to be announce within weeks, to prevent construction work grinding to a halt. The budget overspend, believed to be up to 10% of the overall cost, is likely to raise more questions about Britain’s ability to deliver megaprojects on time and to budget.

HEALTHCARE

NHS spends £2.4bn a year on nurse shortage

UK hospitals are spending approximately £2.4bn a year to plug nursing shortages, with NHS trusts increasingly being forced to turn to expensive temporary staff to fill staffing gaps on wards, academics have found.

LEISURE AND HOSPITALITY

Investment firms swoop on Welcome Break

3i Infrastructure is gearing up to make a bid for motorway service station firm Welcome Break. The deal would see the private equity house buy a 55% stake in the company from investment bank Evercore.

REAL ESTATE

ZPG sold for £2.2bn

A US private equity firm is set to acquire the owner of Zoopla. Silver Lake is paying £2.2bn for ZPG, which also owns the PrimeLocation and SmartNewHomes websites. Investors in ZPG will receive 490p a share - almost a third higher than its closing price on Thursday.

IWG open to takeover talks

Serviced office operator IWG is understood to be open to a takeover with potential suitors said to include Lone Star, Starwood Capital and TDR Capital. IWG has been seen as a bid target since a profit warning triggered an unsuccessful approach from Canadian property group Brookfield and private equity firm Onex late last year.

Mortgage rates set to rise as cheap money ends

Banks will be forced to raise mortgage rates as cheap money provided by a closed Bank of England scheme runs out, M&G Investments has warned. Josephine Meertens, an analyst at the investment managers, has warned of upward pressure on mortgage rates.

RETAIL

Poundworld up for sale

Discount retailer Poundworld has been put up for sale by its owner TPG. The chain had been looking at closing about 100 of its 355 stores as part of a restructuring plan, as it battled a tough retail environment. However, that process has now been put on hold by TPG after it received expressions of interest in the company. Any new owner would also be likely to pursue a CVA in order to secure rent cuts and the ability to close more than a quarter of Poundworld's stores.

The Hut Group secures loan

The Hut Group has secured a £600m loan from banks including Barclays and HSBC to help bankroll its rapid expansion and a potential acquisition spree.

ECONOMY

BoE August decision will be without GDP figures

The Bank of England will make its August decision regarding interest rates without seeing the official Q2 GDP figures, which could have a critical bearing on the vote. The Office for National Statistics is scrapping the first of its three GDP estimates from July. The publication, originally scheduled for July 26, has been moved to August 10 - eight days after the Bank publishes its rate decision and updated forecasts.

Wage squeeze worst in modern history

The Trades Union Congress has said the UK’s real wage squeeze will be the worst in modern history and the slowest for 200 years. The TUC says wages have lagged behind inflation since 2008 and are worth £24 less in real terms than ten years ago. It says wages will not recover until 2026, by which time workers will have lost £18,500.

OTHER

London listings at five-year low

Figures from Dealogic show fewer than 20 companies have floated in London since January - a third less than the total this time a year ago and the lowest number since 2013.

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