BANKING
TSB offers customers fraud guarantee
TSB has become the first bank to offer customers a fraud refund guarantee. The new guarantee will cover transactional fraud losses, including unauthorised transactions on customer accounts or when customers are tricked into authorising payments to fraudsters. Richard Meddings, TSB’s executive chairman, said the new guarantee was “the right thing to do”. He added: “The approach to refunds by banks has not kept pace with the increasing sophistication of the fraudsters. We don't think customers should bear the cost of what are often honest mistakes.” The guarantee comes into force today and, alongside a refund, victims will receive personalised information about their case designed to help prevent them being targeted again. Separately, TSB has been criticised after it reduced the rate on its Classic Plus current account to 3% from 5% despite former boss Paul Pester pledging last year that the rate increase was not just a year-long sweetener. TSB introduced the rate after its IT meltdown last year.
HSBC slows down moves to Paris
HSBC has said that the decision to delay Brexit until October 31 will inevitably slow down any relocations to Paris from London the bank had planned. CEO John Flint said that only “a tiny number of people will have moved” to HSBC’s Paris operation. He said: “We need to get a bit more clarity on what Brexit actually means and we'll be able to finalise our plans.” Meanwhile, the bank avoided a row over executive pay. More than 97% of shareholders who voted backed HSBC’s new remuneration policy in a binding poll and 96.8% supported executives’ 2019 pay in a non-binding vote. The bank also rejected calls to stop the funding of coal power projects in developing countries. CEO John Flint insisted HSBC “understands its social role” and rejected accusations that the bank was a "leading financier of coal companies”.
Barclays wins ally in battle against Bramson
Merian Global Investors' Richard Buxton has voted against Edward Bramson’s attempt to win a seat on the board of Barclays. Buxton said the bank did “not need a hostile disruptor in their midst, arguing on false numbers against their execution of the existing strategy to improve returns, for his own short-term end.” Separately, Glass Lewis, the shareholder advisory group, said Bramson’s campaign to be elected as a non-executive director of the lender "falls short" and that other Barclays shareholders should reject his appointment at the bank’s AGM. Meanwhile, the Mail on Sunday reveals that Bramson has collected an estimated £7m in fees since securing support from investors. He earns fees even if he does not secure a board seat at Barclays or execute his turnaround plan.
Investors advised to vote against Standard Chartered’s pay policy
Glass Lewis, the shareholder advisory firm, has recommended that investors vote against Standard Chartered’s executive pay policy because of controversial pension arrangements for CEO Bill Winters. The bank has changed the way it defines Mr Winters’ salary so that the ratio of his pension contributions to base pay falls from 40% to 20%, when the payments from the bank will increase this year to £474,000 from £460,000.
Lloyds embroiled in pension row
- Investment Association has warned that a pension deal for Lloyds Banking Group’s chief operating officer Juan Colombas could trigger an “amber top” alert ahead of its annual meeting in May. Colombas receives a pension allowance worth 25% of his £779,000 salary.
RBS steps on to the digital challengers’ turf
The FT carries an interview with Mark Bailie, the CEO of Bó, a new online-only bank owned by RBS. In the piece Bailie explains how the bank intends to meet changing customer needs. Separately, RBS has relaunched its Business credit card, aimed at start-ups and smaller firms. The bank is now offering the card free of charge for the first year to all new customers.
Thousands more ATMs will charge fee
Notemachine, which operates about a fifth of the UK’s free cash machines, is set to start charging customers when they want to make a withdrawal. The company is now planning to charge customers an estimated 95p fee at about half of its machines. The rest, which are operated under contracts for big businesses such as supermarkets, are likely to remain free.
Bank closures driving Britain to cashless society
The Mail on Sunday looks at how the closure of bank branches has hit the Yorkshire town of Hebden Bridge, leading bank customers to suggest the UK is being driven towards a cashless society. The town has seen Lloyds, Barclays and NatWest all close their doors. A spokesperson for Lloyds commented: “The way customers choose to bank has changed significantly in recent years. We continue to review our presence to ensure branches are located in the right places.”
PRIVATE EQUITY
KKR founders set sights on Japan conglomerates
KKR has declared that it is interested in acquisitions in Japan as the likes of Hitachi, Panasonic and Toshiba offload non-core subsidiaries and create opportunities for private equity.
INTERNATIONAL
Record-breaking profit boosts JP Morgan
JP Morgan Chase has reported the largest ever quarterly profit for an American bank, beating forecasts and boosting optimism that the country’s economic boom will continue to run. The bank unveiled a top-line first quarter profit of $9.2bn and revenue of $29.1bn. JP Morgan's corporate and investment bank suffered an 18% fall in first-quarter profits to $3.3bn as markets revenues fell 17%. The bank had previously warned of a "high teens" fall in trading revenues. CEO Jamie Dimon praised “strong” results in debt underwriting and advisory.
Profit rises at Wells Fargo
Net income at Wells Fargo rose by 14% in the first-quarter to $5.9bn, up from $5.1bn a year ago. Revenue at the US bank dipped to $21.6bn from $21.9bn. The bank is currently searching for a replacement for CEO Tim Sloan, who left at the end of last month.
Big banks blamed for ‘crazy’ tech valuations
William De Gale, a former fund manager at BlackRock, has said that big banks and asset managers including Goldman Sachs are to blame for the “crazy” valuations of tech companies coming to the market. He said tech companies were now “coming to the market at valuations that can't be supported”.
Regulators push Deutsche Bank for more cuts to US unit
European regulators are calling on Deutsche Bank to shrink its US investment bank further. The FT claims the bank’s supervisors are concerned the unit remains too large and unprofitable.
AUTOMOTIVE
Ford told to come clean over factory closures
Unions have called on Ford to “come clean” over the future of its British operations amid fears that factories could be closed. In a statement to workers across Ford's five British plants, Unite and GMB warned this weekend that they were “ballot ready” and prepared to fight factory closures and compulsory redundancies.
AVIATION
Jet Airways halts all international flights
Passengers have been left stranded around the world after Jet Airways suspended all international flights. The airline has been saddled with more than $1bn of debt. It is currently seeking a financial lifeline to avoid collapse and last week grounded 10 planes over unpaid fees to leasing firms.
Grounding of jets leaves airlines with hefty bills
New research has revealed that airlines have racked up nearly $2bn of extra costs since the crashes that grounded Boeing’s 737 Max jets, putting pressure on the US aerospace firm as it looks to navigate the crisis.
FINANCIAL SERVICES
Guernsey stock exchange suspends Woodford stakes
The Guernsey stock exchange has suspended dealings in three holdings listed by fund manager Neil Woodford. The organisation overseeing Guernsey’s exchange said that it had suspended the listing of stakes in Benevolent AI, a biotechnology business, Industrial Heat, a cold fusion company, and Ombu, a technology investor.
Non-Standard Finance admits infringements
Non-Standard Finance has admitted that it had made “certain technical infringements” after Provident Financial, its hostile takeover target, suggested that it may have illegally paid dividends. NSF said that the issues would be rectified without affecting the company’s financial position.
Revenues plummet at Plus500
The online trading platform Plus500 has reported that subdued financial markets caused trading revenue to drop 65% to $53.9m (£41.2m) in the first three months of 2019. Shares in the company fell by more than 31% to close at 495p.
TP ICAP calls time on troubled executive incentive scheme
TP ICAP is planning to end an incentive scheme for executives with former chairman Rupert Robson suggesting it was “no longer fit for purpose”. The new scheme will have lower potential pay-outs.
Brewin Dolphin in talks to acquire Investec’s Irish wealth unit
Brewin Dolphin has confirmed it is in talks to acquire Investec’s Irish wealth management business for up to €60m.
Large fund houses slash broker research spend after Mifid II
Analysis by the FT has revealed that fund houses including Janus Henderson, Amundi and Invesco spent less on research last year after Mifid II came into effect.
HEALTHCARE
Babylon to double US operations
NHS supplier Babylon is to double its presence in North America to chase a larger slice of a market estimated to be worth $400bn by 2025. A spokesman said the growth aimed “to support our existing partnerships and launch our localised technology” after a “successful” entry into Canada.
MANUFACTURING
Eurozone factories stuck in longest slump since debt crisis
Eurozone factories have suffered a fourth straight month of contraction with industrial production slipping 0.3% year-on-year in February, dragged lower by a 2% decline in Germany's ailing factories. The region's manufacturers have blamed trade tensions, Brexit uncertainty, the car industry's woes and China's slowdown for the longest losing streak since 2013.
MEDIA AND ENTERTAINMENT
Disney launches streaming service
Disney has announced it plans to launch a streaming service. It will be available in North America from November, before then being rolled out to other markets.
WPP seeks buyer for Kantar
WPP has hired advisers from Goldman Sachs to find a buyer for Kantar, its market research firm. Analysts at Deutsche Bank said in a research note they expect the deal to value Kantar at £3.1bn.
REAL ESTATE
Investec helps out lazy mortgage customers
Investec has come up with an alternative financial model to stop apathetic mortgage customers from lapsing on to its expensive standard variable rate (SVR). The bank says it will automatically switch customers on to its base-rate tracker rate, which means that what they pay will vary depending on the loan-to-value ratio of their mortgages.
NatWest launches flexible mortgage
NatWest has become the first high street bank to launch a flexible mortgage since the financial crisis as lenders seek to attract new borrowers. The “HomeFlex” mortgage offers customers a flexible pot of cash that can be used whenever they choose – for holidays, property refurbishment or a deposit for offspring. Borrowers can also make unlimited overpayments without fees, reducing the interest they pay each month.
Mortgage comparison service set to launch
MortgageGym, an online broker which only shows mortgage deals it knows customers can afford, is set to launch this summer. The comparison service assesses affordability by looking at bank account history over 12 months, using open banking rules, and credit profiles.
RETAIL
Debenhams boss expected to step down
Debenhams boss Sergio Bucher is expected to step down following the department store chain’s recent takeover by its lenders, which include Barclays and US hedge funds Silver Point and Golden Tree. Mr Bucher had already been voted off the retailer's board after major shareholders, Mike Ashley’s Sports Direct, and Landmark Group, voted against his re-election in January.
LK Bennett sold to Chinese partner
LK Bennett has been sold to Byland UK, a company formed a few weeks ago by Rebecca Feng, the retailer’s Chinese franchise partner. The purchase includes LK Bennett's headquarters, 21 stores, all of its concessions and 325 employees.
ECONOMY
Finance ministers say global growth will ‘firm up’
Following the Spring meetings of the IMF and World Bank, finance ministers and central bank governors said global growth was likely to “firm up” in coming months, leading to an improved outlook in 2020.